Every reporter Wang Lin, every editor Zhang Haini

On the evening of May 8th, Tianyu Ecology (SH603717, share price 6.Livesicboonline.62 yuan, with a market capitalization of 19LivesicboonlineAccording to the announcement, the company received a decision on Administrative Supervision measures issued by the Chongqing Regulatory Bureau of the China Securities Regulatory Commission (hereinafter referred to as Chongqing Securities Regulatory Bureau). It is considered that the preparation for the impairment of the long-term equity investment of Qinghai Juzhiyuan New Materials Co., Ltd. (hereinafter referred to as Juzhiyuan) was insufficient in 2022. Chongqing Securities Regulatory Bureau asked Tianyu Ecology to re-calculate the recoverable amount of Juzhiyuan's long-term equity investment by the end of 2022 and correct the relevant information in the 2022 annual report.

The reporter noted that the Tianyu ecology, which encountered setbacks on the cross-border road, has recorded a net profit loss for four consecutive years. Tianyu Ecology also faces the risk of asset impairment of accounts receivable, contract assets and long-term receivables.

The long-term equity investment in Juzhiyuan is accused of insufficient provision for impairment.

In July 2022, Tianyu Ecology completed a capital increase of 210 million yuan and acquired a 35% stake in Juzhiyuan.

Poly source is specialized in lithium hexafluorophosphate, lithium battery cathode materials, lithium battery ternary materials research and development, production and sales of new energy materials enterprises, the product is "lithium hexafluorophosphate".

According to Tianyu Ecology, the first phase of the production line with an annual output of 2000 tons of lithium hexafluorophosphate at that time already had normal production conditions, but it was still at a loss.LivesicboonlineThe second phase of the production line with an annual production capacity of 4000 tons of lithium hexafluorophosphate began in August 2021 and is expected to be put into trial production in October 2022, but it is subject to the uncertainty of the arrival time of the ordered equipment.

However, the actual result of the follow-up of the project is that the actual production capacity of the main products of the first phase of the Juzhiyuan project is only 343 tons, far less than expected, while the second phase of the project is only completed.LivesicboonlineThe civil construction of the plant and part of the equipment entered the site, and the project has been suspended since October 2022.

In November 2022, Fengyuan shares (SZ002805, 13.92 yuan, market capitalization of 3.898 billion yuan) planned to increase the source of capital to acquire a 35% stake in the latter, but the investment plan eventually fell through. On the other hand, Tianyu Ecology calculates the long-term equity investment of the company's shareholding ratio on the basis of Fengyuan shares' valuation of 529 million yuan (without evaluation), and provides provision for impairment.

Chongqing Securities Regulatory Bureau believes that the basis for judging the fair value of long-term equity investment in the above calculation of Tianyu Ecology does not meet the requirements of enterprise accounting standards, resulting in insufficient provision for impairment.

Chongqing Securities Regulatory Bureau requires Tianyu Ecology to re-calculate the recoverable amount of Juzhiyuan's long-term equity investment as of December 31, 2022 in strict accordance with enterprise accounting standards, and correct the relevant information in the 2022 annual report.

"in the disclosed 2023 annual report, the company has calculated the balance of Juzhiyuan's long-term equity investment to zero. At present, the company is re-calculating the recoverable amount of Juzhiyuan's long-term equity investment as of December 31, 2022 according to the requirements of the regulatory authorities. " On May 9, Tianyu Ecology said in an interview with the Daily Economic News.

The recoverable amount of Juzhiyuan has been changed to 0 yuan.

Tianyu Ecology was originally engaged in ecological environment business, including garden ecological engineering, pastoral complex, seedling planting and so on. Due to the bottleneck of traditional business development, Tianyu ecology began to cross the border to pig farming, distributed photovoltaic power stations and so on.

However, the road to the transformation of Tianyu ecology is not smooth. As the new energy and pig farming industry have gradually entered a cyclical trough in recent years, Tianyu Ecology has recorded a loss of net profit for four consecutive years from 2020 to 2023.

It is worth mentioning that according to the previous investment agreement, Liu Bingsheng, the controlling shareholder of Juzhiyuan, had promised that Juzhiyuan's cumulative net profit after deducting Fei from 2022 to 2024 would reach 900 million yuan.

However, Juzhiyuan made a net profit loss of about 124 million yuan after deducting non-return in 2022. According to the 2023 annual report of Tianyu Ecology, the operating income of Juzhiyuan dropped sharply to 2.7421 million yuan in 2023 compared with the same period last year, and the net profit continued to lose 136 million yuan.

With regard to performance compensation in 2022, Tianyu Ecology applied for arbitration.

According to the 2023 annual report, Tianyu Ecology set aside 112 million yuan for impairment of long-term equity investment in Juzhiyuan in 2023, and the recoverable amount of the investment has become 0 yuan.

In addition, according to the first quarterly report, by the end of the first quarter of 2024, the book values of accounts receivable, contract assets and long-term receivables of Tianyu Ecology were 372 million yuan, 430 million yuan and 405 million yuan respectively, totaling 1.207 billion yuan, accounting for 36.03% of the company's total assets.

Tianyu Ecology said in an interview with reporters that in 2024, the company will continue to orderly shrink its ecological environment business and divest some non-performing assets, and the company has not undertaken large-scale engineering projects in recent years, and the risk of asset impairment has been fully controlled.

Cover photo: photo by Liu Guomei, Daily Economic News (file photo)