Xinya Process (002388) announced today that it responded to an inquiry letter from the management department of the Shenzhen Stock Exchange to the company on May 17th for the company's 2015 annual report. In the announcement, Xinya Process explained the reasons why the company's sapphire business was optimistic about the reasons why it did not prepare for the impairment of its shareholding company Fuyuan Technology in 2015.
An important issue in the inquiry letter was the transfer of a 10.3% stake in Guangdong Saiyu (now renamed Fuyuan Technology) for 287 million yuan in 2014. The transferor Fuyuan Industrial has promised that the net profit of Guangdong Saiyi from 2014 to 2016 will not be less than 50 million yuan, 250 million yuan and 550 million yuan respectively. For example, the actual net profit of Guangdong Saiyu is less than 850 million yuan. The transferor promises to compensate the company for the difference. In 2015, Fuyuan Technology actually realized a net profit of 226 million yuan, which did not meet the 250 million yuan promised by the transferor. However, the company did not make provision for impairment of the available-for-sale financial assets. The Shenzhen Stock Exchange asked Xinya to explain this.
Xinya Process said that the company mainly carried out online inquiries, consulting industry experts, on-site inspection, observation, inquiry, understanding of interviews and other procedures, comprehensive analysis and judgment on the sapphire industry market conditions, Fuyuan Technology's latest production and operation status and profitability. It is considered that no provision for impairment of available-for-sale financial assets is required at the end of the period. According to the disclosure, the Xinya process has observed and observed the production workshops and warehouses of Fuyuan Technology on the spot. The production and operation of Fuyuan Technology is operating normally and orderly, and the production lines of roughing, finishing, cutting and polishing are further expanded.
Xinya Process learned through on-site interview with Fuyuan Technology General Manager that after the US GT Company announced bankruptcy protection, Fuyuan Technology and GT Company have signed orders and continue to execute and basically completed the contract, and the relevant sales funds have been contracted according to the contract. Take back. At present, the production and operation of Fuyuan Technology has been carried out in a normal and orderly manner. New customer orders are gradually being mass-produced, except for the original customers such as Kyocera, Jinli, Meizu, Dongguan Jingshi and Oufeiguang (27.350, 0.00, 0.00%). In addition to good partnerships, it has also established partnerships with major mobile phone manufacturers such as Huawei, ZTE, VIVO, and HTC, and has established business relationships with luxury mobile phone manufacturers such as James and WEB. Large area sapphire panel.
Xinya Process said that the latest financial status of Fuyuan Technology was inquired. Fuyuan Technology was operating well in 2015, with stable growth in operating income and profit, normal capital turnover, and no serious financial difficulties. Although Fuyuan Technology's net profit achieved in 2015 did not reach the transferor's commitment of 250 million yuan, but 2014 and 2015 net profit totaled 313 million yuan, has achieved the performance commitment of the previous two years.
In addition, the company also compared the equity transfer price of Fuyuan Technology after the acquisition of equity in Xinya Process. On April 28, 2015, Fuyuan Technology's shareholder Fuyuan Industrial transferred its 4.7% equity and share capital of 28.2 million yuan to Tongxin Investment Fund for RMB 155 million. The transfer price per share was 5.5 yuan, which is higher than the investment in Xinya Process. The average cost per share of technology is 10.53%. The Xinya Process thus judged that there was no serious or non-temporary decline in the fair value of Fuyuan Technology's available-for-sale financial assets.
Another key issue in the Shenzhen Stock Exchange's enquiry letter comes from Fuyuan Technology's major customer, GT Company, filed for bankruptcy protection on October 6, 2014, which may result in the risk of impairment of the investment in Fuyuan Technology by Xinya Process, but the company's current period The provision for impairment of the available-for-sale financial assets was not made, and the Shenzhen Stock Exchange asked the company to explain the reasons.
Xinya Process said that after Fuyuan Technology's major customer GT Company filed for bankruptcy protection, Fuyuan Technology and GT Company have signed the order and continue to execute it, and the basic execution has been completed according to the contract. The relevant sales amount has been recovered normally according to the contract. Fuyuan Technology's production and operation are carried out in a normal and orderly manner, and new customer orders are gradually being mass-produced.
The new Asia process also said that the sapphire industry is in the development stage. In the future, with the application of sapphire products on smart terminals, the sapphire industry has broad prospects for development. After considering various factors such as the company's technology, market, and sapphire industry development prospects, it is expected that the adverse impact of the US GT company's application for bankruptcy protection on Fuyuan Technology is not non-transient. The matters highlighted in the original audit report have brought to Fuyuan Technology. The impact has been basically eliminated. In summary, the company believes that no provision for impairment is available on Fuyuan Technology's available-for-sale financial assets.
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