Shanghai Stock Exchange
Szgh [2022] No. 0322
About Guizhou Changzheng Tiancheng Holding Co.Ltd(600112)
Regulatory inquiry letter on information disclosure of 2021 annual report Guizhou Changzheng Tiancheng Holding Co.Ltd(600112) :
In accordance with the requirements of the standards for the content and format of information disclosure by companies offering securities to the public No. 2 – the content and format of annual report (hereinafter referred to as the standard for the format No. 2), the guidelines for industrial information disclosure of Shanghai Stock Exchange and other rules, after the post audit of your company’s 2021 annual report, and in accordance with the provisions of article 13.1.1 of the stock listing rules of the exchange, Please further supplement and disclose the following information.
1、 On audit opinion
1. Zhongshenhua Certified Public Accountants (special general partnership) issued an audit report on the company’s 2020 financial statements that could not express an opinion. The basis for the formation of an opinion that could not be expressed included the significant uncertainty in the ability of going concern, the impact of the filing and investigation of the CSRC, the authenticity and commercial rationality of other receivables, the rationality of the fair value of other equity instruments Completeness of funds occupied by related parties and accuracy of bad debt provision, completeness of external guarantee and accuracy of provision of corresponding estimated liabilities. In 2021, the company hired China Audit Asia Pacific Certified Public Accountants (special general partnership) (hereinafter referred to as China Audit Asia Pacific) as the audit institution. China Audit Asia Pacific believed that the impact of the matters mentioned in the company’s 2020 audit report could not be expressed, and issued an unqualified opinion with emphasis on the matters. At the same time, a paragraph with significant uncertainty related to going concern was added to the audit report. The annual audit accountant is requested to explain: (1) what audit procedures have been implemented and what audit evidence has been obtained for the matters that cannot express opinions in 2020; (2) When the company’s business situation has not improved significantly, the operating revenue has continued to decline, the problems of fund occupation and illegal guarantee have not been solved, there are still a large number of lawsuits unresolved, and the huge assets are limited, the specific basis and reasons for believing that the impact of the matters involved in the company’s inability to express opinions in 2020 has been eliminated; (3) Whether it complies with the audit standards, guidelines for the application of regulatory rules – Audit No. 1 and other relevant provisions, and whether it has issued improper audit opinions to help the company avoid delisting.
2、 About company assets
2. The annual report disclosed that the company’s net assets attributable to shareholders of listed companies at the end of 2021 were 133 million yuan, changing from negative to positive. North Northking Information Technology Co.Ltd(002987) ASI Asset Appraisal Office (special general partnership) has evaluated the 13% equity investment of Guiyang Guiyin Financial Leasing Co., Ltd. (hereinafter referred to as Guiyin financial leasing) and 17% equity investment of Hong Kong Great Wall Mining Development Co., Ltd. (hereinafter referred to as Hong Kong Great Wall) held by the company. The evaluation method is income method. The fair value of 13% equity of Guiyin Jinzu was 604 million yuan, an increase of 222 million yuan over the end of 2020; The fair value of 17% equity of Hong Kong Great Wall was 405 million yuan, an increase of 93 million yuan over the end of 2020. The company is requested to supplement and disclose the evaluation report. The appraiser is requested to explain: (1) the income method is used as the basis for the third level valuation. The reason why the income method is preferred in this appraisal, the specific parameters and process of the appraisal, and the detailed reasons for the appreciation of the two equity investments; (2) Whether the appraisal methods and conclusions of the above two equity investments in the past three years are significantly different from this appraisal and whether the relevant reasons are reasonable.
3. According to the annual report, the closing balance of the company’s trading financial assets was 57 million yuan, an increase of 24 million yuan over the end of the previous year, with a year-on-year increase of 73.41%, mainly due to the changes in the fair value of Yunnan Xiyi Industrial Co.Ltd(002265) ( Yunnan Xiyi Industrial Co.Ltd(002265) ) held by the company. In the first 11 months of 2021, Yunnan Xiyi Industrial Co.Ltd(002265) share price remained below 9 yuan / share and fluctuated slightly. Since December, the limit has been rising continuously, with the highest share price reaching 31 yuan / share. It has continued to decline since 2022, and fell to about 12 yuan / share by the disclosure date of the annual report. Please add whether the company or its related parties have directly or indirectly hyped Yunnan Xiyi Industrial Co.Ltd(002265) share price, so as to increase the net assets of the company. Please comment on the annual audit accountant.
3、 About revenue recognition and deduction
4. The annual report disclosed that the company’s operating revenue in 2021 was 118 million yuan, and the operating revenue after deducting the business revenue irrelevant to the main business and the revenue without commercial substance was 103 million yuan, of which the revenue in the fourth quarter was 55 million yuan. Among the company’s main products, the production and sales volume of solid sealed circuit breakers, gas insulated ring network cabinets and solid insulated ring network cabinets decreased significantly, while the production volume of switchgear increased by 456.07% and the sales volume increased by 316.84% over the previous year. Please explain: (1) the specific reasons for the rapid growth of revenue in the fourth quarter, combined with the operating performance of previous years and the characteristics of comparable companies in the same industry, whether it conforms to the law of seasonal characteristics and whether it is reasonable; (2) The specific reasons for the substantial increase in the production and sales volume of switchgear, the specific situation of new orders and customers, and the revenue distribution, proportion and year-on-year increase and decrease of switchgear business by quarter and product; (3) Supplementary disclosure of the top five customers and suppliers of switchgear business. Please comment on the annual audit accountant.
5. According to the company’s announcement in the early stage, in December 2021, the holding Sun company Dikang Electric Co., Ltd. (hereinafter referred to as Dikang electric) signed two sales contracts for low-voltage cabinet equipment with China Railway First Bureau Group Electrical Engineering Co., Ltd. (hereinafter referred to as China Railway Electrical), and Dikang electric confirmed the income of RMB 131613 million in the current month. China Railway Telecom also won the general contracting project of Guangxi Nantian Expressway Co., Ltd. through public bidding. Guangxi Nantian Expressway Co., Ltd. and Guangxi Railway Development Investment Fund (limited partnership) (hereinafter referred to as Guangxi railway investment), the largest shareholder of the company, are both holding subsidiaries of Guangxi Communications Investment Group Co., Ltd. The company is requested to: (1) explain the specific situation of Dikang Electric’s business development and revenue recognition quarterly, and whether there is any situation of relying on the association relationship or influence of Guangxi railway investment to rush to confirm revenue and avoid delisting; (2) Specific contents and execution of the aforesaid equipment purchase and sale contract; (3) Explain the specific mode of the company’s low-voltage cabinet business from the aspects of production cycle and profit model, complete the production, delivery and acceptance in the month when the contract is signed, and confirm whether the income conforms to the industry practice; (4) The production and sales of the company’s low-voltage cabinet products in recent three years, as well as the amount and proportion of revenue contributed accordingly. Please comment on the annual audit accountant.
6. The annual report shows that the company’s operating revenue in 2021 was 118 million yuan, a year-on-year decrease of about 16%; The cash received from selling goods and providing labor services was 88 million yuan, a year-on-year decrease of about 28%. Please quantitatively analyze the specific reasons why the decline of cash received from selling goods and providing labor services is significantly higher than that of operating income, and whether there is any illegal recognition of income. Please comment on the annual audit accountant.
7. In combination with the above three questions 4, 5 and 6, explain whether the company has not recognized the income in accordance with the accounting standards for business enterprises, and whether it has not deducted the relevant income in accordance with the financial delisting index: operating income deduction, No. 7 of the annex to the self discipline supervision guide for listed companies of Shanghai Stock Exchange No. 2 – business handling.
Please comment on the annual audit accountant.
4、 Other matters
8. According to the company’s announcement, the company reached a settlement with its creditor Li Zhentao on April 16, 2022. Both parties agreed that the scope of guarantee liability of the company in the lawsuit dispute with Li Zhentao would not exceed RMB 27.45 million. Therefore, the company’s illegal guarantee balance would be reduced by RMB 27.45 million and the illegal guarantee balance would be RMB 79.25 million. Please explain: (1) the specific conditions of the above guarantee, including the guarantee time, guarantee object, litigation progress, as well as the signing time and main contents of the settlement agreement; (2) The specific accounting treatment of the important nodes of the matter, including the total amount, proportion and reasons for the provision of estimated liabilities for illegal guarantees, whether the provision proportion is unreasonable, and whether it complies with the relevant provisions of the accounting standards for business enterprises. Please comment on the annual audit accountant.
9. The annual report shows that the largest supplier of the company is a related party, with a purchase amount of 136032 million yuan, accounting for 13.99%. Among the top five suppliers of the company in 2020, the purchase amount of the largest supplier is 8.9122 million yuan, accounting for only 3.90%. Please explain: (1) the details of the supplier’s related parties, including name, related relationship, cooperation years, specific time point of becoming a related party, main business, etc; (2) The business transaction mode between the company and the related party in this year, lists the purchase amount between the company and the related party in previous years, and explains the main considerations and commercial rationality of adding related suppliers this year. Please comment on the annual audit accountant.
10. The annual report shows that the company invested 8.3019 million yuan in R & D in this period, of which the capitalization proportion is 58.34%. In 2020, the company invested 9.1 million yuan in R & D, accounting for 11.88% of the capitalization. Please explain: (1) the specific direction of R & D investment in this period; (2) The reasons for the sharp increase in the capitalization proportion of R & D investment in this period and the specific basis for capitalization treatment; (3) Whether there is improper accounting treatment for R & D investment, so as to adjust profits. Please comment on the annual audit accountant.
In view of the above problems, if the company believes that it is not applicable or inconvenient to disclose due to special reasons in accordance with the requirements of standard format No. 2 and the guidelines for industry information disclosure of Shanghai Stock Exchange, the company shall explain the reasons why it cannot disclose. According to the relevant provisions of the stock listing rules of the exchange, if a listed company applies for canceling the delisting risk warning, the exchange may require the listed company to provide supplementary materials, and the period during which the company replies to the inquiry letter shall not be included in the period for making relevant decisions.
The company is requested to disclose the information immediately after receiving this letter, and reply to our department in writing on the above matters within 5 trading days, fulfill the obligation of information disclosure and revise the periodic report accordingly.
Shanghai Stock Exchange listed company management Department II may 4, 2002
