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(Original title: Blacklist, warning! After being blacklisted by the State Grid, this leading company was targeted by the Southern Power Grid again, and its annual revenue loss may exceed 300 million yuan! The chairman urgently increased his holdings, what should the 20,000 shareholders do?)

Late at night on July 30, Dingxin Communications (603421.SH) issued a risk warning that the company and its subsidiaries received a warning from China Southern Power Grid Co., Ltd. (hereinafter referred to as “China Southern Power Grid”) on July 29.blacklistEarly warning,China Southern Power Grid initially believed that the company was suspected of disciplinary violations and included it in the early warning from July 29, 2024, and recommended a market ban.The warning period and final handling results are not yet determined.

According to the announcement, the company's winning bids and revenue recognition in the Southern Power Grid system in the past two years are as follows (the subsidiary's winning bids and revenues have been incorporated into the listed company):

In 2023,The winning bid amount is RMB 684 million (tax included).The revenue amount is 530 million yuan, accounting for 14.60% of the company's audited operating income in 2023; the winning bid amount in the Southern Power Grid system from January to July 2024 is 611 million yuan (including tax) and the revenue amount is 283 million yuan.

As of July 30, the company has won bids in the Southern Power Grid system but has not signed contracts for approximately RMB 610 million (including tax), and the subsequent execution of this part of the bid is not yet determined. This incident only affects the company's new business in the Southern Power Grid, and the orders that have been contracted are being fulfilled normally, and there is no associated impact on other businesses outside the Southern Power Grid.

The announcement stated,Assuming that the impact of this incident lasts for half a year, based on the company's winning bid amounts and confirmed revenue in the Southern Power Grid system in the past two years, it is estimated that the company's operating income will decrease by an average of approximately RMB 310 million per year in the next two years.

The announcement reminded that the company has only received a blacklist warning notice from the China Southern Power Grid.The company has lodged a complaint with the China Southern Power Grid.The final outcome and release deadline of this incident are still unknown, so the impact of this incident on the company's bids and revenue in the Southern Power Grid system is highly uncertain. The company will strictly fulfill its information disclosure obligations in accordance with relevant laws and regulations. Investors are advised to invest rationally and pay attention to risks.

On the same day, Dingxin Communications announced thatThe company's controlling shareholder and actual controller Wang Jianhua (also the company's chairman, editor's note), Zeng Fanyi and some directors, supervisors and senior managersBased on the confidence in the company's future development and recognition of the company's long-term investment value, and in order to enhance investor confidence and safeguard the interests of all shareholders of the company, it is planned that within 6 months from the date of disclosure of this announcement,The company's shares were increased through methods permitted by the Shanghai Stock Exchange system (including but not limited to centralized bidding and block trading). The total amount of this increase in holdings shall not be less than RMB 12 million and not more than RMB 20 million.

Image source: Daily Economic News, photo by Lan Suying

Public information shows that Dingxin Communications is mainly engaged in the research and development, production, sales and technical services of intelligent products in the fields of electricity, fire electronic alarm, etc.

It is worth mentioning that Dingxin Communications issued an announcement on June 4 that on June 3, the company received the "Notice of the State Grid Corporation on the Handling of Suppliers' Bad Behaviors" issued by the State Grid Corporation.The company has been blacklisted by the State Grid Corporation of China from February 23, 2024 to February 22, 2026. During this period, all products of the company will be prohibited from participating in the State Grid system.Tenderingpurchase.

Image source: Dingxin Communications official website

On February 27, Dingxin Communications received a notice from the State Grid Corporation of China that due to the suspected violations of the company's bidding activities in the State Grid Hubei Wuhan Power Supply Company, according to the relevant provisions of the "State Grid Corporation of China Supplier Relationship Management Measures", it was decided to initiate a ban on all the company's procurement categories from February 18, 2024.TenderingProcurement "circuit breaker mechanism" and launch an investigation into the company's suspected violations.

According to a previous report by the Securities Times, the "fuse mechanism" implemented by Dingxin Communications this time is related to the bribery case of Li Mouhua, a squad leader of the Wuhan Power Supply Company of State Grid Hubei Electric Power Co., Ltd. Li Mouhua was accused of accepting bribes of 6.897 million yuan in 5 years, of which "Xing Mou, the regional manager of a Qingdao Communications Co., Ltd. in Wuhan, gave 1.85 million yuan", and Xing Mou's company was Dingxin Communications.

On May 7, Dingxin Communications received a notice issued by State Grid Hubei Electric Power Co., Ltd., stating that from February 23, 2024 to February 22, 2026, all categories of the company will be blacklisted by State Grid Hubei Electric Power Co., Ltd. for two years in the centralized large-scale bidding in Hubei Province.

On June 3, Dingxin Communications received the "Notice of State Grid Corporation of China on the Handling of Suppliers' Bad Behavior" issued by State Grid. The company was blacklisted for two years by State Grid in all categories of bidding and procurement in the State Grid system from February 23, 2024 to February 22, 2026.

After being "blacklisted" by customers, Dingxin Communications will face a huge "gap" in its future performance.

According to the announcement, the amount of bids won by Dingxin Communication in the State Grid system (including subsidiaries at all levels) in 2022 was 1.67 billion yuan (tax included), of which the amount of revenue recognized in 2022 was approximately 480 million yuan, accounting for 15% of the company's operating income in 2022, and the amount of revenue recognized in 2023 was approximately 950 million yuan.The company obtained approximately 1.45 billion yuan in operating income from the State Grid system in 2022, accounting for 47% of the operating income that year.

In 2023, Dingxin Communication won a bid of 1.609 billion yuan (including tax) in the State Grid system, of which the amount of revenue recognized in 2023 was approximately 610 million yuan, accounting for 17% of the company's operating income in 2023. The company obtained approximately 1.70 billion yuan from the State Grid system in 2023, accounting for 47% of the operating income of the year.

At that time, Dingxin Communications said frankly that according to the company's winning bids and confirmed revenue in the State Grid system in the past two years,The penalty imposed by the State Grid will cause the company's operating income to drop by approximately RMB 3.3 billion in the next 4 to 5 years.The company's operating income will be reduced by approximately RMB 550 million in 2024, by approximately RMB 1.42 billion in 2025, and by approximately RMB 980 million in 2026.

At the performance briefing held on May 15, an investor mentioned that the 1.85 million yuan bribe caused the company's market value to evaporate by 1.85 billion yuan, and asked the company what reflections it had. In response, Wang Jianhua, chairman of Dingxin Communications, said that the circuit breaker incident would have a significant impact on the company's performance, and the company would actively adjust its production and operation direction. He also expressed "sincere apologies" to the majority of investors.

It is worth noting that for Dingxin Communications, the importance of the State Grid is beyond words. In the 2023 financial report, Dingxin Communications mentioned that during the reporting period,According to the statistics of the winning bids of State Grid and China Southern Power Grid, the company's products ranked among the top three among all winning companies, making it a first-tier company in the industry.

In the latest announcement, Dingxin Communications said that the company will reduce the impact of this incident on the company's revenue and profits by actively exploring new markets, developing new products, reducing costs and increasing efficiency.

In the secondary market,Since the beginning of this year, Dingxin Communications' stock price has fallen by 53%.

As of July 19,The total number of shareholders of Dingxin Communications is 206,780.

Disclaimer: The content and data of this article are for reference only and do not constitute investment advice. Investors who act accordingly shall bear their own risks.

edit|Cheng Peng Du Hengfeng

Proofreading|Tang Yawen

Cover image source: Daily Economic News, photo by Lan Suying

Daily Economic News is compiled from company announcements, Securities Times, and previous reports by Daily Economic News.