Doushen(Beijing) Education&Technology Inc(300010) Technology (Beijing) Co., Ltd
Reply to the inquiry letter on the annual report of Shenzhen Stock Exchange
Shenzhen Stock Exchange gem company management department:
On May 15, 2022, our company received the inquiry letter on the annual report of Doushen(Beijing) Education&Technology Inc(300010) Technology (Beijing) Co., Ltd. [2022] No. 341 from your ministry. After receiving the inquiry letter, our company attaches great importance to it and has carefully verified the relevant matters mentioned in the inquiry letter. The specific replies to the questions involved in the inquiry letter are as follows:
1. The reply shows that your subsidiary China future education technology (Beijing) Co., Ltd. (hereinafter referred to as "China future") achieved net profits of 1502825 million yuan and -426093 million yuan respectively in 2020 and 2021. Your company disclosed the announcement on adjusting the performance commitment of wholly-owned subsidiaries and signing supplementary agreements on May 18, 2021, Your company adjusted the Chinese future performance commitment to "achieve a net profit of no less than 60 million yuan in 2018 and an accumulated audited net profit of no less than 509 million yuan from 2019 to 2021" and "all parties agree and promise that the above adjustment is irrevocable and will not be adjusted after this adjustment". Please your company:
(1) Verify the fulfillment of future performance commitments in Chinese. If the performance commitments are not fulfilled, please calculate the amount of performance compensation to be performed by the performance commitment party, and verify whether the performance commitment party has implemented performance compensation as agreed. If not, explain the recovery measures your company has taken or plans to take.
reply:
On May 17, 2021, the company signed the supplementary agreement to the equity transfer agreement with Fusui Zhuge chuangxiang information technology partnership (limited partnership), Fusui Zhuge Xuetang information technology partnership (limited partnership) and Dou Xin, which agreed that, The performance commitment agreed in the original agreement "the audited net profit commitment of Chinese from 2018 to 2021 (the audited net profit attributable to the owner of the parent company before and after deducting non recurring profits and losses, whichever is lower) shall not be less than 60 million yuan, 130 million yuan, 169 million yuan and 21 million yuan respectively", Adjusted to "the net profit realized by Chinese in 2018 shall not be less than 60 million yuan, and the total audited net profit realized from 2019 to 2021 (the audited net profit attributable to the owner of the parent company before and after deducting non recurring profits and losses, whichever is lower) shall not be less than 509 million yuan (hereinafter referred to as" cumulative committed net profit ").
After deducting the impact of share based payment, the net profit attributable to the shareholders of the parent company after deducting non recurring profits and losses in 2018 is 680941 million yuan, realizing the performance commitment in 2018. In 2019, 2020 and 2021, the audited net profit attributable to the shareholders of the parent company after deducting non recurring profit and loss was 1460597 million yuan, 1383262 million yuan and - 252231 million yuan respectively. The total net profit attributable to the shareholders of the parent company after deducting non recurring profit and loss was 2591628 million yuan, and the cumulative committed net profit of 20192021 was not completed. During the reporting period, the company has accrued corresponding performance compensation amounting to 249837200 yuan.
For the above performance compensation, the company has fully communicated with the promisor Mr. Dou Xin, who is actively planning and raising funds to fulfill the performance compensation obligation to the company. Relevant initiatives are as follows:
1. The source of performance compensation shall be deducted from some equity transfer funds payable by the company but not yet paid to the original shareholders of Chinese future, and the balance of various loans lent by Mr. Dou Xin to the company;
As of the reply date of this reply, the balance of equity transfer payable by the company to the former shareholders of Chinese in the future is 47.94 million yuan, and the balance of loan payable to Mr. Dou Xin is 548401 million yuan. Therefore, the amount that can be directly used to deduct the performance compensation is 1027801 million yuan. After deducting the above two items, the remaining compensation amount is 1470571 million yuan.
2. As of the disclosure date of this reply, the balance of future borrowings payable by the company in Chinese is 1290231 million yuan, of which 916259 million yuan is lent to Chinese future by Mr. Dou Xin and the core team of Chinese future to support the development of the company and lend the money to the company from Chinese future. The company will repay the above related loans payable to Chinese future and Chinese future core team as soon as possible. Dou Xin and Chinese future core team also agree to use all the money to pay performance compensation after receiving the above money.
3. Whereas the performance commitment party has made the following important contributions to the development of the company, resulting in the loss of its own interests: as of the disclosure date of this reply, due to the continuous shortage of funds, the company has failed to pay the corresponding equity transfer payment at the time agreed in the contract, resulting in interest of 21.4 million yuan; Mr. Dou Xin's personal long-term loan to the company has accumulated interest of 28.35 million yuan; Long term pledge of personal shares (45.36 million shares) to provide credit enhancement for the company's loan financing; Mortgage its personal real estate to provide financial support for the company. For details, see the announcement on borrowing from the second largest shareholder and related party transactions disclosed by the company on October 13, 2021. After friendly negotiation with the performance commitment party, the company plans to give the performance commitment party a certain amount of financial compensation. The company will timely bring the above compensation matters to the relevant review process, and subject to the approval of the company's review procedure in accordance with the requirements of relevant laws and regulations. Mr. Dou Xin promises that all the money will be used for performance compensation after receiving it.
4. The remaining part of Mr. Dou Xin will be paid by means of not limited to selling some of the company's shares he holds;
As of the disclosure date of this reply, 45.36 million shares held by Mr. Dou Xin have been pledged to financial institutions for the company to help the company obtain loans. At present, they are still in the state of pledge. When the pledge is lifted, Mr. Dou Xin will sell some shares in due time according to the law and regulations according to the amount of shares of the listed company he holds, and the obtained funds will give priority to paying the balance of the above performance compensation.
Mr. Dou Xin has been firmly optimistic about and supportive of the company for a long time. After fulfilling the performance compensation, if he personally encounters the company's dividend or large bonus payment, he still promises to buy all the shares of the listed company.
In conclusion, Mr. Dou Xin will actively raise funds through various ways to pay performance compensation to the company. And complete all performance compensation matters after the pledge of 45.36 million shares pledged for the company is lifted.
(2) Explain the reason why the expected future net cash flow in 2023 is 63.09 million yuan, which is much higher than the expected net cash flow in 2022 of 7.91 million yuan, and disclose the detailed prediction basis. Please comment on the rationality of the forecast data.
reply:
The estimated future net cash flow in 2022 and 2023 is:
Unit: 10000 yuan
Project / year 20222023
Income 38597444478835
Cost 19410522212692
Gross profit margin 0.4971 0.5060
Taxes and surcharges 41.16 47.77
Operating expenses 723.50 837.33
Administrative expenses 850507914243
R & D expenses 448734453043
EBIT 5,429.85 8,103.46
Income tax 778.89117550
NOPLAT 4,650.95 6,927.97
Increase in working capital 385974 619.09
Net cash flow 791.21630888
It can be seen from the above table that the future net cash flow of Chinese in 2023 is much higher than that in 2022, which is mainly due to the change of working capital increase. The working capital in 2022 is 385974 million yuan, while the working capital in 2023 is 6.1909 million yuan.
The additional amount of working capital refers to the additional working capital required by the enterprise to maintain the sustainable operation ability of the enterprise without changing the current main business conditions, such as the basic capital required for cash, product inventory purchase, advance purchase payment (accounts receivable) on behalf of customers and accounts payable, etc. required for normal operation. The addition of working capital refers to the cash used to obtain the commercial credit of others and the cash and inventory required to be maintained for normal operation with the change of business activities of the enterprise; At the same time, in economic activities, the provision of commercial credit can correspondingly reduce the immediate payment of cash. Generally, the accounting contents of other accounts receivable and other accounts payable are mostly irrelevant to the main business or temporary transactions, which need to be screened and determined individually according to their relevance to the estimated business. Therefore, in principle, only the main factors such as cash, accounts receivable, inventory and accounts payable required for normal operation need to be considered in estimating the increase of working capital.
The working capital increase defined in the company's goodwill forecast is: working capital increase = current working capital - previous working capital. Where, working capital = current assets excluding surplus assets – current liabilities excluding surplus liabilities and excluding interest bearing liabilities. In addition, the company determines the proportional relationship between working capital and business operation income and cost expenses based on the statistical analysis of historical assets, business operation income and cost expenses including goodwill asset group and the working capital turnover of enterprises in the same industry, and then predicts the increase of working capital in each year of the future operation period according to the income and cost estimation of each year in the future operation period.
The following table is the calculation of working capital in the forecast period:
Unit: 10000 yuan
Project / year 20222023 20242025 2026
Working capital 385974447883499025553713596602
Operating income 38597444478835499025055371355966017
Proportion of working capital in revenue 10.00% 10.00% 10.00% 10.00% 10.00%
Increase in working capital 385974 619.09 511.41 546.89 428.88
Overall evaluation method: the specific calculation formula is as follows:
Where:
P: Present value of future cash flow of assets;
RI: estimated future cash flow of assets in year I;
RN: estimated future cash flow of assets after the forecast period;
r: Discount rate;
n: Detailed forecast period;
A: Opening working capital.
Combined with the above calculation methods, the expected future net cash flow of Chinese in 2023 is much higher than that in 2022, mainly due to the large increase of working capital in 2022: it is estimated that the initial working capital a (working capital in 2021) is negative, so the working capital (a) in 2021 is taken as 0. The increase in working capital in 2022 = working capital in 2022 - working capital in 2021, resulting in a large increase in working capital in 2022, while the increase in working capital in 2023 is only 6.1909 million yuan compared with 2022. At the same time, the initial working capital (working capital in 2021) needs to be deducted when calculating P (present value of future cash flow of assets). On the whole, the future working capital level is positively correlated with income. The working capital increases greatly in 2022, resulting in the impact of the initial working capital of RMB 0 in 2021.
The future impairment of goodwill has been recognized by Zoomlion asset appraisal group Co., Ltd. in 2022
