On May 18, Beijing Unistrong Science & Technology Co.Ltd(002383) ( Beijing Unistrong Science & Technology Co.Ltd(002383) , SZ) issued the announcement on reply to the inquiry letter of the annual report of Shenzhen Stock Exchange.
From 2019 to 2021, Beijing Unistrong Science & Technology Co.Ltd(002383) achieved net profit after deduction of non-profit of -869 million yuan, – 1095 million yuan and -683 million yuan. Shenzhen stock exchange requires the company to explain “whether there is significant uncertainty in the ability of sustainable operation, and the specific basis and rationality of the company’s annual report based on the assumption of sustainable operation.”
In this regard, Beijing Unistrong Science & Technology Co.Ltd(002383) said: “the proportion of financial expenses and asset impairment in revenue is much higher than that of comparable companies, resulting in negative net profit after deducting non recurring profits and losses for three consecutive years.”
The reporter of the daily economic news noted that according to the reply announcement of Beijing Unistrong Science & Technology Co.Ltd(002383) , the total loss of credit and asset impairment from 2019 to 2021 exceeded 1.77 billion yuan.
financial expenses and asset impairment lead to negative deduction of non net profit for three consecutive years
In response to the reason why the deduction of non net profit has been negative for three consecutive years asked by Shenzhen Stock Exchange, Beijing Unistrong Science & Technology Co.Ltd(002383) selected Beijing Bdstar Navigation Co.Ltd(002151) , Shanghai Huace Navigation Technology Ltd(300627) and Guangzhou Hi-Target Navigation Tech Co.Ltd(300177) from comparable companies in the same industry to compare the operation from 2019 to 2021.
“After analysis, the accumulated financial expenses and asset impairment of the company in three years are 718 million yuan and 1.31 billion yuan more than the average value of comparable companies respectively. The proportion of financial expenses and asset impairment in revenue is much higher than that of comparable companies, resulting in negative net profit after deducting non recurring profits and losses for three consecutive years.” Beijing Unistrong Science & Technology Co.Ltd(002383) indicates.
“Affected by the large amount of advance money and long accounting period of communication and communication integration business, the company has a large scale of interest bearing liabilities, and the proportion of financial expenses in revenue is much higher than that of peers.” Beijing Unistrong Science & Technology Co.Ltd(002383) scalep align=”center” style=”text-align:center;”> Image source: Beijing Unistrong Science & Technology Co.Ltd(002383) announcement screenshot
It is worth noting that over the past three years, Beijing Unistrong Science & Technology Co.Ltd(002383) has been withdrawing large amount of asset impairment, totaling about 1.77 billion yuan. Among them, goodwill, long-term equity investment, inventory and accounts receivable are greatly impaired, accounting for 88% in totalp align=”center” style=”text-align:center;”> Image source: Beijing Unistrong Science & Technology Co.Ltd(002383) announcement screenshot
In view of the goodwill impairment of 760 million yuan, Beijing Unistrong Science & Technology Co.Ltd(002383) said: “the project-based companies in the company’s subsidiaries, such as zhongkeyatu, Shanghai Titan, Beijing spatiotemporal IOT, etc., due to the characteristics of on-site operation, long project delivery and acceptance cycle and labor-intensive, affected by the covid-19 epidemic, the performance did not meet the expectations, and the impairment was confirmed by the evaluation organization.”
Regarding the rationality of the “going concern assumption” asked by the exchange, Beijing Unistrong Science & Technology Co.Ltd(002383) replied that after nearly three years of efforts, the company’s asset structure has been optimized, the factors of asset impairment have been basically eliminated, the scale of liabilities and financial expenses have decreased significantly, and the liquidity has been completely improved. There is no major uncertainty in the company’s continuing operation, so the basis for preparing the annual report based on the assumption of continuing operation is sufficient and reasonable.
said there was no case of selling to customers who did not have the ability to pay
At the end of 2021, the balance of Beijing Unistrong Science & Technology Co.Ltd(002383) accounts receivable was 867 million yuan, a decrease of 800 million yuan compared with the beginning of the period. The bad debt provision of accounts receivable at the end of the period was 346 million yuan, and the balance of accounts receivable with bad debt provision withdrawn by single item was 268 million yuan. The exchange asked Beijing Unistrong Science & Technology Co.Ltd(002383) to explain: “verify whether the relevant sales are true and accurate, whether the transaction price is fair, and whether there is a situation of selling to customers who do not have the ability to pay.”p align=”center” style=”text-align:center;”> Image source: Beijing Unistrong Science & Technology Co.Ltd(002383) announcement screenshot
Beijing Unistrong Science & Technology Co.Ltd(002383) said that the business period corresponding to the accounts receivable for which the bad debt provision is withdrawn individually is mainly before 2018. Since Xinghui Electronics (referring to Beijing Unistrong Science & Technology Co.Ltd(002383) controlling shareholder and Xinghui Electronic Technology Co., Ltd. of Zhengzhou airport port area) became the controlling shareholder of the company, it has focused on strengthening the management of accounts receivable and controlling the increment, clarified the collection responsibility for historical arrears and included them in the assessment objectives. However, due to the long time of relevant arrears, the settlement effect did not reach the expectation.
“At that time, the company carried out business based on normal business logic and credit policy, had reasonable business reasons, and did not sell to customers who did not have the ability to pay.” Beijing Unistrong Science & Technology Co.Ltd(002383) indicates.
In addition, at the end of 2020, Beijing Unistrong Science & Technology Co.Ltd(002383) all batches of contracts related to prepayments and accounts receivable formed by conducting communication integration business have been overdue. In 2021 Beijing Unistrong Science & Technology Co.Ltd(002383) transferred these prepayments and accounts receivable to Henan Puzhi Technology Center (limited partnership) (hereinafter referred to as Puzhi Technology), This has also led to the annual audit accountant issuing an unqualified audit report with emphasis on the financial report of Beijing Unistrong Science & Technology Co.Ltd(002383) 2020.
In response to the above events, Shenzhen stock exchange requires Beijing Unistrong Science & Technology Co.Ltd(002383) supplementary disclosure of the progress of the above transactions and whether the accounting treatment process meets the requirements of the standards.
Beijing Unistrong Science & Technology Co.Ltd(002383) replied that the above prepayments and accounts receivable had been transferred to Zhengzhou HANGGANG Youhe Technology Co., Ltd. (hereinafter referred to as Youhe Technology), and then it transferred 100% equity of Youhe technology to Puzhi technology. In May 2021, Beijing Unistrong Science & Technology Co.Ltd(002383) received the equity transfer payment of Youhe technology. In June 2021, Youhe technology completed the industrial and commercial change registration procedures, and Youhe technology is no longer included in the scope of Beijing Unistrong Science & Technology Co.Ltd(002383) consolidated statements.
“With the disposal of equity, the risk return of creditor’s rights and debts has been transferred. The accounting treatment is in line with the provisions of the accounting standards for business enterprises,” Hezhong Sichuang said
