ZYD(SH:900906)2019-06-27 16:00Financial Performance - The company reported a cumulative undistributed profit balance of -1,916,636,359.16 yuan at the end of 2018, resulting in no profit distribution or capital reserve increase plan for the year [6]. - In 2018, the company's operating revenue was 0, a decrease of 100% compared to 30,521,415.09 in 2017 [26]. - The net profit attributable to shareholders was -497,757,777.69, improving from -1,128,558,032.40 in 2017 [26]. - The net asset attributable to shareholders decreased by 1,419.88% to -462,701,572.23 at the end of 2018 [26]. - Total assets dropped by 93.97% to 26,008,562.43 at the end of 2018, compared to 431,550,290.81 in 2017 [26]. - Basic earnings per share for 2018 was -0.4646, an improvement from -1.0535 in 2017 [27]. - The company reported a total revenue of 0, with a net profit of -497,757,777.69 RMB, and a net profit of -389,051,508.04 RMB after deducting non-recurring gains and losses [37]. - The company's total assets decreased by 93.97% from 431,550,290.81 RMB in 2017 to 26,008,562.43 RMB in 2018, primarily due to the loss of control over subsidiaries and significant asset impairment provisions totaling 369,376,637.55 RMB [38]. - The company reported a significant reduction in financial metrics due to the loss of control over subsidiaries and lack of operational activities [28]. - The company’s financial performance in 2018 reflects a challenging operational environment with substantial losses and asset reductions [28]. Governance and Management Issues - The company experienced a complete governance breakdown, with all previous non-independent directors and senior management going missing, leading to significant operational challenges [10]. - The company has not been able to ascertain the actual controller due to uncertainties surrounding its major shareholder, Dashen Group [8]. - The company plans to strengthen corporate governance and improve internal control systems to protect shareholder rights [5]. - The company has not received any financial accounting materials or contact from previous management, complicating the transition [45]. - The company has undergone a governance restructuring, with the seventh board of directors established on June 28, 2018, consisting of 11 members [142]. - The company reported a significant turnover in management, with multiple resignations including the general manager and several board members throughout 2018 [143]. - The company’s governance issues have been highlighted as a concern, impacting stability and management continuity [143]. - The company has faced significant governance issues, with major discrepancies between its governance practices and the requirements set by the China Securities Regulatory Commission (CSRC) due to previous management's negligence [158]. - The company’s management has been publicly criticized, with specific individuals deemed unsuitable for future positions in listed companies [106]. - The company’s independent directors have experienced turnover, with three resignations noted in early 2019 [141]. Legal and Regulatory Challenges - The company received an audit report with a disclaimer of opinion from Zhongxi CPA, indicating significant uncertainties regarding its financial situation [5]. - The company faced multiple civil lawsuits and was listed as a dishonest executor in two major cases, indicating a lack of repayment capability [11]. - The company was subject to administrative penalties totaling 90,000 yuan for failing to disclose financial reports in a timely manner and for inflating revenue in previous reports [13]. - The company has been under investigation by regulatory authorities for suspected violations of information disclosure laws, with ongoing inquiries as of the report date [12]. - The company was listed as a dishonest entity by the Urumqi Intermediate Court, further complicating its financial recovery efforts [41]. - The company has ongoing significant litigation matters, including a civil lawsuit involving a RMB 34 million loan guarantee [97]. - The company has been involved in a major litigation case with a claim amounting to RMB 43,492,738.75, which has affected its operations significantly [79]. - The company faced public reprimands from the Shanghai Stock Exchange for failing to disclose periodic reports and for financial information inaccuracies, including a 35 billion yuan commercial acceptance bill risk [106]. - The company has been involved in multiple legal disputes, reflecting ongoing financial and operational challenges [100]. - The company has taken legal measures to protect its rights and is actively seeking solutions to mitigate the negative impacts of being listed as untrustworthy [80]. Operational Challenges - The company lost control over its wholly-owned subsidiaries in 2018, resulting in no actual operating business [28]. - The company has not engaged in any significant business operations during the reporting period, leading to a complete halt in its main business activities [41]. - The company faced a liquidity crisis starting in November 2017, leading to an inability to pay employee salaries and a significant employee turnover by the end of 2018 [40]. - The company has lost control over all subsidiaries, resulting in zero revenue for 2018 [43]. - The company has experienced a complete loss of its previous executive team and most employees, leading to potential fraud or significant misstatements in financial reporting [187]. - The company has not generated any main business revenue for the current period, and net profits have been negative for two consecutive years, indicating substantial uncertainty in future business development [184]. - The company has lost control over all subsidiaries, resulting in zero reported employees in those entities [152]. - The company has not established effective mechanisms for managing employee advances and handling receivables, leading to long-term outstanding accounts [174]. - The company is facing multiple significant litigation matters, with insufficient evidence to determine the impact on financial statements [187]. - The company is actively seeking solutions for ongoing litigation and aims to resolve debt crises through various measures, including negotiations and debt restructuring [76]. Financial Liabilities and Assets - Total liabilities increased by 23.26% to CNY 488,710,134.66 at the end of 2018 from CNY 396,494,085.35 at the end of 2017 [118]. - The company recognized an asset impairment provision of CNY 369,376,637.55, including investment impairment of CNY 131,355,278.84 and bad debt provision of CNY 234,283,368.34 [118]. - The company recognized a bad debt loss of 202 million yuan related to receivables from Xiamen Zhongyida due to the loss of control over subsidiaries [59]. - The company reported a significant increase in accounts receivable by 4% to 18,297,917.04 CNY, while prepayments rose by 3% to 12,305,779.19 CNY [66]. - The company has a contingent liability for overdue loans amounting to 30.99 million yuan related to its subsidiary Xiamen Zhongyida [111]. - The company has recognized an investment impairment provision of 58,246,101.45 RMB in addition to a previous provision of 219,292,663.62 RMB due to the loss of control over subsidiaries [41]. - The company reported a significant increase in short-term borrowings from CNY 132,198,565.86 to CNY 100,000,000.00, a decrease of approximately 24.3% [194]. - The company reported a total of 54 lawsuits related to securities false statements, with a total amount involved of approximately 9.66 million yuan [63]. - The company has been ordered to bear guarantee responsibilities for a maximum guarantee of RMB 91.92 million provided to Xiamen Bank [97]. - The company has faced severe internal control issues, including unauthorized issuance of electronic commercial bills totaling 3.5 billion yuan, leading to regulatory scrutiny [167]. Future Outlook and Strategies - The company plans to enhance internal management and operational standards to improve profitability and restore normal operations [76]. - The company is actively seeking solutions to resolve litigation and debt issues to restore operational capabilities [47]. - The company plans to communicate with potential restructuring parties and improve operational conditions [48]. - The company aims to resolve litigation and debt crises through various measures, including litigation, settlement, and debt restructuring [178]. - The new management team plans to improve internal management and operational standards, actively seeking new business opportunities and profit growth points [178]. - The company plans to strengthen corporate governance and improve internal control systems to protect shareholder rights [5]. - The company plans to select quality assets and seek restructuring opportunities to restore normal operations and improve profitability [81]. - The company is in discussions with potential restructuring parties to select quality assets and improve operational conditions and profitability [179]. - The company intends to strengthen internal management and oversight of subsidiaries to mitigate operational risks [175]. - The company plans to enhance internal control training to ensure better understanding and implementation of internal control measures across departments [175].