Filinger was ordered to make corrections for multiple violations; the review procedures for directors’ and senior executives’ compensation were non-compliant.

Leju Finance Li Lan Recently, Filinger (603226.SH) issued an announcement that the company and related personnel received a decision from the Shanghai Securities Regulatory Bureau regarding “Orderly Correction Measures for Filinger Home Technology Co., Ltd. and Warning Letters to Relevant Responsible Personnel.”

The announcement shows that after investigation, Filinger has the following violations: First, false recognition of project revenue. The company used forged acceptance certificates, required Party A to cooperate in issuing acceptance certificates early, and delayed revenue recognition through internal approval processes, thereby recognizing revenue from 9 projects that should not have been included in 2024 into that year, resulting in false statements in the 2024 annual report.

Second, some financial assets were misclassified. In August 2021, the company invested as a limited partner in Shanghai Lingang New Area Sci-Tech Phase I Industrial Equity Investment Fund Partnership (Limited Partnership); in December 2021, the company invested as a limited partner in Hainan Province Key Industry Investment Development Fund Partnership (Limited Partnership). These two financial assets do not meet the definition of equity instruments. The company recorded the fair value changes during the holding period in the “Other Comprehensive Income” account. This accounting treatment does not comply with relevant regulations, leading to false statements in the 2021-2024 annual reports.

Third, the approval procedures for directors’ and senior management’s compensation were not compliant. From 2022 to 2024, the company’s director remuneration was not reviewed by the shareholders’ (general) meeting, and the compensation of senior management was not approved by the board of directors or explained to the shareholders’ (general) meeting, which does not meet relevant regulations.

The Shanghai Securities Regulatory Bureau decided to impose an administrative regulatory measure of “Orderly Correction” on Filinger, and decided to issue warning letters to then-President Liu Dunyin and others.

In terms of performance, Filinger expects to achieve a net profit attributable to the parent company of -85 million to -65 million yuan in 2025, and a net profit attributable to the parent company after deducting non-recurring gains and losses of -90 million to -70 million yuan in 2025.

Filinger expects to achieve operating revenue of 340 million to 370 million yuan in 2025, with operating revenue after deducting non-core business income and income lacking commercial substance of 330 million to 360 million yuan.