Recently, Baosheng (stock code: 600973) released an announcement involving litigation and rulings.
The announcement pointed out that due to Shenzhen Evergrande Group Data Equipment Co., Ltd. and its affiliates failed to pay the wire and cable payment on time, in order to safeguard the legitimate rights and interests of the company and all shareholders, Baosheng Stocks filed four civil lawsuits to the Guangzhou Intermediate People's Court in August 2021, requesting Shenzhen Evergrande Data Equipment Co., Ltd. and its affiliates, as well as the guarantor to pay the payment of the goods and the liquidated damages of a total amount of 712 million yuan.
The amount of the four lawsuits were 283 million yuan, 188 million yuan, 157 million yuan and 84.4784 million yuan, Baosheng shares are the plaintiffs, and the defendants include Shenzhen Evergrande Data Equipment Company, Guangzhou Evergrande Data Equipment Company, Evergrande Real Estate Group, Evergrande Children's World Group, Evergrande Group, and a number of other affiliated enterprises.
In the lawsuit, Baosheng emphasized that the defendant owed a huge amount of money for the goods and the commercial promissory notes provided could not be honored upon maturity, and the company had reason to judge that the defendant was no longer able or had no intention of fulfilling the matured and unmatured debts.
Baosheng shares said, Shenzhen Evergrande data equipment company and related enterprises and the guarantor for the company's above payment provided about 283 million yuan worth of real estate guarantee, and commitment to Guiyang Evergrande Central Plaza and other projects of the sales return as a source of repayment, at present the pawn guarantee procedures are being processed.
As this 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 for the current period or earnings after the period.
Baosheng Stock, a listed company in Yangzhou, is mainly engaged in the production of wire and cable, bare conductor and other products, with a current market capitalization of approximately 6.3 billion yuan. Evergrande Group, an important customer of Baosheng, has had business cooperation between the two sides since 2010.In March 2017, Baosheng had signed a strategic cooperation agreement with Evergrande Real Estate.
Data show that in 2019, Baosheng shares of Guangzhou Evergrande Data Equipment Company and Shenzhen Evergrande Data Equipment Company's accounts receivable balance of 408 million yuan and 190 million yuan, respectively, the transaction matters for wire and cable sales, these two companies this time are Baosheng shares sued.
In 2019, the amount of commercial promissory notes issued by Guangzhou Evergrande Data Equipment Company and Shenzhen Evergrande Data Equipment Company in the wire and cable business of Baosheng shares was 182 million yuan and 98,949,800 yuan, respectively.
In its reply to the SSE's regulatory inquiry letter on the company's 2019 annual report information disclosure, Baosheng said, "The cable business of Hengda System Company and Hengli are the company's cable business's major customers, whose 2019 supplier tickets totaled 620 million yuan and 160 million yuan, respectively."
At that time, Baosheng said: "There are stricter control measures for the collection of commercial promissory notes, and will judge whether to collect commercial promissory notes according to the credit situation of customers. The creditworthiness of such companies is high, the payback situation is good, and the commercial promissory notes paid in the past years, there has not been a situation of overdue and unable to be honored, 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 realized operating income of 20.588 billion yuan, an increase of 29.15%; realized net profit attributable to the parent company 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 mentioning that on the evening of September 6, the three trees replied to the verification letter of the Securities and Futures Commission, showing that its holdings of Evergrande and its companies also existed in the case of overdue notes.
