Ge Long Hui·2025-04-26 05:09Core Viewpoint - The investigation into Hongtian Co., Ltd. and Nord Co., Ltd. by the China Securities Regulatory Commission (CSRC) highlights significant governance issues and raises concerns about compliance in capital operations due to undisclosed related-party transactions [1][3]. Group 1: Regulatory Investigation - Both Hongtian and Nord have been investigated for failing to disclose related-party transactions, with the CSRC launching formal inquiries into their executives [1][3]. - The investigation was triggered by a secret asset sale by Hongtian, involving a property transaction with a related party, which was not disclosed until the annual report [4][3]. - The close business relationship between Hongtian and Nord, with related transactions amounting to 405 million yuan (approximately 58.5 million USD), raises questions about undisclosed connections between their major shareholders [4][3]. Group 2: Financial Performance - Hongtian's revenue plummeted by 38.6% year-on-year to 1.374 billion yuan (approximately 193 million USD) in 2024, with net profit down 42.87% to 117 million yuan (approximately 16.5 million USD) [5][6]. - Nord reported a revenue increase of 15.4% to 5.28 billion yuan (approximately 748 million USD) in 2024, but suffered a net loss of 352 million yuan (approximately 49.5 million USD) [5][7]. - The financial struggles of both companies are compounded by industry challenges, including price wars and rising costs, leading to significant declines in profit margins [5][7]. Group 3: Control and Governance Issues - Concerns about control changes at Hongtian have emerged, with the actual controller shifting from founder Shu Zhigao to Zhao Weibin, while Shu remains involved through related parties [10][12]. - The series of transactions by Hongtian, including the acquisition of Hongtian Technology and the sale of traditional business units, has raised suspicions of undisclosed arrangements [12][10]. - Regulatory scrutiny has intensified, with the Shanghai Stock Exchange questioning the fairness of related-party transaction pricing and the nature of recent acquisitions and divestitures [12][10].