On June 7th, Cailian Press reported that Hongbo Co., Ltd. (002229.SZ) replied to the Shenzhen Stock Exchange's annual report inquiry letter in the evening, stating that the actual fulfillment of AI computing power-related contracts with Beijing Jingneng, Baichuan Intelligence, and Ziguang Xiaotong did not meet the contract agreement or the original planned progress. The contract amount is relatively large and the performance period is relatively long. In the process of contract performance, there are uncertainties or risks in terms of laws, regulations, policies, performance capabilities, technology, and markets, and it may also face risks caused by major changes in the external macro environment and other force majeure factors, which may result in the risk of the contract not being fulfilled normally.

At the same time, Hongbo Co., Ltd. responded that the dismissal of Deputy General Manager Zhou Weiwei's position was mainly to prevent the subsidiary from losing control.

The Cailian Press reporter noticed that in the reply, Hongbo Co., Ltd. elaborated on the three contracts separately, of which delayed delivery of GPU servers was the main reason.

Specifically, Hongbo Co., Ltd.'s wholly-owned subsidiary, InnoStar Digital Technology Co., Ltd., has completed the delivery obligation of 62 GPU devices out of the 128 units agreed with Beijing Jingneng (including some supporting equipment), received a payment of 500 million yuan, and the revenue has not been recognized as of 2023 and has not yet reached the income recognition standard as of the date of the reply.

Regarding Baichuan Intelligence, InnoStar Digital Technology Co., Ltd. has signed a three-year service contract with it. As of the date of the reply, no revenue has been generated, and it is expected that there will be some delay in progress compared with the actual situation, mainly due to the delayed delivery time of GPU server equipment. At the same time, the company stated that at present, there is a lack of reference debugging precedent for large-scale Nvidia GPU server clusters in China, and InnoStar's technical staff have fewer related technical paths to refer to.

In addition, the actual situation of the 494 million yuan purchase and sale contract signed by InnoStar Digital Technology Co., Ltd. and the supplier Ziguang Xiaotong is also delayed compared with expectations, mainly due to the "US Department of Commerce's restriction policy on high-end chips for Peking", resulting in a shortage of domestic computing equipment, and major changes in the external environment from when the contract was signed.

It is worth noting that on April 19th, Hongbo Co., Ltd. announced the dismissal of Deputy General Manager Zhou Weiwei. The company stated in the reply that the dismissal of Zhou Weiwei was mainly because "it was found that Zhou Weiwei had violated regulations and had a confrontational attitude towards the parent company's management, in order to prevent the subsidiary from losing control."

InnoStar Digital Technology Co., Ltd.'s reply shows that the company dismissed Zhou Weiwei because she used her personal rights at InnoStar to disobey the parent company's management, accepted media interviews without authorization, posted sensitive information on her personal social platform, and violated the company's internal regulations.

However, according to Zhou Weiwei's statement quoted by the media, the adjustment of the 2023 performance forecast was the direct trigger for the company's internal turmoil. On the evening of April 12th, Hongbo Co., Ltd. announced a revision of its performance forecast, expecting a loss of 50-58 million yuan for the full year of last year, which constituted a directional reversal compared with the previously predicted profit range of 37.40-56.10 million yuan. In response to the "change of face" in the performance forecast, Hongbo Co., Ltd. explained that the timing of revenue recognition had been postponed. As a result, Hongbo Co., Ltd. also received warning letters from the China Securities Regulatory Commission and the Shenzhen Stock Exchange.

In fact, in addition to the slow progress of the AI computing power business and the turmoil within the core subsidiary, the company's status of having no controlling shareholder or actual controller has also caught the attention of the exchange. Cailian Press reporters will continue to pay attention to the progress of related businesses.