Film and television giants were fined again nearly 100 billion market value evaporated 92 percent

June 2 due to irregularities in the reduction of holdings, Huayi Brothers real controller Wang Zhongjun, Wang Zhonglei just ate a regulatory warning letter, three weeks after the two film and television giants repeated the same mistake.

In the evening of June 23, Huayi Brothers announcement, due to the 2021 performance forecast from the beginning of the tens of millions of profit, to three months later revised downward to a loss of hundreds of millions of dollars, the relevant information disclosure is inaccurate, Huayi Brothers and the chairman of the board of directors Wang Zhongjun, general manager Wang Zhonglei, the head of finance Wang Xiaoyu, the board of directors of the secretary of the Gao Hui through the Zhejiang Bureau of Securities and Supervision to take the regulatory measures of the issuance of warning letters, and recorded in the securities and futures market Integrity file.

As one of the first 28 companies on the GEM board in 2009, Huayi Brothers' market capitalization was once close to 100 billion in 2015, and now it has fallen by more than 90%, leaving only 7 billion. The company has also been four consecutive years of huge losses, the Wang brothers continued to reduce their shares, many investors began to worry about the risk of delisting.

Forecast at least 22 million profit

Actual loss of 250 million

According to the announcement, Huayi Brothers has recently received the Zhejiang Bureau of Securities Supervision, "on the Huayi Brothers Media Company Limited and the relevant personnel responsible for the decision to take the measures to issue a warning letter".

According to the above decision letter, Huayi Brothers disclosed the "2021 Annual Results Forecast" on Jan. 28, 2022, expecting to realize net profit attributable to shareholders of the listed company of 22.5209 million yuan to 33.7139 million yuan for the year of 2021.

On April 28, 2022, Huayi Brothers disclosed the "Announcement of Revision of the Annual Results for the year of 2021", which was revised to expect to The net profit attributable to shareholders of the listed company for the year 2021 will be a loss of RMB25,000,000 to RMB246,000,000, which is a big difference from the "2021 Annual Results Announcement", and the relevant information disclosure is inaccurate.

The above behavior violates the provisions of Articles 3 and 4 of the Administrative Measures for Disclosure of Information by Listed Companies (SEC Decree No. 182).

Wang Zhongjun, Chairman of Huayi Brothers, Wang Zhonglei, General Manager of Huayi Brothers, Wang Xiaoyu, Treasurer of Huayi Brothers, and Gao Hui, Secretary of the Board of Directors of Huayi Brothers, bear the primary responsibility for the above matters. According to the provisions of Article 51 and Article 52 of the Measures for the Administration of Information Disclosure of Listed Companies (SEC Decree No. 182), Zhejiang Securities Regulatory Bureau decided to take the supervisory and management measures of issuing a warning letter to the company and the above responsible persons respectively, and to record them in the integrity file of the securities and futures market.

Punished just three weeks ago

This is the second warning letter received by the Wang brothers this month.

Just on the evening of June 2, Huayi Brothers announced that it had received a decision from the Zhejiang Bureau of Securities Supervision on the decision to issue a warning letter to the company's actual controllers, Wang Zhongjun and Wang Zhonglei.

According to the decision letter of Zhejiang Securities Regulatory Bureau, Wang Zhongjun and Wang Zhonglei, as the de facto controllers of Huayi Brothers, during the period from October 30, 2009 to December 20, 2021, the proportion of interest in the company held by the company decreased from 34.41% to 23.74%, with a cumulative change in the proportion of 10.67%, which was due to the implementation of the company's non-public offering of stock on August 14, 2015, resulting in a The cumulative percentage of interest decreased by 7.54%; from November 24, 2015 to December 20, 2021, the cumulative percentage of interest decreased by 3.13% due to the active increase or decrease of ownership, the Company's repurchase and cancellation of shares, and the exercise of stock options.

When the proportion of change in interest reached 5%, Wang Brothers failed to stop trading in the company's shares and fulfill the reporting and announcement obligations in a timely manner as required, and it was not until December 22, 2021 that they disclosed the simplified report on change in interest. The aforesaid acts violated the relevant provisions of Article 14 of the Administrative Measures for the Takeover of Listed Companies (SEC Decree No. 108). According to the relevant provisions, Zhejiang Securities Regulatory Bureau decided to take supervisory and management measures of issuing warning letters to Wang Brothers, and recorded in the integrity file of the securities and futures market.

And on April 22 this year, the Shenzhen Stock Exchange also gave Wang Zhongjun, Wang Zhonglei a notice criticizing the punishment, recorded in the integrity file of listed companies, and open to the public.

Nearly 100 billion market value evaporated 92%

Huge loss of four years investors worried about delisting

Huayi Brothers is China's film and television industry is the first listed company, known as "China's first film and television entertainment stock!

Huayi Brothers is the first listed company in China's film and television industry, known as "China's first stock of film and television entertainment", and has launched more than a hundred outstanding films, including many box office hits, with a number of big-name directors and movie stars such as Feng Xiaogang and Fan Bingbing in the glory days. However, in recent years, due to intensified market competition, loss of contracted artists, heavy asset expansion and other reasons, Huayi Brothers performance continued to pull the crotch, heavy losses. The company's stock price has also continued to fall from its high in 2015, down more than 90% so far.

From 2018 to 2021, Huayi Brothers' non-deductible net profit will be -1.181 billion yuan, -3.966 billion yuan, -1.018 billion yuan and -1.073 billion yuan respectively. With the downward trend in performance, the company's cash flow is also tightening, and the pressure to repay debt is extremely high. Data show that as of the end of the first quarter of 2022, Huayi Brothers' money funds amounted to 480 million yuan, short-term borrowings amounted to 529 million yuan, and non-current liabilities due within one year amounted to 561 million yuan. In addition, the company at the end of 2021 there are a number of accounts receivable, long-term equity investment, fixed assets pledged for financing.

As the first 28 GEM listed stocks, Huayi Brothers listed in 2009 to raise nearly 1.2 billion yuan, and in May 2014 non-public offering of shares to raise a total of about 440 million yuan, in 2015 again non-public offering to refinance 3.57 billion yuan, a total of about 6.2 billion yuan of financing, followed by poor performance does not meet the conditions for refinancing, and other reasons did not add new financing. But continued to circle the money at the same time the company basically did not have any dividends, only in 2016 and 2017 each dividend of more than 80 million yuan, the total dividend is only 166 million yuan.

Continued financing stacked with continued loss-making performance has brought about a continually falling stock price.

From 2009 listing to 2015, Huayi Brothers was once the market star stock, the highest share price reached 32.13 yuan (ex-complex, the same below), the market value once close to 100 billion. But after touching the above historical big top Huayi Brothers shares turned sharply down, out of the long 7 years of decline channel, the latest share price of 2.52 yuan, the market value of less than 7 billion, compared with the peak fell 92%.

In the 2022 Huayi Brothers results meeting, the company's future will be delisted or even become the main focus of investors. Secretary Gao Hui said that according to the new regulations, for Huayi Brothers, the risk of delisting has been eliminated to a greater extent. Indeed, as Gao Hui said, because the Shenzhen Stock Exchange delisting new regulations removed the loss of delisting provisions, so Huayi Brothers loss of four years is still safe.

However, investors in Huayi Brothers still need to be aware of the possibility of negative net assets and delisting at par value. At present, Huayi Brothers most recent financial report net assets is 2.4 billion yuan, down sharply from the peak of more than 10 billion back in 2016, it is also difficult to withstand large losses again. As for the stock price, Huayi Brothers fell as low as 2.32 yuan, approaching the $1 par value is also just short of a waist cut.

As the real controller, the Wang brothers have been continuing to reduce the company's shares, the current shares of Huayi Brothers has fallen to only 20.16%, and nearly 100% pledged.

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