Securities code: 600654 securities abbreviation: St Zhong’an Announcement No.: 2022-014 bond Code: 136821 bond abbreviation: 16 Zhong’an consumer
Announcement of annual performance loss in 2021
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Important content tips:
China Security Co.Ltd(600654) (hereinafter referred to as “the company”) expects the net profit attributable to the shareholders of the listed company in 2021 to be – 140 million yuan to – 1 million yuan.
The company estimates that the net profit attributable to shareholders of listed companies after deducting non recurring profits and losses in 2021 will be – 990 million yuan to – 590 million yuan.
Due to the unexpected business income, the impairment of some assets, high financial expenses and other non recurring profits and losses, the annual performance loss in 2021 was comprehensively caused.
According to the preliminary calculation of the company’s financial department, the owner’s equity attributable to the shareholders of the listed company in 2021 is expected to be – 1310 million yuan to – 910 million yuan. According to the relevant provisions of article 9.3.2 of the stock listing rules of Shanghai Stock Exchange, if the audited ending net assets of the company in 2021 are negative, There is a risk that the company will be warned of delisting risk due to negative net assets at the end of the period.
If the court accepts the applicant’s application for company reorganization according to law, the company’s shares will be subject to delisting risk warning.
1、 Performance forecast of the current period
(I) performance forecast period
From January 1, 2021 to December 31, 2021.
(II) performance forecast
1. According to the preliminary calculation of the company’s financial department, it is expected to realize an operating revenue of about 260 million yuan in 2021. It is expected that there will be a loss in the performance of 2021, and the net profit attributable to the shareholders of the listed company will be – 140 million yuan to – 100 million yuan.
2. The company estimates that the net profit attributable to shareholders of listed companies after deducting non recurring profits and losses in 2021 will be – 990 million yuan to – 590 million yuan.
3. The company estimates that the owner’s equity attributable to shareholders of Listed Companies in 2021 will be – 1310 million yuan to – 910 million yuan.
(III) the performance forecast has not been audited by certified public accountants.
2、 Performance in the same period of last year
(I) net profit attributable to shareholders of the listed company: – 182.3351 million yuan
(II) net profit attributable to shareholders of listed company after deducting non recurring profit and loss: – 392984300 yuan (III) owner’s equity attributable to shareholders of listed company: 92.612 million yuan
(IV) earnings per share: – 0.14 yuan
3、 Main reasons for performance loss in advance in the current period
(I) in 2021, the overall situation of the epidemic situation in China was stable, but there were local aggregated epidemics in some areas. In addition, the spread of the global covid-19 epidemic has not been effectively curbed, and the economic activities of most countries and regions have not been carried out normally and orderly. The stability of the company’s business is affected by the global market environment. Due to the continuous impact of the epidemic outside China, it has a great adverse impact on the development and implementation of the company’s business, resulting in the company’s profitability falling short of expectations, and the operating revenue decreased by about 15% year-on-year.
(II) according to the actual operating conditions of each subsidiary and the changes of operating policies, market and environment, in accordance with the provisions of the accounting standards for business enterprises and the company’s accounting policies and the principle of prudence, the company conducted a preliminary impairment test on all assets of the company, and accrued impairment on some assets, resulting in the reduction of profits in the current period. (III) the scale of the company’s “16 Zhong An Xiao” bonds and other stock debts is high, and there is default, the financial cost increases, and the overall financial expenses are high, resulting in the reduction of profits in the current period.
(IV) the non recurring profit and loss of the company in the current period has a great impact on the net profit, mainly including: (1) the estimated liabilities accrued for the liability dispute of Securities Misrepresentation; (2) Default interest and liquidated damages accrued due to debt default; (3) Reversal of impairment reserves of receivables that have been tested for impairment; (4) Government subsidies received.
The above data are the preliminary calculation data of the company’s financial department, and the final amount will be subject to the audited financial report.
4、 Risk tips
(I) uncertainty of the impact of disputes over Securities Misrepresentation liability on net profit
On May 30, 2019, the company officially received the decision on administrative punishment from the CSRC. As of January 6, 2022, the company has received 3581 civil litigation response notices and relevant legal documents from Shanghai financial court and Shanghai Higher People’s court, including 307 cases that have not been adjudicated, and the total amount of litigation claims involved is RMB 281 million after being changed and adjusted by the original request; A total of 3197 cases have been adjudicated in the first instance, and the total amount of claims involved is 432 million yuan after the original request for change and adjustment; A total of 77 cases have been adjudicated in the second instance, involving a total amount of litigation claims of 20 million yuan. (see announcement: 2022-002 for details).
However, due to the continuous increase of some Securities Misrepresentation liability disputes and the completion of some relevant judicial procedures, the company is unable to judge the accurate value of the impact on the company’s current or future profits, and the estimated amount of liabilities may change, resulting in uncertainty in the estimated amount of non recurring profits and losses on net profits in the reporting period.
(II) impact of asset impairment
The company will accrue impairment in accordance with the accounting standards for business enterprises, the measures for the administration of major asset restructuring and other laws and regulations and based on the principle of prudence. At present, the relevant impairment test is still in progress, and the specific amount of impairment is uncertain. The final amount of impairment will be determined after audit and evaluation by professional audit institutions and evaluation institutions hired by the company.
(III) other risk tips
1. The company 16 bonds failed to repay the principal and interest on schedule
As of December 31, 2019, the 1.1 billion corporate bonds issued by the company in 2016 have expired but have not been cashed. The debt settlement agreement signed by the company and the bondholders totals 556506000 yuan (see announcement: 2020-002 for details). As of December 30, 2020, the total bond principal of the new debt settlement agreement signed by the company and bondholders in 2020 was 311004000.00 yuan (see announcement: 2020-077 for details). At present, the company is still actively communicating and negotiating with bondholders, trustees and other relevant parties on debt reconciliation, bond maturity disposal plan, including cashing plan. If there is any subsequent progress, the company will timely fulfill the obligation of information disclosure.
If the company fails to repay the principal and interest on schedule, the company may face the risks of paying relevant penalty interest and litigation. In addition, the assets that provide guarantee for bonds may also have the risk of negative impact on the company due to the creditor’s claim for security interests. The company invites investors to invest rationally and pay attention to investment risks. 2. The proportion of equity pledge of the company’s controlling shareholders is high and is waiting to be frozen
Mr. Tu Guoshen, the actual controller of the company, holds 527977838 shares of the company through Shenzhen Zhongheng Huizhi Investment Co., Ltd. (hereinafter referred to as “Zhongheng Huizhi”), accounting for 41.15% of the total share capital of the company, including 479098000 Pledged Shares, accounting for 90.74% of the company’s shares. Due to its own litigation matters, its shares in the company have been frozen by the judiciary, with a total of 527977838 frozen shares, accounting for 100.00% of its shares and 41.15% of the total share capital of the company. The aforesaid pledge and freezing have not affected the company’s control right, the company’s production and operation, or the distribution of the company’s equity does not meet the listing conditions. However, in view of the high pledge proportion of the company’s shares held by Zhongheng Huizhi and the early warning closing line has been touched, the company’s shares held by Zhongheng Huizhi still have the risk of being frozen or disposed of due to other litigation or pre litigation preservation. The company invites investors to invest rationally and pay attention to investment risks.
3. Some shares held by the controlling shareholders of the company will be auctioned by the judiciary
The company received the notice of Zhongheng Huizhi on January 26, 2022, and received the auction notice of Shenzhen intermediate people’s Court of Guangdong Province [(2020) Yue 03 Zhi No. 6417]. The 38355787 restricted circulating shares of the company held by Zhongheng Huizhi will be auctioned online on February 28, 2022 on the judicial auction platform of Shenzhen intermediate people’s Court of Guangdong Province on jd.com, These shares account for 2.99% of the total share capital of the company (see announcement: 2022-017 for details). At present, the above judicial auction matters are still in the publicity stage, and the follow-up will involve auction, payment, equity change and transfer, and the auction results are still uncertain. If the judicial auction is successful, it will not affect the actual control of the company and the production and operation of the company.
5、 Other explanatory matters
(I) the above forecast data are only preliminary accounting data. The specific and accurate financial data shall be subject to the audited 2021 annual report officially disclosed by the company. Please pay attention to the investment risks.
(II) there is a risk that the company’s shares may be subject to delisting risk warning
According to the preliminary calculation of the company’s financial department, the owner’s equity attributable to the shareholders of the listed company in 2021 is expected to be – 1310 million yuan to – 910 million yuan. According to the relevant provisions of article 9.3.2 of the stock listing rules of Shanghai Stock Exchange, if the audited ending net assets of the company in 2021 are negative, There is a risk that the company will be warned of delisting risk due to negative net assets at the end of the period. The scheduled disclosure time of the company’s 2021 annual report is April 30, 2022. The audit of the company’s 2021 annual report is in progress. The specific financial data shall be subject to the audited 2021 annual report officially disclosed by the company.
On December 23, 2021, the company received the reorganization application notice from the creditor Shenzhen Wande private equity securities investment fund management Co., Ltd. (formerly Shenzhen Wande Investment Consulting Co., Ltd., hereinafter referred to as the “applicant”), which claimed that the company was unable to pay off its due debts and obviously lacked solvency, It submitted to Wuhan intermediate people’s Court of Hubei Province for bankruptcy reorganization of the company. According to the relevant provisions of article 9.4.1 of the Listing Rules of Shanghai Stock Exchange, if the court accepts the applicant’s application for company reorganization according to law, the company’s shares will be subject to delisting risk warning. The company invites investors to invest rationally and pay attention to investment risks.
(III) the company has the risk of being declared bankrupt due to the failure of reorganization, resulting in the termination of listing
If the court formally accepts the above reorganization application, the company will be at risk of being declared bankrupt due to the failure of reorganization. If the company is declared bankrupt, the company will be subject to bankruptcy liquidation. According to article 9.4.13 of the listing rules, the company’s shares will face the risk of delisting. The company invites investors to invest rationally and pay attention to investment risks.
It is hereby announced.
China Security Co.Ltd(600654) board of directors
January 27, 2002
