Will be subject to other risk warnings, Hengxin Dongfang will be suspended for one day on April 7.

(Source: Beijing Business Today)

Beijing Business Today reported (Reporter: Ma Huanhuan, Li Jiaxue) that recently, Hengxin Oriental (rights protection) (300081) disclosed an announcement stating that other risk warning measures will be imposed on the company’s stock trading. The stock will be suspended for one day on April 7, and will resume trading from April 8.

The announcement shows that from April 8, the company’s stock will be subject to “other risk warning” treatment. The stock short name will change from “Hengxin Oriental” to “ST Hengxin,” while the securities code will remain “300081.” After implementing other risk warning measures, the limit on the day-to-day rise and fall of the company’s stock trading will remain unchanged, still at 20%.

It is understood that on April 3, Hengxin Oriental and relevant parties received a “Preliminary Notice of Administrative Penalty” issued by the Beijing Securities Regulatory Bureau. According to the findings, in 2022, Hengxin Oriental and Chuangyi Information and Nobikan carried out business involving computing power system integration and technical services. Hengxin Oriental sold servers and related software to Chuangyi Information, and sold software to Nobikan. When Hengxin Oriental engaged in the Chuangyi Information business and some of Nobikan’s business (hereinafter referred to as the “involved business”), it did not have control over the goods. Despite being aware of the trading model of the involved business, it still used the gross amount method to recognize revenue, which does not comply with the provisions of Article 34 of the “Accounting Standards for Business Enterprises No. 14 — Revenue,” leading to false entries in the company’s 2022 annual report disclosed by Hengxin Oriental. The company’s 2022 operating revenue was artificially inflated by approximately RMB 182 million, accounting for 37.12% of the operating revenue disclosed for the period. On October 25, 2024, the company disclosed the “Explanation of the Correction of Prior-Period Errors,” and corrected the relevant financial data.

The Beijing Securities Regulatory Bureau intends to issue a warning to Hengxin Oriental and impose a fine of RMB 5 million; it intends to issue warnings to the relevant parties and impose fines on them, respectively.

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