The Stock Market Crashed Suddenly. The Previous Night Just Announced That KPMG Resigned As The Auditor Of The Company.

In November 14th, 360 degrees suddenly crashed.

After the opening of the morning, the shares fell sharply, nearly ten fifteen, its share price plummeted over 37%, once below HK $1.

This is quite the opposite of its stock price performance in August 20th this year, when the stock price of the medium term performance has been released for 24% days. In the last three months, the performance of the shares was stable. Against this background, today's collapse has caused many conjectures.

Some investors believe that the 31st degree share price crash today has a direct bearing on its sudden announcement of the replacement of auditors. On the evening of November 13th, the announcement of the 31st degree said that KPMG auditor had resigned as auditor of the company because of its consensus that KPMG and KPMG failed to reach a consensus on the annual audit fee for the financial year ended December 31, 2019.

The board of directors decided to appoint Dahua Ma Shi Yun accounting firm Limited (hereinafter referred to as "Dahua Ma Shiyun") as the new auditor of the company. It will take effect from November 13, 2019 to fill temporary vacancies after KPMG resigned.

At present, the 31st degree of the stock price crash has not been explained externally. At the close, its share price has risen to HK $1.35, narrowed to 15.63%, and the latest total market value is HK $2 billion 791 million, which has evaporated over HK $500 million compared with the previous trading day.

One

　　 Share price crash after announcing change of auditor

Due to the lack of more sensitive information in the recent 31st degree, investors who are concerned about the 31st degree of today's stock price crash are directly linked to their replacement auditors.

Although the public information did not disclose when the 31st degree and KPMG began to cooperate, but the reporter looked at the 31st degree financial report, found that as early as the company's listing in 2009, KPMG has served as its auditor. Therefore, the two sides maintained a "commercial marriage" for several years, and suddenly came to an end. Is it the reason for the announcement, or is there something else?

"Listed companies changing auditors is a common case, but there are still some" sensitivity ", which depends on the reasons for the change and reform. Generally speaking, the common reasons for the change (auditors) of listed companies are that they have not reached an agreement on audit fees, or have been replaced by the auditors because they have not published or rejected opinions. In the afternoon of November 14th, a senior auditor told the international finance daily that replacing auditors with fees is a common phenomenon, which is often cited as a "common" reason for listed companies to disclose relevant announcements.

The above statement is traceable. The reporter noted that as early as 2019 May, global digital innovation had announced that KPMG had resigned as a company auditor because the two sides failed to reach an agreement on the cost of nuclear charges up to the end of March 31, 2019.

Coincidentally, 4 months later, AI Wah Ye credit also announced the resignation of KPMG on the same grounds.

"If it is only a matter of cost, it is unlikely that KPMG will resign as a member of the 31st degree auditor. It will not be excluded from the financial statements. This is also a common concern in the market, so the company's share price will plunge." Xiang Sheng capital director Shen Meng told reporters.

In November 14th, the International Financial Daily reporter contacted 31st degree and KPMG (China) responsible person on the details of the service charges, such as the 31st degree and the KPMG. "The company is not responding now." At noon on November 14th, the relevant person in charge of 360 degrees responded to this reporter. On the same afternoon, KPMG (China) also told reporters that it was inconvenient to answer because of customer information.

People who once worked in a short agency told International Financial Daily that in the United States, listed companies often change their audit firms to be questioned. In the past, when studying a listed company, one of its concerns was whether it had changed two auditors in the short term.

In fact, the replacement of auditors caused a sharp fall in corporate stock prices.

In October 2016, the tiger market, which was located in the middle and high-end men's clothing market, issued a notice that the auditor KPMG had assessed the required expansion procedures and communicated with the company on the basis of the company's financial data, and eventually failed to agree on the 2016 audit fees. Under the recommendation of the audit committee, Kaixin Sindh certified public accountants Co., Ltd. took over KPMG and was appointed as the new auditor of the company. The announcement disclosed that in the early morning of the following day, the stock price of tiger stock dropped by more than 14%.

In addition, Nanjing based Fortune Holdings has encountered similar situations. In December 6, 2018, the board of directors of the company, on the ground that it could not reach a consensus with Ernst & Young on the cost of nuclear charges in 2018, proposed to remove Ernest as the group auditor and appoint Luo Bingxian evergreen CPA as the new auditor of the group.

However, at that time, the industry believes that the company's key nodes in the early stage of the performance of the recall of group auditors, may be abnormal operating conditions. To this end, its stock price fell for several consecutive trading days, with a drop of nearly 20% in the month.

Two

　　 Thirty one degree is in transition.

Thirty one degree is one of the representatives of Chinese sports brand. As early as 1983, its predecessor Huafeng shoe factory was established. In 2009, overcoming the financial crisis and the lack of experience in the capital market, 360 degrees struck the listing bell at the Hong Kong Stock Exchange and became another Jinjiang shoe company that went to Hong Kong.

Although Jinjiang has the same fortune as Anta, at present, the market performance of the market is much larger than that of the latter. In 2018, the revenue reached 360%, which was about 5 billion 187 million yuan, an increase of 0.6% over the same period last year, a profit margin of about 782 million yuan, a decrease of about 20.85% compared with the same period last year, and a profit margin of about 304 million yuan, representing a decrease of about 33.48% over the same period last year. By the end of 2018, the group had opened 5539 core brand stores.

In the first half of this year, the performance of the company was improved, with a turnover of about 3 billion 237 million yuan, an increase of 7.3% over the previous year, a gross profit of about 1 billion 323 million yuan, an increase of 5.3% over the same period last year, and a profit margin of about 367 million yuan, an increase of 9.7% over the same period last year.

Anta's strides are very big. In 2018, Anta sports business income increased by 44.4% over the same period, reaching 24 billion 100 million yuan, and the net profit of shareholders belonging to listed companies increased by 32.9% over the same period last year, reaching 4 billion 100 million yuan. This is Anta's double-digit growth in performance for the fifth consecutive year. In the first half of this year, Anta's revenue increased by 40.3% to 14 billion 810 million yuan, and the profit attributable to shareholders increased by 27.7% to 2 billion 480 million yuan.

Insiders told the "International Finance News" reporter, compared with Anta's "buy buy buy" extension strategy, 360 degrees used to be prudent in business layout, and investment in brand was relatively conservative.

At present, the market value of Hong Kong share listed brands including Anta, Lining, XTEP and China is at the end of the market value.

In fact, in order to seek further development, 360 degree has begun to transform and brand remodeling. Prior to that, it announced the basketball into the district project, intends to build community basketball venues in a number of first and second tier urban communities, at the same time for young basketball enthusiasts to establish a professional coach team. According to the previously announced plan, the goal scale of 1000 basketball courts should be achieved in the next three years.

Zhu Minjie, a senior vice president and chief marketing officer of the 31st degree group, once said in an interview with the international finance daily that 360 degrees would provide consumers with an "integrated experience platform", and basketball is only the first step. Next, it will try similar layout in running, training, football and other fields. "First, I firmly believe that the Chinese market needs a cost-effective local sports brand that is popular among mainstream consumers. Second, the future sports consumption is a very comprehensive sports consumption. China has great potential in this area. We should not only focus on shoes and clothes, but also be a platform to provide consumers with the overall experience.

At present, it is difficult to judge whether the stock price will crash in November 14th.