Securities code: 002058 securities abbreviation: Shanghai Welltech Automation Co.Ltd(002058) Announcement No.: 2022-003 Shanghai Welltech Automation Co.Ltd(002058)
Announcement on the reply to the letter of concern of Shenzhen Stock Exchange
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.
Shanghai Welltech Automation Co.Ltd(002058) (hereinafter referred to as “the company”) received the attention letter on Shanghai Welltech Automation Co.Ltd(002058) issued by the second Department of management of listed companies of Shenzhen Stock Exchange on January 26, 2022 (company Department attention letter [2022] No. 45) (hereinafter referred to as “the attention letter”), and the company timely organized relevant departments and the company’s audit institutions to seriously discuss and analyze the issues raised in the attention letter, The answers to the questions in the letter of concern are as follows:
Question 1. According to the performance forecast, your company’s operating income after deduction is 140 million yuan to 170 million yuan; From January to September 2021, your company realized an operating income of 78.5249 million yuan. Since Ziyan machinery completed the industrial and commercial change registration on October 28, 2021, the operating income after deduction in the fourth quarter was 61.4751 million yuan to 91.4751 million yuan. Please your company:
(1) Explain whether the specific content and amount of operating income deduction comply with the provisions of relevant rules in combination with “4.2 matters related to operating income deduction” in the guide to self discipline supervision of listed companies No. 1 – business handling; (2) Explain in detail the reasons and rationality of the substantial increase in operating revenue in the fourth quarter of 2021; (3) Explain whether there is a situation of increasing income and net profit through the acquisition of Ziyan machinery to avoid termination of listing; (4) The annual audit accountant shall explain whether there is any situation of early recognition of accounts receivable, over counting of operating income and increase of net profit in combination with the changes of accounts receivable compared with the beginning of the period.
Company reply:
(1) The deduction of operating income in the performance forecast of the company is mainly the income from the beginning of the period to the merger date of the merged subsidiaries under the same control, that is, the operating income of Shanghai Ziyan Machinery Technology Co., Ltd. (hereinafter referred to as “Ziyan machinery”) from January to October 2021, about 89 million yuan; In addition, according to the communication between the company and the audit institution, the income generated by some businesses that have not formed or are difficult to form a stable business model is deducted, and the amount of deduction is expected to be no more than 200000 yuan. The above deduction of operating income complies with the provisions of “4.2 matters related to deduction of operating income” in the guide for self discipline supervision of listed companies No. 1 – business handling.
(2) The company’s performance increased significantly in the fourth quarter due to two main reasons:
1) The company’s electromagnetic flowmeter, pressure transmitter, valve, environmental protection analysis instrument and other products are mainly used in customers’ engineering construction projects. Due to the influence of weather and Spring Festival holidays, the construction volume of engineering projects is usually less in the first quarter, resulting in less orders from customers, and then the order volume of each quarter increases gradually, The performance in the second half of the year is generally better than that in the first half of the year. In particular, the operating revenue in the fourth quarter is usually the highest in a year. The sales revenue realized by the company in the fourth quarter of 2020 accounted for 34.39% of the annual sales revenue. According to the comparison of {3009} and Shenzhen Maxonic Automation Control Co.Ltd(300112) in the same quarter of 2020, the operating characteristics of the company are the same as those of {3009} in the fourth quarter of 2020. At the same time, the operating characteristics of the company are the same as those of Shenzhen Maxonic Automation Control Co.Ltd(300112) in the fourth quarter of 2020
Unit: 10000 yuan
Name: total of the first quarter, second quarter, third quarter and fourth quarter of 2020
Operating income of Chuanyi 64345.40 114195.82 118422.23 128374.55 425338.00
Shares accounted for 15.13%, 26.85%, 27.84%, 30.18% and 100.00%
Xintian operating income 13156.55 28311.59 33704.51 44277.72 119450.37
Science and technology accounted for 11.01%, 23.70%, 28.22%, 37.07% and 100.00%
Wanxun’s operating income is 912777.19515.80 21037.38 23539.27 73220.22
Automatic control accounts for 12.47%, 26.65%, 28.73%, 32.15% and 100.00%
*St operating income 1015.24 2197.47 2188.51 2831.12 8232.33
Will accounts for 12.33%, 26.69%, 26.58%, 34.39% and 100.00%
In 2021, through effective sales incentives, production guarantee and other measures, with the efforts of all employees of the company, the annual sales performance increased significantly. In the fourth quarter, after deducting the influencing factors of Ziyan machinery, the operating revenue of the company is expected to be 43-53 million yuan, an increase of 52% – 87% over the same period of the previous year.
2) At the end of October 2021, the company completed the purchase of major assets and obtained 51% equity of Shanghai Ziyan Machinery Technology Co., Ltd. the operating revenue of Ziyan machinery from November to December 2021 was about 25-30 million yuan. After calculating the performance of Ziyan machinery from November to December 2021, the company further increased the scale of operating revenue in the fourth quarter of the reporting period.
Therefore, it is reasonable for the company’s operating revenue in the fourth quarter to increase significantly compared with the same period of last year.
(3) Ziyan machinery, as the first batch of companies to enter the auto inspection tool industry in China, has formed a good reputation and brand image in the auto inspection tool industry after years of development, with mature business development, large production scale and good profitability. The company’s acquisition of Ziyan machinery can extend the design, production and sales of professional testing instruments and equipment on the basis of the original industrial automation instruments and meters, and the company’s customer field will be expanded more widely, which is conducive to further optimizing the business structure of listed companies, promoting the growth of future business performance and continuously improving the core competitiveness of listed companies.
The delisting risk warning was implemented after the disclosure of the 2020 annual report. At the beginning of 2021, focusing on the company’s products and operation, the board of directors and the management formulated a number of measures to improve the business performance and strive to revoke the delisting risk warning. With the effective implementation of relevant measures and the improvement of the market environment, the company’s business status has been significantly improved.
According to the company’s report for the third quarter of 2021, the company has turned losses into profits in the third quarter. At the same time, according to the current preliminary calculation of the company’s financial department on the performance of 2021, excluding the performance improvement factors brought by the reorganization of Ziyan machinery, the company can also achieve a positive net profit after deducting the operating income of more than 100 million yuan and deducting non recurring profits and losses.
To sum up, the company does not increase revenue and net profit by acquiring Ziyan machinery to avoid termination of listing.
(4) Accountant’s reply:
According to our understanding, the company implemented a major asset restructuring this year and obtained 51% equity of Shanghai Ziyan Machinery Technology Co., Ltd., forming a business merger under the same control. Therefore, the company’s operating revenue after deduction in the fourth quarter includes the operating revenue of Ziyan machinery in November and December, which has a significant increase compared with the operating revenue in the fourth quarter of last year (the amount before retroactive adjustment under the same control). After deducting the influencing factors of Ziyan machinery, the company’s revenue in the fourth quarter of this year is about 43 million yuan to 53 million yuan, which also has a certain increase compared with the previous year, The proportion of increase is 52% ~ 87%; Due to the seasonal fluctuation of the company’s operating income after deducting Ziyan machinery, the operating income in the fourth quarter is usually the highest in the whole year. In addition, the company’s operating income in 2021 increased significantly compared with the previous year, so the accounts receivable at the end of the year increased compared with the end of the previous year, and the accounts receivable ranged from about 40 million yuan to 45 million yuan, with an increase ratio of about 65% ~ 85%, The changes of accounts receivable are basically consistent with the changes of operating income. The audit of the company’s annual report is in progress. So far, we have not seen the company’s recognition of accounts receivable in advance, over counting of operating revenue and increase of net profit.
Question 2. According to the performance forecast, your company’s operating income and net profit after non deduction after considering restructuring in 2020 are 184754500 yuan and – 1497100 yuan respectively. The income and net profit after non deduction in 2021 have increased significantly compared with the same period of last year; According to the restructuring report, Ziyan machinery achieved operating income of 81.3469 million yuan, 102.53 million yuan and 57.7999 million yuan from 2019, 2020 and January to July 2021 respectively. The income method assessment predicts that the operating income from August to December 2021 is 35.5812 million yuan. Please your company:
(1) Explain the forecast range of operating income and net profit of Ziyan machinery and the changes compared with previous years; (2) Combined with the market demand and price changes of the industry, this paper explains the specific reasons for the difference between the operating revenue of Ziyan machinery in 2021 and the predicted amount.
Company reply:
(1) The forecast of operating revenue and net profit of Ziyan machinery in 2021 is as follows:
The current fiscal year of the project is 2020
The operating income is 115 million yuan – 120 million yuan and 102.53 million yuan
Net profit: 16.5 million yuan – 19 million yuan; Profit: 5.36 million yuan
Changes operating income increased by about 12.16% – 17.04% over the previous year
The net profit increased by 207.84% – 254.48% over the previous year
The above data are the preliminary calculation results of the company’s finance department. The audit of the company’s annual report is still in progress, and the final data must be subject to the 2021 annual report issued by the company.
(2) The comparison between the actual operating revenue and the predicted amount of Ziyan machinery in 2021 is as follows:
Project actual amount forecast amount
Operating income of 115 million yuan – 120 million yuan and 98.68 million yuan
Note: the predicted amount listed in the above table is the predicted annual operating income of Ziyan machinery when the company replied to the restructuring inquiry letter. The actual operating income of Ziyan machinery this year increased by 17% ~ 21% compared with the forecast.
The specific methods of revenue recognition of Ziyan machinery are as follows:
“For domestic sales of the company, after the products are manufactured and passed the mold test, the company’s personnel are required to go to the customer’s factory to assist in the installation and commissioning of inspection tools and other products, and the revenue is recognized after the installation and commissioning is completed and the customer issues the final acceptance certificate; for inspection tools and other products that do not require the company’s personnel to install and debug, the revenue is recognized after the products have been issued and the customer issues the final acceptance certificate. Therefore, domestic sales When the products sold pass the final acceptance in the customer’s factory, the risk and reward will be transferred, and the company’s revenue will be recognized on the date of issuance of the customer’s acceptance certificate.
The company’s overseas sales revenue shall be recognized according to the declaration date indicated in the export goods declaration form after the products have been issued, declared to the customs and handled the export formalities. “
As Ziyan machinery is mainly sold in China, and the whole vehicle inspection tools are delivered to customers, the acceptance cycle is usually long. Customers generally conduct final inspection within 1-3 years after delivery. Therefore, the fluctuation of operating income is mainly affected by the final inspection time of customers, and the product price will not be changed according to the contract.
According to the data of the Research Report on market prospects and investment opportunities of China’s automobile industry released by China Commercial Industry Research Institute, China’s passenger car production and sales will end “three consecutive declines” in 2021. The output of passenger cars was 21.408 million, a year-on-year increase of 7.1%. The sales volume was 21.482 million, a year-on-year increase of 6.5%. Affected by the recovery of the vehicle market, the acceptance progress of downstream customers (vehicle manufacturers) of Ziyan machinery exceeded expectations. For example, FAW Volkswagen, Dongfeng Xiaokang, Chongqing Chang’an, Jiangling Motors Corporation Ltd(000550) all carried out the final acceptance of the delivered products of Ziyan machinery in the fourth quarter, resulting in the actual operating income of Ziyan machinery exceeding the predicted amount.
Question 3. According to the performance forecast, your company has conducted pre communication with the signing accountant of the annual audit, and there are no major differences. Please communicate with the accountant on whether the deduction items comply with the provisions of the company’s annual audit and clarify whether the specific items comply with the provisions of the company’s annual audit.
Accountant’s reply:
The company has made pre communication with us when disclosing the performance forecast without major differences. We have mainly communicated with the company on the following matters, as follows:
(1) Whether the company’s business model has changed significantly;
(2) Whether the principles and methods of revenue recognition of the company are consistent with those of the previous year;
(3) Whether the company’s revenue recognition basis is sufficient and appropriate;
(4) Whether the company’s costs are complete;
(5) Whether the scope of the company’s merger and the accounting treatment of the merger are appropriate;
(6) The deduction items involved in the income in the company’s performance forecast and whether they comply with relevant regulations. The operating income deduction items in the performance forecast disclosed by the company mainly include the operating income of Ziyan machinery from the beginning of the period to the merger date arising from the merger of enterprises under the same control formed by the company’s acquisition of Ziyan machinery. The income deduction items comply with relevant regulations.
It is hereby announced.
Shanghai Welltech Automation Co.Ltd(002058)
Board of directors
