*ST Doushen's annual report was asked: the company's debt due in the next 12 months, and whether the solvency has been substantially improved?

On April 26, the Shenzhen Stock Exchange issued an inquiry letter on the annual report of Doushen Education Technology (Beijing) Co., Ltd. (hereinafter referred to as "*ST Doushen" or "the Company"). The letter of inquiry requires *ST Doushen to explain the company's debts due in the next 12 months, including but not limited to the specific amount of debts, maturity time, repayment plan, etc., and further explain whether the company's solvency has been substantially improved after the completion of bankruptcy reorganization.

Screenshot of the inquiry letter of the Shenzhen Stock Exchange

According to the inquiry letter, the Shenzhen Stock Exchange paid attention to the following situations in the post-mortem review of *ST Doushen's 2023 annual report:

1. On April 25, 2023, Zhongxing Cai Guanghua Certified Public Accountants (Special General Partnership) (hereinafter referred to as the "Annual Audit Accountant") issued an unqualified audit report on the company's 2022 financial report with significant uncertainties in the ability to continue operations due to the significant uncertainty of *ST Doushen's continuing operation. On April 24, 2024, the annual audit accountant issued the "Special Explanation on the Elimination of Non-standard Matters Involved in the Audit Report of the 2022 Financial Statements of Doushen Education Technology (Beijing) Co., Ltd."

(1) Please explain the company's debts due in the next 12 months, including but not limited to the specific amount of debts, maturity time, repayment plan, etc., and further explain whether the company's solvency has been substantially improved after the completion of bankruptcy reorganization.

(2) Please explain whether the company has liquidity risk based on the company's working capital needs, discretionary monetary funds, asset liquidity ability, financing ability and plan, etc., and if so, explain the countermeasures that the company has taken or intends to take, and make necessary risk warnings.

(3) From 2018 to 2023, the company's net profit attributable to the parent company after deducting non-profits continued to be negative. As of the end of 2023, the company's uncovered losses amounted to one-third of the total paid-up share capital. Please explain the reasons why the net profit attributable to the parent company after deducting non-profits continues to be negative, whether the company is facing greater operational risks, whether there are major uncertainties in the company's ability to continue operations and the basis for judgment.

(4) The annual audit accountant is requested to explain whether the impact of the non-standard matters has been eliminated and whether there is still significant uncertainty in the company's ability to continue operations in combination with the audit procedures implemented by the matters involved in the non-standard opinions, the audit evidence obtained, and the audit conclusions formed.

2. On December 28, 2023, *ST Doushen obtained the (2023) Jing 01 Po No. 393-1 Civil Ruling, and the Beijing No. 1 Intermediate People's Court ruled to confirm the completion of the implementation of the company's reorganization plan.

Please list the calculation process and results of the reorganization gains, the impact of bankruptcy reorganization on the company's financial statements in each year, and explain whether the company's relevant accounting treatment complies with the provisions of the Accounting Standards for Business Enterprises. Ask the annual accountant to check and give an opinion.

3. The annual report shows that during the reporting period, *ST Doushen achieved operating income of 993 million yuan, a year-on-year decrease of 2.03%, of which the content (security) management solution business achieved revenue of 118 million yuan, a year-on-year increase of 20.97%, and the education products and management solutions business achieved revenue of 868 million yuan, a year-on-year decrease of 3.6%.

(1) Please distinguish the content (security) management solution business - file management outsourcing services, high-end imaging solutions, customized software development, customized services and other four specific businesses, combined with the changes in business market demand, sales volume, average unit price, total sales price during the reporting period, revenue realization in each quarter of the reporting period, revenue change trend of comparable companies in the same industry/comparable business during the reporting period, and the same period in the company's history (2021 and 2022) Trend of income changes, quantitative analysis of the reasons and reasonableness (if any) of the above-mentioned four types of business income changes.

(2) Please distinguish three specific types of businesses, such as education product and management solution business - education product sales, education services, and education integration projects, and quantitatively analyze the reasons and reasonableness of the changes in the income of the above three types of businesses (if any) in combination with the changes in business market demand, the sales quantity, average unit price, and total sales price during the reporting period, the revenue realization of each quarter of the reporting period, the revenue change trend of comparable companies/comparable businesses in the same industry during the reporting period, and the revenue change trend of the company in the same period in history (2021 and 2022). )。

(3) Please list the details of the top 10 customers of the capacity (security) management solution business, education products and management solution business during the reporting period, including the name of the customer, the time of contract signing, the scale of sales revenue during the reporting period, the scale of accounts receivable at the end of the reporting period, and the business transactions of previous years, and compare the relevant data in the past two years to explain whether there are new customers or customer withdrawals, and if so, please explain the reasons and reasonableness.

(4) The annual audit accountant is requested to elaborate on the selection of samples from the sales revenue records, check the selection criteria, the proportion of the selected quantity, the inspection results of the supporting documents such as sales contracts, invoices, receipts, acceptance reports, the standards, sampling proportions, and sampling results of the letter sampling, the sampling standards, sampling proportions, and interview results of on-site or telephone interviews, and the audit procedures for testing the company's back-end system by experts, the audit evidence obtained, and the audit conclusions formed, and express clear opinions on the authenticity of the company's income.

4. The annual report shows that the net cash flow generated by the company's operating activities was 58 million yuan, a year-on-year decrease of 40.61%.

(1) Please quantitatively analyze the reasons and reasonableness of the deterioration of the net cash flow generated by operating activities compared with 2022 based on the relationship between the cash flow received from the sale of goods and the provision of labor services and the cash flow from the purchase of goods and the payment of labor services in the current period and the corresponding balance sheet items and income statement items, the sales settlement policies and cycles, procurement settlement models and cycles of the company's various main businesses.

(2) Combined with the situation of companies in the same industry, explain whether the changes in the company's cash flow from operating activities are comparable.

5. The annual report shows that the closing book balance of accounts receivable provided for bad debts is 603 million yuan, and the proportion of bad debts is 74.11%, of which the closing book balance of accounts receivable of government customer portfolio is 87 million yuan, and the proportion of bad debts is 55.80%, the closing book balance of accounts receivable of state-owned enterprise customer portfolio is 25 million yuan, and the proportion of bad debts is 25.85%, and the closing book balance of accounts receivable of school customer portfolio is 10 million yuan, and the proportion of bad debts is 40.26% The closing book balance of accounts receivable from other customer portfolios was 480 million yuan, and the proportion of bad debts was 80.72%.

(1) Please distinguish the type of main business carried out in the previous period and the main company of the business implementation, and list the book balance, bad debt provision amount and book value of the accounts receivable from government customers and other customers aged more than three years.

(2) Please list the details of the top five customers with the middle and closing book balances of government customers receivable and other customers with an account age of more than three years, including the type of main business carried out in the previous period, the main company of business implementation, and the business implementation period, combined with the customer's credit status and customer repayment intention, etc., to explain the reasons for the long-term non-payment, the collection measures taken by the company, and whether the corresponding business activities in the previous period are true.

(3) For other customer accounts receivable with an account age of more than three years, please list the number and total amount of accounts receivable with a book balance of less than 500,000 yuan, 500,000 yuan to 1 million yuan, 1 million yuan to 5 million yuan, 5 million yuan to 10 million yuan, and more than 10 million yuan according to the customer's summary.

(4) Please verify one by one whether *ST Doushen has taken litigation and other collection measures to protect the company's rights for the receivables with bad debts aged for more than three years, if not, please explain the specific reasons and reasonableness, whether there is an untrue situation of income in the previous period, if the company judges that the relevant money can be recovered without taking reminder measures, please explain the basis and reasonableness of the judgment.

(5) Ask the annual accountant to explain the audit procedures for the authenticity of the accounts receivable, the audit evidence obtained, the audit conclusions formed, and if the letter is involved, explain the amount, quantity, proportion, amount, quantity, proportion of the reply, the non-conformity of the reply, and the alternative procedures implemented;

6. The annual report shows that the closing balance of interest receivable under other receivables of ST Doushen was 63 million yuan, the opening balance was 16 million yuan, the equity transfer receivable was 36 million yuan, and the opening balance was 105 million yuan.

(1) Please list the details of interest receivable, explain the reasons for the formation of each item, the name of the counterparty, the amount of capital borrowing, the term, and the interest, and explain the reasons and reasonableness of the company's capital lending in combination with the company's capital situation, the company's specific measures to protect the recovery of principal and interest, and whether the relevant impairment provisions are sufficient.

(2) Please explain the reasons why the equity transfer receivable has not been recovered and whether the relevant impairment provision is sufficient in combination with *ST Doushen's reply to the inquiry letter of the 2023 semi-annual report.

7. The annual report shows that the closing balance of *ST Doushen's prepaid accounts was 51 million yuan, of which more than 60% were prepaid for more than 1 year.

Please list the details of the top 10 suppliers with prepayment book balance of more than 1 year, including the name of the supplier, the background of the transaction, and the terms of the contract, and whether the supplier has a relationship with the company's (then) directors, supervisors and senior executives, more than 5% shareholders, (then) If the actual controller and its affiliates have an affiliated relationship or other relationships that may lead to skewed interests, whether the company's prepayment is based on the contract, if not, please explain the reasons and reasonableness of the company's prepayment without the prepayment clause in the contract, and whether the supplier has violated the contract and fails to settle within the time limit, and if so, please explain the reasons and reasonableness of the failure to settle in time. Ask the annual accountant to check and give an opinion.

8. According to the annual report, *ST Doushen issued a commodity with a closing book balance of 29 million yuan, and the cost of the project under construction was 230 million yuan.

(1) Please list the issued commodities, the cost of the project under construction, the inventory age, the provision for price decline or impairment.

(2) Please list the details of the issued goods, including but not limited to the name of the issued goods, the time of issuance, the method of issuance, the storage location and status, the customer to be signed, the customer's signing procedure, the reasons for not signing for the goods at the end of the reporting period, and the carry-over situation after the period, combined with the above reply, explain the reasons and reasonableness of the company's large-scale provision for price decline during the reporting period, and whether the issued goods are real.

(3) Please explain the content of the cost accounting of the project under construction, the basis for confirming the cost of the project under construction, the conditions for carrying forward the operating cost of the project under construction, list the name of the top 10 projects with the book balance at the end of the period, the contract amount, the construction time range, the construction start time, the completion progress, and the cumulative revenue and cumulative carry-forward cost of the aforementioned projects in 2023, and explain whether there is a situation where the relevant operating income has been recognized but the operating cost has not been carried forward.

(4) The annual audit accountant shall explain the audit procedures, audit evidence obtained, and audit conclusions formed on the authenticity of the cost of the issued commodities and projects under construction, and explain the scope of inventory included in the monitoring and the monitoring situation, including but not limited to the monitoring personnel, monitoring time, inventory type and proportion, and whether the inventory accounts are consistent, and express opinions on the authenticity of the inventory.

9. According to the annual report, the closing balance of ST Doushen's other equity instruments was 82 million yuan, and the opening balance was 80 million yuan, and there were no gains or losses included in other comprehensive income in the current period, and the cumulative gains and losses included in other comprehensive income at the end of the period were 27 million yuan and 96 million yuan respectively.

Please explain the accounting treatment of the Company's purchase and holding of other equity instruments, the calculation process and accuracy of other comprehensive income recognized, and the reasons for the change in the balance of other equity instruments at the end of the reporting period compared with the beginning of the period.

10. The annual report shows that the closing book balance of ST Doushen's long-term receivables is 42 million yuan, all of which are overdue, and the company makes bad debt provisions according to the portfolio, and the bad debt provision ratio is 64.41%. According to the company's long-term receivables corresponding to the previous business development, the business types include compensation payable and product sales.

(1) Please explain the accounting content of the company's long-term receivables, whether the listing of the funds formed by product sales as long-term receivables complies with the provisions of the "Accounting Standards for Business Enterprises", and whether the company has insufficient provision for bad debts.

(2) Please explain the specific circumstances of the compensation to be paid for the PPP project for the establishment and construction of the PPP project in Yanling County with the basic balance of basic education improvement and compulsory education development signed by the company and the customer, including the name of the customer, the accounting treatment at the time of signing the compensation agreement, the reason for the payment of compensation, the construction of the PPP project, the reason for the overdue payment of the compensation, and whether the relevant impairment provision is sufficient.

11. According to the annual report, the closing balance of ST Doushen's other non-current financial assets - equity instruments investment was 109 million yuan, and the opening balance was 136 million yuan.

(1) Please explain the investment in equity instruments one by one, including the product name, counterparty, initial investment cost, purchase time, product term, relevant accounting treatment during the purchase and holding period, investment income calculation process and recognition basis.

(2) *ST Doushen's reply to the inquiry letter of the 2023 semi-annual report shows that the main rights and obligations of equity instrument investment are "when the product term is reached, the company can exercise the repurchase right if the conditions in the agreement are not completed", please explain whether there is a situation where the product has expired but has not been withdrawn in combination with the conditions agreed in the aforementioned agreement, the time of product purchase and the product period, and if so, please explain the reasons and reasonableness.

12. According to the annual report, the closing book balance of intangible assets formed by ST Doushen's self-developed software was 519 million yuan, and the cumulative impairment provision was 300 million yuan, of which 50 million yuan was added in the current period.

(1) Please list the details of self-developed software with a book value greater than 0 as of the end of the reporting period, including the name of the software, the time of entry, the main business of the company for which the product is used, the original book value, the amortization method and expected useful life, and the amortization and impairment amounts for each year from 2021 to 2023.

(2) Please list the revenue scale of the company's main business using self-developed software and the scale of cash flow directly brought by the use of self-developed software from 2021 to 2023, and quantitatively analyze the timeliness and adequacy of the company's impairment provision by comparing the data of the above years and combining the calculation process and results of the recoverable amount of intangible assets. Ask the annual accountant to check and give an opinion.

13. The annual report shows that the closing book balance of ST Doushen's project receivables is 68 million yuan, the impairment provision has been made for 09 million yuan, and the opening book balance is 66 million yuan.

Please list the details of the project funds receivable, including the name of the debtor, the amount of the receivables, the business background of the previous period, the account age, the construction content of the project agreed in the contract, the terms of payment and other terms, the progress of each year after the start of construction of the project, the calculation process and basis of the impairment provision at the end of the reporting period, and explain the authenticity of the project funds receivable and whether the relevant impairment provision is sufficient. Ask the annual accountant to check and give an opinion.

14. *ST Doushen was subject to a delisting risk alert due to the negative audited net assets at the end of the period in 2022, and the company's stock trading was superimposed with other risk warnings due to the negative net profit before and after deducting non-recurring gains and losses for three consecutive fiscal years from 2020 to 2022 and the 2022 annual audit report showed that there was significant uncertainty in the company's ability to continue operations. On April 24, 2024, *ST Doushen submitted an application to cancel the company's stock trading financial delisting risk alert and other risk alerts.

(1) Please reply to the above questions to verify whether the company meets the conditions for withdrawing the delisting risk alert and other risk alerts.

(2) Please check whether the company has any circumstances in which the stock trading as stipulated in Articles 10.3.1 and 9.4 of the Rules Governing the Listing of Stocks on the ChiNext Board of the Shenzhen Stock Exchange (revised in August 2023) (hereinafter referred to as the "Listing Rules") should be subject to delisting risk alert or other risk warnings, and whether there are any circumstances in which the listing of shares specified in Article 10.3.10 of the Listing Rules should be terminated.

(3) Ask the annual audit accountant to check and express opinions.

Read and create a comprehensive financial and economic system

Review: Sun Shijian