Hubei Accord Konjac Biotechnology Co., Ltd. (stock abbreviation: Accord Konjac; stock code: 839273. BJ) has disclosed its 2023 annual report, the company's listing on the Beijing Stock Exchange increased revenue in the first year without increasing profits, deducting non-net profit fell back to the level of five years ago, and the company also transferred 100% equity of its subsidiaries to major suppliers during the year. At the same time, the accounting and construction progress of the company's fund-raising projects under construction seem to contradict the acceptance report.
Source: Photo.com
Non-net profit fell back to five years ago
Accord Konjac is mainly engaged in the deep processing of konjac and the research and development, production and sales of konjac-related products, covering three categories: konjac powder, konjac food, and konjac beauty products, and will be listed on the Beijing Stock Exchange from February 2023. On March 22, 2024, Consistent Konjac disclosed the annual report of the year of listing, which shows that in 2023, the company will achieve an operating income of 478.8231 million yuan, a year-on-year increase of 7.03%, an attributable net profit of 52.7436 million yuan, a year-on-year decrease of 19.23%, and a non-net profit of 31.3122 million yuan, a year-on-year decrease of 46.01%.
It is worth noting that Consistent Konjac once released a performance express report at the end of February 2024, which shows that in 2023, the company will achieve an operating income of 478.9338 million yuan, an attributable net profit of 59.2085 million yuan, and a non-net profit of 37.2187 million yuan. There is a significant difference between the express report data and the annual report data, of which the difference in attributable net profit is 6.4648 million yuan, accounting for 12.26% of the attributable net profit disclosed in the annual report, and the difference in non-net profit is 5.9064 million yuan, accounting for 18.86% of the non-net profit disclosed in the annual report.
From 2019 to 2022, the attributable net profit of consistent konjac was 38.6372 million yuan, 44.3545 million yuan, 59.3527 million yuan, and 65.3008 million yuan respectively, and the non-net profit deducted was 34.0594 million yuan, 35.5798 million yuan, 51.0936 million yuan, and 57.9923 million yuan respectively. During the reporting period before the listing of the Beijing Stock Exchange, the net profit of the consistent konjac continued to grow, while the company's net profit in the first year of listing on the Beijing Stock Exchange suddenly changed its face, and the non-net profit even fell back to five years ago.
Parallel to the change in performance was the change of auditors. At the end of 2020, Consistent Konjac hired Tianjian Certified Public Accountants as the audit institution, and three years later, on December 6, 2023, Consistent Konjac announced that the company intends to appoint Zhonghui Certified Public Accountants as the auditor in 2023. As for the reason for the change of audit institution, Consistent Konjac disclosed that it was due to the company's business development and future audit business needs.
In terms of products, in 2023, the sales revenue of konjac flour will be 362.6635 million yuan, a year-on-year decrease of 2.46%, the sales revenue of konjac food will be 105.1249 million yuan, a year-on-year increase of 71.96%, and the sales revenue of konjac beauty products will be 4.4341 million yuan, a year-on-year decrease of 38.82%. According to the analysis of volume and price changes, affected by market competition, the sales volume of konjac flour and konjac food increased compared with the same period last year, while the selling price decreased compared with the same period last year, resulting in an increase in overall sales revenue and a decline in net profit.
In fact, there are doubts about the above statement of consistent konjac. In 2022 and 2023, the sales revenue of konjac food will be 61.1323 million yuan and 105.1249 million yuan respectively, and the gross profit margin will be 13.41% and 18.23% respectively, according to which the gross profit will be 8.1978 million yuan and 19.1643 million yuan respectively. It can be seen that the profit of konjac food in 2023 is higher than that in 2022, and it has not caused a decline in overall profits, which contradicts the consistent statement of konjac.
There is a contradiction between the construction in progress of the fund-raising project and the acceptance report
The technical transformation project of the reconstruction and expansion of the konjac deep processing intelligent manufacturing production line is a consistent konjac listed on the Beijing Stock Exchange, with a total planned investment of 101.0489 million yuan and a commitment to invest 101.0489 million yuan in raised funds. According to the special report on the deposit and actual use of raised funds, as of the end of 2023, the fundraising project has invested a total of 32.1056 million yuan in raised funds.
According to the disclosure of the prospectus and the annual report, the technical transformation project of the reconstruction and expansion of the konjac deep processing intelligent manufacturing production line began to form a project under construction in 2021, and from the end of 2021 to the end of 2023, the balance of the project under construction was 142,600 yuan, 6,431,600 yuan, and 19,237,500 yuan respectively, of which 12,507,800 yuan will be consolidated in 2023, with a cumulative investment of 31,745,300 yuan.
However, the acceptance report shows that the technical transformation project (phased) of the reconstruction and expansion of the konjac deep processing intelligent manufacturing production line was completed on March 31, 2021, with a total investment of 50 million yuan, and the acceptance will be completed in September 2022. The acceptance report exposes potential problems with the fundraising project. First of all, if the fund-raising project was completed in phases on March 31, 2021, and the project EIA approval date is July 30, 2021, that is, the EIA approval was obtained four months after the phased completion of the project.
Secondly, according to the acceptance report, the actual investment of about 50 million yuan has been invested in the reconstruction and expansion of the konjac deep processing intelligent manufacturing production line as of March 2021, while according to the consistent konjac disclosure, the balance of the project under construction at the end of 2021 is only 142,600 yuan. There is a contradiction between the investment progress of the construction in progress and the acceptance report of the consistent konjac accounting.
At the same time, according to the acceptance report, the technical transformation project of the reconstruction and expansion of the konjac deep processing intelligent manufacturing production line will be completed in phases in 2021, and the acceptance of the completed part will be completed in 2022, which means that it will reach the intended usable state and should be transferred to fixed assets, but the consistent konjac will only be partially consolidated in 2023, which is significantly delayed compared with the acceptance report.
Sale of 100% equity interest in the subsidiary to major suppliers
In June 2023, Consistent Konjac issued an announcement on the resolution of the sixth meeting of the third board of directors, in order to revitalize existing assets, improve asset utilization, and reduce operating costs, the company intends to transfer 100% of the equity of its wholly-owned subsidiary, Yunnan Accord Konjac Biotechnology Co., Ltd. (hereinafter referred to as Yunnan Accord), to Chuxiong Yunchang Biotechnology Co., Ltd. (hereinafter referred to as Yunchang Biotechnology), with an equity transfer price of 21 million yuan.
Yunnan Accord was established in 2011 by Accord Konjac and was originally engaged in the primary processing business of fresh konjac. In June 2021, the on-site inspection of ecological and environmental law enforcement in Yunnan Province found that Yunnan unanimously had environmental problems such as improper operation of pollution prevention and control facilities, illegal discharge of air pollutants, and failure to store and dispose of hazardous waste in accordance with national environmental protection standards, and issued an "Administrative Penalty Decision" and imposed a fine of 210,000 yuan on Yunnan Zun.
From July 2021, Yunnan Accord has ceased the acquisition and processing of konjac raw materials, and at the same time, Yunchang Biotechnology has been established and leased all the land, houses and factories of Yunnan Accord to engage in the production and processing of konjac flour. In 2022, Yunchang Biotech will become the third largest supplier of consistent konjac, with a purchase amount of 32.8705 million yuan that year.
According to the annual report, Consistent Konjac has received 18.000 million yuan of earnest money for Yunnan Consistent Equity Transfer from April to June 2023, and as of the end of 2023, the company's balance of other receivables to Yunchang Biotech is 3.0642 million yuan. This means that Accord Konjac has reached an equity transfer intention with Yunchang Biotech at least in April 2023 and received the intention money, but the company did not make an announcement until June 2023.
According to the annual report, the investment income generated by the company's disposal of long-term equity investment in 2023 will be 5.1609 million yuan.