Gelonghui, May 29?Founder Technology (600601.SH) announced that according to the standard unqualified audit report issued by Shanghai Accounting firm (Special General Partnership), the undistributed profit in the company's consolidated statement on December 31, 2019 is approximately-776 millionYuan, paid-in share capital is about2.195 billionYuan, the amount of uncompensated losses exceeds 1/3 of the total paid-in share capital. The main reasons for the losses are as follows:
1. The domestic broadband access market is affected by the national "speed-up and fee reduction" policy and the promotion of converged package broadband by basic telecom operators, the competition is becoming more and more fierce, and the price of broadband access products continues to decline. In 2019, founder Broadband Network Services Co., Ltd. ("founder Broadband"), a wholly-owned subsidiary of the company, lost users of its broadband access business, shrank its scale and greatly reduced its gross profit, resulting in a loss in founder Broadband's operation.384 millionYuan.
2. In the face of the changes in the overall competition pattern of the domestic broadband access market, founder broadband services are facing transformation. According to the actual operation of founder broadband access services, combined with the forecast of the future income of its broadband assets, there are obvious signs of impairment in some of founder broadband assets. The financial department of the company, together with the evaluation agency, evaluated the assets of Zheng Broadband, and set aside about the provision for impairment of fixed assets.798 millionYuan.
3. In 2019, the company's wholly-owned subsidiary founder International Software Co., Ltd. ("founder International") projects increased, personnel costs and expenses increased, but the project needed a certain implementation cycle to recognize revenue, at the same time, founder International financing costs increased, resulting in an increase in founder International year-on-year losses in 2019.