Special Explanation from Asia-Pacific (Group) CPA Firm Regarding Inquiry Letter on the 2021 Annual Report of Kairuide Holdings Co., Ltd.
Shenzhen Stock Exchange: We acknowledge the inquiry letter titled "Inquiry Letter on the 2021 Annual Report of Kairuide Holdings Co., Ltd." (Company Department Annual Report Inquiry Letter [2022] No. 154, hereinafter referred to as the "Inquiry Letter") forwarded by Kairuide Holdings Co., Ltd. (hereinafter referred to as the "Company" or "Kairuide"). We have conducted a prudent review of the financial matters requiring our explanation in the Inquiry Letter and respond to the issues raised as follows:
- Regarding Operating Performance. The annual report shows that your company achieved an operating income of 127 million yuan in 2021, a year-on-year increase of 379.62%, and a net profit of 8.55 million yuan, a year-on-year increase of 104.22%. The net profit attributable to shareholders of the listed company, after deducting non-recurring gains and losses (hereinafter referred to as "net profit after deduction"), was 4.09 million yuan, a year-on-year increase of 102.05%. The net cash flow from operating activities was -89.78 million yuan, a year-on-year decrease of 1,525.10%. The quarterly financial indicators for your company show that the operating income for the first to fourth quarters was 7.85 million yuan, 6.48 million yuan, 4.78 million yuan, and 108 million yuan, respectively. The net profit after deduction for each quarter was -1.57 million yuan, -0.29 million yuan, -2.49 million yuan, and 8.44 million yuan, respectively. The net cash flow from operating activities for each quarter was -23.93 million yuan, -29.62 million yuan, -21.81 million yuan, and -14.42 million yuan.
(1) Your company experienced a significant increase in operating income in the fourth quarter. Please supplement the report on the composition of the fourth quarter's operating income, including product or service categories, recognized income amounts, customer names, establishment dates, registered capital, whether there are related party relationships, whether they are new customers in 2021, etc. Please explain the current status of sales collections and returns for the fourth quarter (if any) and clarify whether your company has recognized revenue in advance, and whether the related accounting treatment complies with the provisions of enterprise accounting standards.
Company Response: ① The composition of income is as follows: The operating income for the fourth quarter of 2021 included two main categories: coal trading income and leasing service income. The products sold in the coal trading business include coal, coke, etc., with an operating income of approximately 107 million yuan in the fourth quarter. As of now, all sales in the fourth quarter have been collected, with no returns. The basic information of the customers is shown in the table below:
| Customer Name | Establishment Date | Registered Capital | New Customer in 2021 | Related Party Relationship |
|---|---|---|---|---|
| Zhangjiagang Bonded Zone Yongxin Nuo International Trade Co., Ltd. | 2016 | 86.88 million yuan | Yes | No |
| Taizhou Henglixin Chemical Co., Ltd. | 2004 | 5.90 million yuan | Yes | No |
| Linfen Wanxinda Coking Co., Ltd. | 2003 | 150 million yuan | No | Related party of the actual controller's former concerted action |
The leasing service business provided property leasing services, achieving an operating income of approximately 1.03 million yuan in the fourth quarter. As of now, all sales in the fourth quarter have been collected, with no returns. The basic information of the customers is shown in the table below: