Tuyere financial reporter Zhao Chong
The trouble-ridden *ST Garden City is once again under regulatory attention.
On the evening of April 24, Yuancheng Gold announced that the company's 2023 annual report will be postponed to April 30, 2024.
The reporter noted that after submitting the relevant application, Yuancheng Gold received the "Regulatory Work Letter on Matters Related to the Postponement of the Disclosure of Annual Reports by Yantai Yuancheng Gold Co., Ltd." (hereinafter referred to as the "Working Letter") issued by the Second Department of Management of Listed Companies of the Shanghai Stock Exchange on April 24, 2024.
According to the "Working Letter", Yuancheng Gold should ensure that the 2023 annual report is prepared and disclosed in accordance with the relevant regulations of the China Securities Regulatory Commission and the Exchange within the statutory period, and at the same time fully alert the risk of termination of listing that may be touched. If the company fails to disclose the periodic report within the statutory time limit, the SSE will initiate the termination of the listing process for the company in accordance with the relevant regulations.
The recognition of sales revenue from alcoholic beverages is doubtful
At the moment of disclosure in the annual report, Yuancheng Gold can be described as in trouble.
Let's start by recapping the situation of *ST Garden City. Due to the negative net profit in 2022 and the operating income of less than 100 million yuan, *ST Garden City was labeled as *ST. According to the rules, if it continues to lose money in 2023, the company will face the fate of delisting. However, the company's pre-performance announcement at the beginning of this year seems to give investors a glimmer of hope. According to the announcement, the company is expected to have an operating income of 170 million yuan to 210 million yuan in 2023 by expanding its trade business and strengthening cost control, with an operating income of 160 million yuan to 200 million yuan after deducting business income unrelated to the main business and income without commercial substance, a net profit of 3.2 million yuan to 4.5 million yuan, and a non-net profit of 3.2 million yuan to 4.5 million yuan.
According to the above performance forecast, the risk of delisting of *ST Garden City shares has been greatly reduced. Recently, however, the situation has suddenly reversed.
On the evening of April 22, Yuancheng Gold disclosed that in the process of auditing the company's 2023 annual financial statements, Hexin Certified Public Accountants (Special General Partnership) (hereinafter referred to as Hexin Firm) had a revenue of 16 million yuan to be verified, mainly involving alcoholic beverages business, and found that there was a difference between the sales price of the company's Moutai Bulao Liquor in 2023 and the sales price of some e-commerce platform stores during the 2024 audit period, and the compliance of related business revenue recognition was doubtful.
"Our audit is ongoing, and we have carried out audit procedures for our beverage business, including interviews, corrobories, inventories, and spot checks on vouchers," the letter said. Up to now, the audit procedures carried out by Hexin Certified Public Accountants (Special General Partnership) have not been able to dispel its doubts about the compliance of the relevant business, nor have they formed a conclusive opinion."
It is worth noting that before Hexin sent a notification letter to Yuancheng Gold, the Shanghai Stock Exchange issued a regulatory letter to Yuancheng Gold on April 19 on the same issue.
According to the regulatory letter, Yuancheng Gold submitted the text of the proposed announcement to it on April 19, saying that after pre-communication with the company's annual review agency and the letter institute, based on the principle of prudence, the previous performance forecast was corrected, and the total profit of 8.6839 million yuan generated by the company's alcoholic beverage business was no longer recognized, but the reason was not explained, and the announcement was not disclosed, and refused to answer the call of the regulator.
On April 24, the Shanghai Stock Exchange once again clarified in the "Working Letter" that *ST Yuancheng received a notification letter from the Hexin Exchange, clarifying that if it is unable to obtain sufficient and appropriate evidence on matters such as case filing and compliance of the alcoholic beverage business, it will issue an audit report on the company's 2023 financial statements that cannot express an opinion.
The SSE believes that, judging from the statement issued by Hexin, *ST Garden City's 2023 financial report may be issued a non-unqualified opinion by the auditor. If the company's financial report is finally issued with a non-unqualified opinion, *ST Yuancheng shares will be terminated from listing.
The actual controller of the company "changed hands"
It is worth noting that before the release of the 2023 annual report, *ST Garden City ushered in the "change of ownership" of the actual controller.
On March 29, Yuancheng Gold announced that the controlling shareholder and actual controller had changed, and Tianjin Tianji Tongsheng Technology Co., Ltd. (hereinafter referred to as Tianji Tongsheng), a subsidiary of Wang Huancheng, received 24,669,300 shares of Yuancheng Gold from Xu Chengdong, accounting for 11% of the company's total share capital, at a transfer price of 14.3545 yuan per share, with a total transfer price of 354 million yuan. Tianji Tongsheng thus became the controlling shareholder of Yuancheng Gold, and Wang Huancheng became the actual controller of the listed company.
Embarrassingly, the transaction has only been completed, and Wang Huancheng may have to face the risk of the company's shares being delisted, and his investment is also facing the risk of loss. Up to now, the market value of Tianji Tongsheng's above-mentioned holdings is about 260 million yuan, and it has lost more than 90 million yuan. Since Tianji Tongsheng promised not to reduce its holdings within 18 months after the completion of the transfer of the above-mentioned *ST Yuancheng shares, it can only "wait and see" the company's stock price fluctuations.
At the same time, *ST Park City shareholders have also chosen to reduce their holdings.
From April 12 to 15 this year, Yi Yingning, a shareholder of more than 5% of ST Yuancheng, reduced his holdings by 1,712,200 shares through block trading, and the shareholding ratio dropped to 4.99% after the reduction was completed.
Sun Weinia, a shareholder who also holds more than 5% of the shares, sold a total of 2,716,600 shares of the company through block trading from September 25, 2023 to April 16, 2024, accounting for 1.21% of the company's total share capital. Its shareholding decreased to 5.79% from 7% before the reduction.
The chairman was investigated less than a year after taking office
Previously, *ST Yuancheng received the "Notice of Case Filing" issued by the China Securities Regulatory Commission on April 22, 2024. Due to suspected violations of information disclosure laws and regulations, the CSRC decided to file a case against the company. Also on file was also filed by Mu Saiying, chairman of Yuancheng Gold.
Following the resignation of the previous chairman, the company experienced several months of absence of a head until August 2023, when the board of directors elected Mou Saiying as the company's chairman. According to the resume, Mu Saiying, who was born in 1980, has worked in *ST Garden City for many years.
However, the "post-80s" chairman has only been in office for more than 8 months, and he was investigated by the regulator on suspicion of insider trading, and the company once again stood on the cusp of public opinion.
According to public information, *ST Garden City is the first listed company in Yantai City. In recent years, the company's main business has been sluggish, and its performance has been in a state of meager profits or losses for a long time. Since 2020, the company has tried cross-border environmental protection, liquor, new materials, new energy, etc., but the road to transformation has been repeatedly defeated. According to the company's 2023 semi-annual report, the company's main business during the reporting period is the sales of steel, coal and fuel oil.
So, will the investigation of the company and its chairman have an impact on the company's operation? On April 25, a financial reporter called the company for an interview, but did not receive a response as of press time.
In the secondary market, *ST Yuancheng fell for four consecutive trading days, closing at 10.90 yuan per share on the 25th.