Recently, the financial media released a report titled "Capital Packaging of Hexing Packaging: The Three-Year M&A Layout Behind the Accounting Algorithm's Inflated 290 Million Profit", which believes that "Hexing Packaging relies on accounting methods to inflated 296 million profits." The balance of assets and liabilities is deteriorating. The stunning revenue data is behind the game of capital games for nearly three years."
To this end, on November 2, 2018, Hexing Packaging issued a clarification announcement stating that the content description of the report was completely inconsistent with the facts and caused serious misleading to investors. Based on its attitude towards the majority of investors and various stakeholders, Hexing Packaging clarified the issues involved in the media coverage.
The company did not have a false increase of 296 million in profits in the acquisition of Hezhong Chuangya Project.
The profit of 296 million is strictly in accordance with the provisions of Article 13 (2) of the "Accounting Standards for Business Enterprises - Business Combinations". "The purchaser's cost of combination is less than the fair value of the identifiable net assets of the acquiree obtained in the merger. The difference in share shall be handled in accordance with the following provisions: 1. Review the fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree and the measurement of the combination cost; 2. The merger cost after review is still less than the merger. If the acquiree obtained in the acquisition can recognize the fair value of the net assets, the difference should be included in the current profit and loss, and the profits from accounting treatment.
The profit was objective, true, and there was no inflated situation, but the media reported that the company “inflated 290 million profits according to accounting algorithmsâ€, which expressed serious misleading to investors.
Description of company accounts receivable
In June 2018, the company acquired Hezhong Chuangya Packaging Service (Asia) Co., Ltd. (hereinafter referred to as “Hezhong Chuangya (Asia)â€) and four companies in Southeast Asia. Since June 2018, it has been included in the scope of consolidation. The income belongs to the income statement item, and only the operating results from the purchase date to the one month of the balance sheet date can be combined. Therefore, in the 2018 semi-annual report, only the operating income of the acquired company during the period is reflected, and the accounts receivable belong to the balance sheet. For the project, the closing balance is fully incorporated into the listed company. Therefore, there is a situation in which the ratio of accounts receivable to operating income is relatively large at the consolidated statement level.
The average age of accounts receivable of corporate customers is about three months, so it is reasonable that the accounts receivable at the end of June accounted for about half of the operating income in the first half of the year.
Description of company bank loans
As a result of the completion of the acquisition of four companies in Hezhong Chuangya (Asia) and Southeast Asia, the size of listed companies has increased rapidly, and the overall working capital demand has increased. The increase in short-term borrowings is mainly to meet the needs of working capital. Long-term borrowings are M&A loans borrowed from the acquisition of four companies in Hezhong Chuangya (Asia) and Southeast Asia. The expansion of the company's scale, the overall solvency and anti-risk ability have been further enhanced, and the borrowing will not affect the normal operation of the company.
Finally, Hexing Packaging also stated that if the misleading reports of relevant media have a bad influence on the company and seriously damage the interests of investors and companies, the company will reserve the right to pursue the legal liability of the relevant parties.
Long Hao Media & China Good Packaging Network Comments:
As a company engaged in the production of medium and high-grade corrugated boxes and cardboard, Hexing Packaging has dozens of production bases across the country, covering South China, Central China, North China, East China, Southwest China and other regions. It is undoubtedly the leading enterprise in the industry.
Not only is the scale large, but its development performance is also amazing: in the first half of 2018, the company achieved revenue of 4.82 billion yuan, an increase of 89.53% year-on-year, and net profit of 410 million yuan, a year-on-year increase of 476.37%. In the first three quarters of 2018, the company achieved revenue of 8.11 billion yuan, a year-on-year increase of 89.54%, and a net profit of 482 million yuan, a year-on-year increase of 367.97%.
Judging from the current development trend, Hexing Packaging will maintain a high performance growth in the future, and it is likely to become the first tens of billions of enterprises in the paper packaging industry. This is also a microcosm of the rapid development of China's paper packaging industry, and it is a necessary process to become bigger and stronger.
However, Mu Xiu Yu Lin, the wind will destroy, in the face of this high-speed development, it is inevitable to be questioned. The clarification announcement issued by Hexing Packaging is not humbled. There is no violent language, it is completely on the matter, and it is closely related to the problem, which fully reflects the literacy and "innocence" of a listed company.
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