Theme of "Illegal Letters" (1):

 

Blindly rubbing hot spots is easy to hit risk

 

 

Editor's note: In conjunction with the China Securities Regulatory Commission's "Investor Protection, Rules and Risks" special publicity campaign, the Shenzhen Stock Exchange continues to launch a series of "violation letter disclosure" cases, hoping to help investors understand all kinds of illegal cases and promote market parties Enhance awareness of law-abiding and risk prevention.

 

Listed company announcements are an important way for investors to understand the company’s business operations and industry development trends, as well as an important source of information for investors to make investment decisions. However, some listed companies may play some tricks in their announcements in order to change investors' expectations for the company's current performance and future development in order to boost their stock prices. Among them, "rubbing hot spots" is a common method used by some listed companies.

 

Company A’s main business is to provide IT development outsourcing services for commercial banks. Since the second half of 2014, Company A has continuously issued announcements stating that the company has begun to set foot in the field of Internet finance, and has successively disclosed the establishment and participation in the establishment of credit investigation business and data business. , Internet finance business, small loan cloud service business and inclusive financial business subsidiaries, and joint ventures with other institutions to buy shares in commercial banks and other "big moves."

 

Company A's layout can be described as comprehensive, basically covering the core business scope of Internet finance, and is quite likely to become the next generation of BAT. At the same time, Company A also frequently receives surveys from institutional investors and conveys to them the company's business vision for the Internet financial business. Some institutional investors also praised Company A by publishing research reports. In this way, Company A caught on to the hot spots of Internet finance, and for a time became a sweet pastry in the capital market, with its stock price skyrocketing, with an increase of more than ten times.

 

Xiao Ming and his colleague Xiaogang also paid attention to the strong stock price of Company A and considered investing. After reading the announcement of Company A, Xiao Ming found that Company A’s investment seemed like thunder and rain, and rarely disclosed the progress of specific business operations. Xiao Ming became suspicious of Company A and then analyzed the periodic reports disclosed by Company A. The so-called The income of Internet financial service business is only over one million yuan, accounting for less than 1% of the income. After careful consideration, Xiao Ming believes that Company A’s Internet financial business may be illusory, so he gave up buying Company A’s stock. Xiaogang laughed at Xiaoming’s analysis. Xiaogang said that even institutions are rushing to buy company A’s stock. You can be better than the institution. Xiaogang firmly buys company A’s stock at a high position, and several daily limits after the purchase. Even let him optimistically add leverage to his investment.

 

The development of the story is always full of drama. Company A was investigated by the Securities Regulatory Commission for violations of information disclosure. The investigation found that Company A’s Internet finance-related business information did not conform to the reality and lacked the basis for future realization. Some businesses could not continue to operate due to policy reasons; In the announcement, the company selectively disclosed favorable information, avoided unfavorable information, and failed to disclose the risks and progress of Internet finance-related businesses. In the end, Company A received an administrative penalty from the China Securities Regulatory Commission for misleading information disclosure, and the exchange also publicly condemned it. The stock price of Company A has already fallen in response, and many investors, including Xiaogang, have suffered large losses. But fortunately, some eligible investors can also recover part of their losses by suing Company A and its main responsible persons in court.

 

At the end of the story, we can't help but praise Xiao Ming's wit, and we can't help but regret what happened to Xiao Gang. But more importantly, as a rational investor, in the face of market speculation hot topics, we must remain calm, not just form investment decisions based on the company’s temporary announcements and analyst reports, but must return to the company’s Fundamentals, especially by carefully reading annual reports and other regular reports to analyze the company's actual operating conditions and development prospects, do not blindly follow the trend. In addition, it needs to be reminded that for new industries and new businesses, company operations are often affected by industry policies and regulations, and investors also need to pay close attention.

 

(Disclaimer: The information in this column does not constitute any investment advice. Investors should not use such information to replace their independent judgment or make decisions based solely on such information. The contributors require the information in this column to be accurate and reliable, but not It does not make any guarantee for its accuracy, completeness and timeliness, nor is it liable for losses caused by the use of the information in this column.)

Theme of "Illegal Letters" (2):

 

Market rumors cannot be trusted

 

Since the development of the media is in full swing, there are many sources of information. Investors should keep their eyes open and carefully screen out the authenticity of the information. Don't be led by the so-called "informed people". Those gossips, top-secret rumors, and heavy exposure are likely to be bait released by some people with ulterior motives.

 

There is such a listed company, there are rumors in the stock bar that it will be reorganized. At the end of April, 201X, a post appeared on the interface of Oriental Wealth Stock Bar W Company, saying that “W Company will initiate a major asset restructuring, and multi-channel private equity funds are planning to promote W Company to take control and carry out large-scale business integration of the company. And restructuring, the secondary market valuation will soar. The major shareholders are now very passive, and many brokerages are anxious to find white knights and high-quality assets to inject W in order to respond to the attacks of private equity funds and retain control." and "Jingxiang Company Insiders have verified that the company’s executives have recently posted passwords. Any topic involving asset restructuring is highly confidential and cannot be spoken. Such a high degree of confidentiality, which is only for asset restructuring, has never been before. Now, the company’s stock price has skyrocketed. It is not ruled out that major shareholders participated in the counterattack of the secondary market equity contention."

 

In mid-May, the account that made the above remarks once again posted a post "This backdoor may have been negotiated" in the Oriental Fortune Stock Bar, saying "It is rumored that the reorganization of W company has been frequently contacted recently and may have been negotiated. The secondary market share price The backdoor reorganization has been fully supported." The above posts have been clicked more than 3000 times. Two days later, W Company issued a clarification announcement to clarify rumors about major asset restructuring on the Internet.

 

At first glance, there seems to be nothing wrong. Who knows that this rumors and refuting the farce is actually a play led by the chairman of the board. Seeing that the price of company W’s stock has risen sharply in the past two months, the chairman told the Secretary-General that he issued a clarification announcement without reorganization to suppress the stock price. Secretary Dong said that there are no rumors of restructuring in the market, and this clarification announcement is not easy to issue. The chairman said that if there is no condition, we should create conditions. We must find a way to send this clarification announcement. After some blending, the two came up with the idea of ​​arranging someone to post on the stock bar before clarifying the announcement.

 

After the clarification announcement was issued, the company's stock price did fall by 4%. However, the chairman and secretary of the board and other related personnel also received a fine from the China Securities Regulatory Commission. For fabricating and disseminating false information and disrupting the securities market, the chairman and secretary of the board were fined 200,000 yuan, and the poster was fined 50,000 yuan. This incident also smeared the corporate image of W company.

 

Investors, after seeing the eye-catching news, first search the Internet to see the source of the information. If it is only a web post, the credibility will be discounted; then search for keywords in the information to learn more The current reporting situation, to avoid partial hearing and partial belief. Regarding stock market rumors, we must avoid the mentality of "I would rather trust what they have, but not trust them". You must refer to it from multiple sources and trust information from official media and authoritative sources. Don't listen to or be biased to avoid losses.

 

(Disclaimer: The information in this column does not constitute any investment advice. Investors should not use such information to replace their independent judgment or make decisions based solely on such information. The contributors require the information in this column to be accurate and reliable, but not It does not make any guarantee for its accuracy, completeness and timeliness, nor is it liable for losses caused by the use of the information in this column.)

Theme of "Illegal Letters" (3):

 

Pursue stable happiness and be vigilant without "significant contracts"

 

In the daily operations of listed companies, major orders from customers or operating and production contracts have an important role in promoting the company's operating income, indicating the company's good profit prospects and market recognition. However, there are also some listed companies that use major contracts to have a huge impact on stock prices, disclose inaccurate, untrue, or even deliberately fabricated major operating contracts, exaggerate the company’s operating performance, try to mislead investors, and deliberately push up the stock price; moreover, It may also take advantage of the soaring stock price after the contract was disclosed to participate in insider trading.

 

At the end of January 2011, company C, which is engaged in the chemical coatings industry, had a steady stock price suddenly showed a continuous upward trend. By mid-February, the stock price rose widened and touched the standard of abnormal stock price fluctuations on the exchange. The company issued an announcement of abnormal stock price fluctuations in accordance with the requirements of the Exchange’s "Stock Listing Rules". In the announcement, the company stated that the company is operating normally and there are no matters that should be disclosed or related planning matters. But the strange thing is that on the second day of the company's announcement, Company C applied for a stock suspension on the grounds of planning major issues. A week later, on March 2, the company threw a heavy news to investors-company C announced that its subsidiary company L had signed 4 intents with four customers of company D, company J, company S and company Z. Sexual product sales agreements, involving a total amount of nearly 2 billion yuan.

 

What is the concept of an order of 2 billion yuan? Company C's operating income that year was only less than 400 million yuan, even if it is based on the annual revenue growth rate of about 20% after listing, it will take three to four years to complete the cumulative revenue of 2 billion yuan. Now, the four-year income is injected into the company at a time, and the boost to the company's performance can only be described as "prehistoric power". Sure enough, on the day the company resumed trading, the stock price was very strong and rose rapidly, reaching the highest point since its listing.

 

However, the investors of Company C, who were happy from the sky, had not recovered from their happiness, and they were immediately overshadowed by a report. On March 8, a mainstream securities media publicly questioned Company C's contract. The report found through investigation that the content of C company's announcement was full of loopholes, and its authenticity was doubtful. For example, as mentioned earlier, the company's annual revenue is only 400 million yuan, and now to accept a large order of 2 billion yuan, it must first expand production capacity and recruit manpower. However, the reporter went to the C company park to make an unannounced visit and found that the factory area was very calm, and there was no trend of expanding production and recruiting people, and there was no situation of working overtime. In addition, the report also visited a purchaser of the contract, Company J in Hong Kong, and found that the house number provided in the announcement did not exist. In addition, for the purchasers of S company and D company, the reporter also found that the contents of the announcement did not match the actual situation. This information puts a big question mark on the identity of the purchaser and the purpose of the transaction. Finally, the reporter found that there are also interesting points in the C company's contract announcement: for example, general contracts will have breach clauses to prevent all parties from breaching the contract. However, in the announcement, Company C curiously reminded the risk that "the contract is not clear on the responsibilities of the breaching party." For such a large amount of contract, not only does it not set up a strict and clear liability for breach of contract, but it also includes a statement of excuse, which obviously does not conform to the logic of general commercial contracts. Putting it another way, did both parties to the contract already understand the "moisture" of the contract when it was signed?

 

As soon as the report was published, it attracted strong attention from the market. On the same day, the stock of Company C was required to be suspended from trading to verify the relevant content. At the beginning of the verification period, Company C also gave an ambiguous response. However, as time went by, because the previously blown bubbles were too large, the company finally announced the release of the four purchasers at the end of July and early August. Announcement of intentional contract. So far, this unnecessarily large contract of 2 billion yuan has actually only implemented 1 million yuan. Faced with doubts from the market, the company did not produce any conclusive evidence within 5 months of suspension.

 

According to Article 2.1 of the Exchange’s "Stock Listing Rules", "Listed companies and relevant information disclosure obligors shall disclose information in a timely and fair manner, and ensure that the disclosed information is true, accurate, and complete, and there shall be no false records or misleading statements. Or a major omission.” Company C’s actions undoubtedly violated the information disclosure rules, and the exchange imposed severe penalties on Company C. Moreover, as soon as the company's stock resumed trading, the price plummeted, continuously fell to the limit, and quickly returned to the January price.

 

The company was eventually punished heavily, but investors who followed suit and bought the shares of Company C in the secondary market suffered losses due to sharp stock price fluctuations. Therefore, in the face of major contracts suddenly disclosed by listed companies, investors should avoid blindly following the trend, but carefully verify the authenticity and feasibility of the information when observing stock price fluctuations. Investors should combine their usual understanding of the industry in which the listed company is located and the company's own operating conditions to determine whether the contract has any doubts worthy of scrutiny. Then, carefully analyze whether the amount of the contract, the object of the contract, the performance terms of the contract, and the risk of contract breach are reasonable and credible, so as to prevent being deceived by the unnecessary contract. In addition, you can also find clues for verification from the information of the parties in the contract. Investors should also pay attention to media reports and exchange inquiries on the market and study them carefully. A qualified stock investor, in a mixed market, must have the courage to invest in "the higher the risk, the greater the return", as well as the wisdom of demining and avoiding risks and pursuing "stable happiness".

 

(Disclaimer: The information in this column does not constitute any investment advice. Investors should not use such information to replace their independent judgment or make decisions based solely on such information. The contributors require the information in this column to be accurate and reliable, but not It does not make any guarantee for its accuracy, completeness and timeliness, nor is it liable for losses caused by the use of the information in this column.)

The theme of "Illegal Letters" (4):

 

There is a mysterious risk warning announcement

 

["Investor Protection • Clear Rules, Know Risks" Series]

 

In the stock market, investors often buy stocks based on major positive announcements disclosed by listed companies. In order to induce small and medium-sized investors to buy company stocks, some institutions usually interpret the company’s negative announcements such as risk warnings disclosed in the same period as "market makers washing." , "Benefits are exhausted", investors also often based on "ostrich psychology", selectively ignore the company's negative announcements, causing heavy losses.

 

In the second half of 2016, Xiao Ming saw someone posting on an online forum claiming that Company J was a high-quality standard integrating new energy, robotics and high-end intelligent manufacturing. Xiao Ming noticed that the company did announce the establishment of an M&A fund for new energy and robotics related industries, but he also noticed that the company would disclose a risk warning announcement about the suspension of listing every other month. Xiao Ming didn't quite understand the content of the announcement, so he asked Da V Xiaogang on the forum. Xiaogang replied to Xiaoming that to see the content behind the announcement when stocks are traded, company J must have planned for a long time for investment in the new energy and robotics sector and has invested heavily in it. The reason why the announcement is relatively conservative is to avoid investors Detect the intention of the dealer and hold the bargaining chips in advance; as for the risk warning of the suspension of listing, the company cooperates with relevant institutions to suppress a large number of retail investors in order to attract money. The more the company discloses risk warnings, the more retail investors have to hold on to their bargaining chips. After hearing these remarks, Xiao Ming felt that it made sense that he still insisted on holding the shares of Company J when the stock price of Company J fell sharply.

 

At the beginning of 2017, Xiao Ming saw that Company J disclosed an announcement that it had received an advance notice of administrative penalty. The company was punished with a top-level fine for violating securities laws and regulations. The company’s then director and supervisor was punished with market bans and fines. The stock price fell sharply. Xiao Ming was in a hurry, and he hurried to contact Xiao Gang, only to find that Xiao Gang had not logged into the forum for a month. Under this circumstance, Xiao Ming chose to continue to hold shares and watch the changes. Xiao Ming believed that listed companies involved financial fraud and he was an investor. The right to claim against the company at that time. A few months later, the company received the administrative penalty decision, and investors continued to demand compensation. Xiao Ming also consulted with the lawyers about the specific process of compensation. Only then did he discover that the company’s stocks were purchased after the company’s announcement of the suspension of listing risks. Investors are not covered by the company's compensation. Not only did Xiao Ming fail to catch hot topics, but instead lost part of his principal due to fluctuations in the company's stock price.

 

According to Article 11.11.3 of the Shenzhen Stock Exchange’s Growth Enterprise Market Stock Listing Rules, listed companies have been investigated by competent authorities or subject to major administrative or criminal penalties for suspected violations of laws and regulations, and by the China Securities Regulatory Commission for suspected fraudulent issuance or major information disclosure violations. If a case is filed for inspection, the company shall disclose a risk warning announcement once a month, explaining the progress of the case and the risk that the company's stock may be suspended from listing. "Several Provisions of the Supreme People's Court on Trial of Civil Compensation Cases Caused by False Statements in the Securities Market" (Fa Shi [2003] No. 2) also stipulates the corresponding conditions for investors to obtain compensation.

 

Therefore, when buying stocks, investors should carefully review the company's disclosure announcements, pay close attention to high-risk announcements such as "listing suspension risk warning announcements", and make investment decisions based on their own risk tolerance and reasonable judgment on the company's stock price. For questions that need to be consulted, you should consult institutions and personnel with securities business qualifications, and avoid blindly listening to information obtained through forums, microblogs and other channels to avoid being deceived.

 

(Disclaimer: The information in this column does not constitute any investment advice. Investors should not use such information to replace their independent judgment or make decisions based solely on such information. The contributors require the information in this column to be accurate and reliable, but not It does not make any guarantee for its accuracy, completeness and timeliness, nor is it liable for losses caused by the use of the information in this column.)

Theme of "Illegal Letters" (5):

 

Teach you to identify the traps of listed company restructuring

 

["Investor Protection • Clear Rules, Know Risks" Series]

 

The stock market is volatile, and the market capital has a keen sense of smell. Stocks involving popular topics, favorable policies, and restructuring concepts are often sought after by investors. Among them, the restructuring concept has an immediate impact on the stock price. The disclosure of the restructuring plan has brought the stock price N to continue to be normal. However, once the restructuring aborts or fails, the stock price falls off cliffs. The thrilling roller coaster trend challenges the small hearts of investors. In order to avoid becoming the high stock price receiver of the company's restructuring, investors need to train their eyes to identify restructuring traps.

 

Take the reorganization of a forestry company's acquisition of a flower grower in the same area as an example. The plan is a merger in the same industry. The forest product industry and the flower industry are organically combined, which perfectly fits the State Council's spirit of supporting the agricultural industry to form a large enterprise group through mergers and reorganizations. From the company level, the program is not "sexy", and from the national level, its significance is not far-reaching. But the final result was that less than one month after the plan passed the general meeting of shareholders, the company applied to the China Securities Regulatory Commission to withdraw the application materials, on the grounds that the counterparty requested the reduction or cancellation of profit compensation obligations. At this time, the company's stock price has risen from 15 yuan before the suspension to 20 yuan, and it rose to 27 yuan during the period.

 

A few months later, the listed company was filed for investigation by the China Securities Regulatory Commission for allegedly violating securities laws and regulations. A year later, the company was punished by the China Securities Regulatory Commission due to false records in the restructuring report. It turned out that this flower grower’s restructuring target had falsely increased revenue in the past two or three years. Under the direction of the chairman of the board, financial staff, sales staff, and distributors staged a fictitious show of receipt, delivery and cash flow. According to the investigation by the China Securities Regulatory Commission, the inflated proportions of the business income of the flower growers from January to September 2012 to 2014 were 15.93%, 14.76%, and 13.96%. The listed company and related parties, as well as the reorganization subject and related parties, were all He was given administrative punishment by the Securities Regulatory Bureau and disciplinary action by the Exchange.

 

How to understand the restructuring plan of listed companies, we might as well start from the following aspects:

 

Take a look at the history of the subject. According to media reports, the flower grower had planned an overseas listing in 2008, and entered the queue of IPO filing companies announced by the China Securities Regulatory Commission in 2012. The review was terminated during the financial inspection in 2013 and then planned with another listed company. Reorganization failed. The target has repeatedly rushed to the capital market without success, and there must be reasons for repeated battles and defeats.

 

Second, look at the target industry. The periodicity, regionality and volatility of the performance of agricultural enterprises are usually relatively large; at the same time, in view of the special characteristics of agricultural enterprise companies such as large cash expenditures and difficulty in auditing and verification, the financial affairs of agricultural enterprises are prone to fraud. As in the aforementioned case, the underlying inventory balance is as high as 400 million yuan, accounting for 60% of the total assets, involving millions of orchids, and the price difference between different varieties is huge. Accountants lack the professional ability to distinguish all orchid species, and it is difficult to confirm the value of inventory. In addition, the target company’s sales channels and sales growth mainly rely on distributors and wholesalers, mainly self-employed. The target company’s cooperation and management of distributors and wholesalers, whether the target company can provide true and accurate income data, etc. Big risk.

 

Third, look at the profitability of the target. According to media analysis, affected by the slowdown in macroeconomic growth and the tightening of San Gong consumption, the flower market, especially the high-end orchid market, has seen a rapid decline and is in a state of oversupply. The clues can also be seen from the disclosure of the restructuring report. Compared with the previous year, the unit prices of major orchid varieties have shown signs of being cut in half and are continuing to decline, but the sales volume has not increased significantly. But under this circumstance, the target company's value-added rate as a traditional agricultural enterprise has reached more than 90%, and promised an annual performance of 100 million yuan and an increase of more than 10%, which must make people vigilant.

 

Fourth, look at the target financial data. According to the disclosure in the restructuring report, the target company’s operating income and accounts receivable have increased slightly in the past two years, but accounts payable have fallen sharply. The balance of accounts payable in the most recent period has been zero, and long-term borrowings The doubling of the growth has led to a continuous decline in the net cash flow generated by the company’s operating activities. The most recent period was a net outflow, but the net cash flow generated by financing activities has increased. The above slightly weird financial data can not help but make people wonder: What kind of credit policy is between the company and its suppliers, distributors, and wholesalers, which has caused the company to be increasingly short of money despite the slight increase in operating income. , Do not hesitate to raise large amounts of debt, is this in line with business logic?

 

According to current regulations, the company will continue to suspend trading after the reorganization plan is disclosed, and trading will resume after replying to the exchange's inquiry letter and revising the restructuring plan. Therefore, the quickest and most efficient way to interpret the restructuring plan is to read the inquiry letter from the exchange. The lower-risk plan usually has fewer questions, and the higher-risk plan usually has a large-scale inquiry letter. Ask in the end. Seeing this kind of inquiry letter, you will have to keep your eyes open and wonder whether you will vote with your hands or your feet after the trading resumes.

 

(Disclaimer: The information in this column does not constitute any investment advice. Investors should not use such information to replace their independent judgment or make decisions based solely on such information. The contributors require the information in this column to be accurate and reliable, but not It does not make any guarantee for its accuracy, completeness and timeliness, nor is it liable for losses caused by the use of the information in this column.)

 

Theme of "Illegal Letters" (6):

 

Announcement on the progress of major neglected matters

 

Some major matters of listed companies will involve phased disclosure of progress, and investors need to continue to carefully read relevant announcements. When matters last for a long time, some investors habitually underestimate the severity of the impact of the matter and are making investment decisions. At times, the company ignored the risk warnings disclosed in the progress announcements, resulting in heavy losses.

 

In September 2012, Xiao Ming paid attention to the announcement of W company’s case being investigated. The content of the announcement showed that “because the company is suspected of violating securities laws and regulations, in accordance with the relevant provisions of the Securities Law of the People’s Republic of China, X Securities Regulatory Bureau decided to file an investigation on the company. "On the day the announcement was disclosed, trading in the stocks of listed companies began to be suspended. Almost a month after the suspension, the company disclosed the 2012 interim report correction announcement and resumed trading. The content of the announcement showed that the company disclosed that the 2012 interim report had false profits exceeding 40 million yuan, and it also failed to disclose the company’s suspension of production in the first half of the year. The above behavior was serious Violated the "Company Law", "Securities Law" and other relevant laws and regulations. At present, the company is conducting further self-inspection, and at the same time cooperating with the China Securities Regulatory Commission's investigation. The relevant financial data and other information may change further. Investors should pay attention to investment risks. The company's stock fell to the limit on the day of resumption.

 

A month later, Xiao Ming also paid attention to the exchange’s public condemnation of the company’s 2012 mid-year report for inflated revenue, costs and profits. Although the company continues to disclose risk warning announcements indicating that the company is still cooperating with the investigation by the Securities Regulatory Commission, Xiao Ming believes that the company's bad news has been released, and the company's stock price has fallen sharply in the previous period. It is the best time to buy the company's stock. At the same time, there are some posts in the stock bar that agree with him, so Xiao Ming Shigekura bought the company's stock.

 

Little did they know that the follow-up company disclosed the self-examination result announcement again, showing that the company had inflated revenue and profits from 2008 to 2011, and the company's stock price continued to fall. Now Xiao Ming panicked. He never thought that the company’s fraud was so serious and its nature was so bad. Xiao Ming really realized the importance of the risk warnings disclosed by the company in the early stage. This is the end of the matter. Xiao Ming decided to cut his position with tears and lose a lot of money. principal. Xiao Ming did not seriously evaluate the seriousness of the company’s investigation, and relied on his superficial self-feeling and some "grass" and "informed sources" in the stock bar as the basis for decision-making in investing in stocks. The investment loss to W company was regarded as Xiao Ming. I paid myself an expensive tuition fee. Half a year later, the company disclosed the "Administrative Penalty Decision" issued by the China Securities Regulatory Commission, and determined that the financial data disclosed in the company’s listing prospectus contained false records, the company did not meet the conditions for public offering of shares, and the company’s financial data after listing remained There are false records, and related matters are transferred to judicial authorities for handling.

 

Investors should carefully review the company’s announcements when buying stocks. They should pay close attention to the company’s major risk warning announcements on matters related to the company. They can also use the Shenzhen Stock Exchange’s Interactive Exchange Platform (for Shenzhen companies) or the company’s investor relations Telephone questions to listed companies on issues of concern, and then make investment decisions based on their own risk tolerance and reasonable judgment on the company's stock price. Do not habitually underestimate the severity of the incident that the company has made risk warnings or credulously believe in the information disseminated by forums, Weibo, WeChat and other channels.

 

(Disclaimer: The information in this column does not constitute any investment advice. Investors should not use such information to replace their independent judgment or make decisions based solely on such information. The contributors require the information in this column to be accurate and reliable, but not It does not make any guarantee for its accuracy, completeness and timeliness, nor is it liable for losses caused by the use of the information in this column.)

Theme of "Illegal Letters" (7):

 

Believe in violation of regulations is not a trivial matter

 

As a public listed company, timely disclosure of matters that have a significant impact on the company is the proper meaning of the word public, so that investors can have a clear understanding of the company's operations and obtain sufficient information to make investment decisions. Those that have a positive impact on the company should be disclosed, and those that have a negative impact should also be disclosed. If a company reports good news but does not report bad news, or many things are kept secret, either the company intends to manipulate the news to affect the stock price, or the company’s internal control is weak and the board of directors is simply rooted. I don't know what happened to the company. Regardless of the type, it reflects the irregular operation of the company and the flaws in the texture. Information disclosure is a refraction mirror. Investors must think twice when encountering a company with a bad reputation, and look at the inside through the face.

 

Company Z is a company with long-standing problems in information disclosure. This company has been punished by the China Securities Regulatory Commission and exchanges many times for information disclosure: First, the subsidiary of the listed company paid a large amount of funds to the outside without disclosure, the controlling shareholder, actual control The company’s planned equity transfer was not disclosed, the company’s shares held by the controlling shareholder and actual controller were frozen by the judicial waiting list, and the company repeatedly borrowed money from natural persons. Second, a number of major issues were not disclosed, mainly due to the fact that the actual controller was obstructive. For example, due to long-term non-performance of contracts and outstanding loans, the counterparty of the subsidiary was sued by the counterparty to the court and applied for property preservation. After the senior executives of the subsidiary received the judicial documents sent by the court, they transferred them to the actual controller and actual controller of the listed company. After signing the documents, it is believed that a settlement will be reached with the counterparty as soon as possible, and the subsidiary executives will not be allowed to report to the board of directors of the listed company, and this lawsuit will not be concealed by the board of directors of the listed company. In addition, the actual controller knew in the middle of the year that the contract of the subsidiary could not be executed, but did not inform the directors, supervisors, executives, etc. of the listed company of the true status of the subsidiary. The listed company stated in the annual report that the contract was progressing smoothly and did not mention anything. And the slow progress has caused great misleading to investors. The Securities Regulatory Commission imposed penalties on Company Z for the above-mentioned violations of information disclosure; the actual controller used its position advantage and position convenience for a long time, resulting in serious defects in corporate governance, confusion in internal control, and repeated violations of information disclosure by listed companies. The Securities Regulatory Commission Severe punishment is also imposed.

 

Doing a good job in continuous information disclosure is the basic obligation of listed companies. The Securities Law and Stock Listing Rules have made clear provisions on the information disclosure obligations of listed companies. When a listed company has a major event that may have a greater impact on its stock trading prices, but investors have not yet known, the listed company should immediately perform its reporting and disclosure obligations. The "Stock Listing Rules" prescribe specific criteria for judging various major events that may occur in listed companies. These criteria are formulated after a comprehensive combination of various factors and taking into account the information disclosure costs of listed companies. Therefore, listed companies should take an attitude of being honest and responsible for investors, and perform their information disclosure obligations strictly in accordance with relevant standards.

 

In addition, the relevant standards and requirements of the "Stock Listing Rules" and other rules are only the minimum and basic requirements for the regulatory authorities to perform information disclosure obligations for listed companies. As a specific business rule, it is impossible to list all the various situations and problems that may occur in listed companies. Therefore, listed companies should, on the basis of the minimum requirements of the regulatory authorities, do their best to do a good job in information disclosure, try to ensure the transparency and symmetry of the company's information, and cannot refuse or evade information under the pretext that relevant regulations have not made specific provisions. Disclosure obligations. Especially when it comes to information asymmetry that may occur, listed companies should give special consideration to disadvantaged groups such as small and medium investors, and have the obligation to enable them to obtain relevant information fairly. Small and medium investors also have the same right to know as large shareholders. The quality of information disclosure not only reflects the seriousness of the information disclosure of listed companies, but also reflects the company's standard operation and corporate governance level. If a listed company's information disclosure is extremely chaotic, and it is often punished by regulatory agencies for violations of information disclosure, its internal control and standardized operation may also be worrying. Investors encounter such companies that are often punished and have poor quality of information disclosure, so they should be careful not to step on thunder.

 

(Disclaimer: The information in this column does not constitute any investment advice. Investors should not use such information to replace their independent judgment or make decisions based solely on such information. The contributors require the information in this column to be accurate and reliable, but not It does not make any guarantee for its accuracy, completeness and timeliness, nor is it liable for losses caused by the use of the information in this column.)