HSSM(SZ:002290) Hua Xia Shi Bao·2025-08-10 05:43Core Viewpoint - He Sheng New Materials plans to use a total of 1.104 billion yuan from its statutory surplus reserve and capital reserve to cover accumulated losses, aiming to prepare for future dividends [2][3][5]. Group 1: Financial Situation - As of December 31, 2024, He Sheng New Materials reported a negative retained earnings of approximately -1.102 billion yuan, primarily due to a full provision for overdue receivables in 2019 [3][4]. - The company experienced significant losses in 2019, with a net profit of -1.198 billion yuan and total revenue of 1.726 billion yuan, largely due to provisions for overdue receivables amounting to 1.208 billion yuan [3][4]. - Despite recovering profitability from 2020 to 2024, with net profits of 55.08 million yuan, 81.98 million yuan, 65.93 million yuan, 82.77 million yuan, and 97.91 million yuan respectively, the retained earnings remain negative [3][4]. Group 2: Dividend Qualification - The use of reserves to cover losses is a strategy to regain dividend eligibility, as the company has not distributed dividends for seven consecutive years since its last payout in 2018 [4][5]. - New regulations stipulate that companies with no cash dividends in the past three years or cumulative dividends below 30% of the average net profit cannot have major shareholders reduce their holdings [4][6]. Group 3: Regulatory Context - The recent changes in company law allow for the use of capital reserves to cover losses, which was previously restricted, thus enabling companies like He Sheng New Materials to address their negative retained earnings [6][7]. - Following the implementation of the new regulations, several other companies have also announced plans to use reserves to cover losses, indicating a trend in the market [7][8].