Recently, Guangdong Qunxing Toys Joint-Stock Co.Ltd(002575) received the inquiry letter of the annual report of Shenzhen Stock Exchange, requiring supplementary disclosure on the failure to accrue relevant losses in time, the sharp fluctuation of revenue such as alcohol sales and the sharp decline of sales and management expenses, and explaining whether there are behaviors to avoid delisting such as falsely increasing profits and cross cycle adjusting profits.
Following the previous trading day’s limit, on April 27, Guangdong Qunxing Toys Joint-Stock Co.Ltd(002575) intraday limit fell again, closing down 4.32%.
real estate transaction litigation without accrued estimated liabilities
Statistics show that Guangdong Qunxing Toys Joint-Stock Co.Ltd(002575) was a well-known listed company in China’s toy industry and was listed on Shenzhen Stock Exchange in 2011. However, the performance plummeted after listing, gradually withdrew from the toy business after 2017, and repeatedly planned major restructuring plans, high-profile cross-border mobile games, nuclear power, new energy and other popular industries.
In 2019, the company’s financial report was issued with an audit report that could not express an opinion by the accounting firm. In 2020, the company’s net profit after deducting non-profit was negative and its operating income was less than 100 million yuan, which continued to be warned of delisting risk.
According to the inquiry letter, due to the housing sales contract dispute with Shantou jinjiali Industrial Co., Ltd., jinjiali filed a lawsuit on July 28, 2020, requiring the company to cooperate in handling the transfer procedures and bear the corresponding liability for breach of contract, involving an amount of 53.5 million yuan. Subsequently, Guangdong Qunxing Toys Joint-Stock Co.Ltd(002575) filed a counterclaim, and the Shenzhen Stock Exchange also issued an inquiry letter.
On June 29, 2021, Shantou Chenghai District People’s Court issued a civil judgment, requiring the company to cooperate with Shantou jinjiali transfer procedures and rejecting the company’s counterclaim request. However, Guangdong Qunxing Toys Joint-Stock Co.Ltd(002575) did not disclose the above judgment results, nor did it accrue estimated liabilities for the above litigation.
In this regard, the Shenzhen stock exchange requires the company to disclose the contents of the civil judgment and its impact on the company, and explain the reasons for the failure to disclose it in time. At the same time, the company and the accounting firm are also required to explain the reasons, basis and rationality of not withdrawing the estimated liabilities for the above matters, and whether they comply with the relevant provisions of the accounting standards for business enterprises.
Source: company announcement
is there any behavior to avoid delisting
On April 20, Guangdong Qunxing Toys Joint-Stock Co.Ltd(002575) issued the annual report for 2021. Data show that last year, the company achieved an operating revenue of 512241 million yuan, a year-on-year decrease of 43.76%; The net profit attributable to the parent company was 19.804 million yuan, a year-on-year decrease of 19.57%, and the net profit after deducting non-profit was 5.5667 million yuan, a year-on-year increase of 132.42%. After the release of the annual report, Guangdong Qunxing Toys Joint-Stock Co.Ltd(002575) submitted an application for withdrawing the delisting risk warning to the Shenzhen Stock Exchange.
It is worth noting that the company’s operating revenue and net profit after deduction in the third quarter were 275767 million yuan and 6.023 million yuan respectively, accounting for 53.84% and 107.83% of the annual operating revenue.
In this regard, the Shenzhen stock exchange requires the company to explain the reasons and rationality that the performance of the third quarter is significantly better than that of other quarters in combination with the development mode of various main businesses during the reporting period, the fluctuation of quarterly performance of relevant businesses in recent three years, the way of revenue recognition, the composition of expenses and costs, etc.
The data also showed that during the reporting period, the company’s own property leasing and entrepreneurship Park operation services achieved a revenue of 189852 million yuan, a year-on-year increase of 40.89%, the operating cost was 3.0726 million yuan, a year-on-year decrease of 29.07%, the gross profit margin was 83.82%, a year-on-year increase of 15.96%. The revenue from alcohol sales was about 30.2 million yuan, a year-on-year decrease of 43.37%, while the gross profit margin also fell to 32.07%, a year-on-year decrease of 31.94%.
In view of the abnormal fluctuation of the above performance indicators, Shenzhen stock exchange requires to explain the reasons for the deviation between the company’s rental income and the change of rental cost, the rationality of the sharp fluctuation of gross profit margin, whether the relevant income meets the recognition conditions, and whether there are behaviors to avoid delisting such as falsely increasing profits and cross period adjusting profits. At the same time, it is also required to explain the reasons and rationality of the sharp decline in liquor sales revenue and gross profit margin.
sales and administrative expenses decreased significantly
According to the annual report, during the reporting period, Guangdong Qunxing Toys Joint-Stock Co.Ltd(002575) incurred sales expenses of 1699500 yuan, a year-on-year decrease of 78.69%, and management expenses of 7604600 yuan, a year-on-year decrease of 59.26%. The company said that the main reason was the decrease of sales and management personnel in the current period. The data also shows that the number of employees in the company during the reporting period was only 17, but the total number of employees receiving salary in the current period was 70.
For the above problems, the inquiry letter requires the company to further explain the reasons and rationality of the sharp decline in sales expenses and management expenses, whether there is any behavior to avoid delisting by adjusting profits through sharp salary reduction or layoffs, and whether it affects the company’s sustainable operation ability.
In addition, the Shenzhen Stock Exchange also requires to explain the reasons for the large difference between the number of on-the-job employees and the number of employees receiving salary, the positions or business segments involved in the resigned employees, and the calculation and settlement of the costs and expenses related to the resignation.
