DPU chip companies were notified by the China Securities Regulatory Commission that they were suspected of major financial fraud
Xinxi reported on January 31 that the official website of the China Securities Regulatory Commission issued a document on January 29 to announce the results of the investigation into the delisting risk company DPU chip company Zuojiang Technology Co., Ltd. (hereinafter referred to as *ST Zuojiang). It was preliminarily found that the financial information disclosed by *ST Zuojiang in 2023 was seriously untrue and suspected of major financial fraud.
The case is currently under investigation, and the China Securities Regulatory Commission (CSRC) has indicated that it will ascertain the facts of the violation as soon as possible and seriously deal with it in accordance with the law; severely crack down on listed companies' financial fraud that seriously misleads small and medium-sized investors in their trading decisions; continue to maintain a high-pressure posture of "zero tolerance" law enforcement, strictly and quickly investigate and deal with all kinds of fraud, and strengthen the three-dimensional accountability of administrative, civil, and criminal cases; strictly implement the delisting system, so that those who commit fraud "should retreat as much as possible" and make those who commit fraud and disrupt the market pay a heavy price.
Benefiting from the concept of DPU chips, *ST Zuojiang's share price has been soaring since April 29, 2022, and has risen to a maximum of 299.80 yuan on July 14, 2023, an increase of more than 834%, and the market value has increased by more than 766% in the same period.
Today, *ST Zuojiang announced that the company's shares have deviated by 110.78% for six consecutive trading days from January 12 to January 22, 2024, and 47.64% for two consecutive trading days on January 22 and 23, compared with the same period in the broader market, the company's shares have been suspended since the market opened on January 24 and resumed trading since the market opened on January 31. *ST Zuojiang opened today with a one-word drop limit, the latest stock price is 42.42 yuan, and the market value is about 4.328 billion yuan.
At the same time, the announcement responded to the suspected material financial fraud, saying that the company will actively cooperate with the relevant investigation, disclose the relevant progress in a timely manner, and emphasize that "considering the company's production and operation conditions and internal and external business environment, the company's stock price and fundamentals are seriously deviated".
According to the latest 2023 performance forecast released by *ST Zuojiang, its net loss attributable to the parent company has expanded compared with the previous year, and the loss is expected to be in the range of 160 million yuan to 225 million yuan.
According to previous annual reports, Chengdu Beizhong Netcore, a subsidiary of ST Zuojiang Holdings, has developed the first domestically produced independent and controllable programmable network data processing chip (DPU) in China, which can be used in the field of network data communication, network data security and network cloud service acceleration. Beizhong Netcore's revenue in 2022 is 0, *ST Zuojiang said in the first quarter of 2023 report that the revenue growth is mainly due to the sales revenue of the company's chip business.
In April 2023, *ST Zuojiang disclosed that its stock trading would be subject to a delisting risk warning and stock trading suspension. According to the relevant provisions of the Rules Governing the Listing of Stocks on the Growth Enterprise Market of the Shenzhen Stock Exchange (Revised in August 2023), if the company is subject to administrative punishment by the China Securities Regulatory Commission and the illegal act touches the illegal situation of material information disclosure, the company's shares may be at risk of being terminated.
Since May, *ST Zuojiang has received inquiries or letters of concern from regulatory authorities for many times, and replied to the inquiry letter in the same month, saying that the chip business of Beizhong Netcore will achieve sales revenue of 11.1593 million yuan in the first quarter of 2023, a net profit of -2.7849 million yuan, a gross profit margin of 95.98%, sales expenses of 745,600 yuan, management expenses of 1.5267 million yuan, and research and development expenses of 11.347 million yuan, and the programmable network data processing chip is in the cultivation and promotion stage.
*ST Zuojiang issued a public relations announcement on the proposed change of accounting firm on January 16 this year, and issued an announcement on the resignation of the chief financial officer on January 20, saying that the company's chief financial officer Zhou applied for resignation due to personal health and family reasons, and no longer held any position in the company after resignation, and Ms. Zhang Jun, chairman of the board of directors, acted as the chief financial officer during the period when the board of directors did not formally appoint a new chief financial officer.