2024-08-31
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interface news reporter |
yueyang forest & paper (600963.sh), which has been listed for more than 20 years, once again handed in a "loss" report card.
after losing 234 million yuan last year, the company suffered a net loss of 48.6166 million yuan in the first half of this year, a year-on-year decrease of 147.24%. in addition to the forestry assets that continued to depreciate, the second largest loss-making subsidiary of yueyang forestry and paper is chengtong kaisheng (formerly known as zhejiang kaisheng garden and municipal construction co., ltd., later renamed "chengtong kaisheng ecological construction co., ltd.", hereinafter referred to as "chengtong kaisheng"), which is engaged in municipal garden services. chengtong kaisheng lost 17.0275 million yuan in the first half of the year, compared with a profit of 29.1864 million yuan in the same period last year.
interface news found that chengtong kaisheng, a subsidiary of yueyang forest & paper that was acquired nine years ago in an attempt to transform itself, not only suffered losses for the first time, but also had more problems emerge.
on august 30, yueyang forest & paper disclosed its 2024 semi-annual report, which showed that in the first half of the year, the company set aside 159 million yuan in inventory impairment provisions and 6.5585 million yuan in credit impairment provisions for accounts receivable, which had a total impact of 165 million yuan on the consolidated total profit from january to june 2024.
the company said that the forest assets of its subsidiary maoyuan forestry were affected by the ice and snow disaster and showed signs of impairment. after preliminary verification, it made provisions for asset impairment. the financial report showed that maoyuan forestry lost 160 million yuan in the first half of the year, compared with a profit of 8.8761 million yuan in the same period last year.
it is worth mentioning that the second largest loss-making subsidiary of yueyang forest & paper is chengtong kaisheng, which is engaged in municipal gardening services and was the company that yueyang forest & paper sought to acquire for transformation 9 years ago.
yueyang forest & paper, formerly known as yueyang paper mill, was founded in 1958 and listed on the shanghai stock exchange in may 2004. it is the leading integrated pulp and paper enterprise among domestic papermaking listed companies. the company's controlling shareholder, tiger forest & paper group, is a holding company of china paper industry under china chengtong holdings group, which is managed by the state-owned assets supervision and administration commission of the state council.
in 2012, yueyang forest & paper suffered a loss of 218 million yuan; in 2013 and 2014, the company made profits of 19.3706 million yuan and 13.2864 million yuan respectively, but in 2015 it suffered a loss of 390 million yuan.
in order to get out of trouble, yueyang forestry and paper chose to transform into the gardening industry in 2015, and chengtong kaisheng was the "first stop" of its transformation. in june 2015, yueyang forestry and paper planned to acquire 100% of chengtong kaisheng's equity through a private placement. in 2016, yueyang forestry and paper issued 354,574,000 a-shares to china paper, shandong state investment, xinhaitian, chenyuan finance, guolian securities, yueyang forestry and paper employee stock ownership plan phase 1 asset management plan, and liu jianguo through a private placement, raising 2.291 billion yuan, of which 934 million yuan was used to acquire chengtong kaisheng.
chengtong kaisheng's main source of income and profit is landscaping construction business. it was established in november 2000 with a registered capital of 120 million yuan. liu jianguo is the founder, controlling shareholder and legal representative. at that time, liu jianguo and tu hongyan contributed 65% and 35% respectively, with a capital contribution of 78.1105 million yuan and 42.0595 million yuan respectively.
according to the audit report issued by lixin, in 2014 and 2015, chengtong kaisheng's operating income was 531 million yuan and 540 million yuan respectively, with net profits of 71.6751 million yuan and 80.417 million yuan respectively, and gross profit margins of 18.41% and 23.45% respectively. as of december 31, 2015, the company had total assets of 642 million yuan and total liabilities of 347 million yuan. yueyang forest and paper believed at the time that the acquisition would help the company quickly enter the gardening industry, which has good development prospects and strong profitability.
on may 15, 2017, yueyang forest & paper completed the acquisition. since then, as a professional ecological company under china chengtong holdings group, a large state-owned enterprise, chengtong kaisheng has participated in many national and regional key projects such as the xiong'an new area green belt, yan'an red tourism scenic belt, the yangtze river protection yueyang dongfeng lake, and the xi'an national games.
according to the acquisition agreement at the time, liu jianguo and tu hongyan promised that chengtong kaisheng's net profits in 2016, 2017 and 2018 would be rmb 108.64 million, rmb 131.07 million and rmb 144.63 million respectively.
judging from the actual performance, chengtong kaisheng's operating income in 2016, 2017 and 2018 was rmb 672 million, rmb 636 million and rmb 908 million respectively, and its net profit was rmb 115 million, rmb 139 million and rmb 162 million respectively.
in the past three years, chengtong kaisheng has been the most profitable subsidiary of yueyang forest & paper. in 2017, the first year after the consolidation, yueyang forest & paper's net profit increased by 1131.86% year-on-year to 348 million yuan, and continued to increase to 366 million yuan in 2018.
however, once the three-year commitment period was over, chengtong kaisheng's performance began to "change".
in 2019, chengtong kaisheng's net profit fell 33.5% year-on-year to 108 million yuan. from 2020 to 2023, chengtong kaisheng's net profit was 103 million yuan, 73.3823 million yuan, 85.0489 million yuan, and 3.207 million yuan, respectively. during this period, yueyang forest and paper's net profit was 313 million yuan, 414 million yuan, 302 million yuan, 621 million yuan, and -234 million yuan, respectively.
yueyang forest & paper may have buried a "hidden danger" at the very beginning of this acquisition.
jiemian news recently learned of a reply letter from the hunan securities regulatory bureau regarding the report on yueyang forest & paper's acquisition of chengtong kaisheng. the reply letter shows that liu jianguo and tu hongyan issued a letter of commitment to china paper and made adjustments to the letter of commitment, which were negotiated with china paper and the two parties reached an agreement; on december 23, 2021, shanghai guoneng linghang, a joint actor of liu jianguo and tu hongyan, had completed a paid-in capital contribution of 165 million yuan to china chengtong ecology in accordance with the adjusted letter of commitment.
the reply letter also mentioned that "china paper, as the direct controlling shareholder of yueyang forest & paper, signed relevant commitments with liu jianguo and tu hongyan, which is a major event that may have a significant impact on the trading price of listed company securities and their derivatives. china paper failed to inform yueyang forest & paper of the above matters and disclose information. our bureau will handle it in accordance with the law."
jiemian news learned that china chengtong ecology is a platform under china chengtong holdings group that specializes in ecological and environmental protection industries and is the fourth batch of mixed-ownership pilot enterprises identified by the state.
tianyancha shows that at the end of november 2019, shanghai guoneng linghang became the second largest shareholder of china chengtong ecology with a 32.0255% stake and a subscribed capital of 165 million yuan. during the same period, china paper and yangzhou rencheng ecological environmental protection partnership also invested in china chengtong ecology, subscribing to capital of 245 million yuan and 20 million yuan respectively, with shareholding ratios of 47.5531% and 3.8819%.
china chengtong ecology's 2023 annual report shows that the above shareholders completed their paid-in capital on december 31, 2021.
the ultimate beneficiary of the china chengtong ecology shares involved in shanghai guoneng linghang is lin zichao, a director of china chengtong ecology. tianyancha shows that lin zichao indirectly holds 32.0255% of the shares of china chengtong ecology through controlling shanghai guoneng linghang, and indirectly holds 3.8819% of the shares of china chengtong ecology through yangzhou rencheng ecological environmental protection partnership.
like lin zichao, liu jianguo has been one of the directors of china chengtong ecology since november 29, 2019. tianyancha does not show his specific shareholding situation.
jiemian news also found that yueyang forest & paper's controlling shareholder china paper had provided loans to chengtong kaisheng during the listed company's acquisition of the latter. in february 2016, in order to meet chengtong kaisheng's production and operation needs, china paper provided it with a short-term loan of 100 million yuan; at that time, liu jianguo and tu hongyan signed a pledge contract with china paper, pledging their 65% and 35% equity interests in chengtong kaisheng to china paper respectively for security, and completed the pledge registration procedures on march 1, 2016.
in addition, litigation documents disclosed by the china judgments online website and other sources also show the relationships between liu jianguo, lin zichao, shanghai guoneng linghang, china paper and other parties.
the "first-instance civil ruling on the dispute over the confirmation of shareholder qualifications between liu jianguo and china chengtong ecology co., ltd." released by china judgment documents network in march 2022 shows that the plaintiff liu jianguo and the defendant china chengtong ecology, the third party shanghai guoneng linghang, china paper, yangzhou rencheng ecological environmental protection partnership, and beijing tongcai enterprise management partnership had a shareholder qualification confirmation dispute. after the case was filed, the plaintiff liu jianguo finally filed an application for withdrawal on november 16, 2021 on the grounds that the plaintiff and the defendant had reached a settlement.
the above dispute has not been completely resolved. the "first-instance civil ruling on the dispute over the confirmation of the validity of the contract between liu and shanghai guoneng linghang energy co., ltd." released by the china judgment documents network in may 2023 shows that the case of the dispute over the confirmation of the validity of the contract between the plaintiff liu jianguo and the defendant shanghai guoneng linghang energy was filed on january 28, 2023. but the plaintiff liu jianguo withdrew the lawsuit again.
jiemian news learned that shanghai guoneng linghang was established on april 29, 2015, and is engaged in technology development and other businesses in the fields of new energy, energy conservation, and environmental protection. tianyancha's tracking of equity relations shows that lin zichao and wang jinping are the ultimate beneficiaries of shanghai guoneng linghang. lin zichao has been a director of shanghai guoneng linghang since 2017, and became the legal representative and chairman in december 2020. after being sued by liu jianguo in 2023, lin zichao resigned in january 2024 and gradually "disappeared", leaving the positions of legal representative and executive director to ying shengxuan.
after lin zichao "disappeared", liu jianguo continued to sue shanghai guoneng linghang in february 2024, involving "disputes related to the company", and in june applied for equity freeze and consumption restriction against shanghai guoneng linghang and its current legal representative ying shengxuan. coincidentally, the equity that liu jianguo applied for freezing was the china chengtong ecological shares held by shanghai guoneng linghang, and the amount of equity and other investment income involved was exactly 165 million yuan.
according to the aforementioned reply letter, liu jianguo, tu hongyan and shanghai guoneng linghang are persons acting in concert. however, now shanghai guoneng linghang seems to "deny its responsibility".
regarding the above-mentioned matters, jiemian news tried to interview shanghai guoneng linghang through the phone number, email and other contact information disclosed by the company, but has not received a response so far. on august 23, jiemian news went to the publicly disclosed address of shanghai guoneng linghang, "room 1001, 1st floor, building 2, no. 568, jinshajiang west road, jiading district, shanghai". the company in this office is no longer shanghai guoneng linghang. jiemian news did not see the words of shanghai guoneng linghang in the entire work park. the staff on duty in the park that day told jiemian news, "i have never heard of this company."
interface news called the securities department of yueyang forest and paper, and the staff on duty replied to interface news, "there is similar content, but it is undisclosed information. please refer to the company's announcement later." however, when interface news called for the second time to inquire about the progress of the relevant matters, the staff on duty told interface news that they were not sure, "at present, we have not heard that the controlling shareholder has responded to the listed company on related matters."
on august 26, a staff member of the hunan securities regulatory bureau’s reporting department told jiemian news, “there is definitely a letter number, but we cannot give an answer as to whether the specific content of the letter matches or is authentic.”
"if the above agreement really exists, it may be a violation of regulations," a lawyer told jiemian news. in addition, "if the listed company knows about the reported matter and is investigated by the csrc, it may be involved in untimely disclosure of information," said a former secretary of a listed company.
industry insiders familiar with the information disclosure work of listed companies specifically pointed out that according to laws and regulations, listed companies must disclose information related to the company's operations, financial status, major events, etc. in a timely and comprehensive manner. if a listed company fails to disclose important information in a timely manner after learning of it or conceals the true situation, it may be regarded as an information disclosure violation; in addition, according to the "information disclosure management measures for listed companies", listed companies need to disclose any information that may have a significant impact on the company's stock price in accordance with regulations. "if a listed company fails to disclose relevant information in a timely manner after learning of the csrc's investigation conclusion, it may involve information disclosure violations. in general, after learning of important information such as the csrc's investigation conclusion, listed companies should comply with information disclosure regulations in a timely manner and disclose relevant information to avoid violations and protect the interests of investors."
xu feng, director of shanghai jiucheng law firm, told jiemian news that "it is possible that there is a violation of information disclosure regulations, but attention should be paid to whether the csrc itself has made information disclosure requirements. if there are no special requirements, the conclusion of the csrc should be disclosed in a timely manner, as this is important information that affects investors' investment decisions."
another lawyer also believes that the relevant reporting matters are still under investigation. if there is no conclusion, there is still major uncertainty, and it is reasonable for the listed company not to disclose it for the time being.
the above reply letter also involves the evaluation of yueyang forest and paper's acquisition of chengtong kaisheng.
according to the asset appraisal report issued by zhonghe asset appraisal co., ltd. ("zhonghe appraisal") with april 30, 2015 as the appraisal base date, after evaluation using the income method, the value of all shareholders' equity of chengtong kaisheng was rmb 934.06 million. compared with the book value of shareholders' equity of rmb 236.7953 million, the value-added amount was rmb 697.2647 million, and the value-added rate was 294%.
according to zhonghe evaluation, compared with the market approach, "the income approach considers the company's future profitability, reflects the comprehensive profitability of the company's assets, and also embodies the value of various intangible assets formed by comprehensive factors such as the company's good management experience, stable core team, customer relationships, reputation, technological advantages, and unique development concepts."
after the aforementioned asset appraisal report expired on april 30, 2016, yueyang forestry and paper hired zhonghe appraisal to conduct another appraisal. the asset appraisal report issued by zhonghe appraisal with december 31, 2015 as the appraisal base date showed that the book value of chengtong kaisheng's total assets was 641.9276 million yuan, the book value of total liabilities was 346.5649 million yuan, and the book value of shareholders' equity was 295.3627 million yuan. the appraisal value increased to 977.17 million yuan, with an appreciation rate of 231%.
in addition, interface news found that the pledge guarantee matters involving the 100 million yuan short-term loan support provided by china paper to chengtong kaisheng were not reflected in the evaluation report.
the appraisal report updated again by yueyang forestry in january 2017 showed that the book value of chengtong kaisheng's total assets as of december 31, 2016 increased to rmb 878.7702 million, the book value of total liabilities was rmb 469.5603 million, the book value of shareholders' equity was rmb 409.2099 million, and the newly assessed shareholders' equity value increased to rmb 1009.603 million, with the appreciation rate falling to 147%.
the valuation keeps rising, but chengtong kaisheng's estimated operating income and profit are being adjusted down. the final asset appraisal report shows that, considering the actual revenue of chengtong kaisheng in 2015 and 2016, the operating income in the forecast period (2017-2021) will be reduced by 1.7-2 billion yuan compared with the operating income in the forecast period of the original appraisal report. at the same time as the estimated operating income was adjusted down, chengtong kaisheng's gross profit during the forecast period was also adjusted down from 1.46 billion yuan and 1.55 billion yuan to 1.202 billion yuan.
the evaluation results were significantly lowered, and the average gross profit margin of chengtong kaisheng during the forecast period was continuously raised from 20.03% to 22.9%, and the discount rate was also raised from 13.42% to 15.01%. at the same time, the period expenses (sales expenses, administrative expenses and financial expenses) during the forecast period of the evaluation report (2017-2021) were reduced by 40-50 million yuan in total compared with the original evaluation report period expenses, and were continuously lowered from the initial 161 million yuan to 115 million yuan.
as period expenses decreased, despite the decline in revenue and net profit, chengtong kaisheng's gross profit margin continued to rise. yueyang forest and paper explained that from 2013 to 2016, chengtong kaisheng's actual gross profit margin increased from 16.5% to 28.12%, and the gross profit margin has been increasing year by year; the gross profit margin for 2017 predicted in this assessment is 22.34%, which is based on the existing unfinished projects, signed contracts but not yet constructed projects, and predicted projects. the gross profit margin from 2018 to 2021 is calculated based on the company's average gross profit margin from 2014 to 2016, which is 23.05%. "this change is closer to the company's actual gross profit margin in recent years. the industry's average gross profit margin has been around 29% in the past three years, so the adjustment of the company's gross profit margin in this assessment is reasonable, and the forecast is relatively cautious and conservative."
regarding the adjustment of the above assessment report, jiemian news called zhonghe assessment, and a staff member of the agency told jiemian news, "regarding matters related to the assessment report, we are only in contact with the client, and the client needs to issue a letter."
the above-mentioned reply letter stated, "when yueyang forest and paper acquired chengtong kaisheng, it hired an appraisal agency to conduct an appraisal of chengtong kaisheng; the appraisal procedures and appraisal report complied with relevant regulations on asset appraisal."
however, in the view of industry insiders, compliance with the evaluation procedures and evaluation reports does not mean that the evaluation results are reasonable. "first of all, we need to know who hired the evaluation agency." this industry insider who is familiar with auditing and evaluation work told jiemian news that the evaluation agency takes the client's money and must stand on the client's side to do things. "if the client has requirements, the evaluation agency will basically do it according to the client's needs as long as the deviation is not too large. the room for maneuver mainly lies in the income method. the evaluation basis of the income method is mainly based on the profit forecast for the next few years provided by the evaluated party. the reliability and credibility of the basis for this evaluation are relatively weak. if the evaluation is conducted according to the asset-based method, there is not much room for maneuver, and if there are problems later, it is easy to trace the responsibility of the evaluation agency."
"when some listed companies are making acquisitions, they mostly show the best side of the target assets they acquire, but they are likely to hide their bad side." in the view of the aforementioned industry insider, the evaluation cannot be based solely on the best side of the target assets. "the evaluation agency predicts the performance of the target assets in the next three or five years, and the performance promised by the relevant parties is generally only for the next three years. however, company operations are a long-term thing. what should a listed company do if the performance of the target company it acquires is poor three or five years later? this risk is rarely estimated during the evaluation. currently, there are no stricter regulations on this aspect."
no matter how many problems this acquisition has currently surfaced, liu jianguo and tu hongyan have already made a fortune.
in addition to the aforementioned acquisition payment of rmb 934 million, liu jianguo became the third largest shareholder of yueyang forest and paper with a 6.44% stake and 90 million shares after completing the private placement acquisition in may 2017.
on may 12, 2020, yueyang forest & paper completed the implementation of the 2019 annual equity distribution, paying a cash dividend of rmb 0.47 (tax included) per 10 shares to all shareholders, and converting 3 shares into capital reserves formed by share premium for every 10 shares. liu jianguo's shares in yueyang forest & paper increased to 117 million shares, and his shareholding ratio changed to 6.48%.
coincidentally, a week later (may 19, 2020), the three-year lock-up period promised in this fixed increase acquisition ended. liu jianguo then began to reduce his holdings. from june 8 to 24, 2020, liu jianguo reduced his holdings of yueyang forest and paper by 1.62%, with a total of 29.25 million shares, a price range of 3.24-3.4 yuan per share, and a reduction amount of more than 95 million yuan; from february 1 to may 25, 2021, liu jianguo again reduced his holdings by 14.553271 million shares, with a reduction amount of 82.8184 million yuan.
however, since liu jianguo resigned as a director on october 28, 2021, yueyang forest and paper has not publicly disclosed his share reduction information. after completing the equity incentive in june 2021, liu jianguo held 67.4467 million shares by the end of 2021, accounting for 3.74% of the shares. judging from the changes in equity, liu jianguo's share reduction behavior has not ended. as of the end of the first quarter of 2024, his latest shareholding was 17.2153 million shares, accounting for 0.95% of the shares. liu jianguo is no longer on the list of the top ten shareholders disclosed in the 2024 semi-annual report. he is currently the 10th largest shareholder.hong kong securities clearing company limitednumber of shares held10.8127 million shares,the shareholding ratio is 0.6%. according to rough estimates, liu jianguo has sold more than 200 million yuan in cash since 2022.
in other words, by transferring chengtong kaisheng to the listed state-owned enterprise yueyang forest and paper, liu jianguo and tu hongyan have realized more than 1.3 billion yuan.
yueyang forest & paper, the acquirer, is under great pressure of goodwill impairment.
yueyang forest & paper previously admitted that it would use part of the raised funds to purchase 100% of chengtong kaisheng's equity to form a merger of companies under different control, which would generate a certain amount of goodwill in the company's consolidated balance sheet. the 2017 annual report showed that the acquisition brought yueyang forest & paper 516 million yuan in new goodwill.
the 2023 annual report shows that the audit agency listed goodwill impairment as a key audit matter for yueyang forest & paper. as of december 31, 2023, the company's goodwill book value was 516 million yuan, the impairment provision was 66.8442 million yuan, and the book value was 449 million yuan.
in this regard, the shanghai stock exchange issued an annual report inquiry letter to yueyang forestry, asking the company about the rationality and adequacy of the impairment provision for chengtong kaisheng's goodwill and whether the previous provision was sufficient. yueyang forestry replied that in 2022, the company expects the market economy to recover rapidly, with sufficient orders on hand and a high expected gross profit margin, and good information on future revenue and profits. according to the calculation, the recoverable amount is higher than its book value, so no impairment provision was made for goodwill in 2022; "the calculation process and specific indicator selection basis of chengtong kaisheng's goodwill impairment test from 2021 to 2023 are reasonable, and the impairment provision for goodwill is sufficient and reasonable."
"the situation this year is not very good. whether or not there will be an impairment will depend on the specific financial statements." a person working in the securities department of yueyang forest and paper told interface news that it also depends on the situation throughout the year. most of the (chengtong kaisheng) repayments are concentrated in the fourth quarter. "the specific impairment situation cannot be responded to yet. this is all after the annual report work is completed."
after the sweet period of the acquisition, what else will chengtong kaisheng bring to the loss-making yueyang forest & paper?
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