has experienced the darkest moment in 2021. Where will Shanghai Electric Group Company Limited(601727) go
On April 18, Shanghai Electric Group Company Limited(601727) disclosed the performance in 2021: the annual revenue was 130681 billion yuan, a year-on-year decrease of 4.29%; The net profit attributable to the parent company was -9.988 billion yuan, with a net profit of 3.758 billion yuan in the same period last year, from profit to loss.
The next day, Shanghai Electric Group Company Limited(601727) closed at 4 yuan / share, a slight increase of 1%, and the latest market value was 62.32 billion yuan.
withdrawing large amount impairment
For large losses, Shanghai Electric Group Company Limited(601727) gives six reasons: withdraw relevant losses for risk matters of communication companies; The operation cost of overseas projects has increased; The price fluctuation of raw materials leads to the rise of costs; Major losses of some associated enterprises accounted by equity method of the company; Withdraw credit impairment losses on assets related to Evergrande group held by some subordinate enterprises; Provision for goodwill impairment of some subsidiaries.
The communication company mentioned in Shanghai Electric Group Company Limited(601727) refers to Shanghai Electric Group Company Limited(601727) Communication Technology Co., Ltd. in 2021, the communication company accrued a total impairment loss of 9.222 billion yuan, and the impact on the net profit attributable to the parent company in the consolidated financial statements of 2021 was 8.354 billion yuan.
Shanghai Electric Group Company Limited(601727) also “stepping on thunder” Evergrande. The company announced on the same day that as of December 31, 2021, the notes receivable of its subsidiaries to Evergrande group and its member enterprises was 2.173 billion yuan, the accounts receivable was 1.781 billion yuan, and the contract assets were 275 million yuan, totaling 4.229 billion yuan.
Shanghai Electric Group Company Limited(601727) said that due to the difficulties in the operation of Evergrande group, some subsidiaries of the company have successively overdue the receivables related to Evergrande group. The company believes that there are obvious signs of impairment and it is necessary to make a single impairment provision. In 2021, the provision for impairment of receivables of Evergrande group totaled RMB 2.023 billion. The impact of the above provision on the company’s net profit attributable to the parent company in 2021 was a loss of RMB 761 million.
In addition, during the reporting period, the company achieved 144.18 billion yuan of new orders, a decrease of 22.3% over the same period last year Shanghai Electric Group Company Limited(601727) has three major business segments, namely energy equipment, industrial equipment and integrated services. Among them, energy equipment achieved an operating revenue of 59.224 billion yuan in 2021, a year-on-year increase of 5.83%; The operating income of industrial equipment was 42.241 billion yuan, a year-on-year increase of 0.15%; Integrated services achieved an operating revenue of 39.452 billion yuan, a year-on-year decrease of 24.47%.
The reporter also noted that the cash flow of Shanghai Electric Group Company Limited(601727) was not optimistic. By the end of 2021, the net operating cash flow of the company was -10.554 billion yuan, a year-on-year decrease of 324.74%. In this regard, the company said that the main reason was the decrease in cash received from the sale of goods and the provision of labor services, and the increase in cash outflow from operating activities such as purchasing goods, production and preparation of goods compared with the same period.
experience to dark time
In 2021, Shanghai Electric Group Company Limited(601727) experienced a dark moment. On May 30 of that year, Shanghai Electric Group Company Limited(601727) suddenly announced that the accounts receivable of the holding subsidiary communication company within the scope of the consolidated statements were generally expected, and there was a risk that large accounts receivable could not be recovered. In extreme cases, it may eventually cause a loss of 8.3 billion yuan to Shanghai Electric Group Company Limited(601727) attributable net profit.
At that time, the communication company had filed four lawsuits with Shanghai Second Intermediate People’s court and Shanghai Yangpu District Court, all of which were accepted by the court on May 27, 2021. The defendants are Beijing Capital Venture Group Co., Ltd. and its trading branch, Harbin Industrial Investment Group Co., Ltd., Fushen Industrial Company (hereinafter referred to as “Fushen industry”) and Nanjing Changjiang Electronic Information Industry Group Co., Ltd., with a total principal of 4.127 billion yuan.
To the surprise of the outside world, the Shanghai Electric Group Company Limited(601727) incident triggered a series of thunder of “private network communication” of a shares, and Shanghai Hongda New Material Co.Ltd(002211) , Raisecom Technology Co.Ltd(603803) , Jiangsu Zhongtian Technology Co.Ltd(600522) and other listed companies successively issued risk warning announcements, all of which were due to abnormal execution of some contracts in the electronic communication equipment business.
After the huge financial thunder was exposed, Shanghai Electric Group Company Limited(601727) the management turbulence followed. On July 27, 2021, Shanghai Electric Group Company Limited(601727) chairman Zheng Jianhua was suspected of serious violation of discipline and law and was subject to review and investigation; On August 5, 2021, Huang ou, President of Shanghai Electric Group Company Limited(601727) company, died unexpectedly.
In addition, according to the announcement on November 17, 2021, Shen Xin, the former general manager of the communication company, Mao Limin, the former chief financial officer, and Jin Hang, the former marketing director and Minister of Commerce, are suspected of serious violations of discipline and law and are being subject to discipline review, supervision and investigation by the supervision committee of Shanghai Changning District Commission for Discipline Inspection.
It should be noted that Shanghai Electric Group Company Limited(601727) received the notice of investigation from China Securities Regulatory Commission on July 5, 2021 and decided to file a case for investigation. At present, the investigation of the CSRC is still in progress.
Although a large amount of impairment is accrued, the litigation of Shanghai Electric Group Company Limited(601727) is not smooth. On November 15, 2021, Shanghai Electric Group Company Limited(601727) said to the public that the communication company received the notice of response to the lawsuit filed by Fushen industry from the Xuhui District Court of Shanghai, and Fushen industry asked the communication company to cancel the product sales contract and return the paid advance payment and payment totaling 977418 million yuan. The product sales contract falls within the scope of the contract when the communication company sued Fushen industrial for overdue accounts. Encountering the counterclaim of the “debtor”, the identity of the communication company was reversed and became the defendant.
Shanghai Electric Group Company Limited(601727) said that for the above-mentioned litigation, the communication company raised a jurisdictional objection to the court. Recently, the communication company received the civil ruling of Shanghai No. 1 Intermediate People’s court and ruled to transfer the case to Shanghai Yangpu District Court for trial. As the case of communication company v. Fushen industry has not been heard and judged, there may be uncertainty in the measurement of expected credit loss of communication company in the current period or later. Since the company has disclosed the major risks of the company caused by the overdue accounts receivable of the communication company, the litigation matters have been fully considered in the calculation of relevant major risk losses, which will not have a material impact on the disclosed risk exposure of the company.
fali new energy
As an old traditional energy company, Shanghai Electric Group Company Limited(601727) is developing new energy.
On March 30, Shanghai Electric Group Company Limited(601727) revealed in the performance express that in 2021, the demonstration project of Huaneng Shidaowan high temperature gas cooled reactor nuclear power plant, the world’s first spherical bed modular high temperature gas cooled reactor nuclear power plant, which the company participated in the construction, was successfully connected to the grid for the first time, and the No. 5 unit of Fuqing nuclear power plant, the world’s first reactor of “Hualong No. 1” was officially put into commercial operation.
In terms of wind power industry, in the first half of 2021, Shanghai Electric Group Company Limited(601727) in the field of wind power equipment, the new installed capacity was the seventh in the world, and the new installed capacity at sea was the second in the world. In addition, in May 2021, Shanghai Electric Group Company Limited(601727) also spun off its holding subsidiary Shanghai Electric Wind Power Group Co.Ltd(688660) to be listed on the science and innovation board, becoming the first share of Shanghai state-owned assets spin off and listing. Shanghai Electric Wind Power Group Co.Ltd(688660) is mainly engaged in the production, sales and engineering installation of wind power equipment.
Looking forward to 2022, Shanghai Electric Group Company Limited(601727) said that it would promote industrial restructuring and the transformation of old and new driving forces, continue to cultivate and innovate core industries, resolutely withdraw backward industries and enterprises, concentrate limited resources on new tracks, and go all out to plan new tracks and expand new driving forces. At the same time, the company will improve the quality of economic operation and the profitability of its main business by revitalizing resources, paying attention to management, reducing interest bearing liabilities, improving the turnover rate of accounts receivable and inventory.
