After the core product was revealed by 315, Qinghai Spring ushered in a major crisis.

Regulatory action taken one after another

Due to the suspected violation of the law, the China Securities Regulatory Commission decided to carry out an inspection of Qinghai Spring. Currently, the inspection team has entered the field to carry out work.

Qinghai Spring indicated the risk in the announcement that there may be a risk of being punished by the relevant authorities.

Furthermore, Qinghai Spring was issued a letter of supervisory work by the Shanghai Stock Exchange regarding the company's advertising violations.

This year, CCTV's 315 gala named Qinghai Spring's subsidiary to listen to false propaganda, including the fact that no international patent has been certified, that the “high-tech” cooling agent is actually a common peppermint extract, and claims to the outside world that it has effects such as boosting immunity, improving sleep, protecting male function, and regulating physiological disorders.

According to past data, Huaju used photos of many Nobel Prize winners to endorse it during the promotion. What's even more outrageous is that during the promotion, the inspiration for this wine came from the “Taishang Laojun Tuo Dream” of Qinghai Spring Chairman Zhang Xuefeng.

With the support of technology and mythology, the price of flower wine is very expensive. It sells for more than 50,000 in a hardcover bottle, far surpassing Maotai.

After it was revealed this time, its WeChat account has been blocked, and related products have also been removed from various e-commerce stores such as Taobao and Jingdong.

In response to the issues reported by 315, the Qinghai Spring Announcement responded that the company attached great importance to the above issues and set up a special team as soon as possible to carry out comprehensive inspection and rectification work.

Successive losses in performance

Qinghai Spring's main business is sales of alcohol products and sales of Cordyceps sinensis products, while alcohol sales are mainly based on the Tinghua series, which accounts for the majority of the company's revenue.

Looking back, Qinghai Spring's development process can be described as very bumpy. The company initially relied on Cordyceps sinensis products and went public under ST Xiancheng in 2015, becoming the “first Cordyceps sinensis stock”.

In 2016, the China Food and Drug Administration issued the “Notice on Stopping the Pilot Work of Cordyceps Sinensis for Health Products”. The reason is that the use of Cordyceps sinensis can cause excessive intake of arsenic, and Qinghai Spring's core product “Jikusa” was also ordered by the relevant authorities to stop production.

After a major setback in the Cordyceps business, Qinghai Spring saw the liquor business again and launched the high-end liquor “Listen to Flower Wine” in 2020. Today, the company's main products are once again facing a major crisis.

As far as fundamentals are concerned, the company's performance has been losing money for many years and is struggling on the verge of delisting.

From 2020 to 2022, Qinghai Spring had net losses of 320 million yuan, 249 million yuan, and 288 million yuan respectively.

In 2023, Qinghai Spring expects to achieve operating income of 232 million yuan to 248 million yuan, an increase of 72.276,900 yuan to 882,197 million yuan compared with the same period last year, an increase of 45.12% to -55.08%; net profit loss to mother is 222 million yuan to 287 million yuan, and the amount of loss is about the same as the same period last year.

Regarding the reason for the loss in 2023, Qinghai Chuntian said that it was mainly due to the company's subsidiary's foreign investment in Shenzhou Yiqiao, the Chinese enterprise Yiqiao, and Hangzhou Shangjintai, which resulted in losses of 140 million yuan.

At the same time, Qinghai Spring said that the company's main products are still in the market expansion period, and related expenses have been invested heavily, and no scale effect has yet been achieved.

Regarding the pre-loss situation, the Shanghai Stock Exchange also issued a letter of supervisory work.

In terms of stock prices, Qinghai Spring's stock price reached a high of 50.09 yuan/share in 2015, and closed at 6.57 yuan/share last Friday, down more than 85% from its high level.