Supermarket chain enterprise Better Life Commercial Chain Share Co.Ltd(002251) ( Better Life Commercial Chain Share Co.Ltd(002251) . SZ) can be described as a well deserved flow responsibility of A-Shares in April. Since April 12, the company has recorded seven trading limits in eight days, and then three trading limits in four days.
Between the ups and downs, the performance forecast disclosed by the company on April 22 “changed face”, which became the watershed of the company’s share price.
According to the 2021 performance forecast and apology announcement, company had deviation in a series of accounting judgments at the beginning of the year, including the recognition of the investment income from the issuance of REITs in Jinxing Road Plaza and the impairment of goodwill, resulting in a loss of 170 million to 210 million, a year-on-year decrease of 252% to 287.98% as the company had not expected relevant losses before and the performance fluctuation was small, the performance forecast was not published according to regulations before the first quarter.
Better Life Commercial Chain Share Co.Ltd(002251) ‘s “face change” is just a corner of the iceberg.
The reporter found that only on April 28, five A-share companies, including Dima Holdings Co.Ltd(600565) , Huayi Brothers Media Corporation(300027) , Shifeng Cultural Development Co.Ltd(002862) , changed their faces in the performance forecast. And throughout April, according to incomplete statistics by reporters, more than 30 enterprises have significantly revised their performance forecasts .
Relevant people told reporters that under the influence of the epidemic, the company’s demand for “poor sales” objectively exists. Some enterprises also take advantage of the epidemic to take advantage of their performance, which is subjectively “more acceptable”.
real estate industry “face changing”
In a series of “face changing” cases, the reporter found that real estate enterprises have frequent cases, and the amount is mostly “exaggerated”,
In the past week alone, five real estate companies, including Tahoe Group Co.Ltd(000732) , Risesun Real Estate Development Co.Ltd(002146) , Greattown Holdings Ltd(600094) , Aoyuan Beauty Valley Technology Co.Ltd(000615) , Dima Holdings Co.Ltd(600565) , have changed their performance.
as announced in Risesun Real Estate Development Co.Ltd(002146) April 19, the performance forecast for 2021 is adjusted from “profit of 100 million to 150 million” to “loss of 4.5 billion to 6 billion”
As for the reasons for the substantial correction of performance, Risesun Real Estate Development Co.Ltd(002146) said that the company considered that the epidemic situation tended to be stable in the region at the beginning of the year, and calculated the inventory falling price reserves only based on the net realizable value of the reference selling price. However, later, it was considered that although the house purchase policies in various regions were relaxed, consumers’ willingness to buy houses continued to decline, and the epidemic prevention and control situation, including around Beijing and Hebei, intensified, so the inventory falling price reserve was increased.
The change from profit to loss also includes Tahoe Group Co.Ltd(000732) . The company adjusted the “profit of 101.4 million to 131.9 million” in the performance forecast to “loss of 3.5 billion to 4.6 billion”, and cited four factors including supplementary asset impairment, additional financial expenses incurred in debt restructuring, progress of follow-up litigation and impairment of investment real estate as the reason for “face change”.
Both Greattown Holdings Ltd(600094) and Aoyuan Beauty Valley Technology Co.Ltd(000615) also said that considering the impact of the epidemic and the trend of real estate, it is expected to increase the impairment of inventory in the audit annual report.
The reporter found that the Risk Spillover of real estate enterprises has also become the reason for some upstream enterprises to correct their performance.
For example, D&O Home Collection Co.Ltd(002798) ( D&O Home Collection Co.Ltd(002798) . SZ) issued a performance adjustment announcement on the evening of April 22, which lowered the profit estimate of 272 million to 369 million to 51.75 million to 77.5 million yuan. The reason for the correction is the individual impairment of the accounts receivable of downstream developers. Previously, D&O Home Collection Co.Ltd(002798) had been pushed to the forefront of the storm because a head real estate enterprise was unable to cash the notes receivable of 39.5 million yuan overdue, but later said that a head real estate enterprise would repay the arrears by offsetting the loan with the house.
Also creeping on the head of the real estate enterprise is Yichuang International (839120. NQ), an innovative enterprise to be listed on the Beijing stock exchange. The overall performance estimate of the company was revised down by more than 30 million. It said that considering the increase of the credit risk of the real estate enterprise, the bad debt provision was supplemented for the part of the receivables of the real estate enterprise and its affiliated companies that did not use the house to pay the debt.
Yan Yuejin, a well-known real estate analyst, told reporters: “some projects in real estate enterprises are no problem or even optimistic from the perspective of relative static last year, but they will no longer be optimistic from the perspective of this year. Falling house prices, sluggish transactions and overstock of inventory can occur, and there will be risks in destocking.”
“epidemic impact” into a “universal pot”
In addition to the real estate industry, the industries with more “face changing” enterprises also include film and television, environment and other industries.
For example, since April, several film and television enterprises including Huayi Brothers Media Corporation(300027) , Shanghai New Culture Media Group Co.Ltd(300336) and others have announced to revise their performance.
For the performance change of these companies, the announcement almost attributed the reason to the epidemic.
Huayi Brothers Media Corporation(300027) then pointed out in the report: “at the end of 2021, covid-19 epidemic broke out and repeated across the country and continued until the end of the first quarter of 2022. During this period, the operation of local cultural and tourism projects was impacted unpredictably, resulting in a sharp drop in project revenue. At the same time, it also caused great obstacles to the business development such as on-site investigation of real projects, communication with partners and negotiation and promotion of new projects, resulting in a slowdown in the overall business progress.”
Shanghai New Culture Media Group Co.Ltd(300336) said that the closure caused by the epidemic had delayed the company’s advertising business and increased the impairment of goodwill in addition, the company made provision for the loss of inventory falling price of “Mermaid 2” which was not released. Staying at home, logistics difficulties, work stoppage and Exhibition problems caused by the epidemic also plagued a series of companies .
According to the statistics of the reporter, enterprises including Xingyuan Environment Technology Co.Ltd(300266) , Dagang Holding Group Co.Ltd(300103) , Beijing Baolande Software Corporation(688058) , Annil Co.Ltd(002875) and others revised the forecast on the grounds of covid-19 epidemic prevention and control.
In terms of the reasons for revision, many companies expect their subsidiaries to be affected by the epidemic prevention and control, and the future performance is uncertain, so they implement goodwill impairment. Some companies also cited, including but not limited to, the reasons for the difficulty of business development caused by epidemic prevention and control, the provision of credit impairment, the impairment of revenue recognized in the contract and so on.
performance “bathing”? Motives vary
For the frequent occurrence of asset impairment and inventory falling price, a financial practitioner told reporters: “when the performance forecast is released, the general audit institutions have not entered the site, so the evaluation of some prudent projects often leads to deviation in profit calculation.”
As performance changes often involve non recurring profits and losses, there is a large room for financial treatment, and performance changes are often easy to be criticized as “performance bathing”.
At the end of March, Vanke Group held an annual performance conference to dispel investors’ doubts about the decline in performance in the fourth quarter.
Statistics show that the performance of Vanke Group in the fourth quarter of 2021 decreased by 73.05% year-on-year. To this end, some investors questioned Vanke’s performance at the press conference.
Vanke explained that in addition to the decline in the proportion of settlement equity, the inventory of investment income in the fourth quarter increased the range of investment impairment due to the obvious decline in the market.
For the suspicion of “performance bathing”, Zhu Jiusheng, President of Vanke, said: “the tickets for performance bathing can not be too expensive. The personal income of the management including Yu Liang has also decreased significantly due to the decline of performance. If Vanke cadres and employees pay more than two orders of magnitude for this, it is unnecessary and impossible to bathe performance at such an expensive price.”
Of course, not all enterprises are Vanke, and there may not be no motivation for “bathing”.
The above-mentioned financial practitioners said that the business focus of enterprises has different performance in different periods. When the economy is good, they tend to prove themselves. At this time, it is also more conducive to investment and financing and cooperation; On the contrary, when the economy is not very good, especially when affected by natural disasters such as the epidemic, enterprises focus on the control of some personnel costs or fixed costs. At this time, poor performance can be a reason.
Yan Yuejin pointed out: “the mentality of enterprises is actually very similar to human nature. They always do things in a favorable position for themselves. Last year, in order to show that the enterprise is stable, there will be more or less water in profits. But now, at the time of the epidemic, it seems that it can be explained.”
However, he also pointed out that behind the frequent changes in performance is bound to be risks: “there is a strict operational framework for financial data. For enterprises, frequent and substantial fluctuations in performance will affect their credibility .”
