With the disclosure of annual reports in 2020 entering the intensive period, the two cities’ relevant annual report inquiry letters will gradually increase. As an important means for the exchange to supervise the authenticity and adequacy of the contents disclosed in the annual report of listed companies, the annual report inquiry letter is of great significance for investors to understand the company’s operating conditions and avoid financial risks, which is worthy of attention of investors, especially small and medium-sized investors.
“Investor Network” summer warm
The annual “March 15 rights and interests day” is coming. Related to product quality issues, new fraud, false publicity, performance fraud and other violations have attracted market attention. In the capital market, investors are to listed companies what consumers are to businesses.
Standing at the current point, with the A-share market A new round of annual report season gradually into A climax, financial fraud, performance, goodwill thunder and other problems are hidden among them. These risks are like undercurrents under still water, into which it is “too late” if investors fail to “clean” their eyes.
As a Chinese saying goes, “We can learn from history the ups and downs of our lives. In view of this, “315 Series Special Issues” of “Investor Net” summarizes and presents a number of risk problems that are detrimental to investors’ interests, so as to help investors find hidden dangers as soon as possible and prevent “black swan” events in investment in advance, so as to make more accurate and targeted investment judgments.
Regulatory inquiry letters are increasing year by year
In recent years, the phenomenon of “false performance”, “false concept” and even “false finance” has emerged one after another, which not only challenges the seriousness of the information disclosure system, seriously damages the foundation of market integrity, but even involves illegal and criminal acts, which may also bring immeasurable losses to investors, especially small and medium-sized investors.
For listed companies, as front-line regulators, the Shenzhen and Shanghai Stock Exchanges also conduct a comprehensive review of the “report card” disclosed by them, and carry out necessary inquiries regarding risks. Relevant companies are required to make supplementary disclosure and explanation on the matters questioned, reveal the company’s doubts to investors and remind investors to pay attention to them.
In fact, annual review inquiry has been pushed forward for many years, and supervision is also increasing. Take Shenzhen Stock Exchange as an example. According to the statistics of Investment.com, from 2017 to 2020, Shenzhen Stock Exchange issued 214, 318, 456 and 583 letters of inquiry for the annual report respectively, showing an increasing trend year by year.
According to market analysis, there are two main factors for the company’s performance inquiry. On the one hand, some companies have exposed risks in their daily operation or performance in their financial statements. On the other hand, the regulatory level has improved the standardization of information disclosure matters in the periodic reports of listed companies.
As the annual report disclosure in 2020 enters the intensive period, the two cities’ annual report inquiry letters will gradually increase. As of March 14, 2021, 153 listed companies on the Shanghai and Shenzhen stock exchanges had disclosed their annual reports; The Shenzhen and Shanghai Stock Exchanges have issued nearly 40 annual report inquiry letters, which mainly focus on production and operation, financial information disclosure, accounts receivable and other aspects, requiring relevant companies to make supplementary disclosure and explanation on the inquired matters.
CITIC Securities said that the annual report inquiry letter is an important supervision method for the authenticity and adequacy of the contents disclosed in the annual report of listed companies by the exchange. It is of great significance for investors to understand the company’s operating conditions and avoid financial risks, and deserves attention.
An investment banker also said that the annual report is one of the most important information disclosure documents of listed companies, as well as one of the most important channels for investors to understand listed companies. “Some of the inquiries even went as far as helping investors do an in-depth research, advising them to manage expectations based on the exchange’s inquiry letters.”