Zitian Technology, are you giving up completely?
Zebra Consumer Fan Jian
As a listed company, Zitian Technology (300280.SZ) not only allegedly violated information disclosure regulations, but several executives also allegedly refused and obstructed law enforcement. It's utterly rotten!
On the operational front, the company's 2023 performance took a drastic turn, raising major financial concerns. Despite the exchange's inquiry letter regarding the annual report, the company has indefinitely delayed its response, failing to disclose any updates for nearly half a year.
In response to such blatant negligence, regulators have decided to investigate the company and several responsible individuals.
Investigated for Negligence
Under relevant laws and regulations, timely and accurate disclosure of important information is the "bottom line" that listed companies should adhere to, ensuring investors have a full understanding of the company.
But Zitian Technology chose to neglect its duties entirely.
After repeated "Letters of Concern" from the exchange, Zitian Technology (300280.SZ) finally "briefly" disclosed yesterday that it has been under investigation multiple times by the China Securities Regulatory Commission (CSRC), shocking investors.
It is reported that due to alleged violations of information disclosure regulations, the CSRC decided to investigate Zitian Technology and issued a "Notice of Investigation" and "Notice of Case Filing" on September 6. According to regulations, such a significant matter should be disclosed immediately by the listed company.
However, Zitian Technology failed to comply. Even after the exchange issued a Letter of Concern, the company still did not fulfill its disclosure obligations.
On October 25, due to alleged refusal and obstruction of law enforcement, the CSRC formally investigated Zitian Technology, along with its Chairman and Board Secretary Song Qing, General Manager Li Lin, and CFO Li Xiang.
Additionally, the company is under investigation by the Fuzhou Public Security Bureau for allegedly concealing accounting vouchers, ledgers, and financial reports. Law enforcement officers repeatedly contacted Song Qing, Li Lin, and Li Xiang via phone and text messages but received no response.
The Fujian Securities Regulatory Bureau explicitly informed the company of these matters and demanded immediate disclosure, but the company continued its "delaying tactics." As a result, the exchange issued another Letter of Concern, stating it would initiate disciplinary procedures and take further regulatory actions based on the investigation.
Yesterday, after the disclosure of Zitian Technology's consecutive investigations by the CSRC, its stock price plummeted, closing down 13.33%.
Not only Zitian Technology, but even its annual audit firm, Beijing Yatai International Accounting Firm (Special General Partnership), adopted a passive attitude toward regulatory oversight.
On May 9 this year, the Fujian Securities Regulatory Bureau began inspecting Beijing Yatai's audit of Zitian Technology's 2023 financial report. On the same day, it requested Beijing Yatai to submit audit working papers.
However, Beijing Yatai and its executive partner Tian Mengjun repeatedly failed to provide the required documents without valid reasons. Tian also refused to cooperate with interviews, ignored phone calls, and did not respond to text messages or WeChat messages from the inspection team.
On July 24, the Fujian Securities Regulatory Bureau inspection team visited Beijing Yatai's office and issued an "Order to Submit Documents via Specified Means," demanding the audit working papers be sent via courier.
Surprisingly, Beijing Yatai initially sent the documents via courier but later withdrew the shipment and never resubmitted them.
Due to these actions, on August 29, the Fujian Securities Regulatory Bureau imposed corrective measures on Beijing Yatai and Tian Mengjun.
Unresolved Annual Report Doubts
Zitian Technology, formerly known as Nantong Forging & Pressing Machinery, went public on the ChiNext board in 2011, initially focusing on the R&D, production, and sales of forging equipment.
In 2016, the original controlling shareholder and actual controller, Guo Qing, transferred his shares to Anchang Investment, making Yao Haiyan and Zheng Lan—two retired women—the new actual controllers.
Subsequently, the company underwent a series of mergers and transitions into the advertising media business, rebranding as Zitian Technology in 2018.
With the consolidation of acquired assets, Zitian Technology's performance surged in the short term. From 2019 to 2022, it reported a cumulative net profit of 955 million yuan but distributed only 13 million yuan in dividends. By the end of 2022, the company's undistributed profits reached 1.092 billion yuan.
In the first three quarters of 2023, Zitian Technology's performance remained strong. The Q3 report showed that from January to September, its revenue and net profit were 2.29 billion yuan and 206 million yuan, respectively, both doubling year-over-year.
However, when the annual report was disclosed, the situation abruptly reversed. Full-year revenue was 2.188 billion yuan, with a net loss of 1.21 billion yuan, nearly wiping out all previous profits.
Zitian Technology failed to issue an earnings forecast for this significant change, prompting the exchange and Fujian Securities Regulatory Bureau to issue a Letter of Concern and a Warning Letter, respectively.
On May 6 this year, the exchange issued an inquiry letter regarding various anomalies in Zitian Technology's 2023 annual report, demanding a response and disclosure by May 20.
Notably, during the critical period of annual report disclosure, Zitian Technology suddenly changed its audit firm, with Beijing Yatai taking over at the last minute. Meanwhile, the company's Board Secretary, who had only been in the role for three months, abruptly resigned, and the annual report disclosure was delayed. In hindsight, these signs were highly abnormal.
After receiving the inquiry letter, Zitian Technology repeatedly postponed its response, citing heavy verification workloads.
The exchange repeatedly contacted the company and its Chairman Song Qing to cooperate with regulatory requirements and fulfill disclosure obligations. However, Song Qing, acting as the interim Board Secretary, refused substantive communication with the exchange, citing health issues and claiming he was not responsible for the reply.
It is worth noting that in December last year, Zitian Technology suddenly underwent a board reshuffle, replacing five directors, including former Chairman Yao Xiaoxin. Song Qing and Li Lin, who had never worked at the company before, were appointed Chairman and General Manager, respectively. The exchange also expressed concerns about this change.
On June 1, three independent directors of Zitian Technology submitted a "Letter of Urgency," urging the company to promptly address regulatory inquiries and strengthen internal controls.
On July 31, Zitian Technology issued its last announcement about delaying the response to the annual report inquiry. Since then, there have been no further updates.
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