“Science and Technology Innovation Board Daily”, May 6 (Reporter Guo Hui) As the “first stock transferred to the Beijing Stock Exchange” and is now a hotly debated low-altitude economy concept stock, Guandian Defense has been listed on the Science and Technology Innovation Board for two full years, yet it has welcomed a qualified audit report issued by the auditing agency on its latest annual report. The Shanghai Stock Exchange urgently issued two successive regulatory letters around the May 1st holiday this year, pointing directly at the chaotic financial and internal control issues of Guandian Defense over the past year.

On May 5, Guandian Defense announced that the company received a regulatory inquiry letter from the Shanghai Stock Exchange regarding the disclosure of information in the company's 2023 annual report.

According to the content of the letter, after conducting an ex post facto review Guandian Defense's 2023 report, the exchange inquired about 14 issues, including the company's 2023 monetary funds, acceptance notes and cash flow from financing activities, transactions, revenue recognition methods and execution, customer structure, sales model, and revenue for the fourth quarter of last year, and requested additional disclosure of relevant specific information from Guandian Defense.

The cause of the incident was that on April 30, on the same day that Guandian Defense released its 2023 financial report, the company's auditing agency, Daxin Certified Public Accountants, issued a qualified audit report on its annual report and issued an audit report with negative opinions on the internal control of financial reports.

Among them, during the financial report audit process, the auditing agency believed that Guandian Defense had a situation where the use of large sums of money was unclear.

According to the announcement, in 2023, Guandian Defense paid a total of 229 million yuan to various entities including Beijing Road Road Changtong Information Technology Co., Ltd., Beijing Lanqiyuan Electromechanical Equipment Co., Ltd., and Beijing Yamei Composite Materials Co., Ltd. However, the auditing agency Daxin Certified Public Accountants stated that it was unable to determine the nature and commercial rationality of such payments, as well as the impact on items related to financial statements.

Second, in the past, Guandian Defense also had cases of large amounts of illegal external guarantees, and the audit agency was unable to obtain corresponding audit evidence.

According to the Gudian Defense Notice, this year's self-inspection revealed that the company used bank time deposits to provide external pledge guarantees. The total guarantee balance was 43 million yuan. It failed to comply with the relevant review procedures and information disclosure obligations of listed companies, constituting an illegal guarantee. At present, the company has communicated with the relevant banks to cancel the illegal guarantee agreement.

Daxin Certified Public Accountants reports that during the implementation or investigation of matters, the auditing agency failed to obtain corresponding audit evidence, was unable to determine the completeness of the company's disclosure of external guarantees, etc., and believed that Guandian Defense had major flaws in internal controls relating to fund approval, external guarantees, etc.

Furthermore, in terms of product sales, Guandian Defense has also failed to effectively implement internal control management systems in terms of control such as authorization approval, sales pricing, contract execution, and shipping approval, and has caused internal control flaws. The audit agency stated in the report that effective internal control can provide reasonable guarantees for the truthfulness and completeness of financial reports and related information, and that these major flaws have caused Guandian Defense Company's internal control to lose this function.

The major flaws in finance and internal control mentioned above also make many details of the 2023 Defense Report look doubtful.

For example, the sharp increase in transactions such as advance payments, receivables, and payables at the end of 2023 and the end of the first quarter of 2024 indicated in the Shanghai Stock Exchange's supervisory letter; the company's revenue in the fourth quarter of 2023 was only 786,500 yuan, and revenue in the first quarter of 2024 increased sharply by 479.48 million yuan month-on-month. The revenue extension confirmed whether the contract partner had an interest arrangement with the company; and the software book balance in intangible assets increased rapidly in the past two years, and was transferred many times from ongoing construction, external purchases, development expenses, etc. However, there is no transfer of internal R&D. What is the actual research status of the project...

The few questionable amounts mentioned above, whether they are interest-based loans between companies or advance payments to purchase assets, all kinds of issues require further disclosure and resolution by the Ministry of Defense. According to the announcement, the company needs to respond to inquiries in the exchange regulatory letter before the May 20 time point.

It is worth noting that Guandian Defense will also hold the 2023 Annual General Meeting of Shareholders on May 20, which means that small and medium-sized investors will also have the opportunity to communicate with the company on related issues.

“Family-style business doesn't work anymore. Gao Dong used to being used to saying things, but now the supervision is in full swing.” After the publication of the above series of announcements, some investors made such claims on interactive platforms.

According to information, Gao Ming, the current chairman and general manager of Guandian Defense, and Li Zhenbing, the company's director and board secretary, are brothers. The two were acting in concert. By the end of the first quarter, their total shareholding ratio in the company had reached 50.70%.

In 2023, Guandian Defense achieved revenue of 212 million yuan, a year-on-year decrease of 27.12%; realized net profit of 25.213 million yuan to mother, a year-on-year decrease of 71.30%. The company said that the company's sales revenue for drone flight services and data processing, drone systems and intelligent defense equipment changed last year, mainly due to the macroeconomic environment and mid-term adjustments in related industries, and delays in acceptance confirmation of some projects.

Guandian Defense said that drones are currently the leading industry in the low-altitude economy. The company is currently using drones as the core, with two major business segments: flight services and data processing, drone systems, and intelligent defense equipment.

In addition to the anti-drug field of drones, the company said it is also targeting application characteristics and needs in the fields of resource investigation and environmental monitoring, integrating its existing data resources, digging deeper into the application value of irreversible historical information recorded by data resources, and cultivating new application markets. According to a research report released by Huachuang Securities in March this year, the low-altitude economic wave may accelerate the company's cross-sector exploration.