Securities code: Xiamen Overseas Chinese Electronic Co.Ltd(600870) securities abbreviation: ST Xiahua announcement Code: pro 2022017 Xiamen Overseas Chinese Electronic Co.Ltd(600870)
With regard to the announcement of receiving the “second inquiry letter on Performance Forecast of Xiamen Overseas Chinese Electronics Co., Ltd.” from Shanghai Stock Exchange, 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 integrity of its contents.
Xiamen Overseas Chinese Electronic Co.Ltd(600870) (hereinafter referred to as “the company”) received the second inquiry letter on matters related to performance forecast of Xiamen Overseas Chinese Electronic Co.Ltd(600870) issued by Shanghai Stock Exchange on March 1, 2022 (shgh [2022] No. 0151) (hereinafter referred to as “the inquiry letter”), with the specific contents as follows: Xiamen Overseas Chinese Electronic Co.Ltd(600870) :
On March 1, 2022, your company disclosed the reply to the inquiry letter of 2021 annual performance advance loss. In view of the significant impact of the company’s financial data in 2021 on the termination of the listing of the company’s shares, in accordance with article 13.1.1 and other relevant provisions of the stock listing rules of the exchange, your company is hereby requested to further disclose the following issues.
1、 About the structure and nature of customers and suppliers. According to the performance forecast and reply, first, the number of natural person customers is high. In 2021, the company’s import frozen beef business sold to more than 50 Chinese customers, including 13 natural person customers; China’s fresh beef business has sold to more than 8 Chinese customers, including 3 natural person customers. Second, the company cooperated with the top five customers of all businesses for the first time in July 2021 and later, and all of them were traders or natural person customers. Third, the company cooperated with the top five suppliers of various businesses for the first time in May 2021 and later, and most of them were traders. Among them, the top five suppliers of the company’s import frozen beef business are traders. Inner Mongolia keniu cold food Co., Ltd., the only supplier of the company’s fresh beef business in China, was established in May 2021, and the company is the exclusive distributor of its hot fresh beef categories in Zhejiang, Fujian and Shanghai, but the gross profit margin is only 0.70%.
The company is requested to verify and disclose: (1) explain whether there is any relationship or other interest arrangement between the main customers and suppliers of the trade business of imported frozen beef and Chinese fresh beef, and between the suppliers, main customers and the directors, supervisors and senior managers of the listed company, and disclose the verification process; (2) Combined with the gross profit margin, explain the exclusive distribution right acquisition process, customer source and commercial rationality of Chinese fresh beef in Zhejiang, Fujian and Shanghai, Whether it complies with the “business income without commercial substance” stipulated in the “No. 7 Financial delisting index: operating income deduction” (hereinafter referred to as “operating income deduction”) under the “guidelines for self discipline supervision of listed companies of Shanghai Stock Exchange No. 2 – business handling”, and in combination with the business situation, supplier and customer structure changes of Horqin in the past three years, Explain whether there is a situation of avoiding delisting by constructing trade business; (3) According to the relevant provisions of the accounting standards for business enterprises, combined with whether the company has control over the goods before transferring the goods to customers, the branch business shall explain whether the company is the main responsible person or agent when engaging in the transaction, and explain the basis and rationality of the total amount method. Ask the accountant to express his opinion.
2、 About going concern ability. According to the public information, performance forecast and reply, first, the company’s financial report for three consecutive years from 2018 to 2020 was issued by the annual audit accountant with an unqualified audit report with “major uncertainties related to continuous operation”, Both involve the statement that “there is great uncertainty about the sustainability of the company’s existing business and it is still in the transition period of forming a stable profit model”. Second, the import of frozen beef is entrusted to importers or self operated, and transferred to a leased third-party professional cold chain warehouse after picking up the goods, without self operated warehousing or transportation services. The sales revenue of this business accounted for 67.91% and the gross profit margin was 3.70%. Third, the production cycle of China’s fresh beef business is relatively short. The company is responsible for supervising the production process through expatriates, and directly entrusts a third party to transport according to the needs of suppliers without warehousing. The sales revenue of this business accounted for 22.64% and the gross profit margin was only 0.70%.
The company is requested to verify and disclose: (1) whether the imported frozen beef and Chinese fresh beef businesses can provide processing or conversion activities for products, so as to realize the appreciation of the value of products or services, whether they have significant dependence on customers and suppliers, and whether they are sustainable, And explain whether it complies with the provisions of “operating income deduction”: “income generated by businesses that have not formed or are difficult to form a stable business model”; (2) Under the condition that the business model of the company has not changed, whether there is still great uncertainty about the ability of sustainable operation and whether it is still in the transformation period of forming a stable profit model. Ask the accountant to express his opinion.
3、 Your company shall, on the basis of full communication with the annual audit accounting firm, comply with the relevant requirements of self regulatory guidelines for listed companies on Shanghai Stock Exchange No. 2 – business handling No. 7 – Financial delisting index: operating income deduction (hereinafter referred to as “operating income deduction”), The business income irrelevant to the main business and the income without commercial substance shall be deducted according to law and regulations. If the company is suspected of not deducting the operating income in accordance with the regulations and avoiding the termination of listing, our department will timely request to start on-site inspection and other regulatory measures after the disclosure of the company’s 2021 annual report, and impose disciplinary sanctions on the company and relevant responsible persons. Please fully remind the company of the risks such as termination of listing.
4、 The annual audit accountant shall strictly abide by the audit standards and other relevant rules and requirements, maintain reasonable professional doubt, formulate necessary, feasible and targeted audit plans and procedures, record relevant matters in detail, strictly perform the quality control review system, issue appropriate audit conclusions, and prudently express special opinions on the deduction of the company’s income.
5、 Your company should attach great importance to the preparation and disclosure of the company’s annual report in 2021, do a good job in the annual report and related information disclosure, timely hire the annual audit accountant, actively cooperate with him to complete the audit report, disclose the annual report to the public on schedule, and ensure that the information disclosed in the annual report is true, accurate and complete.
Please disclose this letter to the public immediately after receiving this letter and reply within five trading days. The board of directors of your company shall be diligent and responsible, implement the requirements of this working letter on time, timely perform relevant information disclosure obligations and protect the rights and interests of investors.
The above is all the contents of the inquiry letter. The company will actively organize relevant parties to prepare reply documents according to the requirements of the inquiry letter and fulfill the obligation of information disclosure in time.
Please pay attention to the company’s announcement in time and pay attention to investment risks.
It is hereby announced.
Xiamen Overseas Chinese Electronic Co.Ltd(600870) board of directors March 1, 2022
