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Our reporter Qi Meng (chinatimes.net.cn) reports from Shenzhen

Another company was fined due to information disclosure issues.

On the evening of August 1, Jiayun Technology (300242.SZ) issued an announcement stating that the company received the "Administrative Penalty Advance Notice" issued by the Guangdong Regulatory Bureau of the China Securities Regulatory Commission on July 31, 2024. Because the company failed to disclose significant losses in a timely manner and was suspected of violating laws and regulations in information disclosure, the Guangdong Regulatory Bureau intends to give Jiayun Technology and related personnel a warning and impose a fine.

In this regard, economist and new finance expert Yu Fenghui told the China Times reporter that this reflects defects in the company's internal management and information disclosure systems. The company's behavior not only violates the transparency principle of the securities market, but may also mislead investors to make wrong investment decisions.

It is worth noting that in recent years, Jiayun Technology's revenue has been declining year by year, its gross profit margin has continued to decline, and its net profit has even fallen into a loss. Regarding this, our reporter contacted Jiayun Technology's securities department on related issues, but no response was received as of press time.

Failure to disclose significant losses in a timely manner

On May 17, Jiayun Technology received a "Notice of Filing" (Zhengjian Filing No. 0062024015) issued by the China Securities Regulatory Commission. In accordance with the Securities Law of the People's Republic of China and the Administrative Penalty Law of the People's Republic of China and other relevant laws and regulations, the China Securities Regulatory Commission decided to initiate a formal investigation into Jiayun Technology because the company was suspected of violating information disclosure regulations.

Now, the Guangdong Securities Regulatory Bureau has completed the investigation of Jiayun Technology's suspected illegal information disclosure. It has been found that Shenzhen Jiajie Culture Media Co., Ltd. (hereinafter referred to as "Jiajie Culture"), a subsidiary of Jiayun Technology, unfortunately suffered a major financial loss in the C-LOUD Music Carnival hosted in 2021. According to Jiayun Technology's announcement on December 14, 2021, Jiajie Culture's monthly loss in October 2021 was as high as 68.248 million yuan, and the accumulated loss by the end of the month reached 70.6324 million yuan. This loss amount accounts for 19.56% of the absolute value of Jiayun Technology's audited net profit of -361 million yuan in 2020.

Pursuant to Article 80, paragraph 2, item 5 of the Securities Law of the People's Republic of China and Article 20, paragraph 2, item 1 of the Measures for the Administration of Information Disclosure of Listed Companies (CSRC Order No. 182), Jiayun Technology has the responsibility to disclose such major loss information to the public in a timely manner.

However, Jiayun Technology failed to comply with the regulations and did not disclose the loss until April 28, 2022 in its 2021 annual report, which clearly violated the principle of timeliness of information disclosure.

The Guangdong Securities Regulatory Bureau believes that the above-mentioned behavior of Jiayun Technology is suspected of violating relevant laws and regulations and constitutes an illegal situation. At the same time, Guo Xiaoqun, as the then chairman of Jiayun Technology, Zhong Liang, as the director and general manager of Jiayun Technology, and as the executive director and general manager of Jiajie Culture from March 2021 to June 2022, Liu Chaoxiong, as the then financial director of Jiayun Technology, and Zhu Honglei, as the then secretary of the board of directors of Jiayun Technology, failed to perform their duties diligently and were the supervisors directly responsible for the above-mentioned illegal information disclosure of Jiayun Technology, and are suspected of violating relevant laws and regulations.

Based on this, the Guangdong Securities Regulatory Bureau gave a warning to Jiayun Technology and imposed a fine of 1.5 million yuan; gave a warning to Guo Xiaoqun, Zhong Liang, and Liu Chaoxiong, and imposed a fine of 400,000 yuan each; and gave a warning to Zhu Honglei and imposed a fine of 300,000 yuan.

In this regard, Cao Zhe, chief investment officer of Aven Intelligence, told our reporter that Jiayun Technology should establish and improve its internal control system and governance structure to ensure the transparency and accuracy of the company's decision-making and information disclosure. At the same time, the company should strengthen internal audit and compliance management to ensure that various rules and regulations are effectively implemented. In addition, the company should also strengthen the training and education of senior executives to improve their legal and compliance awareness.

Lin Xianping, former deputy secretary-general of the Civil and Commercial Committee of the China Legal Consulting Center, told the China Times that investors can apply for compensation. According to relevant laws and regulations, if investors suffer losses due to illegal and irregular information disclosure by listed companies, they have the right to claim compensation from the responsible party. Investors can file a lawsuit in the local court and demand compensation for losses from the responsible party.

Profitability put to the test

The financial report shows that Jiayun Technology's revenue has gradually declined in recent years and has suffered losses. From 2021 to 2023, Jiayun Technology's revenue fell by 6.69%, 65.17% and 66.81% year-on-year respectively. At the same time, the net profit attributable to the parent company also suffered losses in 2021 and 2023, which were -194 million yuan and -95.5437 million yuan respectively.

Until the first quarter of this year, the company's operating conditions had not improved. In the first quarter of 2024, Jiayun Technology achieved revenue of 157 million yuan, a year-on-year decline of 14.52%. The company's net profit attributable to the parent company was a loss of 15.5554 million yuan, and its non-net profit loss was 14.9799 million yuan. The company's operating cash flow was negative, at -50.1454 million yuan.

At the same time, the company seems to be trapped in the curse of "high revenue and low profit". From 2021 to 2023, the company's revenue was 6.529 billion yuan, 2.274 billion yuan and 755 million yuan respectively, but the net profit attributable to the parent was -194 million yuan, 16.4899 million yuan and -95.5437 million yuan respectively, and the non-net profit was -220 million yuan, -70.8198 million yuan and -113 million yuan respectively.

According to previous financial reports, this seems to be related to the company's high operating costs. In 2021, the company's total operating revenue was 6.529 billion yuan, but its operating costs were as high as 6.343 billion yuan; in 2022, the company's total operating revenue was 2.274 billion yuan, and its operating costs were as high as 2.089 billion yuan; in 2023, the company's total operating revenue was 755 million yuan, and its operating costs were 677 million yuan.

Corresponding to this is the continuous decline in its gross profit margin. In 2023, the operating costs of Jiayun Technology's Internet marketing business accounted for 92.44% of the total operating costs. This high proportion of cost expenditure is mainly used for the purchase of media traffic, etc. The current gross profit margin of this business is only 2.74%, and the company's profitability is facing severe challenges.

In this regard, Jiayun Technology mentioned in its 2023 annual report that although the company has controlled costs by cutting teams and office workplaces, the Internet marketing business still suffered losses this year. However, in order to seek new profit growth points, the company has initially laid out new businesses such as beauty and skin care, game development, etc., and the related businesses have not yet generated profits in 2023. In the future, the company will continue to optimize its business structure, strive to improve operating performance, and increase the company's profitability.

Editor-in-charge: Xu Yunqian Editor-in-chief: Gong Peijia