Cross-Border Link predicted a loss of 3.8 billion last year, and two directors of the company have resigned!

There have been many major events in the cross-border circle recently, and netizens have been eating up the melons. The every move of Cross-Border Link, the leading cross-border e-commerce company in the A-share market, has attracted much attention. From the proposed sale of no less than 60% of Paton's shares to Cross-Border Link's sale of 100% of Paton's shares, when the dust finally settled, Cross-Border Link did not fade out of people's sight, but instead enriched the topics of conversation among netizens with its latest performance announcement.

In addition to the performance issues in 2020, Cross-border Communication’s newly issued “Risk Warning Announcement on the Expected Failure to Disclose Periodic Reports within the Legal Period” also contains important information. It is still unclear when Cross-border Communication’s 2020 financial report will be released, and two directors of Cross-border Communication have resigned...

The lowest expected profit of 100 million yuan turned into a huge loss of 3.8 billion yuan . Cross-border Communication revised its performance forecast

Yien.com learned that in its 2020 performance forecast on January 30 this year, Cross-border Communication said that it expected to make a profit of 100 million to 150 million in 2020. However, the "Performance Forecast Correction Announcement" released by Cross-border Communication yesterday was unexpected. Why? Because the net profit value not only turned from positive to negative, but also turned negative by a large margin.

In its "Revised Announcement on Performance Forecast", Cross-Border Communication stated that it expects operating revenue to be between 16.5 billion and 17.5 billion in 2020, compared with 17.874 billion in the same period last year; net profit is expected to be a loss of 3 billion to 3.8 billion, compared with a loss of 2.7 billion in the same period last year.

Cross-border Communication disclosed the reasons for the performance revision in the announcement ↓

In 2020, affected by the global epidemic and capital shortage, the company's wholly-owned subsidiary Shenzhen Global Easybuy E-Commerce Co., Ltd. (hereinafter referred to as "Shenzhen Global") had a total number of employees of 3,353 at the beginning of 2020, and by the end of 2020, the total number of employees was only 885 , a reduction of about 3/4.

Staff reductions and the closure of some businesses led to inefficient management of Shenzhen Global, a sharp decline in business, and poor coordination between the business team and the financial team at the operational level, which resulted in the Shenzhen Global financial system failing to obtain business documents in a timely manner at the end of 2020, resulting in forecasting deviations.

In addition, the high short-term severance costs and other management business losses caused by staff reduction, inventory clearance of obsolete products, and bad debt provision for accounts receivable led to a loss of approximately RMB 2.5 billion for Shenzhen Global , and the deferred income tax assets of RMB 460 million were reversed. At the same time, based on the principle of prudence, the company hired a third-party appraisal agency to conduct an impairment test on Shenzhen Global's goodwill. According to the results of the impairment test, Shenzhen Global's goodwill was impaired by approximately RMB 700 million.

Is Cross-Border Link facing the risk of delisting?

At the same time as announcing the revised earnings forecast, Cross-border Communication also issued a "Risk Warning Announcement on the Expected Failure to Disclose Periodic Reports within the Legal Period". The content of the announcement is as follows ↓

Cross-border Communication was originally scheduled to disclose the "2020 Annual Report" and "2021 First Quarter Report" on April 30, 2021. At present, the company's annual auditor has completed the company's 2020 annual audit. Because the company's board of directors still needs to discuss some of the matters to be reviewed in the 2020 annual report, it is expected that there is a risk that the above report cannot be disclosed within the statutory period. According to the "Shenzhen Stock Exchange Stock Listing Rules" (revised in 2020), the relevant risk items are now disclosed as follows :

1. If the company fails to disclose its 2020 annual report and 2021 first quarter report within the statutory period , and still fails to disclose them within two months of the suspension of the company's stock, the Shenzhen Stock Exchange will implement a delisting risk warning for the company's stock trading.

If the company's stock has not disclosed the 2020 annual report and the 2021 first quarter report that are guaranteed to be true, accurate and complete by more than half of the directors within two months from the date on which the delisting risk warning is implemented , the Shenzhen Stock Exchange will decide to terminate the company's stock listing.

2. If more than half of the company's directors are unable to guarantee the truthfulness, accuracy, and completeness of the 2020 annual report and the 2021 first quarter report, and if more than half of the directors are still unable to guarantee this within two months of the company's stock being suspended, the Shenzhen Stock Exchange will implement a delisting risk warning for the company's stock trading.

If more than half of the directors are unable to guarantee the truthfulness, accuracy, and completeness of the 2020 annual report and the first quarter report of 2021 within two months from the date on which the company's shares are issued a delisting risk warning , the Shenzhen Stock Exchange will decide to terminate the company's stock listing.

In addition, Cross-border Communication also received inquiries from the Shenzhen Stock Exchange. In the reply to the Shenzhen Stock Exchange's letter of concern, Cross-border Communication stated that because the company's board of directors still needs to discuss some of the matters to be reviewed in the 2020 annual report, it is temporarily unable to guarantee the authenticity, accuracy and completeness of the company's 2020 annual report. The company expects that there is a risk that the 2020 annual report will not be disclosed within the statutory period , and the company will fully remind of the relevant risks in the form of a temporary announcement.

Two directors of Cross-border Communication resigned because ...

Yien.com learned that before Cross-border Communication released the revised earnings forecast, two directors resigned. Cross-border Communication also disclosed the reasons for the resignation of the two directors in the announcement. The specific announcement content is as follows ↓

Mr. Zhang Bo, a director of the company, has applied to resign from the positions of director and member of the audit committee of the company due to work reasons. After his resignation, Mr. Zhang Bo will no longer hold any position in the company. The resignation report will take effect from the date of submission to the board of directors ( April 28, 2021).

Mr. Xi Zhimin, a director of the company, has applied to resign from the positions of director of the company and member of the strategic committee for personal reasons. After his resignation, Mr. Xi Zhimin will no longer hold any position in the company. The resignation report will take effect from the date of submission to the board of directors.

From the summary of the announcement, we can learn that the two directors applied for resignation due to company reasons and personal reasons respectively. The announcement did not elaborate on the specific company and personal reasons. This was bound to arouse endless imagination among the onlookers, so the Shenzhen Stock Exchange, which was also curious, took action.

Just after the announcement of the resignation of the two directors was issued, the Shenzhen Stock Exchange's Corporate Management Department sent a letter of concern to Cross-Border Link, requiring the company to verify and disclose additional information on the reasons for the resignation of Xi Zhimin and Zhang Bo.

From Cross-Border Communication’s response, we can learn that due to adjustments in his main job, Xi Zhimin was unable to devote sufficient energy to continue to perform his duties as a director. In order not to affect the normal operation of the company’s board of directors, he applied to resign from the company’s director and member of the strategic committee.

As a director and member of the audit committee of the company, Zhang Bo participated in the audit of the 2020 annual report. During this process, he failed to obtain cooperation from the management, which affected the progress of the annual report audit work . Therefore, he applied to resign from the position of director and member of the audit committee of the company.

Cross-Border Communication stated that the company originally had 9 board members and currently has 7 board members. The resignation of Mr. Xi Zhimin and Mr. Zhang Bo will not cause the number of board members of the company to fall below the statutory minimum number and will not affect the normal work of the company's board of directors. The company will speed up the by-election of directors.

This article has ended, but the story of Cross-border Communication has not yet ended. Now, let us wait together: How much net profit did Cross-border Communication make in 2020...

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