"Science and Technology Innovation Board Daily" June 6th News (Reporter Guo Hui) After the market today (June 6th), two science and technology innovation board companies in A shares, Fujirui and HCR Co., Ltd., successively announced that they will revoke the risk warning of delisting and suspend trading.

HCR Co., Ltd. and Fujirui's announcement stated that the company will suspend trading on June 7th for one day, and will revoke the risk warning of delisting starting from June 11th. After the risk warning of delisting is revoked, the accumulated number of shares purchased by investors through bidding transactions, bulk transactions, and after-hours fixed price transactions on the same day will no longer apply to the provisions of Article 12.1.4 of the "Listing Rules of the Shanghai Stock Exchange Science and Technology Innovation Board". The daily limit of the company's stock price remains unchanged at 20%.

After HCR Co., Ltd. revoked the risk warning of delisting, the A-share abbreviation of the company changed to HCR Co., Ltd. and the A-share expanded abbreviation changed to HCR Information Co., Ltd. The stock code remains "688500". After Fujirui's delisting risk warning was revoked, the A-share abbreviation became Fujirui, and the A-share expanded abbreviation became Fujirui Optoelectronics.

HCR Co., Ltd. is a technology innovation-oriented enterprise with data analysis and application technology as its core support. The main segmented markets positioned by the company are large and medium-sized customers in the commercial field and customers of governments and public service agencies. It provides integrated scenario services based on multi-dimensional data collection, processing, analysis to generate insights/strategies for management decision-making, market marketing, product innovation, production and operation, customer service, urban governance and other fields.

In April 2022, HCR Co., Ltd. was subject to delisting risk warning due to PwC Zhongtian's audit report for the year 2022 issuing an audit report that was unable to express an opinion, and disclosed the "Announcement on the Implementation of Delisting Risk Warning and Suspension of Trading". The risk warning of delisting was implemented starting from May 5, 2023.

Later, HCR Co., Ltd. changed its audit firm, and DHWJ Co., Ltd. issued a standard unqualified audit report and a special explanatory audit report on the influence of the unable-to-express-opinion relevant to the 2022 annual audit report that has been eliminated. According to the provisions of Article 12.4.10 of the "Listing Rules of the Shanghai Stock Exchange Science and Technology Innovation Board", the influence of the unable-to-express-opinion relevant to the 2022 annual audit report has been eliminated and there are no other situations requiring implementation of the risk warning of delisting.

In April of this year, after approval by the HCR Co., Ltd. board of directors, the company agreed to submit an application to the Shanghai Stock Exchange to cancel the risk warning of delisting for its stock. As of June 6 this year, the Shanghai Stock Exchange agreed to cancel the risk warning of delisting for the company.

In 2023, the annual revenue of HCR Co., Ltd. was 539 million yuan, a year-on-year increase of 8.27%; the net profit attributable to the parent company was a loss of 170 million yuan, and the loss expanded year-on-year.

Looking again at Fujirui, the reason for its risk warning of delisting is different from that of HCR Co., Ltd., mainly due to poor performance.

It is understood that the non-recurring net profit of Fujirui in 2022 audited is negative, and the operating income after deducting business income unrelated to its main business and income without commercial substance is less than 100 million yuan. According to Article 12.4.2 (1) of the "Listing Rules of the Shanghai Stock Exchange Science and Technology Innovation Board", the company's stock was subject to the risk warning of delisting starting from April 27, 2023.

Fujirui is a technology enterprise mainly engaged in the research and development, production and sales of infrared thermal imaging products and systems. The military market oriented by the company is mainly used in general arms, individual soldiers, ground equipment, air equipment and water equipment.

In 2023, Fujirui's performance rebounded, with annual operating income of 209 million yuan, and operating income after deducting business income unrelated to its main business was 196 million yuan; the net profit attributable to the parent company was a loss of 96.3187 million yuan, and the non-recurring net profit attributable to the parent company was a loss of 97.5542 million yuan. According to relevant regulations, Fujirui can apply to the exchange to revoke its risk warning of delisting under conditions.

Fujirui stated that the significant increase in revenue in 2023 was mainly due to the batch delivery of military product procurement plans during the "14th Five-Year Plan" period in 2023, which increased sales of military products. At the same time, the demand for civilian products increased in the year, and the company vigorously expanded its civilian customers and developed overseas markets, which increased sales of civilian products.

By continuously expanding the civilian product market, Fujirui's performance continued to rebound in the first quarter of this year, achieving operating income of 76.3741 million yuan, a year-on-year increase of 147.11%.

According to statistics, 33 companies in A-shares have touched the delisting standard this year, including 22 face value delistings, and the market mechanism of survival of the fittest is gradually forming. However, at the same time, there is also some misunderstanding in the market about the new delisting rules.

On June 6th, Guo Ruiming, the director of the regulatory department for listed companies of the China Securities Regulatory Commission, responded to market concerns, stating that the number of delisted companies is not expected to increase significantly in the short term. At the same time, he mentioned that the purpose of the ST and *ST systems is to fully alert investors of the relevant risks of listed companies, and they can apply for revocation after meeting certain conditions.

Guo Ruiming said that the purpose of the ST and *ST systems is to fully alert investors of the relevant risks of listed companies, and they can apply for revocation after meeting certain conditions. After being subject to the risk warning of delisting, they will not be delisted directly. Most of the relevant problems and risks of these listed companies have been repeatedly alerted through case filing notices, order to rectify measures, and financial information disclosure. In addition, according to market rules, stocks of problematic companies will be subjected to ST or *ST for various reasons after the end of annual report disclosure on April 30th each year, including failure to meet financial data standards, massive funds being occupied by major shareholders, and major internal control defects.

It is known that the China Securities Regulatory Commission's ST implementation for failure to meet dividend standards is aimed at profitable companies, or companies whose net income in the latest accounting year is positive and the undistributed profit of the parent company's annual report at the end of the year is also positive. In determining the implementation criteria, only when the cumulative dividend ratio and amount for the past three years fail to meet the requirements will ST be implemented.

It is worth noting that the conditions set in the ST rules fully consider the characteristics of high R&D investment and early-stage development of some enterprises in the sci-tech innovation board and the growth enterprise market. Even for companies with high R&D intensity (cumulative R&D investment in the past three accounting years accounting for more than 15% of cumulative revenue) or high R&D investment (cumulative investment reaching or exceeding 300 million yuan over three years), they will not be subjected to ST implementation, even if they fail to meet the aforementioned conditions for dividends.