内容导读：OntheeveningofMayseventhHouseoffunfreecoinsandspins2021ShenzhenStockExchangeissuedaletterofinquiryforthe2...……
On the evening of May seventhHouseoffunfreecoinsandspins2021Shenzhen Stock Exchange issued a letter of inquiry for the 2023 annual report to Canada Foods, in which eight questions were raised in succession. On the same day, Canada Foods also received a regulatory concern letter issued by Hunan Securities Regulatory Bureau, mentioning that the company has major defects in the internal control of related party transactions and inventory management. After three consecutive years of losses, the extension of the judicial freeze period of shares of controlling shareholders and real controllers, the implementation of other risk warnings, and the change of stock abbreviation from "plus Foods" to "ST Plus", a series of "eating letters" is undoubtedly even worse for plus Foods.
A series of "eating letters"
Specifically, the Shenzhen Stock Exchange paid attention to a number of issues in the inquiry letter. These include the audit report of Canada Foods 2023 with qualified opinions issued by the annual audit accountant. the matters involved are mainly the business of entrusting related parties Ningxia Ke Mei Biological Engineering Co., Ltd. (hereinafter referred to as "Ningxia Komei") and Ningxia Yumi starch Co., Ltd. (hereinafter referred to as "Ningxia Yumi") to process monosodium glutamate on behalf of the business, which adopts the processing mode of supplied materials. The part of the actual tonnage consumption exceeding the standard tonnage consumption should be borne by the processing unit, but in the substitute processing production, the actual tonnage consumption exceeds the standard tonnage consumption agreed upon in the agreement. According to the accounting, the consumption of raw materials and auxiliary materials exceeded the standard by 5118 in 2023.Houseoffunfreecoinsandspins2021.04 million yuan, plus Foods will recognize the loss as arrears of Ningxia Komei and Ningxia Yumi and include it in other receivables. Therefore, the Shenzhen Stock Exchange requires Plus Foods to explain the ownership structure and shareholders of Ningxia Kome and Ningxia Yumi, as well as the history of cooperation with them and the internal control of past business cooperation.
In addition, the Shenzhen Stock Exchange also pays attention to seven other issues. Including the company's investment in Hunan Park and the fund's foreign equity investment intention that the principal and interest were not recovered within the validity period agreed in the agreement, and a number of litigation cases occurred in the subsidiary plus (Beijing) Digital Technology Co., Ltd., the company's sustainable operating capacity, the dealer agency model, the reasons for the decline of product gross profit margin, the basis for the preparation of inventory price decline, and so on. The Shenzhen Stock Exchange requires Canada Foods to make a written statement on the above issues and disclose them to the public before May 21.
The regulatory concern letter issued by Hunan Securities Regulatory Bureau shows that Canada Foods has "significant defects" in internal control of related party transactions and inventory management. it is required to explain the time, amount, specific terms and performance of the monosodium glutamate processing agreement signed with the related parties Ningxia Komei and Ningxia Yumi; the company purchases raw materials, commissioned processing monosodium glutamate, internal use of monosodium glutamate, external sales of monosodium glutamate and inventory count. Reconciliation with the monthly cost accounting of Ningxia cocoa beauty and Ningxia jade honey, and the inventory method adopted in Ningxia cocoa beauty factory area, etc. Hunan Securities Regulatory Bureau requires Canada Foods to disclose immediately after receiving the letter of concern, and reply to Hunan Securities Regulatory Bureau in writing within 5 working days.
With regard to the receipt of inquiry letters and regulatory concerns, on May 8, a person related to Canada Food responded to a reporter from the Beijing Business Daily that the company would disclose a reply letter in the future.
Credit crisis
When the 2023 report was released not long ago, Canada Foods issued an announcement saying that the company's stock trading was subject to other risk warnings due to negative opinions from the audit. However, for related issues, people from the Food Media Department of Canada said at that time that it was inconvenient to reply.
"the current development of Canada Foods is really not optimistic." Zhan Junhao, founder of Fujian Huatze brand positioning consulting, told Beijing Business Daily that these questions in the inquiry letter related not only to the company's financial and operational conditions, but also to the company's internal control management and corporate governance structure. The exposure of these negative information will, to a certain extent, affect investors' confidence in the company and adversely affect the company's stock price and market image.
Zhan Junhao said that the revelation in the audit report that there were internal trading controls in the contract processing business made investors doubt the authenticity and accuracy of Canada Foods' financial data. In addition, the company's investment in Hunan Park and the fund failed to recover the principal and interest of the intended gold as scheduled, as well as a number of lawsuits in subsidiaries, all reflect some problems in the company's investment and operation management. In addition, the controlling shareholder and the actual controller become the executor of bad faith, and the excellent investment is filed for bankruptcy review, which will aggravate the credibility crisis of Canada Foods. Canada Foods urgently needs to solve the current internal control and governance problems to ensure that the company's operation and management are more standardized and transparent.
In the view of Jiang Han, a senior researcher at the Pangu think tank, the continued loss on the financial results of plus Foods directly reflects that the company has encountered serious challenges in the process of operation. The inquiry letter from the Shenzhen Stock Exchange and the regulatory concern letter from the Hunan Securities Regulatory Bureau mentioned a number of issues about the internal control and financial situation of Canada Foods, indicating that there are loopholes and risks in the company's management. "imperfect internal controls may lead to mistakes in decision-making and loss of assets, while poor financial conditions may affect the company's liquidity and solvency. If these problems are not solved in time, it will seriously restrict the future development of the company. " Jiang Han said.
On the evening of April 28th, Canada Foods released its annual report showing that revenue reached 1.454 billion yuan in 2023, down 13.78% from the same period last year, with a net profit loss of 191 million yuan. This is the third year in a row that Canada Foods has lost money. According to the financial report of the past years, the net profit of Canada Foods is 80.16 million yuan in 2021 and 79.63 million yuan in 2022. Canada Foods explained in its 2023 financial report that the reason for the change in performance during the reporting period was, on the one hand, a decline in sales revenue, a decrease in sales of main products and a low sales price due to changes in the market environment in 2023; at the same time, due to the suspension of production of Zhengzhou, a wholly-owned subsidiary, the loss of asset impairment and compensation for personnel turnover led to a decline in the company's performance in the reporting period compared with the same period last year. As well as the increase in advertising investment and other factors, resulting in the company's net profit in the reporting period is negative, operating losses.
Beijing Business Daily reporter Guo Xiujuan Zhang letter