Core Viewpoint - Shanghai Yueshen Health Group plans to use surplus reserves of 72.85 million yuan and capital reserves of 141 million yuan, totaling 214 million yuan, to offset cumulative losses, resulting in a significant reduction of its reserves and a nearly 400% drop in net profit for 2024 [1][2][4]. Financial Summary - For 2024, the company reported revenue of 1.204 billion yuan, a year-on-year decrease of 5.79%, and a net profit attributable to shareholders of -147 million yuan, a staggering decline of 393.87% [4]. - The company has experienced negative net profits for three consecutive years, with cumulative losses exceeding 500 million yuan, indicating concerns over its core business's ability to generate profits [4]. - The company's operating cash flow also decreased by 33.48% year-on-year, amounting to 82.23 million yuan [4]. Business Transformation - Yueshen Health, originally focused on ceramic tiles, has been transitioning into the health sector since 2015, with its business now encompassing building materials, health services, and investment property leasing [5]. - The company’s building materials segment primarily focuses on high-end ceramic tile brand "Simik," while its health services include various care systems and training programs [5]. Loss Factors - The primary reasons for the company's losses include a decline in revenue from the ceramic tile business due to reduced market demand, increased competition, and rising costs [3]. - The company has also faced challenges related to the long investment cycle of its health projects and asset impairment losses, which have further exacerbated its financial difficulties [4].

Core Viewpoint - Shanghai Yueshen Health Group Co., Ltd. plans to use surplus reserves to cover losses, as the company reported a significant decline in net profit due to increased market competition and reduced sales prices of its products [1][2]. Group 1: Financial Adjustments - The company intends to utilize a total of 72,853,943.26 yuan from surplus reserves and 141,057,228.79 yuan from capital reserves to offset losses, resulting in a reduction of capital reserves to 176,595,527.02 yuan [1]. - As of December 31, 2024, the company's undistributed profits were reported at -0 yuan, indicating a complete depletion of retained earnings [1]. Group 2: Causes of Loss - The primary reasons for the company's losses include a slight decline in sales and intensified market competition, which led to a decrease in sales prices and gross margins of tile products [2]. - The company has also recognized potential impairment losses on assets, further exacerbating the cumulative loss [2]. Group 3: Notification to Creditors - The company has formally notified creditors of their rights to claim debts or request guarantees within 30 days of receiving the notice, or 45 days from the announcement date if no notice is received [2][3]. - Creditors must submit written requests along with relevant documentation to the company to assert their claims [2][3].

Core Viewpoint - The Ministry of Finance issued a notification to clarify financial processing issues related to the implementation of the Company Law and the Foreign Investment Law, focusing on the use of capital reserves to cover losses, the evaluation of non-monetary assets for contributions, and the management of specific funds in foreign-invested enterprises [1][10]. Group 1: Use of Capital Reserves to Cover Losses - Companies can use capital reserves to cover losses based on audited financial statements from the previous year, with the limit being the negative retained earnings brought to zero [2][11]. - The notification specifies that companies must create a plan for using capital reserves to cover losses, detailing the loss situation, reasons for covering losses, and the source and amount of reserves to be used [3][11]. - Companies must notify creditors or publicly announce the decision to use capital reserves within 30 days of the shareholders' meeting resolution [3][11]. Group 2: Non-Monetary Asset Contributions - Companies must evaluate non-monetary assets contributed by shareholders according to relevant regulations and follow internal decision-making procedures for establishment, capital increase, merger, and division [4][12]. - Companies should consider various factors that may affect the realization of asset rights when accepting non-monetary contributions and may need to obtain legal opinions if necessary [4][12]. Group 3: Management of Specific Funds in Foreign-Invested Enterprises - Foreign-invested enterprises must convert surplus reserve funds into statutory and discretionary reserves, with specific management requirements for employee reward and welfare funds [5][13]. - From January 1, 2025, foreign-invested enterprises will no longer accrue reserve funds, development funds, or employee reward and welfare funds, and any accruals made after this date should be reversed [5][13].