Recently, Baosheng (stock code: 600973) released an announcement involving litigation and adjudication.
The announcement reveals that due to the failure of Shenzhen Evergrande Equipment Group and its affiliates to pay the payment for the wire and cable goods on time, in order to defend the interests of the company and shareholders, Baosheng Shares filed four civil lawsuits in August 2021 with Guangzhou Intermediate People's Court. Require Shenzhen Evergrande Equipment Group and its affiliates, as well as the guarantor to pay a total of 712 million yuan of payment and liquidated damages.
The four lawsuits amounted to 283 million yuan, 188 million yuan, 157 million yuan and 84.4784 million yuan, with Baosheng as the plaintiff and involving a number of defendants, including Shenzhen Evergrande Equipment Company, Guangzhou Evergrande Equipment Company, Evergrande Real Estate Group, Evergrande Children's World Group, Evergrande Group, and many others.
In the lawsuit, Baosheng emphasized that the defendant owed a huge amount of money for the goods and the commercial promissory note provided could not be honored at maturity, and the company had reason to suspect that the defendant was unable or had no intention of fulfilling the debt as it matured.
Baosheng shares pointed out that Shenzhen Evergrande Equipment Company and affiliated enterprises and the guarantee party have provided real estate guarantee worth about 283 million yuan for the above payment, and promised to Guiyang Evergrande Central Plaza and other project sales return as the source of repayment, and the relevant pawn guarantee procedures are being processed at present.
As the case has not yet been heard in court and the outcome of the litigation is uncertain, it is not yet possible to determine the impact on the Company's earnings in the current or subsequent periods.
Baosheng Stock, a listed company in Yangzhou, specializes in wires and cables, bare conductors, etc., with a current market capitalization of 6.3 billion yuan. Evergrande Group is a big customer of Baosheng, and the two sides have had business cooperation since 2010.In March 2017, Baosheng signed a strategic cooperation agreement with Evergrande Real Estate.
Data show that in 2019, Baosheng shares of Guangzhou Evergrande Equipment Company and Shenzhen Evergrande Equipment Company's accounts receivable balance of 408 million yuan, respectively, and 190 million yuan, the transaction matters for wire and cable sales, these two companies this time are Baosheng shares sued.
In 2019, the amount of commercial paper issued by Guangzhou Everest Equipment Company and Shenzhen Everest Equipment Company in the wire and cable business of Baosheng Corporation was 182 million yuan and 98,949,800 yuan, respectively.
In the reply to the SSE's regulatory inquiry letter on the company's 2019 annual report information disclosure, Baosheng said that "in the cable business, Evergrande and Hengli (Note: the original text of the announcement, "Hengli" should be an error) are the company's cable business as a major customer, and their 2019 supplier tickets totaled 620 million yuan and 160 million yuan, respectively". 620 million yuan and 160 million yuan".
Baosheng said at that time: "There are more strict control measures for the collection of commercial promissory notes, and we will judge whether to collect commercial promissory notes based on the creditworthiness of the customers. The creditworthiness of such companies is high, the payback situation is good, and the commercial promissory notes paid in the past years have not been overdue and unpayable, so the Company believes that there is no risk of recovery of the commercial promissory notes collected."
Data show that in the first half of this year, Baosheng shares realize operating income of 20.588 billion yuan, an increase of 29.15%; realize attributable net profit of 193 million yuan, an increase of 46.47%. By the end of June, Baosheng shares notes receivable 3.005 billion yuan, of which 2.593 billion yuan of commercial paper.
It is worth noting that on the evening of September 6, three trees replied to the SEC verification letter shows that its holdings of Evergrande and its companies also exist in the case of overdue commercial paper.
