The Suzhou Kingswood Education Technology Co.Ltd(300192) (300192) with a significant loss in 2021 due to the provision for goodwill impairment of more than 400 million yuan attracted questions from the regulators.
On January 23, Suzhou Kingswood Education Technology Co.Ltd(300192) disclosed the attention letter issued by Shenzhen Stock Exchange. The company is required to combine the business composition of Longmen education, Xi’an Yucai and Tianjin overseas travel, as well as the impact of the double reduction policy on its production and operation, explain the specific time point when Longmen education’s goodwill shows signs of impairment, whether the provision for goodwill impairment accrued for Longmen education’s goodwill in previous years is sufficient, and the reasons and rationality for not withdrawing goodwill impairment for Xi’an Yucai and Tianjin overseas travel.
The reporter of securities times · e company noted that with the arrival of the peak of A-share performance forecast, many companies, including Wens Foodstuff Group Co.Ltd(300498) (300498), Cosco Shipping Energy Transportation Co.Ltd(600026) (600026), recently exposed huge expected losses, and the provision of impairment loss is one of the important reasons for their losses.
Shenzhen Stock Exchange tortured Suzhou Kingswood Education Technology Co.Ltd(300192) rationality of large amount provision
On January 21, Suzhou Kingswood Education Technology Co.Ltd(300192) disclosed the performance forecast. It is estimated that there will be a loss of 383 million yuan – 483 million yuan in 2021 and a profit of 114 million yuan in the same period of last year. The company frankly stated that the main reason is the provision for goodwill impairment formed by the acquisition of Longmen education of about 420 million yuan to 520 million yuan, as well as the provision for possible disposal and other losses of K12 related businesses in the future.
According to the company’s previous announcement, Suzhou Kingswood Education Technology Co.Ltd(300192) acquired Longmen education, Xi’an Yucai and Tianjin overseas travel, forming goodwill of 596 million yuan, 201.01 million yuan and 21.1487 million yuan respectively. As of June 30, 2021, Suzhou Kingswood Education Technology Co.Ltd(300192) has made provision for impairment of 36.1515 million yuan for the goodwill formed by Longmen education. This time, it has made a one-time provision of 420 million yuan to 520 million yuan, and no provision for impairment has been made for the goodwill formed by Xi’an Yucai and Tianjin.
In this regard, Shenzhen Stock Exchange first asked the company to explain the specific time point when Longmen education’s goodwill showed signs of impairment, whether the goodwill impairment provision for Longmen education’s goodwill in previous years was sufficient, in combination with the business composition of Longmen education, Xi’an Yucai and Tianjin, as well as the impact of the double reduction policy on its production and operation Reasons and rationality of withdrawing goodwill impairment outside Tianjin.
Secondly, Shenzhen stock exchange requires the company to explain whether the specific matters and calculation process of possible disposal and other losses of K12 related businesses in the future mentioned in the performance forecast comply with the relevant provisions of the accounting standards for business enterprises. The annual audit accountant is invited to give special opinions.
In addition, Suzhou Kingswood Education Technology Co.Ltd(300192) the rationality of Longmen education’s calculation of goodwill impairment has also aroused doubts from the exchange. According to the announcement, Shenzhen stock exchange requires the company to explain in detail the impairment calculation process and its rationality in 2021 in combination with the important assumptions and key parameters (growth rate in the prediction period, growth rate in the stable period, profit rate, discount rate, prediction period, etc. when predicting the present value of future cash flow) in the goodwill impairment calculation process of Longmen education, Whether there is a case of adjusting profits by withdrawing large goodwill impairment.
Suzhou Kingswood Education Technology Co.Ltd(300192) in 2011, it was listed on the gem of Shenzhen Stock Exchange. When it was listed, the company mainly engaged in environmental protection offset printing ink business. In 2017, Suzhou Kingswood Education Technology Co.Ltd(300192) acquired Longmen education across the border, and then formed a dual business pattern of offset printing ink and education. In March 2021, the company disclosed that it planned to divest the ink business, and then launched a number of investments in the field of art and sports specialty quality education.
In the context of the “double reduction policy”, Suzhou Kingswood Education Technology Co.Ltd(300192) planned the transformation and said it would focus on the development of modern vocational education. Suzhou Kingswood Education Technology Co.Ltd(300192) in the performance forecast, it is expected that the operation of K12 discipline training business will face great uncertainty, and the relevant business income will decline significantly. At present, K12 extracurricular training and related teaching software business are being handled, and K12 extracurricular training business will no longer be engaged in in the future.
At the same time, in the future, we will continue to promote the comprehensive development of modern vocational education, the integration of vocational education and general education, and the integration of industry and education, and concentrate resources to focus on modern vocational education and talent training in national emerging industries. In addition, actively explore and expand new business growth points, develop secondary and higher vocational education, professional co construction, industrial college, industry education integration and other strategies closely around modern vocational education along the mode of “external M & A + endogenous growth”.
several companies withdrew impairment, resulting in heavy losses
It is worth noting that with the arrival of the peak of A-share performance forecast, many listed companies have recently exposed huge expected losses, and the provision of impairment loss is one of the important factors of losses.
One of the leading pig farmers Wens Foodstuff Group Co.Ltd(300498) disclosed the performance forecast on January 21. It is expected to have a loss of 13-13.8 billion yuan in 2021 and a profit of 7.426 billion yuan in the same period of last year. During the reporting period, the company amortized equity incentive expenses of about 500 million yuan, and preliminarily accrued impairment reserves of about 2.5 billion yuan for the current inventory of consumptive biological assets and productive biological assets.
Also on January 21, Cosco Shipping Energy Transportation Co.Ltd(600026) announced that it was expected to lose 4.92 billion yuan to 5.12 billion yuan in 2021, and the net profit in the same period of last year was 2.37 billion yuan. The company said that the continuous downturn of the international oil transportation market in 2021 and the rigid growth of epidemic prevention costs in the post epidemic period have seriously affected the business performance of the company and its subsidiaries; During the reporting period, provision for asset impairment was made for 94 ships, totaling about 4.96 billion yuan.
Zhejiang Unifull Industrial Fibre Co.Ltd(002427) also issued a performance forecast, and it is expected that the loss will continue to expand. According to the announcement, it is expected to lose 1.15 billion yuan to 1.55 billion yuan in 2021, and 751 million yuan in the same period of last year. In 2021, the price of raw materials rose all the way. Affected by the investment of new production capacity, intensified industrial competition, soaring sea freight, epidemic and other factors, the price increase of the company’s polyester industrial yarn and its ancillary products was weak, and the gross profit margin decreased compared with the same period of last year. The company plans to make provision for impairment of various assets totaling about 554 million yuan.
