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Dismantling The "Gifted Students" Of 28 Gem Annual Reports?

2020/9/26 9:03:00 0

The 31St Issue Of Shenzhen Securities Regulatory Commission Dismantling 28 Gem Annual Reports "Gifted Students": How Can New Economy Companies "Make A Statement"?

On September 23, Premier Li Keqiang presided over the executive meeting of the State Council to further improve the quality of listed companies, protect the rights and interests of investors, and promote the sustained, stable and healthy development of the capital market. The meeting clearly pointed out that we should improve the information transparency and disclosure quality of listed companies.

The annual report of listed companies is the most concerned part of information disclosure. Looking back on the annual reports over the years, the situation of enterprises can be described as two times: on the one hand, the business of high-quality listed companies is booming; on the other hand, large impairment of risk companies, performance explosion, etc. Behind the simple changes in the performance figures, it is the direction for all kinds of market entities to explore the company's current business situation, future development trend and real value from the annual report. On the basis of ensuring the authenticity and accuracy of the annual report information, making the information more concise, clear and easy to understand, so as to improve the usefulness of decision-making has increasingly become the core demand of investors.

In response to this demand, how to make the annual report "meaningful" and effectively improve the transparency and quality is the direction of continuous exploration of listed companies and regulators. Among them, an excellent case collection will come as scheduled every year, which may provide direction. On September 18, the Shenzhen Stock Exchange released the collection of outstanding cases of the annual reports of companies listed on the gem in 2019, and released 37 excellent cases involving 28 companies on the gem. This is the sixth consecutive year that Shenzhen Stock Exchange has compiled annual reports of listed companies on GEM.

In the annual report of 2019, many GEM listed companies strive to enhance the transparency of the annual report information, and explain the company's "what to do", "how to do" and "how to follow up" in understandable and readable language. Judging from the outstanding cases selected this year, although these enterprises belong to different industries, different scales, and different business models and business characteristics, they are "different workers" in how to present a "annual report feast" with "color and flavor" and provide useful information for investors to make decisions.

Add color to the annual report: clarify the company's background from the outside to the inside

When investors open an annual report, they must be concerned about the company's business model, that is, what the company does.

More than 70% of the companies listed on the gem are strategic emerging industry companies. Among them, the industrial agglomeration effect represented by new generation information technology, energy conservation and environmental protection, and biological medicine is obvious. Many companies have the characteristics of new economy enterprises, which are different from traditional industries. Therefore, it is very important for investors to accurately and clearly disclose their business models for value judgment.

However, in some cases in the past, some companies "evade the heavy ones and give light to the light", and talk about the prospect of the industry, and "cherish the ink like gold" for the specific business of the company, which makes investors see it as "in the clouds". In the annual report of a listed company in the growth enterprise market (GEM), a listed company in the communication industry introduced the good prospect of explosive growth in 5g industry. However, there were few words about the main business of the company, especially related businesses such as 5g Internet of things. The specific business model was not clearly described, and the differences between upstream supply chain and downstream customer application scenarios were not well reflected. It is difficult to understand the company from the company's annual report Involved in the specific business, core advantages and business moat.

To add "color" to the company's annual report does not need gorgeous and sophisticated rhetoric, but lies in restoring the real taste of food materials, explaining the connotation and essence of the company's business from the outside to the inside and in line with the reality, so as to give investors a "clear" listed company.

In addition to the company's annual report on the company's annual report, the company also introduced the company's basic business information, including medical equipment, external medical equipment, and medical equipment The R & D, procurement, production and sales mode of the company are introduced, which clearly shows the characteristics of the company's business model. Zhifei biology, which is engaged in vaccine R & D and production, uses data to speak, follows the industry information disclosure guidelines of Shenzhen Stock Exchange, fully discloses the specific situation of the number of vaccine batch issued, and lists the R & D cycle of core products in research, the expected marketing progress of core products in research and the potential market space in the future and other forward-looking and high value-added information.

The "new direction" of the company's "annual report" should break through the "new" business model.

Add "fragrance" to annual report: a reasonable and well founded way to clarify the "context"

When investors open the annual report, they are concerned not only with what the company is doing, but also about how the company is doing. Therefore, for listed companies, it is not only necessary to disclose the main financial data and their changes during the reporting period, but also to analyze the deep-seated reasons behind the changes in data in combination with the macro and micro situations.

Looking at the annual reports and the inquiry letters of the stock exchange, we can see that the deep-seated reasons for the performance changes are also the key points for the listed companies to focus on, investors to pay attention to, and the exchange to focus on inquiries. According to statistics, more than half of the inquiry letters on the annual report of Shenzhen Stock Exchange in 2019 inquired about the company's performance changes.

For example, since the listing of an information technology industry company in 2017, its operating revenue and net profit have maintained an annual growth of more than 30%, and the net sales interest rate in 2019 is as high as 49.62%. More than 90% of the company's products are sold to Europe and the United States through authorized overseas distributors, and the gross profit margin of the distribution mode is much higher than that of the same industry companies adopting direct sales mode. However, the company's annual report did not fully disclose important information such as dealer management system and implementation, final sales situation, specific reasons and rationality of overseas business performance changes, and some information was not supplemented until the exchange issued the annual report inquiry letter.

On the contrary, there are still many companies that can make in-depth analysis on the "context" of changes in major financial data. For example, Huichuan technology, which is engaged in the R & D and production of industrial automation and new energy products, has a year-on-year growth of 26% in 2019. The company actively disclosed the main financial data after excluding the impact of new consolidated subsidiaries in 2019, showing that the company's endogenous operating income is basically the same as that of the previous year, which allows investors to have an objective understanding of the company's operation; in addition, the company also disclosed the main financial data after excluding the impact of the new consolidated subsidiaries in 2019, showing that the company's internal operating income Combined with the development trend of the industry, the downstream industries, customers and application fields of various products are explained in the sub business list, so that investors can fully understand the company's revenue composition and business development. The company's new energy vehicle business sales revenue decreased by 22% compared with last year, and the company focused on the analysis of the impact of subsidy decline. This is not the first time that the company has prompted the impact of relevant policies This kind of business has declined, but investors can see clearly, read at ease.

Another example is lyad, which is engaged in the R & D and production of LED products. Based on the strategic planning, the company analyzed in detail the changes and reasons of the main business, operating cash flow, inventory, net interest rate and other financial indicators. For example, the company analyzed the changes and reasons of net interest rate since 2012 based on the business structure and the characteristics of different products. In view of the new development opportunity of the industry Mini / micro led, the company introduced the relevant technical standards, application fields and the relevant situation of the company's production base in easy to understand language. In addition, the company also introduced the launch of new products and the products and markets being cultivated by means of pictures and pictures or cases, so as to make the future expectation concrete.

Only by knowing what it is, but also knowing why, can investors have a clear understanding of the company's "past, present and future".

Add flavor to annual report: report good news and bad news, and see risk factors clearly

If the company only reports good news about the future development prospects in the annual report and keeps silent about the risks, on the one hand, it is divorced from the objective facts, on the other hand, it may lead to the investors' inability to make an objective and fair judgment on the investment value of the company, resulting in nutritional imbalance.

According to the annual report of GEM companies in 2019, many companies have been able to conduct in-depth risk research and judgment based on the industry analysis and in combination with the company's own business development practice. If it is not possible to make quantitative analysis, they will make targeted qualitative description to let investors know more.

Photo by Gan Jun

For example, KANGLONG Huacheng mainly provides innovative drug R & D outsourcing services, and its overseas business income accounts for a relatively high proportion. In analyzing the possible risks and countermeasures, the company frankly said that the rapid growth of its performance in the past few years was due to the rising demand for drug R & D services and the improvement of the prosperity of innovative drug R & D. Based on the analysis of performance driving factors, the company fully reveals the main risk points that may be faced with, such as the risk of brain drain of scientific research and technology, intellectual property protection risk, policy supervision risk, exchange rate risk, market competition, technology update, etc., and prospectively analyzes the impact of the above risk factors, and puts forward countermeasures one by one, with rich and specific contents, strong pertinence and high correlation It is helpful for investors to identify the company's risks and grasp the company's situation comprehensively and objectively.

The key to improve the quality of annual report disclosure is to have a good expectation of future development and fully reveal the corresponding risk factors.

The balance between disclosure cost and quality: return options to the market

In order to help listed companies disclose a high-quality annual report to the market, regulators have been working hard. Taking Shenzhen Stock Exchange as an example, in addition to compiling the annual report excellent case collection to form a positive guidance, it has also continued to establish and improve the relevant information disclosure system. For example, on the basis of fully combing and summarizing the industry characteristics, it has launched information disclosure guidelines for more than 20 industries, including pharmaceuticals and biological products, medical devices, integrated circuits, and lithium-ion battery industry chain, so as to encourage listed companies to make full disclosure, which is useful for investors Industry information. At the same time, it is also essential to strengthen the service. On the basis of the "routine projects" such as the training of the Secretary of the board of directors and the special training of the annual report preparation, the Shenzhen Stock Exchange has also done a good job in the whole process of the new companies in the first year of listing, answering questions and doubts on the rules of annual report preparation, preparation process and business system.

It is necessary to strike a balance between the disclosure cost of the company and the demand of investors for an annual report with complete colors and flavors. As a matter of fact, many companies are faced with a dilemma when they disclose their annual reports. They are fully covered, worried about their families, and spied on business opportunities by their competitors. They are so simple that they don't seem to explain the company's situation clearly, and investors are also dissatisfied.

In order to solve the above problems, make listed companies balance the cost and quality of disclosure more spontaneously and actively, and disclose more useful information for investors, it also needs the role of market mechanism.

The listed companies will be listed on the stock market with high quality and high technology, which will be reflected by the investors Gradually differentiated, showing different market performance. It can be predicted that the efficient operation of the market and the survival of the fittest will rely more on the information disclosure of listed companies, which is conducive to the rapid development of marketization, standardization and legalization of the capital market, and is also conducive to the implementation of the protection of investors' rights and interests.

 

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