Why Does "Zhongyuan" Suffer From The Failure Of Fu Fu Bird's Bankruptcy?

3 years after the suspension, 01819.HK, the "Limited by Share Ltd of China's real leather shoes", failed to survive. On the night of August 26th, the announcement of the bird of fortune was declared bankrupt. According to a letter sent to the fortune bird by the Hongkong stock exchange, the listing status of the company's shares will be cancelled at 9 a.m. on August 26, 2019.

After the "exit", the birds left a 4 billion 200 million yuan debt and 4 billion 600 million yuan or would become a "waste paper" stock. Many institutions stepped on the thunder, including Zhongzhou securities.

What is fishy is that Zhongzhou securities seem to be running away in recent years, and many large markets known for their capital markets have been "accurately" stepped on.

Zhongzhou securities trample on thunder and birds

Zhongzhou securities (01375.HK) is the abbreviation of Zhongyuan securities Limited by Share Ltd (601375.SH, hereinafter referred to as Zhongyuan securities) H shares. In June 5, 2014, the overseas issuance shares of Zhongyuan securities were listed on the Hongkong stock exchange, and the stocks were referred to as Zhongzhou securities.

In February 27, 2016, the Zhongzhou securities investment decision committee decided to take part in the financing project of the rich birds. The rich birds bought 44 million shares of the Zhongzhou stock for HK $40 million.

In March 4th of the same year, the Zhongzhou securities risk control committee considered and passed the large financing scheme of Fu's bird.

It is worth noting that when Zhongzhou securities passed the financing plan, the bird of fortune had gone its high light moment, revealing the hidden risks. From this perspective, Zhongzhou securities's trampling may have long been a harbinger.

Founded in 1991, the "riches and birds" brand once had the title of "China real leather shoes king". However, it did not last long. In December 2013, when the fortune bird listed on the main board of Hongkong, it slowed down its growth. From 2014 to 2016, the net profit of the company was 450 million yuan, 392 million yuan and 163 million yuan respectively. In 2017, it began to profit from losses. The interim report of the Mid Autumn Festival showed that the loss was about 10 million 887 thousand yuan, and this newspaper also became the last earnings of the rich bird in the stock exchange.

In addition to the decline in performance, Fu Fu bird in the six months after the financing of Zhongzhou securities, to facilitate the September 1, 2016 suspension of up to 3 years. At that time, the reason for the suspension was that "additional time is needed to complete the compilation of certain information for the interim results". The board meeting was postponed and the interim results in 2016 were delayed.

During the suspension period, Fu Fu bird was deeply involved in the debt crisis. At the same time, there were some problems such as violation guarantee and letter draping. The company and chairman of the board of directors were criticized and punished on the average.

The response of the two tier market corresponds to the crisis in operation. In December 20, 2013, the first day of the listing of fortune birds, its stock price once rushed to HK $8.9 / share. At the time of high light, it rose to HK $19.28 / share in March 18, 2015. However, in October 22nd of that year, fortune bird fell 60.86%, and then officially entered the sunset road. The price before the suspension is fixed at HK $3.88 / share.

Because of the thunderstorm of the rich and precious birds, the HK $44 million of Zhongzhou securities is facing a breach of contract, and Zhongzhou securities made all the provision for impairment in three years in 2016-2018 years.

According to the Zhongzhou securities announcement, Zhongzhou securities offered 8 million Hong Kong dollar allowance in the end of 2016, and the provision for impairment in the year 2017 was 18 million 75 thousand Hong Kong dollars. In August 30, 2018, the Zhongzhou securities announcement said that as at June 30, 2018, the book value of the total principal and interest of the company was HK $18 million 173 thousand and 100. Considering the financial condition, guarantee situation of the Limited by Share Ltd and the failure of the company debt to perform on time, the total value of the book value of the exhibition financing will be set up, that is, HK $18 million 173 thousand and 100.

At this point, all collateral loans provided by Zhongzhou securities to Fu Fu bird were all referred to impairment losses.

There are many doubts about Hui Shan's dairy industry.

If there are some "innocent" tramples on the birds of fortune, then the resolution of financing for the Hui Shan dairy industry is desperate.

In February 2017, Guan Feng Co., Ltd. took the 06863.HK stock as collateral. It wanted to apply for HK $50 million credit line to Zhongzhou securities, plus HK $1 million 200 thousand as reserve interest. Crown Feng limited also asked Zhongzhou securities not to convert the hypothecation shares.

To this end, Zhongzhou securities research department specially issued a research report on the Hui Shan dairy industry. In the report, the research department's conclusion is that we are skeptical of its fundamentals.

According to the research report, from the industry point of view, the dairy industry has been affected by the fall in international milk prices for a long time, and the gross profit margin of dairy companies has been negative. Referring to the performance of the leading modern animal husbandry (01117.HK) in the industry, 2016, the company reported a loss of 589 million yuan. The Hui Hui dairy industry still has a profit of 600 million yuan, with gross profit margin reaching 22.58%, which is far ahead of the industry. The company has been suspected of financial fraud for many years, and has recently been criticized by international agencies. We are cautious about this attitude and will not comment.

At the same time, shortly after the Zhongzhou securities agreed to issue credit lines, muddy water company continuously released the report to empty the Hui Shan dairy industry. Muddy water questioned the existence of financial fraud in the first empty Watch report. Yang Kai, chairman of the board of directors of the company, may have disclosed a total of 150 million yuan assets or even more. He believes that the company's excessive leverage makes the Hui Shan dairy industry on the brink of default. Immediately after that, muddy water company also released second reports on bearish duty. The data of value-added tax of the State Administration of Taxation showed that the Hui Shan dairy industry was suspected to inflate its sales revenue in the first quarter of 2017.

In the case of Zhongzhou securities's own research department, the mortgage was identified as possible fraud. In the case of continuous reporting of muddy water, Zhongzhou securities still took the risk of deliberation and adopted the financing scheme of Guan Feng company.

For the mortgage loan of Hui Shan dairy industry, Zhongzhou securities not only risked its risk but also approved it very quickly. According to the interview survey data of Zhongzhou securities by DDT accounting firm, the initial contact intention was in the early February of that year, and it was over 27 on the same month. The speed of 20 days was much faster than that of the general list.

As for the risk of Zhongzhou securities taking risks, it is necessary to take the case of Hui Shan dairy as the single reason. The Zhongzhou Securities Research Institute mentioned above, the researcher who did not give the evaluation report, said: "the advice I gave is not to do it, but at that time, the leader made the report, according to experience, if the newspaper was written, eight or nine should be done".

According to this idea, no matter what the conclusion is, no matter what the conclusion is, the Zhongzhou securities research department's report will not affect the lending results.

Why is it frequent to step on a mine?

Echoing with Zhongzhou securities in H-share "adverse year", Zhongyuan securities also frequently stepped on the A share market.

In the early morning of July 11th, there were reports from the media that 2 total 242 million securities products of Zhongyuan securities were at risk. In the evening of the same day, Zhongyuan securities issued a notice confirming the speculation that the Yuan Yuan Securities 240 million yuan information management product stepped on the market.

Zhongyuan Securities said, in recent days, the company in the union 17 set up asset management plan (hereinafter referred to as union 17) and Zhongjing 1 set up asset management plan (hereinafter referred to as Zhongjing 1) in the follow-up management process, found that there is a financing person can not repay the principal and interest risks. In the process of risk investigation, the company obtained evidence from the financing person to provide false documents and reported it to the public security organ accordingly. The public security organ has placed an investigation on May 4, 2019, and the investigation work is being pushed forward in accordance with the law.

It is understood that Zhongyuan securities two management products invested in Fujian Fujian Xing Pharmaceutical Co., Ltd. to Fujian Medical University Affiliated Union Hospital accounts receivable, as the financing side of Fujian Xing medicine to undertake the difference complement obligation, Min Xing medical real controller Xia Xuewen provides joint and several liability guarantee guarantee.

Wang Jianhui, director of the Securities Research Institute, said publicly that the supply chain finance of the securities business management plan was relatively rare. There is no shortcut to prevent this kind of systemic risk prevention. Only by thoroughly conducting due diligence and fulfilling the manager's responsibility can we properly control the risks. Especially for the supply chain Finance with strong expertise in the industrial field, we must make full adjustments according to the characteristics of the business, rather than simply analyzing the reports and materials.

In the recent listed companies, including the 002770.SZ, *ST, 002477.SZ and 002358.SZ, there are all the Central Plains securities.

In addition, Zhongyuan securities also trampled four listed companies' equity pledge in 2018, including *ST energy saving (000820.SZ), ST Xinguang (002147.SZ), Jubilee Technology (300221.SZ), the Great Wall film and television (002071), involving a total of 788 million yuan.

As an institution, the internal control system is very urgent. The risk that some of them have surfaced is ignored by decision makers.