, June 6 (Zhongxin Financial Reporter Xie Yiguan) The former "king of ginseng" is now waving goodbye to the capital market, due to the touch of trading delisting indicators, *ST Zixin locked in early delisting.

At the same time, these years of crazy ginseng hoarding have also brought a fatal "crisis" to this company. Today, *ST Zixin, which has a large inventory of ginseng, does not know whether it can be successfully reorganized.

Locked-in delisting

On June 6, *ST Zixin opened with a drop limit of 9.0 yuan / share, which is its 45th consecutive trading day of falling limit. Prior to this, the closing price of *ST Zixin shares had been below 26 yuan for 15 consecutive trading days.

*ST Zixin stock price daily K chart.

From the stock price point of view, even if *ST Zixin rises continuously for the next 4 trading days, it will touch the trading delisting indicator because the stock price is below 20 yuan for 1 consecutive trading days.

*ST Zixin also said that in the subsequent delisting of trading categories, the Shenzhen Stock Exchange will make a decision to terminate the listing of the company's shares within the specified period, and the company's shares will not enter the delisting period.

The reporter noted that as of the close of June 6, *ST Zixin's stock price has fallen by 9.80% this year. According to the disclosure, as of the end of the first quarter of 69, the number of shareholders of *ST Zixin was 2023. Now that the company is facing delisting, these shareholders will also suffer.

Crazy hoarding ginseng

As a pharmaceutical company listed for 16 years, *ST Zixin has also experienced glory. In 2008, the company's share price once reached 56.77 yuan.

Why did such an established pharmaceutical company fall into a delisting situation? This needs to start with Guo Chunsheng, the company's former actual controller.

According to a number of media reports, Guo Chunsheng, born in 1971, founded Tonghua Zijin Pharmaceutical Co., Ltd. in 1998, and the company was changed to Jilin Zixin Pharmaceutical Co., Ltd. in 2001. In 2007, Zixin Pharmaceutical was successfully listed on the A-share market.

At the beginning of its listing in 2007, Zixin Pharmaceutical's main products such as Blood Circulation Tablets and Brain Rebuilding Capsules were tepid, and the company ushered in a "historic opportunity" three years later.

In 2010, the Jilin provincial government began to implement the project of revitalizing the ginseng industry. Under the leadership of Guo Chunsheng, Zixin Pharmaceutical entered the field of ginseng in a big way and began to purchase wildly. At that time, it was reported that in 2010, Jilin Province produced 2,<> tons of fresh ginseng per year, and Zixin Pharmaceutical alone purchased one-third of the annual production of ginseng in Jilin Province that year.

During this period, Guo Chunsheng's wealth also increased rapidly. In the Forbes 2011 Best A-share Non-State-owned Listed Companies list, he was the only CEO in Jilin and ranked 25th.

In January 2012, Guo Chunsheng chose to submit his resignation, saying that he resigned as chairman and general manager due to illness. But resignation does not mean relinquishing power, and Dunhua Kangping Investment Co., Ltd., a major shareholder of Zixin Pharmaceutical, was once found to be inextricably linked to Guo Chunsheng.

Guo Chunsheng retreated to the background, and Zixin Pharmaceutical's road of "hoarding ginseng" did not end. At the same time, on the one hand, it wantonly borrowed to acquire ginseng, and on the other hand, it "reluctantly selled" and caused a sharp decrease in cash flow, which not only caused the company's performance to decline, but also was questioned by the market.

However, under the operation of Zixin Pharmaceutical, the market price of ginseng has increased, which can be regarded as achieving the purpose of Zixin Pharmaceutical. At that time, Cao Enhui, chairman of Zixin Pharmaceutical, revealed that the company had spent more than 10 billion yuan in total, promoting the steady rise in ginseng prices.

Riddled with debt

In 2017 and 2018, relying on the income of ginseng series products, Zixin Pharmaceutical's performance has recovered significantly. However, after 2020, Zixin Pharmaceutical's performance took a sharp turn for the worse, and it was in the loss for three consecutive years.

This loss continued into the first quarter of this year, and its net profit loss attributable to shareholders of listed companies was about 2 million yuan.

In addition to the deep performance loss, Zixin Pharmaceutical, which has "put on a star and hat", is also heavily in debt, and the annual audit accountant even issued an audit report that could not express an opinion on its 2022 financial report.

According to the financial report, as of the end of 2022, *ST Zixin has accumulated 8977.38 million yuan in employee salaries. In addition, it also owed 9501.07 million yuan in various taxes and late fees, overdue long-term and short-term loans (total principal and interest) of 22.37 billion yuan, and was sued by relevant debtors for failing to repay the due bank loans, the balance of unrestricted bank deposits was 343.71 million yuan, and the net fixed assets were 5 million yuan.

Although it can't even pay the salaries of its employees, *ST Zixin has not stopped the road of "stockpiling".

Even in 2021, when funds are extremely tight and may even lead to unsustainable operations, *ST Zixin still used an advance payment to transfer 7 million yuan of forest ginseng. This is puzzling to even annual audit accountants.

However, these ginsengs were not sold to pay employees. The financial report shows that in 2022, the sales volume of ginseng series products will be 276.42 kg, which is a cliff-like decline compared with 2021.

In this regard, *ST Zixin said in response to the Shenzhen Stock Exchange's inquiry that in recent years, due to comprehensive factors such as industry policies, intra-industry competition, economic environment and tight company funds, and creditors such as financial institutions freezing accounts and withholding assets, the marketing of proprietary Chinese medicines and ginseng products and customer maintenance have encountered unprecedented resistance, and the shortage of funds has not been able to pay salaries on time, raw material purchases, necessary expenses in the production and sales process, etc., so that normal production has been affected, on-time supply cannot be made, and the reputation of enterprises has been damaged. As a result, production and sales declined significantly during the reporting period.

Under the "high inventory", as of the end of 2022, the book value of *ST Zixin's inventory was 75.77 billion yuan, of which the value of consumable biological assets was 60.17 billion yuan.

Screenshot from *ST Zixin 2022 Annual Report.

According to media reports, at the 2023 online collective reception day for listed companies in Jilin jurisdiction held a few days ago, the relevant person in charge of *ST Zixin also replied to investors' questions about "how much is the company's inventory of ginseng worth": "The company's understory ginseng is worth 60 billion yuan. ”

And the value of this 60 billion yuan of ginseng is also "doubtful". The annual audit accountant pointed out that *ST Zixin conducted a corresponding market inquiry on the expendable biological assets in the inventory at the end of 2022, and at the same time used the sample reference method, using the assessed value of the three plots for other transaction purposes as a fair value sample, rather than a comprehensive evaluation, which is a selective and incomplete test method.

Heavily in debt, *ST Zixin has initiated restructuring procedures, and both it and the "man behind it" have been filed. *ST Zixin's announcement in January showed that due to suspected information disclosure violations and violations, the CSRC decided to file a case against *ST Zixin and Guo Chunsheng, the company's former actual controller.

According to media reports, Guo Chunsheng's ambition is to develop the ginseng food industry, and the large amount of ginseng hoarding is to reserve raw materials. He once said frankly, "If you want to fight, if you succeed, you will turn the entire Chinese ginseng industry around."

But this one, perhaps, is a loss. (End)