Letter on supervision of information disclosure of Shenzhen Heungkong Holding Co.Ltd(600162) 2021 annual report issued by Shanghai Stock Exchange
Reply
Independent financial advisor
May 2022
Shanghai Stock Exchange:
Gf Securities Co.Ltd(000776) as an independent financial consultant of Shenzhen Heungkong Holding Co.Ltd(600162) (hereinafter referred to as the “listed company” and ” Shenzhen Heungkong Holding Co.Ltd(600162) “) for major cash purchases in 2017, the reply to the relevant issues involved in the supervision letter on information disclosure of Shenzhen Heungkong Holding Co.Ltd(600162) 2021 annual report issued by your ministry is as follows:
Question 2 on the inquiry letter
II Performance commitment of controlling shareholders. According to the announcement, in 2018, the company purchased 65% equity of Morishima Baodi, Morishima Hongying and Morishima real estate from the controlling shareholder Nanfang Xiangjiang Group Co., Ltd. (hereinafter referred to as Nanfang Xiangjiang) for a consideration of 250164 million yuan, and agreed that the cumulative net profits of the three target companies from 2018 to 2021 were 353 million yuan, 441 million yuan and 376 million yuan respectively. When the commitment period expires in 2021, the accumulated net profits of the three target companies fail to meet the standard. According to the verification opinions issued by the accountant, Nanfang Xiangjiang needs to pay the company 203689 million yuan of performance compensation before May 16, 2022, which has been included in other receivables in the company’s annual report. Please the company:
2. Negotiate with the controlling shareholders of the company to formulate an effective performance compensation implementation plan as soon as possible, recover the compensation funds in time, and fully safeguard the interests of listed companies and minority shareholders; If it is uncertain whether the performance compensation can be recovered, please fully remind the risk. The financial advisor Gf Securities Co.Ltd(000776) is invited to give comments. reply:
1. Progress in performance commitments
As of the date of issuance of this reply, Nanfang Xiangjiang, the performance commitment party, has paid performance compensation of 1.040 billion yuan to the listed company, and the performance compensation of the remaining part to be paid is 996.89 million yuan. Nanfang Xiangjiang has submitted a letter of commitment to the listed company, promising the following:
(1) We will strictly follow the relevant provisions in the profit compensation agreement to pay all performance compensation in cash;
(2) The interest of the outstanding performance compensation shall be calculated from May 16, 2022 and shall cease to accrue on the date when the performance compensation is actually paid to the listed company. The interest rate shall be subject to the loan interest rate published by the people’s Bank of China for the same period from May 16, 2022 to the actual payment of the performance compensation;
(3) Within 30 trading days after the issuance of the letter of commitment, the company shall submit to the board of directors of the listed company a plan for repaying the remaining performance compensation in installments.
Gf Securities Co.Ltd(000776) as the independent financial advisor of this transaction, we will actively urge the performance commitment party to submit the plan of repaying the remaining performance compensation to the listed company as soon as possible within the deadline specified in the commitment letter, continue to pay attention to the deliberation results of the board of directors and the general meeting of shareholders of the plan of repaying the remaining performance compensation, and supervise the performance commitment party to pay all the performance compensation in cash in accordance with the profit compensation agreement, It also prompts listed companies to truly, accurately and completely fulfill their information disclosure obligations, and strive to solve matters related to performance compensation as soon as possible, so as to fully safeguard the interests of listed companies and minority shareholders.
2. Risk tips
Gf Securities Co.Ltd(000776) hereby remind the majority of investors of the investment risks caused by the uncertainty of the following matters: (1) in view of the large amount of the remaining performance compensation that Nanfang Xiangjiang, the performance commitment party, needs to pay to the listed company, there is uncertainty about whether it can pay the remaining performance compensation;
(2) Nanfang Xiangjiang, the performance commitment party, has not submitted the plan of repaying the remaining performance compensation to the listed company, and there is uncertainty whether it can submit the relevant plan on time;
(3) Nanfang Xiangjiang’s plan to repay the remaining performance compensation by installments needs to be submitted to the board of directors and the general meeting of shareholders of the listed company for deliberation, and there is uncertainty whether it can be passed at the above decision-making meeting.
Gf Securities Co.Ltd(000776) please pay attention to the investment risk caused by the uncertainty of the above matters.
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Gf Securities Co.Ltd(000776) May 22, 2022
