① After its sky-high price flower wine was named by CCTV 315, Qinghai Spring made the latest announcement. The Securities Regulatory Commission decided to inspect the company because the company allegedly violated relevant laws and regulations. This morning, Huajiu issued a statement saying that a special team was set up as soon as possible to carry out comprehensive inspection and rectification work. ③ The biggest cumulative decline in the company's stock price since April 2022 was 78%, with net losses for 4 consecutive years.
Financial Services Association, March 16 (Editor Ping Fang) CCTV's 315 gala named sky-high “rejuvenation” and listening to the influence of flower wine continues to ferment. Qinghai Spring, the parent company of Huaju, with a total market value of less than 4 billion yuan, made a rare announcement on Saturday afternoon. As of press release, this was the only listed company announcement temporarily disclosed on the Shanghai and Shenzhen Exchange website on the same day. Qinghai Spring announced that it has received the “Notice of Supervision and Inspection from the China Securities Regulatory Commission”. Since the company is suspected of violating relevant laws and regulations, it was decided to inspect the company in accordance with the relevant regulations. The inspection team has entered the field to carry out its work.
Earlier this morning, Tsinghua Liquor, a subsidiary of Qinghai Spring, issued a statement saying that the company attached great importance to the issues mentioned in the CCTV March 15 report and set up a special team as soon as possible to carry out comprehensive inspection and rectification work.
According to information, the incident stemmed from listening to flower wine at the sky-high price “rejuvenation” that came to light at the 315th gala. The premium package of Huaju is actually as high as 58,600 yuan/bottle. Reports show that the so-called high-end commercial liquor “Listen to Huaju” has excessive marketing, false publicity, and exaggerated benefits. According to “Listen to Flower Wine”'s self-promotion, its liquor products have health benefits such as improving anxiety, aphrodisiac, anti-aging, improving sleep, and even adjusting blood pressure and heart rate. At the same time, domestic and foreign research experts also spoke out on their platform. According to its sales staff, as a highly regarded liquor product, Tsinghua Liquor can even fight cancer, fight tumors, protect the liver and protect the liver.
As soon as the 315 gala was over, the Shanghai Stock Exchange immediately issued a letter of supervisory work to Qinghai Spring regarding CCTV reporting that the company's product advertising violations were illegal.
After listening to Huaju was exposed on CCTV, their WeChat account was blocked. However, at many e-commerce stores such as Taobao and Jingdong, it is no longer possible to search for Huaju. Furthermore, in response to the problems revealed at China Central Radio and Television's “315” gala, the General Administration of Market Supervision deployed local market supervision departments overnight to carry out enforcement actions to quickly inspect and deal with illegal acts involving market supervision. Among them, market supervisory authorities in Sichuan and Beijing carried out investigations into enterprises and stores that produce and sell “listening to flower wine”.
According to the official website of Tsinghua Liquor, it sells a total of 4 types of liquor products, including sauce-flavored and strong-flavored liquor. Many industry insiders said bluntly that “sky-high” wine lacks heritage, marketing packaging is greater than substance, and judging from the price, it is also difficult to expand the market on a large scale.
According to public information, Qinghai Spring is mainly engaged in R&D, production and sales of Cordyceps sinensis products, as well as the sale of alcohol products. According to the 2023 semi-annual report, quick sales of alcoholic beverages accounted for 39.77% of revenue. However, after Huaju achieved revenue of 72.6982 million yuan in the first half of 2022, sales in the second half of the year were very poor, selling only 1.35 million yuan.
It is worth noting that in recent years, the Shanghai Stock Exchange has issued several regulatory letters on the Qinghai Spring Regular Report and performance forecast information disclosure matters, involving multiple periodic reports and performance forecasts from 2020 to 2023, focusing on the company's alcohol business revenue, sales expenses, accounts receivable, and external advance payments. In November 2022, the Shanghai Stock Exchange issued a regulatory warning on the correction of accounting errors in the company's regular reports.
From 2020 to 2022, Qinghai Spring had net losses of 320 million yuan, 249 million yuan, and 288 million yuan respectively. Qinghai Spring announced on January 31 that net profit attributable to shareholders of listed companies is expected to be -222 million yuan to -287 million yuan in 2023. This will be the company's net loss for 4 consecutive years. As for its continued losses, Qinghai Spring admits that one of the main reasons for the company's losses is that the products operated by the company's FMCG business segment are still in the market development and investment stage, and the investment in product marketing expenses has failed to generate a corresponding increase in product sales volume.
Looking at the performance of the secondary market, Qinghai Spring's April 2022 high is the biggest cumulative decline of 78% in stock prices so far.
