SHCD(SH:603887) Zheng Quan Zhi Xing·2025-07-14 16:25Core Viewpoint - The company has disclosed accounting errors related to internal transactions, asset capitalization, and revenue recognition, leading to a non-standard audit opinion for the 2024 financial report [2][10]. Group 1: Accounting Errors - The company reported errors in internal transaction income and cost offsets, leading to understated costs and overstated inventory [3][4]. - Errors in the capitalization of rental assets were identified, where renovation costs were incorrectly classified [4][5]. - Issues in revenue recognition for IDC system integration projects were noted, primarily due to delays in collecting and processing original documents [5][6]. Group 2: Financial Impact - The adjustments for the accounting errors resulted in changes to the 2023 consolidated financial statements, including an increase in revenue from 2.37 billion to 2.43 billion and an increase in costs from 1.91 billion to 2.02 billion [6][10]. - The company’s 2024 annual report showed a revenue decline of 33.36%, with IDC business revenue decreasing by 23.51% [10][11]. Group 3: Audit Opinion - The audit firm issued a qualified opinion due to insufficient evidence to confirm the accuracy of the accounting error corrections, particularly regarding the IDC system integration revenue and inventory estimates [9][10]. - The audit procedures included evaluating internal controls, interviewing financial personnel, and reviewing relevant documentation, but sufficient evidence was not obtained [8][9]. Group 4: Client and Supplier Information - The company is required to disclose detailed information about its top ten clients and suppliers, including transaction backgrounds and performance metrics, to explain the revenue decline [10][11].