YOUNGOR'S Net Profit In The First Quarter Increased By 8 Billion 680 Million Yuan Over The Previous Year, An Increase Of 687%.

There is nothing more rapid than "accounting processing" to enhance the profits of a A share listed company.

In April 9th, YOUNGOR group issued a notice of first quarter earnings growth in 2018 to achieve a net profit increase of 8 billion 680 million yuan over the same period, an increase of 687%.

In the first quarter of 2017, YOUNGOR's net profit attributable to listed shareholders was 1 billion 260 million yuan, so the net profit in the first quarter of 2018 was 9 billion 940 million yuan, and its total market capitalization was less than 33 billion yuan.

At this point in 2018, a quarterly disclosure time has not been cut off, so the data of listed companies are not yet complete.

If the A-share listed companies ranked the first quarter net profit in 2017, YOUNGOR's 9 billion 940 million yuan has surpassed Guizhou Moutai's 8 billion 750 million yuan, ranking seventeenth, A.

After the announcement of the performance increase notice, level two is issued.

Also gave a warm response, closing in April 10th, YOUNGOR shares rose 6.8%.

But in January 31, 2018, YOUNGOR announced that it was preparing 3 billion 300 million yuan for assets impairment in 2017, that is, 3 billion 300 million yuan of investment losses.

The increase of 8 billion 680 million yuan in the first quarter and the loss of 3 billion 300 million yuan in 2017 all came from the 5% stake in the same asset, CITIC stock.

The announcement shows that the reasons for YOUNGOR's first quarter profit growth are as follows:

After deciding by the board of directors, the accounting method of CITIC shares is changed from "ready to sell financial assets" to "long-term equity investment", and the profit and loss are recognized by the equity method. The difference between the net assets and the book value of the company's CITIC shares is 9 billion 302 million yuan, which will be included in the first quarter of 2018, and the net profit for the current period will be 9 billion 302 million yuan.

This means that the value of shares held is not calculated according to the stock price, but calculated according to the net assets of CITIC shares.

In accordance with the accounting standards of A share listed companies, if a long-term equity investment is converted into a company, the company can calculate long-term equity investment according to the fair value of net assets.

For example, the stock price of a stock is 5 yuan, the net assets per share is 10 yuan, and the initial purchase price is 7 yuan. If the share price is calculated, the investment will suffer a large loss, but if it is calculated according to the net assets, the investment account can earn more than 40%.

YOUNGOR gave three reasons:

1, the deputy general manager of the company has been appointed as the non executive director of CITIC shares. 2, the company is the third largest shareholder of CITIC stock, and the shareholding ratio of the company has increased from 4.99% in March 29th to 5%. 3, according to the accounting standards for Enterprises No. second - long term equity investment, the investment enterprises should have the equity method accounting for long-term equity investments with common control or significant impact on the invested units.

The core reason lies in the second, 5% shareholding ratio. This is also the CSRC's letter asking for the red line.

"Buying 5% or more shares is usually considered a placards."

A partner of a law firm analyzed the first line of Tencent, but first of all, it should not look at the proportion of shareholding, but look at the impact on the investors. It may be because the share ownership of the listed companies is dispersed, and the shareholding ratio of the single stock in the East has not reached 5%, but it can have a significant impact on the operation of the company, together or separately, and it should be accounted for by long-term equity investment.

"Generally speaking, if only 5% stake, and only one non-executive director, it is difficult to be considered to have a significant impact on a large central listed company."

He said that this time should be included in the calculation of current profits and losses of financial assets or for sale of financial assets.

In the announcement, YOUNGOR said that as of March 29th, it held 145451400 shares, the cost of investment was 16 billion 300 million yuan, the final face value was 12 billion 800 million yuan, and the "loss" was 3 billion 500 million yuan.

However, the fair value of the corresponding net assets is 22 billion 100 million yuan, and the difference between the net assets and the book value is 9 billion 300 million yuan.

The book balance of 9 billion 300 million yuan, in accordance with the long-term equity investment accounting caliber, will smoothly erase the about 3000000000 Yuan loss in 2017, and successfully increase the net profit in the first quarter, eliminating this part of the stock returns. According to this, YOUNGOR's net income from other business income in the first quarter is only 640 million yuan.

At present, CITIC share price is about 11 yuan, holding 145 million shares, the book value is only 1 billion 200 million yuan.

Perhaps YOUNGOR's secretaries are too excited to make mistakes in their efforts to reduce their holdings by one zero.

Because 1454514000 shares, that is, 1 billion 450 million shares.

According to YOUNGOR's performance Bulletin released in January 31, 2018, as of December 31, 2017, YOUNGOR held 1 billion 454 million 513 thousand shares of CITIC shares.

In other words,

In the first quarter, only 1000 shares of CITIC shares were added, less than ten thousand yuan, and the original investment of 3 billion 300 million yuan loss was reduced to a net profit of 9 billion 300 million yuan.

The lawyer said that if YOUNGOR wants to adjust net profit and reduce it substantially, then sell the 1000 shares and reduce its shareholding to below 5%.

For this regulation, level two.

Investors voted in favor of the funds, but for regulators, perhaps YOUNGOR's inquiry letter is on the way.