Inquiry letter on Shanghai Welltech Automation Co.Ltd(002058) 2021 Annual Report
Annual report inquiry letter [2022] No. 164 of the company Department Shanghai Welltech Automation Co.Ltd(002058) board of directors:
In the process of reviewing your company’s 2021 annual report (hereinafter referred to as “annual report”), our department has paid attention to the following matters:
According to the previous announcement of your company, in September 2021, your company acquired 51% equity of Shanghai Ziyan Machinery Technology Co., Ltd. (hereinafter referred to as “Ziyan machinery”) held by Shanghai Zijiang (Group) Co., Ltd. (hereinafter referred to as “Zijiang group”) in cash, forming a business merger under the same control. On October 29, 2021, your company completed the equity delivery and obtained the control of Ziyan machinery. According to the annual report, your company achieved an operating income of 244.87 million yuan and a net profit attributable to shareholders of the listed company (hereinafter referred to as “net profit”) of 14.62 million yuan in 2021. According to the segment information, in 2021, Ziyan machinery realized an operating revenue of 118.58 million yuan and a net profit of 18.77 million yuan. After deducting Ziyan machinery, your company realized an operating revenue of 126.29 million yuan and a net profit of 5.01 million yuan. From the beginning of the year to the merger date, Ziyan machinery realized an operating revenue of 74.68 million yuan and a net profit of 12.87 million yuan. Please add the following information to your company:
1. In 2019 and 2020, the sales revenue of your company’s original main business automation instrument business was 89.51 million yuan and 82.32 million yuan respectively, and the net profit was – 13.98 million yuan and – 650000 yuan respectively; In 2021, the business segment achieved an operating revenue of 126.29 million yuan and a net profit of 5.01 million yuan. Please make supplementary disclosure: (1) list the name of the top five customers of the business, sales amount, sales proportion, related relationship and the balance of accounts receivable as of the end of the period;
(2) If the top five customers have changed compared with previous years, please specify the sales situation and reasons for the change in previous years.
(3) Combined with the situation of downstream industries and comparable listed companies in the same industry, this paper analyzes in detail the reasons and rationality of the substantial increase in operating revenue in 2021 compared with the previous years and the reasons for turning loss into profit according to the product classification.
(4) In 2021, the gross profit margins of pressure transmitters, environmental protection products and other instruments and meters in the automation instrument business were 32.66%, 20.03% and 19.62% respectively, with changes of 10.71%, 39.05% and 20.04% respectively compared with the same period of the previous year. Please analyze in detail the reasons for the sharp change in the gross profit margin of the above products, as well as the reasons and rationality for the sharp increase in the sales revenue of environmental protection products and other instruments and meters and the sharp decline in the gross profit margin.
2. In 2019 and 2020, the sales revenue of Ziyan mechanical automobile inspection tools business was 81.35 million yuan and 102.53 million yuan respectively, and the net profit was 7.49 million yuan and 5.36 million yuan respectively; In 2021, the business segment achieved a sales revenue of 118.58 million yuan and a net profit of 18.77 million yuan. Please make supplementary disclosure:
(1) List the name of the top five customers of the business, sales amount, sales proportion, sales content, related relationship and the balance of accounts receivable as of the end of the period;
(2) If the top five customers have changed compared with previous years, please specify the sales situation and reasons for the change in previous years.
(3) In 2021, the gross profit margin of auto inspection tool business was 36.90%, an increase of 6.85% over the previous year. Please analyze the reasons and rationality of the sharp increase in the gross profit margin of this business in detail.
(4) In the fourth quarter of 2021, the sales revenue of automobile inspection tools business was 43.9 million yuan, accounting for 37% of the annual revenue. Please explain whether the realization of sales revenue in the fourth quarter is in line with the laws and rationality of the industry in combination with the sales situation in the same period of previous years and the sales situation of comparable listed companies in the same industry.
3. As of December 31, 2021, the amount of accounts receivable in the company’s consolidated statements was 64.54 million yuan, an increase of 32% over the beginning of the period. The amount of impairment loss of credit assets in 2021 was – 660000 yuan, a year-on-year decrease of 82%. Please make supplementary disclosure:
(1) Disclose the name, amount, aging, sales in 2021, repayment up to now and whether it is overdue of the top five accounts receivable customers according to the automation instrument business and automobile inspection business.
(2) Reasons and rationality for the significant increase in accounts receivable at the end of 2021 compared with the beginning of the year, but the significant decrease in the amount of impairment loss of credit assets.
4. In 2021, your company’s customers carried out debt restructuring by means of stock debt repayment. The amount affected by the provision for impairment of accounts receivable was 950000 yuan, forming a total of 180000 yuan of debt restructuring income and investment income. Please explain whether the specific content and accounting treatment of the above situation comply with the relevant provisions of the accounting standards for business enterprises.
5. The annual audit accountant is requested to check and comment on the above questions 1-4, and check and comment on the following contents:
(1) In accordance with the relevant provisions of “4.2 matters related to the deduction of operating income” in the guidelines for the self discipline supervision of listed companies No. 1 – business handling of the exchange, check whether the company has other operating income items that should be deducted and whether the deduction of operating income is accurate and complete.
(2) Whether the company overstated its operating revenue, recognized accounts receivable and increased its net profit in the fourth quarter.
(3) The specific audit procedures you perform for operating income and accounts receivable, including but not limited to the audit procedures for income cut-off test, the number and scope of sampling test samples, accounts receivable confirmation procedures and post period collection test, the inspection of major contracts, etc., shall report the relevant audit working papers to our department.
6. On April 8, 2021, because the lower net profit before and after deducting non recurring profits and losses in 2020 is negative and the annual operating income is less than 100 million yuan, your company’s stock trading was warned of delisting risk. Your company is requested to check whether the relevant situations have been completely eliminated and meet the conditions for canceling the delisting risk warning in combination with the deduction of operating income and the realization of net profit after deducting non recurring profits and losses in 2021. The annual audit accountant and lawyer shall check and give clear opinions.
Please make a written statement on the above issues, submit the relevant explanatory materials to our department and disclose them to the public before May 12, and send a copy to the dispatched office at the same time.
We are writing to inform you that
Shenzhen Stock Exchange
Listed company management Department II
May 4, 2022
