Doubt on book value of long term equity investment of Weiming pharmaceutical exchange accounting firm

category:Finance
 Doubt on book value of long term equity investment of Weiming pharmaceutical exchange accounting firm


According to the semi annual report of 2020, Weiming Pharmaceutical Co., Ltd. will lose 80 million yuan. Earlier, the company predicted that the third quarter report would lose 100 million yuan to 120 million yuan.

Sudden change of accounting firm

In 2015, Weiming Pharmaceutical Co., Ltd. was listed on the back of Wanchang technology. As the backdoor target of unnamed medicine, Wanchang technology was listed on the SME Board of Shenzhen Stock Exchange on May 20, 2011. After listing, it was audited by Daxin. By 2016, Weiming pharmaceutical changed its financial audit institution to Zhongxi. However, Zhongxi has issued qualified opinions on the annual reports for three consecutive years since 2017.

In terms of audit fees, Daxin previously paid in audit fees of 400000 yuan per year before, but in 2015, the asking price suddenly doubled to 800000 yuan.

In 2016, Weiming pharmaceutical found Zhongxi with an audit fee of 600000 yuan, but in 2018, Zhongxis asking price suddenly doubled to 1.2 million yuan. As of the 2019 annual report, the audit fees actually received by Zhongxi have more than doubled on the basis of 2018, reaching 2.48 million yuan.

Compared with other listed companies with the same level of audit fees, the annual sales volume of Weiming medicine is only more than 500 million yuan, and the audit workload and audit remuneration obviously do not match.

An audit expert told reporters that generally, the business of a company is stable, and the audit workload is relatively stable. If the audit organization suddenly increases the audit fees greatly, but the companys report consolidation scope and business volume do not change greatly, then it must be the work difficulty and workload increased, or there may be problems in the companys internal control, and the audit wind With the increase of risks, audit institutions cover audit risks with more asking prices.

Out of control Beijing Kexing

However, the profits of Weiming medicine are highly dependent on Beijing Kexing. In 2019, the investment income of Beijing Kexing recorded in the unnamed medical account book is 128 million yuan. However, the net profit of the companys consolidated statements is only 73 million yuan, that is to say, if the investment income of Beijing Kexing is excluded, Weiming pharmaceutical will record a loss in 2019. However, Zhongxi was unable to obtain audit evidence from Beijing Kexing, which naturally did not dare to endorse the financial statement data of Weiming pharmaceutical.

According to the annual report of 2018, Weiming pharmaceutical company lost money due to the impairment of goodwill. According to the performance forecast released by the company on the evening of October 14, it is estimated that the net profit loss attributable to shareholders of Listed Companies in the first three quarters of 2020 will be about 109-126 million yuan, and that in the third quarter of 2020, the net profit loss attributable to shareholders of listed companies will be 16.6-33.19 million yuan.

Beijing Kexings investment is crucial for Weiming medicine, which has weak self hematopoietic capacity.

In 2015, Beijing Peking University Weiming bioengineering Group Co., Ltd. (hereinafter referred to as Weiming group) was one of the three industrial groups of Peking University. Under the halo of the crystallization of cooperation between Peking University and Xiamen municipal government in the field of biomedical science and technology, Beijing Peking University Weiming Bioengineering Group Co., Ltd. (hereinafter referred to as Weiming group) listed its assets as Wanchang science and technology.

Weiming pharmaceutical R & D team has a number of doctoral professionals including pan Aihua, chairman of the board of directors. The backdoor transaction consideration reached 2.9 billion yuan. At that time, Weiming pharmaceutical put forward the slogan of 100 trillion project and five largest biomedical bases in the world, which led to a wave of nine connected boards before Wanchang technology borrowed its shell.

Tianyan information shows that Weiming group has been a shareholder of Beijing Kexing as early as 2001. Before the backdoor listing of Weiming pharmaceutical in 2015, Weiming group transferred part of its equity to the wholly-owned subsidiary of Weiming pharmaceutical, which has always owned 26.91% equity of Beijing Kexing.

As can be seen from the audit report when backdoor listing, Weiming pharmaceutical spent nearly 200 million yuan to acquire the 26.91% equity. At that time, Weiming pharmaceutical recorded 192 million yuan of book value of long-term equity investment in Beijing Kexing.

As of the 2019 annual report, the equity proportion of Beijing Kexing held by Weiming pharmaceutical has not changed, but the book value has increased to 563 million yuan.

According to the annual reports of Weiming pharmaceutical, the book value of the increased 370 million long-term equity investment is all converted from the net profit realized by Beijing Kexing according to the shareholding ratio. But in fact, unnamed medicine did not receive any dividends.

According to the information disclosed by the company, the major shareholders of Beijing Kexing have conflicts due to major development problems of the company, and even financial data and financial data have been transferred out of the company maliciously. Although pan Aihua, chairman of unnamed pharmaceutical, is also the chairman of Beijing Kexing, in fact, Beijing Kexing has been controlled by its main founder Yin Weidong.

In view of this, Weiming pharmaceuticals 563 million yuan long-term equity investment in Beijing Kexing, when it can be realized smoothly, and whether it can be settled for safety, has too many variables.

The controlling shareholder has no assets to repay

In addition, the company has a serious problem of capital occupation. By the end of 2019, the companys capital balance occupied by Weiming group was 507 million yuan, with interest of 54.3567 million yuan.

Advance payment and construction in progress may be the assets subject of unknown medicine suspected of being occupied. It has been disclosed that Weiming group has occupied Weiming pharmaceutical funds through a third party in the form of collecting project funds, equipment funds, technology transfer funds and agency purchase funds. Part of the fund transfer path is from Xiamen Weiming and Tianjin Weiming to their suppliers, and the suppliers transfer funds to the creditors of Weiming group, which eventually forms the fund occupation. As of September 23, Weiming group holds 26.38% shares of Weiming pharmaceutical, which has been frozen by the court and waiting to be frozen. In the annual report of 2019, the controlling shareholder used four pharmaceutical technologies and 100% equity of Jilin Weiming outside the listed company to offset the non operating loan of more than 200 million yuan from the listed company. However, Zhongxi refused to endorse the fair value of this asset for debt repayment. The company argues that the acquisition of the above-mentioned assets is an emergency hedge asset preservation measure implemented by the company to safeguard the shareholders rights and interests under the circumstances of necessity. Weiming group has no other executable assets to offset its debts. Source of this article: Guo Chenqi, editor in charge of first finance and Economics_ NBJ9931

Advance payment and construction in progress may be the assets subject of unknown medicine suspected of being occupied. It has been disclosed that Weiming group has occupied Weiming pharmaceutical funds through a third party in the form of collecting project funds, equipment funds, technology transfer funds and agency purchase funds. Part of the fund transfer path is from Xiamen Weiming and Tianjin Weiming to their suppliers, and the suppliers transfer funds to the creditors of Weiming group, which eventually forms the fund occupation.

As of September 23, Weiming group holds 26.38% shares of Weiming pharmaceutical, which has been frozen by the court and waiting to be frozen.

In the annual report of 2019, the controlling shareholder used four pharmaceutical technologies and 100% equity of Jilin Weiming outside the listed company to offset the non operating loan of more than 200 million yuan from the listed company. However, Zhongxi refused to endorse the fair value of this asset for debt repayment.

The company argues that the acquisition of the above-mentioned assets is an emergency hedge asset preservation measure implemented by the company to safeguard the shareholders rights and interests under the circumstances of necessity. Weiming group has no other executable assets to offset its debts.