After the subsidiary lost control, Zhongjia Bochuang replied: there is no financial "big bath"

Zhongxin Jingwei January 20, 2019 Zhongjia Bochuang replied to the Shenzhen Stock Exchange's letter of concern on the 20th, saying that there is no financial "big bath".

　　Specifically, Zhongjia Bochuang said in its reply letter to the Shenzhen Stock Exchange that the company completed a major asset restructuring in November 2018, and issued shares to the counterparty of the restructuring transaction and paid cash to purchase 100% of the equity of Jiahua Information held by it in total, and the transaction consideration for the purchase of assets by issuing shares in this transaction was 1480 million yuan. The cumulative net profit attributable to listed companies achieved by Jiahua Information from June 2018 to September 2021 was 287 million yuan.

　　Based on the principle of prudence, Zhongjia Bochuang said that it intends to make a full impairment provision for the carrying amount of the long-term equity investment of Jiahua Information of 1.48 billion yuan. At the same time, due to the loss of control of Jiahua Information, Zhongjia Bochuang has been unable to exercise the power of shareholders to affect the amount of returns, and the relevant rights and interests originally enjoyed may not be realized, and the company intends to include the cumulative net profit attributable to the listed company of 287 million yuan achieved between June 2018 and September 2021 into the investment loss.

　　In summary, Zhongjia Bochuang said that due to the loss of control of Jiahua Information and the company's no longer including it in the scope of consolidated statements, the company intends to make an asset impairment provision of 1.480 billion yuan for the balance of Jiahua Information's long-term equity investment based on the principle of prudence and recognize an investment loss of 287 million yuan, and there is no financial "big bath". Subsequently, the Company will finally recognize the impairment amount and investment profit or loss of the long-term equity investment based on the arbitral award and carry out corresponding accounting treatment.

　　The accountant said that because Zhongjia Bochuang could not provide the financial information of Jiahua Information, it was unable to grasp the actual operation situation, asset status and potential risks of Jiahua Information, and at present, the original shareholders of Jiabao Chuang and Jiahua Information were in arbitration, and it was impossible to judge whether the impairment provision for long-term equity investment and the amount of investment loss accrued were appropriate.

　　In addition, Zhongjia Bochuang also announced that it had conducted an asset impairment test. Zhongjia Bochuang said that the asset impairment test is an asset impairment test for the target assets at the expiration of the performance commitment period according to the relevant agreements on restructuring, which is a necessary procedure for fulfilling the obligations of the restructuring agreement. At present, Jiahua information has gotten out of control and is no longer included in the scope of the company's consolidated statements, so the results of the asset impairment test have no significant impact on the company's 2021 annual financial report, and there is no "big bath" through the provision for goodwill impairment in the corresponding year.

　　On December 20, 2021, Zhongjia Bochuang issued the "Announcement on the Loss of Control of The Wholly-Owned Subsidiary", saying that the company could not obtain the complete financial information of the wholly-owned subsidiary Jiahua Information, and could not implement on-site audits, etc., resulting in the company's inability to control the major business decisions, personnel and assets of Jiahua Information, and in fact lost control of Jiahua Information.

　　On the same day, the Shenzhen Stock Exchange issued a letter of concern to Zhongjia Bochuang, asking it to explain the management mode and actual management effect of its business, finance, personnel and major matters since the acquisition of Jiahua Information.

　　Zhongxin Jingwei noted that Zhongjia Bochuang issued announcements on December 28, 2021 and January 13, 2022 respectively, requesting an extension of reply to the letter of concern.

　　In the secondary market, Zhongjia Bochuang's share price fell 4.41% from the previous trading day to close at 3.90 yuan. As of now, its total market value is 3.652 billion yuan. (Zhongxin Jingwei APP)