JSHX(SH:600307) Zheng Quan Zhi Xing·2025-07-15 11:14Core Viewpoint - The audit report highlights significant related party transactions of Gansu Jiugang Group Hongxing Steel Co., Ltd. (referred to as "the Company") from 2022 to 2024, indicating substantial sales and purchases with related parties, raising questions about the fairness and transparency of these transactions [1][2]. Related Party Transactions - The Company reported sales to related parties amounting to CNY 46.92 billion and purchases totaling CNY 42.05 billion from Huifeng Industrial Products during the period [1]. - Additional related party transactions include sales of CNY 18.09 billion and purchases of CNY 19.99 billion with Judong Real Estate, as well as sales of CNY 10.02 billion and purchases of CNY 11.21 billion with Western Heavy Industry [1]. - The Company is involved in simultaneous sales and purchases with multiple related parties, including Jiugang Group, Runyuan Environment, Huachangyuan, and Jialixing, indicating a complex web of transactions [1]. Disclosure Requirements - The Company is required to disclose detailed information on related party transactions over the past three years, including names of related parties, nature of relationships, transaction content, transaction amounts, settlement methods, credit policies, and pricing mechanisms [2]. - The Company must explain the reasons and rationale for the significant increase in related party transaction amounts and proportions, considering industry developments and its operational performance [2]. - The audit report requests clarification on the dual role of related parties as both suppliers and customers, ensuring that transactions have a legitimate commercial background and do not involve cost burdens or benefit transfers to related parties [2]. Pricing Mechanisms - The pricing for steel products is based on market conditions, including production costs, regional inventory, supply-demand dynamics, and competitive pricing from other steel manufacturers [7]. - The pricing for raw materials follows market principles, with negotiations based on quality, transportation distance, and prevailing market prices [7]. - The Company employs a combination of bank acceptance and cash transactions for sales and purchases, with credit policies varying based on supplier creditworthiness and transaction history [7].