Shanghai Stock Exchange
Szgh [2022] No. 0169
About Weifang Yaxing Chemical Co.Ltd(600319)
Regulatory inquiry letter on information disclosure of 2021 annual report Weifang Yaxing Chemical Co.Ltd(600319) :
In accordance with the requirements of the standards for the content and format of information disclosure by companies offering securities to the public No. 2 – the content and format of annual report (hereinafter referred to as the standard for the format No. 2), the self regulatory guidelines for listed companies of Shanghai Stock Exchange No. 3 – industry information disclosure guidelines and other rules, after the post audit of your company’s 2021 annual report, According to article 13.1.1 of the stock listing rules of the exchange, your company is requested to further disclose the following information.
1、 About operating income
1. The annual report shows that in 2021, your company achieved an operating income of 193 million yuan, with a gross profit margin of only 0.15%. The net profit attributable to the parent company was 193 million yuan and the net profit after deduction was – 72 million yuan. It has been negative for four consecutive fiscal years. As of December 31, 2021, the net asset attributable to the parent company was only 232 million yuan. The operating revenue of each quarter was 80700 yuan, 241848 million yuan, 731432 million yuan and 952929 million yuan respectively. The reason is that the 50000 ton CPE project in phase I was converted into fixed assets and put into operation in June 2021. The sales volume in the third and fourth quarters increased significantly compared with the previous two periods. Please the company: (1) in combination with the development trend of the industry and the company’s own operation, list the product output, sales unit price and sales quantity by quarter and subregion, explain the reasons for the low gross profit margin of the product, and compare it with the gross profit margin level of comparable companies in the same industry to explain whether it is reasonable; (2) Analyze whether there is a large dependence on non recurring profits and losses in the long term in combination with the main financial indicators such as operating income, net profit before and after non recurring deduction and net assets in recent three years; (3) The company’s financial and accounting reports are issued with unqualified opinions. The annual audit accountant issued a statement saying that the uncertainty of the company’s sustainable operation ability has been eliminated. Please explain whether there is uncertainty in the company’s sustainable operation ability and the judgment basis, and the countermeasures to be taken to improve the sustainable operation ability in combination with the negative net profit and gross profit margin of the company after deducting non profits for four consecutive years. If the audit report shows that the company’s continuous operation ability is uncertain, the company’s shares may face the risk of continuing to implement other risk warnings. Please comment on the annual audit accountant.
2. The annual report shows that in June 2021, the CPE production unit of the company began to be officially put into operation, and the operating revenue of the company in 2021 was 80700 yuan, 241848 million yuan, 731432 million yuan and 952929 million yuan respectively; The net profit attributable to the parent company is -7.079 million yuan, – 5.1410 million yuan, – 225685 million yuan and 2277433 million yuan respectively; The net cash flows from operating activities were -243679 million yuan, – 534424 million yuan, 173996 million yuan and -231285 million yuan respectively. Please explain the reasons for the mismatching of quarterly operating income, net profit attributable to parent company and cash flow change trend of operating activities in combination with procurement and sales, cost and expense collection, etc. Please comment on the annual audit accountant.
3. The annual report shows that the company has achieved an operating revenue of 192 million yuan, of which the sales revenue of distribution agents is 128 million yuan, accounting for 66.67%; Overseas sales revenue was 63 million yuan, accounting for 32.71%. The company is requested to make supplementary disclosure: (1) the specific business model of dealer sales, including the selection criteria of dealers, whether there are a large number of individuals and other unincorporated entities, daily management, pricing mechanism, logistics, return and exchange mechanism, etc., and explain the necessity of adopting the dealer model according to the situation of comparable companies in the contract industry; (2) Whether the company’s revenue recognition policy under the dealer mode complies with the provisions of the accounting standards for business enterprises; (3) The sales details of the company’s top five distributors (related distributors, please calculate together), including name, cooperation years, sales quantity and amount, credit policy and payment collection, end customers, and whether the company has a relationship with distributors and end customers; (4) Name of main customers, cooperation years, region, sales quantity, amount and proportion, credit policy and payment collection of overseas sales in this period; (5) The company and the annual audit accountant are requested to explain whether the company has new trade business and whether the deduction of relevant business income is reasonable in strict accordance with the provisions of the annex “financial delisting indicators: deduction of business income” to No. 7 of the guidelines for self regulation and supervision of listed companies No. 2 – business handling of the exchange; (6) Please explain the audit procedures and audit evidence obtained in respect of dealer sales and overseas sales. The annual audit accountant is requested to give a clear opinion.
2、 Recognition of income from relocation and asset disposal
4. The annual report shows that in the early stage, on October 31, 2019, the company’s original production plant was completely shut down and relocated at the same time. In 2021, the company completed the demolition liquidation according to the demolition compensation agreement, and obtained a total compensation of 1.418 billion yuan for land and other accessories, including 746 million yuan for houses and other accessories. As of March 5, 2022, the company has received relocation compensation totaling 1.051 billion yuan and recognized asset disposal income of 251 million yuan. The company is requested to make supplementary disclosure: (1) the specific contents of the company’s demolition compensation agreement, the specific time node and accounting treatment of the company’s relocation and receipt of relevant funds in recent years, and the allocation arrangement and expected confirmation time node of the remaining compensation; (2) Whether the relocation of the company is a policy relocation, and in combination with the relocation progress and payment collection, explain the specific calculation process of asset disposal income, whether it complies with the provisions of the interpretation of accounting standards for Business Enterprises No. 3, and whether there is a situation of recognizing income in advance. Please comment on the annual audit accountant.
3、 About going concern ability
5. According to the annual report, the company currently has a 50000 T / a CPE plant, and the phase II 50000 T / a CPE project is expected to be completed in 2022. The CPE production capacity is expected to be lower than 170000 T / a before the relocation, and the CPE production capacity is 24000 t in 2021. The analysis of industry operational information shows that it is difficult for the chemical industry to obtain new production capacity indicators. The company is requested to make supplementary disclosure: (1) whether the production status of CPE business after resumption of production is continuous production, whether there is the possibility of stopping production again, and whether the production and operation have actually returned to normal; (2) In combination with the comparison of the capacity utilization rate of CPE units before and after the resumption of production, explain whether the company’s production mode has changed significantly since the resumption of production, the reasons for CPE’s expected capacity decline, and whether there are arrangements to increase the capacity of CPE or other products in the future; (3) Explain the re acquisition of old customers, the development of new customers and the comparison between main customers and those before the resumption of production in combination with the customer name, establishment time, starting cooperation time, whether to sell through dealers, transaction time, transaction amount, amount of orders in hand, historical evolution, main financial status and settlement as of the end of the period, Whether there are significant changes in customer structure and sales mode, and explain the reasons and risks; (4) Conclude the situation of comparable companies in the contract industry, explain the advantages and disadvantages of the company’s use of acid phase process of Hester company in Germany, and whether there are intellectual property disputes and other risks that may affect the company’s production and operation.
Please comment on the annual audit accountant.
6. According to the annual report, the company’s current liabilities accounted for 77.32% of the total assets at the end of the period, of which the balance of short-term loans was 703 million yuan, accounting for 37.7% of the total assets at the end of the period. The company borrowed 284 million yuan and repeatedly borrowed from the controlling shareholder at an annualized interest rate of 7.50% and postponed the repayment period, which was 6.00% higher than the loan interest rate of Changyi rural commercial bank, The company used its own idle funds to purchase bank financial products, with an annual amount of 1.243 billion yuan. The company is requested to make supplementary disclosure: (1) the specific conditions of short-term loans, including but not limited to the borrower, loan interest rate, collateral, loan time, term and specific purpose, whether there is short-term debt and long-term investment, and whether the interest payment and accounting treatment comply with the provisions of the accounting standards for business enterprises; (2) Quantitatively analyze whether there is short-term debt repayment risk in combination with bank credit, funds required for projects under construction and cash flow of the company’s operating activities. If so, please fully prompt the risk; (3) The purpose of the loan from the controlling shareholder, whether the loan interest rate is fair, the reasons for the multiple extension of the loan and the future repayment and loan arrangements; (4) List the bank’s financial management by transaction, including but not limited to the name of the bank outlet, purchase time, financial management amount, term, interest rate, maturity time, whether the capital source is the loan of the controlling shareholder, etc; (5) During the reporting period, whether there were accounts receivable from controlling shareholders, and whether there were non operating funds occupied by controlling shareholders and related parties. Please comment on the annual audit accountant.
4、 About major accounts
7. According to the annual report, the amount of fixed assets at the end of the period in 2021 was 1.081 billion yuan, an increase of nearly 1 billion yuan compared with last year. The reason is that a number of projects under construction in the current period were converted to fixed assets. Please make supplementary disclosure: (1) list the allocation of fixed assets by project, including but not limited to asset details, design capacity, actual capacity, corresponding income, ending balance Accrued depreciation and impairment amount; (2) Combined with the specific use of machinery and equipment and depreciation accrual policies at the end of the reporting period, compare the depreciation policies of comparable companies in the same industry to explain whether the depreciation accrual of machinery and equipment is sufficient. Please comment on the annual audit accountant.
8. According to the annual report, the balance of the company’s accounts payable at the end of the year is 364 million yuan, accounting for 19.51% of the total assets at the end of the year. Please supplement and disclose the details of the accounts payable, including the transaction object, whether it is a related party, amount, cause, time of occurrence, agreed repayment time, whether the relevant accounting treatment complies with the provisions of the accounting standards for business enterprises, and if there is a loan, Explain the interest rate. Please comment on the annual audit accountant.
In view of the above problems, if the company considers that it is not applicable or inconvenient to disclose due to special reasons in accordance with the requirements of standard format No. 2 and other regulations, it shall explain the reasons for the inability to disclose. Where a listed company applies for cancellation of the risk warning, the bourse may require the listed company to provide supplementary materials, and the period during which the company replies to the inquiry letter shall not be included in the time limit for making relevant decisions.
The company is requested to disclose the information immediately after receiving this letter, reply to our department in writing on the above matters within 5 trading days, and fulfill the obligation of information disclosure at the same time.
Shanghai Stock Exchange listed company management department 2 March 6, 2002
