The performance forecast has been greatly reduced, and there may be hidden dangers at the capital level?
"China Science and Technology Investment" Long Min Yixin
On April 25, the Inner Mongolia Securities Regulatory Bureau announced the announcement of the investment in Elion Clean Energy (600277. SH) and its relevant responsible persons, due to the inaccurate disclosure of the performance forecast, Elion Clean Energy and the company's chairman and other three senior executives were warned. According to the disclosure of the Inner Mongolia Securities Regulatory Bureau, in the 2023 annual performance forecast disclosed by Elion Clean Energy on January 31, 2024, it is expected that the net profit attributable to shareholders of listed companies will be profitable, but then in the performance forecast correction announcement issued on April 24 of the same year, the company's performance has reversed sharply, turning from profit to huge loss.
After investigation, it was found that the main reason for this change was that the company made a provision for the credit impairment of monetary funds for the deposits deposited in Elion Group Finance Company (hereinafter referred to as "Elion Finance Company"), and supplemented the asset impairment loss for the coal resources held. The Inner Mongolia Securities Regulatory Bureau pointed out that the above-mentioned behavior of Elion Clean Energy violated the relevant provisions of the "Administrative Measures for Information Disclosure of Listed Companies", and Wang Ruifeng, chairman of Elion Clean Energy, Hou Jinghui, general manager, and Zhang Yanmei, chief financial officer, failed to perform their duty of diligence and responsibility, and bore the main responsibility for the above problems. The Inner Mongolia Securities Regulatory Bureau decided to take administrative supervision measures of issuing warning letters to Elion Clean Energy, Wang Ruifeng, Hou Jinghui and Zhang Yanmei, and recorded them in the integrity file database of the securities and futures market.
In addition, the Shanghai Stock Exchange issued an inquiry letter to Elion Clean Energy on April 23, requiring the company to explain whether the large amount of funds deposited in Elion Finance Company is suspected of transferring benefits to related parties such as controlling shareholders, whether it constitutes the occupation of non-operating funds, and whether the disclosure of information such as the company's monetary funds in the early stage is true and accurate.
The difference between the performance forecast is hundreds of millions of yuan
According to the regulatory measures announced on the website of the Inner Mongolia Securities Regulatory Bureau on the 25th, Elion Clean Energy disclosed the 2023 annual performance forecast on January 31, 2024, and it is expected that the net profit attributable to shareholders of listed companies in 2023 (hereinafter referred to as "net profit") will be a profit of 36.45 million yuan to 52.86 million yuan, a decrease of 694 million yuan to 678 million yuan compared with the same period last year, a year-on-year decrease of 95.01% to 92.77%. The net profit after deducting non-recurring gains and losses (hereinafter referred to as non-net profit) was -112 million yuan to -96 million yuan, a year-on-year decrease of 114.76% to 112.60%.
On April 24, Elion Clean Energy issued a correction announcement for the 2023 annual performance forecast, and it is expected that the net profit attributable to shareholders of listed companies in 2023 will be -487 million yuan to -596 million yuan, a year-on-year decrease of 166.69% to 181.51%. At the same time, it is expected to deduct non-net profit of -620 million yuan to -728 million yuan, a year-on-year decrease of 181.40% to 195.62%. Two of the two major financial indicators in the earnings forecast have been significantly reduced.
As for the reasons for the correction of the performance forecast, Elion Clean Energy announced that: 1. The company continues to assess the risks of Elion Group's financial company, and plans to steadily reduce the company's deposit scale in the financial company. After careful prediction and risk assessment, the company calculated on the basis of the discounted amount of cash flow, the company made a provision for the credit impairment of monetary funds for the deposits of Yili Finance Company of about 420 million yuan; 2. Affected by the external market environment, the coal market price declined, and the impairment of coal resources held by the company exceeded the original estimated amount, and the asset impairment loss of about 27 million yuan needed to be made up; 3. The net profit of the associated enterprises decreased, and the net profit affected by the equity method was about 82 million yuan. Among them, due to the provision for loan losses of Yili Finance Company's "loan-granted" assets, the net profit was reduced, resulting in an investment loss of about 46 million yuan according to the equity method of accounting.
At the same time, the Shanghai Stock Exchange issued an inquiry letter on the evening of April 23, requiring Elion Clean Energy to explain whether the company's large amount of funds deposited in Elion Finance Company is suspected of transferring benefits to related parties such as controlling shareholders, whether it constitutes the occupation of non-operating funds, and whether the disclosure of information such as the company's monetary funds in the early stage is true and accurate. Not only that, Elion Clean Energy was also required to further explain the specific reasons and basis for the impairment of deposits and the reduction of relevant investment income, whether the relevant impairment provision and profit and loss adjustment are complete and sufficient, and whether there is any impairment accrued in previous years without impairment.
It is worth noting that in the early stage, the Shanghai Stock Exchange has publicly reprimanded the company and the relevant responsible persons due to the fact that the huge amount of funds deposited by Elion Finance Company repeatedly exceeded the limit and the funds were occupied during the period.
Bai Wenxi, vice chairman of the China Enterprise Capital Alliance, told China Science and Technology Investment: "It is common for listed companies to have capital exchanges with related parties, but if there are no reasonable and legal reasons and procedures, there may be risks of benefit transfer and non-operating capital occupation." In the process of capital exchanges between listed companies and related parties, the main risk points that need to be paid attention to include, but are not limited to, the necessity, reasonableness and fairness of the transaction, whether there is any damage to the interests of the company or other shareholders, second, whether the decision-making procedures of the transaction are legal and compliant, whether there is a lack of internal control and supervision mechanism, and third, whether there is a situation where related parties require the listed company to bear costs, expenses or other burdens in an unreasonable manner. ”
The equity of major shareholders is waiting to be frozen
Elion's main products include coal, polyvinyl chloride (PVC), caustic soda, ethylene glycol, methanol, compound fertilizer, etc., which are widely used in chemical, light industry, building materials, agriculture, medicine and other industries.
On April 13, 2024, Elion Clean Energy issued an announcement on the freezing of the controlling shareholder's shares by judicial queue, which showed that the controlling shareholder Elion Resources Group Co., Ltd. (hereinafter referred to as "Elion Group") held 1.219 billion shares of the company's unrestricted tradable shares, accounting for 34.24% of the company's total share capital. Elion Group has 1.219 billion shares frozen by the waitlist, and the cumulative number of shares frozen by the waitlist is 1.219 billion shares, accounting for 100% of the company's shares held by it. At the same time, the announcement also shows that Elion Group has about 380 million yuan of overdue debts in the past year, and Elion Group is negotiating with relevant creditors for debt restructuring.
In addition, Elion Finance Company, a related party of Elion Clean Energy, has also been listed as a dishonest person subject to execution by the court many times and restricted from high consumption. According to the company's investigation information, Elion Finance Company has been involved in more than 700 judicial litigation cases, most of which are disputes over the right of recourse for bills, disputes over bills, and disputes over the right to claim payment for bills.
It is worth noting that, according to the information disclosed by the Shanghai Bills Exchange, Elion Clean Energy's commercial acceptance bills are overdue. As of March 31, 2024, the overdue balance of its bills was 719 million yuan, and the cumulative overdue amount was 882 million yuan.
Yuan Shuai, deputy secretary-general of the Zhongguancun Internet of Things Industry Alliance and one of the founding founders of the Xinzhipai New Quality Productivity Lounge, told the reporter of "China Science and Technology Investment": "The financial status and liquidity risk of financial companies directly affect the safety and liquidity of listed companies' funds, and then affect the company's operation and profitability. If the finance company has serious financial problems or liquidity risks, the listed company may face the risk that the funds cannot be recovered in time or cannot obtain the necessary financial support from the finance company, which will have a negative impact on the company's operations. ”
In response to the change of Elion Clean Energy's performance forecast and capital flow, the reporter sent a letter to Elion Clean Energy, but as of press time, no reply has been received.