With annual revenue of 8.6 billion, Huading shares successfully "removed the hat"

Affected by the domestic and international environment, the capital occupation of the controlling shareholder, and the acquisition of Tongtuo Technology, Huading's revenue and net profit have fluctuated greatly in recent years. In 2019, Huading's stock was also issued an "other risk warning" by the Shanghai Stock Exchange and became a ST stock.

Subsequently, Huading Co., Ltd. actively carried out rectification in accordance with the "Shanghai Stock Exchange Listing Rules", and when the relevant circumstances involving other risk warnings were completely eliminated, it applied to the Shanghai Stock Exchange to cancel other risk warnings implemented on the company's stocks, and successfully "removed the hat" recently.

The risk warning was revoked and Huading shares successfully "removed the hat"

Huading Co., Ltd. announced that the company's stock will be suspended for one day on June 24, 2022, and will resume trading on June 27, 2022 and cancel other risk warnings. After the cancellation of other risk warnings, the stock name of Yiwu Huading Nylon Co., Ltd. will be changed from "ST Huading" to "Huading Co., Ltd." , the stock code "601113" remains unchanged, and the daily price increase and decrease limit of the stock price will be changed from 5% to 10%.

In October 2019, because the controlling shareholder of Huading Co., Ltd. had misappropriated funds and failed to resolve the problem within one month from the promised period, the Shanghai Stock Exchange implemented an "other risk warning" on its stocks in accordance with relevant regulations, and Huading Co., Ltd. began to wear the "ST" hat.

In 2020, Huading’s internal control audit report was negatively audited by the accountant, and the controlling shareholder’s capital

The issue of capital occupation has not been resolved. According to the relevant provisions of the "Shanghai Stock Exchange Listing Rules", Huading shares will continue to be subject to "other risk warnings" since April 28, 2021.

Subsequently, Huading Co., Ltd. conducted active investigations and eliminated relevant risk warnings.

It is reported that Huading shares had four illegal guarantees and loans. After discovering the violations, Huading shares strengthened the company's seal management and hired a professional lawyer team to respond to the lawsuits. As of the date of the announcement, the debts and guarantee responsibilities of the four illegal matters have been eliminated.

On April 27, 2022, Huading Co., Ltd. received a total of 596 million yuan in principal and interest from True Love Group Co., Ltd., a third party designated by the bankruptcy and reorganization investor of Sanding Holdings, and the capital occupation situation of the company's controlling shareholder has been eliminated.

At the same time, Huading Co., Ltd. also actively promoted the rectification of matters involved in the negative opinion of the 2020 internal control audit report. In April 2022, Beijing Xinghua Accounting Firm issued a relevant special statement, and the risk warning has been eliminated.

After Huading Co., Ltd. excluded the provisions of other risk warnings for the company's stocks item by item in accordance with the "Shanghai Stock Exchange Listing Rules", the company's situations involving other risk warnings have been eliminated and it does not involve other risk warnings.

According to the relevant provisions of the Shanghai Stock Exchange Listing Rules, other risk warning situations involving Huading Shares have been completely eliminated, and no other risk warning situations have been triggered. Subsequently, Huading applied to the Shanghai Stock Exchange for "delisting".

The successful removal of the label is a happy event for Huading Group, but due to multiple factors, the operating conditions of Huading Group in recent years have not been optimistic.

The cross-border e-commerce situation is grim, and Huading shares' net profit fell by 238.63%

Since 2021, the cross-border e-commerce industry has faced a complex external environment , and platform policies have become increasingly stringent. Affected by Amazon's large-scale account suspension and the platform's VAT withholding policy , Huading's losses have further expanded.

Annual report data shows that in 2021, Huading Co., Ltd. achieved operating income of 8.654 billion yuan, a decrease of 11.36% compared with the same period last year; the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was 812 million yuan, a decrease of 238.63% compared with the same period last year.

It is reported that in 2021 , Huading Group's nylon business maintained a good development trend, with both annual revenue and net profit achieving significant growth. However, the cross-border e-commerce business was affected by multiple unfavorable factors, and its revenue and net profit declined sharply, resulting in a significant increase in Huading Group's losses compared with the same period last year .

Huading Group's cross-border e-commerce segment mainly sells through third-party platforms such as Amazon, Walmart, AliExpress, Shopee, Lazada, eBay, as well as self-built platforms and independent sites. At the same time, the independent website operated by Tongtuo Technology receives and pays through the PayPal platform. Policy changes on these platforms may have a significant impact on Tongtuo Technology's cross-border e-commerce business .

In the Amazon account suspension incident, a total of 54 stores of Tongtuo Technology were banned from selling and closed, and the frozen funds reached 41.43 million yuan, accounting for 3.23% of the company's monetary funds at the end of 2021. At the same time, in order to reduce the impact of the Amazon incident, Tongtuo Technology's related storage fees and advertising fees have also increased.

In the first quarter of 2022, Huading Co., Ltd. achieved operating income of 1.569 billion yuan, down 33.79% from the same period last year; the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was -94.83 million yuan, down 293.56% from the same period last year.

Affected by multiple factors such as the recurrence of the global epidemic , the increasing uncertainty of the world's political and economic situation, and the decline in consumer confidence, the traffic dividend of the Amazon platform is further declining, and the reshuffle of Amazon sellers is expected to intensify in the future . Under such circumstances, the industry will accelerate into a new stage of seeking profits from refined operations, brand premiums and supply chain management.

At the same time, the development of independent sites is also transforming towards vertical sites and brand sites. Due to the further increase in traffic prices and the intervention of capital, the refined, vertical and localized DTC brand independent site model will be further developed.

When talking about the future development plan in the cross-border e-commerce sector , Huading Co., Ltd. stated that it will focus on the management idea of ​​"strategic layout and refined management, and simultaneously improve the core competitiveness of business and team" , actively expand potential customers of the B2B model, find offline sales channels, clear unsalable inventory, speed up inventory turnover, and further optimize local warehouse and overseas warehouse capacity management.

At the same time, while ensuring the continued profitability of the existing cross-border trade model , Tongtuo Technology will also rely on its 18 years of experience in the cross-border e-commerce industry to add a "platform service e-commerce" module, create a three-pronged development model of "talent training + project incubation + investment fund", and enhance the company's comprehensive competitiveness in cross-border e-commerce ecological services.

Although the current cross-border e-commerce market is facing multiple challenges, it is undeniable that the penetration rate of e-commerce is increasing worldwide , and the cross-border e-commerce retail market is also expanding . Cross-border enterprises must operate in compliance with policies when going overseas to ensure long-term and stable development.

Huading Shares

Tongtuo Technology

Cross-border e-commerce