Recently, “Ham first share” Jinzi Ham Co.Ltd(002515) received an administrative supervision warning letter from Zhejiang securities regulatory bureau, which involved the company’s futures loss of more than 55 million due to the unauthorized closing of positions by traders, and the traders paid off the money in three days by relying on their good father-in-law.
According to the supervision letter, Jinzi Ham Co.Ltd(002515) there are four major violations: first, major losses in futures trading were not disclosed in time; second, the company received large employee compensation was not disclosed in time; third, the disclosure of the third quarterly report was inaccurate due to non-standard accounting treatment; fourth, the review and disclosure procedures for excess margin were not implemented.
The supervision decided to take supervision and management measures of issuing warning letters to Jinzi Ham Co.Ltd(002515) , Shi Yanjun, then chairman of the board, Wu Yuexiao, President and chief financial officer, and Wang Qihui, Secretary of the board of directors, and record them in the integrity archives of the securities and futures market.
Since the middle of January this year, Jinzi Ham Co.Ltd(002515) share price has fallen all the way, from the stage high of 6.46 yuan / share to the latest 5.04 yuan / share, with a decline of about 22%, and the latest total market value is only 4.9 billion yuan.
heavy losses in futures trading and failure to disclose in time after receiving large employee compensation
Jinzi Ham Co.Ltd(002515) and senior executives receive regulatory warning letter
The regulatory warning letter issued by Zhejiang securities regulatory bureau shows that the listed company Jinzi Ham Co.Ltd(002515) has four major violations:
Specifically, first, major losses in futures trading were not disclosed in time. Zhejiang securities regulatory bureau said that Jinzi Ham Co.Ltd(002515) plans to carry out pig futures hedging business in January 2021 after deliberation and approval by the board of directors. In actual operation, the hedging business of the company is invalid due to the mismatch between the futures position and the actual demand of the spot.
As of August 24, 2021, the company’s futures account had accumulated a floating loss of RMB 113101 million, accounting for 19.07% of the audited net profit attributable to shareholders of Listed Companies in 2020, and exceeded RMB 10 million for the first time, meeting the disclosure requirements. As of September 30, 2021, the accumulated actual loss of the futures account was 551053 million yuan, accounting for 92.92% of the net profit attributable to the company in 2020. The company will not disclose the above major losses until February 27, 2021.
Second, the company received a large amount of employee compensation and did not disclose it in time. According to the Zhejiang securities regulatory bureau, Yang Kai, a trader, sold out futures contracts without authorization, resulting in heavy losses to the company, which will be fully compensated according to the assessment regulations. On September 29 and September 30, 2021, the company received a total of 551053 million yuan of compensation from Yang Kai, accounting for 92.92% of the net profit attributable to the company in 2020, but the above compensation was not disclosed until January 27, 2022. If the company fails to disclose the additional income, it shall compensate the company in time according to the above provisions.
Third, the non-standard accounting treatment leads to the inaccurate disclosure of the third quarterly report. Zhejiang securities regulatory bureau said that the company did not conduct accurate accounting for the fair value of hedging instruments and did not conduct accurate accounting treatment when receiving Yang Kai’s large compensation, resulting in inaccurate disclosure of the company’s third quarterly report in 2021. The company disclosed the announcement on the correction of accounting errors in the third quarter of 2021 on January 27, 2022 to correct the accounting errors in the third quarter report of 2021.
Fourth, the excess margin did not fulfill the review and disclosure procedures. Zhejiang securities regulatory bureau also said that in September 2021, the company’s futures account invested a total of 70 million yuan, exceeding the amount of 50 million Yuan approved by the board of directors, and the margin invested in the futures account did not fulfill the review and disclosure procedures.
In addition, Zhejiang securities regulatory bureau also said that Jinzi Ham Co.Ltd(002515) ‘s futures business risk control system has some defects, such as lack of effective supervision of accounts, inadequate operation authorization management and so on.
Therefore, the regulator said that the above acts violated the provisions of Articles 3, 22 and 25 of the measures for the administration of information disclosure of listed companies (Order No. 182 of the CSRC) and Article 3 of the standards for the governance of listed companies Jinzi Ham Co.Ltd(002515) then chairman Shi Yanjun, then president and chief financial officer Wu Yuexiao, and then Secretary of the board of directors Wang Qihui were mainly responsible for the above violations, in violation of Article 4 of the measures for the administration of information disclosure of listed companies (Order No. 182 of the CSRC).
According to the relevant provisions of articles 51 and 52 of the measures for the administration of information disclosure of listed companies (Order No. 182 of the CSRC), Zhejiang securities regulatory bureau has decided to take the supervision and management measures of issuing warning letters to the company, Shi Yanjun, Wu Yuexiao and Wang Qihui, and record them in the integrity archives of the securities and futures market.
futures trading loss exceeding 55 million, full compensation by traders
Jinzi Ham Co.Ltd(002515) the share price has plunged by more than 22% since the high point of this year
Jinzi Ham Co.Ltd(002515) is a well-known enterprise in Jinhua, Zhejiang Province. It landed on the Shenzhen SME board in 2010 and became the first listed company in China with ham as its main business. Let’s review the futures losses of Jinzi Ham Co.Ltd(002515) trading before.
According to the contents disclosed in Jinzi Ham Co.Ltd(002515) announcement in January this year, in January 2021, after deliberation and approval by the board of directors of the company, Jinzi Ham Co.Ltd(002515) plans to use a quota of 50 million yuan to carry out pig futures hedging business. The company opened a futures account on March 16, 2021, and gradually bought the pig futures hedging contract in August 2021, with a margin of less than 50 million yuan.
At the end of August 2021, futures traders operated the company’s accounts to successively buy bullish contracts for pigs 2111, 2201, 2203 and 2205. The company’s accounts began to build positions from about 17000 yuan / ton to about 15000 yuan / ton. During this period, the lowest price of pig futures fell to about 13000 yuan / ton.
At the beginning of September 2021, the company decided to make physical delivery of all pig futures contracts held by it in the later stage, and supplemented some margin (the maximum margin is 70 million yuan).
However, from the middle of September 2021, the price of pig futures continued to fall sharply. Due to excessive pessimism about the future market, the futures traders of the company closed the positions of the contracts without approval, resulting in a total loss of 551053 million yuan in the company’s account.
According to the relevant rules and regulations of the company, the company requires futures traders to bear all responsibilities and pay the corresponding losses to the company’s account before September 30, 2021. By September 30, 2021, the company had received 551053 million yuan paid by futures traders.
In February this year, Jinzi Ham Co.Ltd(002515) in response to the inquiry of Shenzhen Stock Exchange on commodity futures hedging business, said that the compensation paid by the company’s futures traders to the company’s account came from his own and self raised funds and his father-in-law Shi xiongbiao.
Jinzi Ham Co.Ltd(002515) said that since September 2021, the pig futures index has continued to decline unilaterally from 16075 points. On September 16, 2021, the pig futures index fell rapidly from 14172 points in the opening to 13798 points. The company’s futures traders were under great pressure and worried about the risk of compulsory liquidation of the company’s position contracts. In the morning of that day, the futures trader sold a total of 902 pig contracts without asking for instructions from any member of the futures decision-making group, and tried to rebuild the position at a lower price, resulting in an actual investment loss of about 44.22 million yuan on that day. The time for futures traders to report the above matters to the company and promise to compensate the company for all losses is September 27, 2021. On September 29 and 30, 2021, the futures trader paid the corresponding loss to the company’s account.
As for the source of compensation for traders, Jinzi Ham Co.Ltd(002515) explained that it came from his own and self raised funds and his father-in-law Shi xiongbiao. Shi xiongbiao is the natural person shareholder who holds 3.45% of the company’s shares and is the brother of Shi Yanjun, the former actual controller of the company.
Jinzi Ham Co.Ltd(002515) said that Shi xiongbiao used his own and self raised funds to help his son-in-law pay compensation based on his father-in-law rather than his shareholder status. Therefore, this transaction does not constitute an equity transaction, so the company included the compensation in non operating income, and there is no case of using the compensation to adjust profits.
According to the previously updated third quarterly report of 2021, from January 1, 2021 to September 30, 2021, Jinzi Ham Co.Ltd(002515) achieved an operating revenue of 401 million yuan, a year-on-year decrease of 17.56%, a net profit of 567992 million yuan, a year-on-year decrease of 38.61%, and a basic earnings per share of 0.06 yuan.
In terms of stock price performance, Jinzi Ham Co.Ltd(002515) since the stage high of 6.46 yuan / share on January 14 this year, it has fallen all the way, once falling to the stage low of 4.79 yuan / share, with a decline of 25.85%; As of the closing on March 10, the stock closed at 5.04 yuan / share, and the latest total market value was only 4.9 billion yuan.
