Us projects failed to meet the conditions for large-scale production Fuan Pharmaceutical (Group) Co.Ltd(300194) net profit decreased by 241.82% year-on-year

300it was announced on March 25, 194 3 that the total operating revenue of the company in 2021 was 2.452 billion yuan, with a year-on-year increase of 3.52%; The operating profit was -592 million yuan, a year-on-year decrease of 345.79%; The total profit was -593 million yuan, a year-on-year decrease of 345.84%; The net profit attributable to shareholders of listed companies was -297 million yuan, a year-on-year decrease of 241.82%.

The net profit accrued to the shareholders of the listed company is RMB 19.46 billion, which is mainly attributable to the net profit of the listed company of RMB 20.31 billion; The provision for impairment of goodwill is 200 million yuan. After deducting the above effects, the company’s net profit attributable to shareholders of listed companies was 220 million yuan, a year-on-year increase of 4.98%.

It is reported that the U.S. projects with provision for asset impairment are mainly the 1% equity of red realty llc51 acquired by Fuan Pharmaceutical (Group) Co.Ltd(300194) 19 with an investment of 73 million US dollars in 2019. Affected by the covid-19 pneumonia epidemic, the construction progress of red realty LLC project has seriously lagged behind. Based on the practical difficulties faced by the project and the uncertainty of future operation, the company signed the equity repurchase agreement with the counterparty (the former shareholder of red realty LLC) in August 2021, Agreed to buy back shares by installment. By the end of 2021, the other party had not paid the initial repurchase payment in accordance with the agreement. After many times of communication and negotiation, the other party failed to perform the contract, and Fuan Pharmaceutical (Group) Co.Ltd(300194) has hired a law firm to protect the interests of the company through legal litigation. Up to now, the litigation work is still in the preparation stage, and the litigation materials are performing the authentication procedure of the Embassy and consulate.

In view of the progress of the project, Fuan Pharmaceutical (Group) Co.Ltd(300194) said that the basic construction of the industrial cannabis plant and workshop of red realty LLC had been completed, and the engineering construction and mother plant cultivation had been carried out in the early stage, but so far, the project has not been fully completed and the conditions for large-scale production have not been met. At the end of 2021, the net asset value of red realty LLC incorporated into the merger was 891 million yuan. The net realizable value of red realty LLC is expected to be 270 million yuan, and the provision for asset impairment of 621 million yuan is expected to be withdrawn, affecting the net profit attributable to the shareholders of the listed company of 317 million yuan.

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