Financial Services Association, May 29 (Reporter Chen Kang) Will the deduction of non-net profit in the performance forecast be changed from loss to profit, and a warning letter will also be received? The answer is yes. This evening, Rongsheng Petrochemical (002493.SZ), a leading refining and chemical company, received a warning letter from the Zhejiang Securities Regulatory Bureau due to inaccurate disclosure of information related to the company's (2023) performance forecast.

In the “2023 Annual Performance Forecast” originally disclosed on January 31, Rongsheng Petrochemical expects to achieve a net profit loss of 400 million to 600 million yuan after deducting non-recurring profit and loss in 2023. On February 24, the company revised the above amount to a profit of 800 million to 1 billion yuan.

The data change stemmed from a small “misunderstanding”. Rongsheng Petrochemical's announcement stated that it misunderstood the new regulation “Company Information Disclosure Explanatory Notice No. 1 - Non-Recurring Profit and Loss (2023 Revision)” issued by the Securities Regulatory Commission in December 2023, and mistakenly included 1.4 billion yuan of government subsidies in non-recurring profit and loss, resulting in deduction of non-loss, and conversion of non-return into profit after correction. This matter has no impact on net profit due to mother in 2023.

This is not the company's first accounting error. In January and May 2023, Rongsheng Petrochemical received a warning letter from the Zhejiang Securities Regulatory Bureau and a regulatory letter issued by the Shenzhen Stock Exchange, respectively. The Zhejiang Securities Regulatory Bureau's warning letter mentioned that Rongsheng Petrochemical had problems such as irregular revenue recognition and irregular accounting processing in the 2020-2021 fiscal year.

According to the Shenzhen Stock Exchange's regulatory letter, on April 20, 2023, the “2022 Annual Report” disclosed by the company showed that the company corrected the accounting errors in the previous period. The accounting errors involved operating income of 5.326 billion yuan in 2020 and 7.423 billion yuan in 2021, accounting for 4.97% and 4.05% of the disclosed revenue amount respectively. The company adjusted the error in the 2022 financial statements, reducing 2022 operating income by 12.749 billion yuan and 2022 operating cost by 12.749 billion yuan, with no impact on 2022 net profit.

The Shenzhen Stock Exchange stated that the above acts violated the provisions of section 1.4 and section 2.1.1 of the Stock Listing Rules (2022 Revision) of the Stock Listing Rules.

The auditors for Rongsheng Petrochemical's 2021-2023 annual report are all Tianjian Certified Public Accountants. The company's head of accounting is Wang Yafang, and the head of the accounting agency is Zhang Shaoying. According to the resolution announcement of the 2023 Annual General Meeting of Shareholders issued by Rongsheng Petrochemical on May 24, the meeting voted to pass the “Proposal on Renewal of the 2024 Audit Institution”.

It is worth noting that at the end of March 2023, Tianjian Certified Public Accountants was asked by the Zhejiang Securities Regulatory Bureau to adopt supervisory and management measures for regulatory discussions due to inadequate audits of Rongsheng Petrochemical's financial statements, claiming that it had two major problems: “inadequate audit of subsidiary revenue” and “inadequate audit of PTA sales revenue.”

Rongsheng Petrochemical achieved revenue of 325.112 billion yuan in 2023, an increase of 12.46% over the previous year; realized net profit of 1,158 billion yuan, or -65.33% over the same period last year. Regarding the increase in revenue and not the increase in profit, the company stated at the May 6 performance meeting that revenue increased accordingly with the commissioning of the project, and that profitability was enhanced by continuously optimizing energy use and putting into production of differentiated products.