Baiyin Nonferrous(SH:601212) Sou Hu Cai Jing·2025-09-12 12:30Core Viewpoint - The announcement of a regulatory investigation has exposed significant internal control issues within a long-established state-owned non-ferrous metal giant, which had recently seen its stock price surge [1][3]. Group 1: Regulatory Investigation - The China Securities Regulatory Commission (CSRC) has initiated an investigation, although specific reasons have not been disclosed. However, two undisclosed criminal cases in recent years appear to have triggered this regulatory action [3]. - In November 2023, a theft involving 990 tons of zinc ingots was reported, with a court ruling in June 2024 mandating compensation of 22.6791 million yuan, which has yet to be enforced [3]. - Additionally, in early 2024, former employees conspired with external parties to forge sales documents, resulting in the misappropriation of copper products valued at 157 million yuan. Investigative authorities have frozen assets worth approximately 50.986 million yuan, along with 20 properties and stocks valued at around 42 million yuan [3]. Group 2: Financial Impact - The company failed to disclose these criminal cases in its 2023 annual report, only revealing them in July 2025 after being prompted by the Shanghai Stock Exchange [3]. - A contract dispute involving a subsidiary led to a provision for expected liabilities of approximately 317 million yuan, contributing to a loss of 217 million yuan in the first half of 2025, a staggering year-on-year decline of 1859.82% [3]. - In November 2023, discrepancies amounting to 388 million yuan were discovered between the shipment volume of zinc ingots and actual payments, highlighting severe management flaws in trade operations [3]. Group 3: Company Background - Established in 1954, the company is a prominent state-owned enterprise in China's non-ferrous metal industry, previously recognized for its leading production and tax contributions in copper and sulfur for 18 consecutive years [4]. - In 2008, the company underwent a shareholding reform with strategic investment from CITIC Group, and in 2017, it became the only state-owned non-ferrous metallurgy enterprise listed on the A-share market, with a registered capital of 7.405 billion yuan [4]. - The company's operations encompass the mining, selection, smelting, and trading of various metals, with a global presence across 15 domestic mines and over 10 countries [6]. Group 4: Financial Performance - Despite being a well-known industry player, the company's profitability has been relatively unimpressive. In its first year of listing in 2017, it reported revenues of 56.634 billion yuan and a net profit of 239 million yuan [7][8]. - From 2018 to 2024, revenues increased from 62 billion yuan to 86.8 billion yuan, yet net profits plummeted to 2.59 million yuan in 2018 and remained stagnant around 30 million yuan until 2022. In 2023, net profit exceeded 100 million yuan, but fell back to 80.79 million yuan in 2024 [8][9]. - This indicates that the company's continuous expansion over the years has not effectively translated into improved profitability [9].