Finance Association, April 28 (Reporter Wu Xin) *ST Zuojiang, whose stock price was once close to 300 yuan per share due to excessive net profit losses and poor revenue, will be terminated. Trading of the company's shares will be suspended from the opening of the market on April 29.

*ST Zuojiang announced today that in 2023, the company achieved operating income of 53 million yuan, a year-on-year decrease of 9.68%. The audited net profit was a loss of 220 million yuan, a year-on-year decrease of 49.67%. Since the company's audited net profit was negative, operating income was less than 100 million yuan, and an audit report with a non-standard audit opinion was issued on the company's 2023 financial statements, it touched upon the relevant provisions of the “Stock Listing Rules”. As a result, the Shenzhen Stock Exchange decided to terminate the listing of the company.

In fact, in the last fiscal year (2022), *ST Zuojiang was issued a delisting risk warning due to revenue of less than 100 million yuan and a net profit loss of 147 million yuan to mother. On November 24, 2023, *ST Zuojiang was also investigated by the Securities Regulatory Commission due to financial fraud. On January 29 of this year, the Securities Regulatory Commission announced the investigation results. *ST Zuojiang's financial information disclosed in 2023 was seriously untrue and suspected of major financial fraud.

According to the “Stock Listing Rules”, *ST Zuojiang shall immediately arrange matters relating to the transfer of shares to securities trading places such as the National Small and Medium Enterprises Share Transfer System after the Shenzhen Stock Exchange makes a decision to terminate the company's stock listing to ensure that the company's shares can be transferred within 45 trading days from the date of delisting.

*ST Zuojiang said, “At present, the company's production and operation management work is all normal. It will coordinate planning and take active measures to focus on the main business by integrating resources, optimizing the business structure, controlling operating costs, improving operating efficiency, increasing market expansion efforts, promoting healthy business development, improving sustainable management capabilities, and effectively safeguarding the rights and interests of the company and all investors, especially small and medium-sized investors.”

According to public information, *ST Zuojiang is a software and hardware solution provider and software and hardware platform supplier in the field of information security. It is mainly engaged in the design, development, production and sale of software and hardware platforms, boards and chips related to the field of information security.

The company is highly sought after in the secondary market due to the DPU concept (network data processing chip). The stock price was once speculated to 299.8 yuan/share — making it the most expensive ST stock. From January 15 to January 23, 2024, due to rumors that the cap was removed, *ST Zuojiang's stock price pulled 5 20cm higher and lower within 7 trading days. But soon after, the Securities Regulatory Commission settled on its financial fraud. *ST Zuojiang had no hope of getting rid of its cap as a result, and the stock price dropped to 6.94 yuan/share (closing price on April 26).

*Why did ST Zuojiang fall to this point? A Financial Services Association reporter checked the financial report and found that since entering the capital market in 2019, *ST Zuojiang's performance has declined year after year. From 2020 to 2023, the company achieved net profit of 94 million yuan, 06 billion yuan, -147 million yuan, and -220 million yuan respectively.

*ST Zuojiang explained in the annual report that the original traditional customer business fluctuated, and that the new business was in a period of expansion, and performance growth was slow. In addition, the company continued to invest in R&D and carry out iterative development of new products. At the same time, the repayment of accounts receivable fell short of expectations, and the amount accrued from inventory price drop losses increased significantly, leading to a further increase in the company's losses.