Securities code: 002024 securities abbreviation: Suning.Com Co.Ltd(002024) Announcement No.: 2022-001 Suning.Com Co.Ltd(002024)
Suggestive announcement on the estimated provision for impairment and investment losses
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
1、 Summary of the expected provision for impairment and investment losses
Combined with the changes of the external environment and the company’s own operation, the company judges that the credit risk of some financial assets has increased significantly, and credit impairment has occurred, and some long-term assets show signs of impairment. In order to fairly reflect the company’s financial position as of December 31, 2021 and the operating results of 2021, the company has evaluated the losses of various assets requiring credit impairment losses and asset impairment reserves as of December 31, 2021 in accordance with the relevant provisions of the accounting standards for business enterprises and the company’s accounting policies. At the same time, the company recognizes the investment loss of some associated enterprises in the current period according to the net loss share of the investee that should be shared. The preliminary results are as follows:
Unit: 100 million yuan
Impairment items affect the amount of net profit attributable to shareholders of listed companies
1、 Credit impairment loss
Bad debt provision for accounts receivable (note) 15
2、 Provision for asset impairment
Provision for impairment of goodwill and other long-term assets 47.75
Impairment of long-term equity investment in associates 63
3、 Long term equity investment losses of associates 129
Total 254.75
Note: the bad debt provision of accounts receivable is about 443 million yuan, which has been reflected in the third quarter report.
The company has hired a professional evaluation institution to evaluate the relevant assets with signs of impairment. Up to now, the evaluation has not been completed. The above estimated provision for impairment and investment losses have not been audited by an accounting firm. The results and related financial impact of the above matters will be subject to the audited 2021 annual report officially disclosed by the company.
2、 Specific description of the expected provision for impairment and investment loss
(I) provision for bad debts of accounts receivable
As of December 31, 2021, customers with significantly increased credit risk and credit impairment are mainly Suning convenience supermarket (Nanjing) Co., Ltd., its subsidiaries and associated companies established with customers. Referring to the experience of historical credit loss, combined with the current situation and the prediction of future economic conditions, the company evaluated the expected recoverable cash flow under different scenarios, and accrued the expected credit loss of about RMB 1.966 billion according to the difference between it and the cash flow receivable under the contract, which had an impact on the net profit attributable to the shareholders of the listed company of about RMB 1.5 billion. (II) provision for impairment of goodwill and intangible assets
1. During the reporting period, the company continued to face the problem of insufficient liquidity, serious shortage of commodity inventory and sharp compression of sales expenses, resulting in a sharp decline in the company’s sales revenue and a significant loss in operating performance. The company compares the book value of the stores to which some long-term assets belong as the asset group with its recoverable amount, and withdraws the impairment provision for the difference between the recoverable amount and the book value of about 2.65 billion yuan, which has an impact on the net profit attributable to the shareholders of the listed company of about 2 billion yuan.
2. During the reporting period, the company accelerated the adjustment of loss making business and stopped the operation of daily express logistics business in the loss making business segment. The company compared the book value of daily express business belonging to relevant trademarks, domain names and other intangible assets with its recoverable amount, and made an impairment provision of about 1.3 billion yuan for the difference between the recoverable amount and the book value, Compare the book value of the assets or asset group combination (including goodwill) related to the daily express logistics business with its recoverable amount, and withdraw the goodwill impairment provision of about 800 million yuan for the difference between the recoverable amount and the book value, which has an impact on the net profit attributable to the shareholders of the listed company of about 1.775 billion yuan.
Suning logistics will give full play to its comparative advantages and pay attention to the improvement of profitability in the future. For example, relying on the storage operation and management ability accumulated for many years, Suning logistics will export storage agent operation services; Continue to cultivate the full link supply chain logistics business of household appliances, home furnishings, building materials and other major categories; Relying on the high-quality service capability of Suning express, it provides distribution services for high-end small commodities such as alcohol and 3C.
3. During the reporting period, Carrefour China’s sales revenue growth failed to meet expectations due to the impact of the epidemic and market competition in the retail environment. The company compared the book value of Carrefour’s business-related assets or asset group portfolio (including goodwill) with its recoverable amount, and made a provision for goodwill impairment of about 1 billion yuan based on the difference between the recoverable amount and the book value, The impact on the net profit attributable to shareholders of listed companies is about 1 billion yuan.
In the future, Carrefour China will give full play to its advantages in commodity supply chain, customers and services, actively expand its 020 business by actively expanding its member stores, creating new store formats, continuously cultivating its hypermarket business, expanding its B2B business, and taking advantage of its localization advantages.
(III) long term equity investment losses of associated enterprises
1. According to the share of net loss that should be shared by the associated company Shanghai Xingtu Financial Services Group Co., Ltd. (hereinafter referred to as “financial services company”), the company confirms that the investment loss to financial services company in the current period is about 3.5 billion yuan, and the impact on the net profit attributable to the shareholders of the listed company is about 2.6 billion yuan.
2. At the end of the reporting period, the company learned that there were large amount of accounts receivable in the associated company established with customers. The company analyzed and evaluated its recoverability, considered that there were obvious signs of impairment, and made provision for bad debts of large amount of accounts receivable in the book of the associated company. According to the share of the net loss of the associated company that should be shared by the company, the investment loss to the associated company in the current period is about 10.3 billion yuan, and the impact on the net profit attributable to the shareholders of the listed company is about 10.3 billion yuan.
(IV) impairment of long-term equity investment of associated enterprises
During the reporting period, the Internet financial services industry policies of the company’s associated enterprise financial services company were successively issued and improved, and the industry as a whole was in the adjustment cycle. Financial services company is actively responding to external changes and is committed to adjusting business structure and increasing technology enabled business. However, considering that the overall business adjustment still needs time, it is expected that the listing plan of financial services company needs to be redefined.
The company compares the book value of the business of the financial services company as an asset group with its recoverable amount. For the difference between the recoverable amount that the company should enjoy and the book value of the long-term equity investment of the financial services company recognized by the company according to the equity method, the impairment provision for long-term equity investment is about 8.2 billion yuan, The impact on the net profit attributable to shareholders of listed companies is about 6.3 billion yuan.
3、 The impact of impairment provision and investment loss on the company is expected this time
It is estimated that the provision for impairment and investment losses will reduce the net profit attributable to the shareholders of the listed company by 25.475 billion yuan in 2021 and the owner’s equity attributable to the shareholders of the listed company by 25.475 billion yuan. The above items are non cash items and will not affect the cash flow of the company in 2021.
The estimated provision for impairment and investment loss of the company has not been audited by an accounting firm. The results and related financial impact of the above matters will be subject to the audited annual report of 2021 officially disclosed by the company.
4、 In order to ensure the fair information disclosure of the company and effectively safeguard the interests of investors, the company will timely perform the obligation of information disclosure in strict accordance with relevant regulations. The relevant information of the company shall be subject to the announcement published on the designated information disclosure media. Please pay attention to the announcement of the company and pay attention to the investment risk.
It is hereby announced.
Suning.Com Co.Ltd(002024) board of directors January 29, 2022
