Founder Motor's performance or "change face".
On the evening of April 28, Founder Motor announced that with the in-depth development of the company's annual audit work, the company has revised the 2023 annual performance forecast based on the principle of prudence, and it is expected that the net profit after deducting non-recurring profits and losses in 2023 will change from profit to loss.
As of the close of trading on April 26, Founder Motor's share price was 5.32 yuan per share, with a total market value of about 2.65 billion yuan.
Source: Straight Flush iFinD
The maximum pre-loss of non-net profit is 10 million yuan
Founder Motor said that considering the quality claims that have occurred in the company in recent years, based on the principle of prudence, combined with factors such as sales scale and product quality, the quality claims for automotive application products will be calculated according to a certain proportion of sales revenue, reducing the net profit attributable to the parent company by about 8.6 million yuan.
In addition, the net profit attributable to the parent company was reduced by approximately RMB5.3 million due to the write-off and reduction of the originally recognized deferred income tax assets, the provision for inventory decline reduced the net profit attributable to the parent company by approximately RMB5 million, and the provision for goodwill impairment reduced the net profit attributable to the parent company by approximately RMB1.3 million.
Founder Motor said that the above-mentioned profit adjustment factors have reduced the company's net profit after deducting non-recurring gains and losses, so after the revision of this performance forecast, the net profit is still within the range of the last performance forecast, but the net profit after deducting non-recurring profits and losses has changed from profit to loss.
It is understood that before this amendment, Founder Motor is expected to achieve a non-net profit of 20 million yuan to 30 million yuan in 2023. At that time, the company said that due to the improvement of the company's sales of drive motor product structure, the increase in shipments of flat wire motors and high-voltage motors, and the increase in the proportion of sales of intelligent controller products, the company's comprehensive operating gross profit margin increased by 4% year-on-year, and the non-net profit was turned into a profit.
However, after this revision, Founder Motor expects to deduct a non-net profit loss of less than 10 million yuan in 2023.
Source: Company announcement
Founder Motor seems to have fallen into the dilemma of "increasing revenue but not increasing profits". From 2018 to 2022, Founder Motor's operating income maintained a growth trend, reaching 1.364 billion yuan, 1.115 billion yuan, 1.143 billion yuan, 1.891 billion yuan, and 2.331 billion yuan respectively, but at the same time, the company deducted non-net profit for 5 consecutive years, with a cumulative loss of about 1.6 billion yuan.
Source: China Securities Intelligent Financial News
"Falsification" of annual reports for 5 consecutive years
According to the data, Founder Motor's main business is the R&D, production and sales of sewing machine application products, automotive application products (including new energy vehicle drive motors, supporting motors and powertrain control products) and intelligent controllers.
In February this year, Founder Motor was ordered by the Zhejiang Securities Regulatory Bureau to make corrections, given a warning, and fined 4 million yuan due to false records in the annual reports for five consecutive years from 2018 to 2022, and a large proportion of false records in individual years.
In addition, the Zhejiang Securities Regulatory Bureau gave a warning and imposed a fine of 1.3 million yuan on Mu Jian, then director, secretary of the board of directors, chief financial officer and deputy general manager of Fang Zheng Motor, Niu Mingkui, then chairman and general manager of Fang Zheng Motor, and Gu Yifeng, then chairman of Fang Zheng Motor, and a fine of 700,000 yuan.
According to the investigation of the Zhejiang Securities Regulatory Bureau, Founder Motor has the following illegal facts: First, the accounting estimate of the "three guarantees" is unreasonable. Since 2015, Shanghai Haineng, a wholly-owned subsidiary of Founder Motor, has sold products to Guangxi Yuchai directly or through Guangxi Sanli, and provided product warranty to Guangxi Yuchai. According to Guangxi Yuchai's claim, Shanghai Haineng accrued or confirmed the "three guarantees" of product quality. Since the end of 2018, there has been a significant increase in product quality claims initiated by Guangxi Yuchai, but the company has not made appropriate accounting estimates and accounting treatments.
The second is to inappropriately expand the asset group related to Shanghai Haineng's goodwill. In 2015, Founder Motor acquired 100% equity of Shanghai Haineng, forming a goodwill of 829 million yuan. Founder Vietnam was originally a wholly-owned subsidiary of Founder Motor, and in July 2019, Founder Motor transferred 100% equity interest in Founder Vietnam to Shanghai Haineng. Since the end of 2019, the Company has improperly included Vietnam Founder in the goodwill-related asset group of Shanghai Haineng for goodwill impairment testing, resulting in an inaccurate amount of goodwill impairment provision recognized.
Based on the above two items, from 2018 to 2021, the total profit of Founder Motor was inflated by 78.4323 million yuan, 5.9645 million yuan, 17.925 million yuan, and 2.3137 million yuan respectively, and in 2022, it was inflated by 86.9762 million yuan, accounting for 18.38%, 31.96%, 2.76%, 27.78%, and 26.03% of the absolute value of the total disclosed profit in the current period, respectively.
There are many violations of the letter
In addition, the "Announcement on the Company and Related Personnel Receiving the Warning Letter from the Zhejiang Securities Regulatory Bureau" disclosed by the company on February 5, 2024 shows that Founder Motor also has the problem of undisclosed non-operating capital occupation and undisclosed related party transactions.
From 2017 to 2020, Zhang Min, the company's former actual controller, occupied 20 million yuan, 133.92 million yuan, 32.5 million yuan, and 12.9 million yuan of the company's funds respectively;From 2018 to 2022, Niu Mingkui, chairman of the company, and some R&D team staff occupied 567,400 yuan, 7.0381 million yuan, 2.1439 million yuan, 7.0652 million yuan, and 331,800 yuan of the company's funds in the name of R&D fees and service fees through related parties Shanghai Jujie and Shanghai Zhengyuan. Founder Motor did not disclose the occupation and return of the above-mentioned non-operating funds.
In addition, from 2017 to 2019, Founder Motor did not disclose the related party transactions of 11.5 million yuan, 43.572 million yuan and 13.05 million yuan with Shanghai Jujie, and from 2019 to 2021, it did not disclose the related party transactions of 1.05 million yuan, 5.25 million yuan and 2.1 million yuan with Shanghai Zhengyuan.
Zhang Min, then the actual controller, chairman and general manager of Founder Motor, Gu Yifeng, then chairman, Feng Rong, then chairman, Niu Mingkui, chairman, general manager and then deputy general manager, Mu Jian, chief financial officer and secretary of the board of directors, and Xu Huayue, then chief financial officer, were responsible for the above-mentioned information disclosure violations and violations.
The Zhejiang Securities Regulatory Bureau decided to take administrative supervision measures to order corrections to Zhengtong, Zhang Min, and Niu Mingkui, and to take supervision and management measures of issuing warning letters to Zhang Min, Niu Mingkui, Mu Jian, Gu Yifeng, Feng Rong, and Xu Huayue, respectively, and recorded them in the integrity file of the securities and futures market.
Reviewer: Cheng Zhu Editor: Zhang Jing Proofreader: Zhang Diange Producer: Yu Zhe Signed: Fei Yangsheng