Jinjia Group Chairman Qiao Luyu Investigated Again as Share Price Hits Limit Down

jinjiaShares (SZ002191, stock price 6.28 yuan, market value 9.237 billion yuan) issued an announcement stating that the company received a notice issued by the Yudu County Supervisory Committee on May 31, 2023 that Qiao Luyu, the company's actual controller and chairman, was investigated and detained. Jinjia shares fell to the limit of "one" after the market opened today (June 1), and the market value evaporated by 1 billion yuan.

Regarding the impact of the above incidents, Jinjia said: "As of the disclosure date of this announcement, the company's control rights have not changed, the company's board of directors is operating normally, and the company's financial and production and operation management are in normal conditions. The company's management will strengthen management to ensure the company's stability and business is proceeding normally. The company has not yet known the progress and conclusions of the investigation, and will continue to pay attention to the follow-up of the above matters."

It is worth noting that this is not the first time that Qiao Luyu has been investigated. As early as March 2022, Qiao Luyu was investigated and detained by the Shangyou County Supervisory Committee. 

He was investigated twice in more than a year and detained

According to public information, Jinjia Co., Ltd. was established in October 1996. The company's main products are high-tech and high value-added cigarette labels (commonly known as "cigarette boxes"), color box packaging for mid-to-high-end well-known consumer brands, laser paper/film, cigarette films and other packaging materials, as well asnew tobaccoProducts. At present, the company's wine package customers mainly include Moutai, Wuliangye, Baoyin, Guotai, Fenjiu, Sishijiufang and other brands.

Jinjia shares '2022 financial report disclosed that Qiao Luyu, male, born in 1956, native of China, long-term residence in Australia, and a high school degree. From 2003 to 2006, he served as Chairman of the Company; from 2006 to 2010, he served as Chairman and General Manager of the Company; and currently serves as Chairman of the Company. In 2022, the total pre-tax remuneration it received from the company was 1.932 million yuan.

Surprisingly, Qialuyu was detained for investigation once last year, only more than a year apart. On March 31, 2022, Qiao Luyu was detained by the disciplinary inspection and supervision authorities.

At that time, Hou Xudong, director and general manager of Jinjia Co., Ltd., signed the relevant notice on April 1. He considered that since Qiao Luyu did not participate in the specific operation and management of the company, he personally judged that the matters under investigation of Qiao Luyu had nothing to do with the company and would not affect the normal performance of the chairman, so he did not report to the company's board of directors. On April 14, since Qiao Luyu was unable to attend the third meeting of the sixth board of directors in 2022, Hou Xudong believed that Qiao Luyu was no longer able to perform his duties normally, so he reported the above matters to the board of directors.

In July 2022, Jinjia Co., Ltd. and related personnel received a warning letter from the Shenzhen Securities Regulatory Bureau. Because the company's above-mentioned behavior violated the relevant provisions of the "Measures for the Administration of Information Disclosure by Listed Companies", the Shenzhen Securities Regulatory Bureau decided to issue a warning letter to the company and Hou Xudong. Supervision measures.# p#pagination title #e#

Photo source: Screenshot of 2022 Annual Report

It was not until September 28, 2022 that Jinjia received a notice of lifting the detention from the Shangyou County Supervisory Commission, and the Shangyou County Supervisory Commission had lifted the detention measures against Qialuyu.

Regarding the reasons why Qiao Luyu was detained twice for investigation, a reporter from "Daily Economic News" called the Securities Department of Jinjia Co., Ltd. on the morning of June 1 to understand the situation. The relevant staff responded,"We don't know the specific reasons because we have received the materials. The content of the announcement is consistent with the content of the materials we received."

In the secondary market, Jinjia shares fell to a "one" limit on June 1, closing at 6.28 yuan, with a market value of 9.237 billion yuan. Since the beginning of this year, the company's share price has fallen by 13.14%.

decline in operating performance

For the whole year of 2022, Jinjia achieved a total operating income of 5.189 billion yuan, an increase of 2.40% over the same period last year; it achieved a net profit attributable to shareholders of listed companies of 197 million yuan, a decrease of 80.65% over the same period last year. In the first quarter of this year, the company's performance did not improve. The financial report showed that during the reporting period, the company achieved operating income of 1.04 billion yuan, a year-on-year decrease of 24.54%, and net profit attributable to shareholders of listed companies was 160 million yuan, a year-on-year decrease of 47.47%.

The reporter of "Daily Economic News" noticed that in the 2022 financial report released by Jinjia Co., Ltd., Qiaolu issued a letter to shareholders. He said: "In 2022, the macro environment will be complex and changeable, raw material prices will rise sharply, and multiple unfavorable factors such as compliance inspections and in-depth business adjustments in the industry have compounded the impact. The company's management team has made every effort to achieve a net profit of 197 million yuan attributable to shareholders of listed companies throughout the year. Compared with the past, net profit has dropped sharply. To hand over such a report card, as Jinjia's 'locomotive', I feel ashamed, self-reproach and pressured, and my heart is full of urgency."

Talking about the reasons for the decline in the company's net profit in 2022, Jinjia explained in the investor relations activity record form on April 24 that there are three main reasons: "First, the increase in equity incentive fees, and the incentive fees in 2022 are higher than those in 2021. An increase of 22.2499 million yuan. Secondly, the company's investment income in 2022 decreased by 248 million yuan; finally, the company accrued a goodwill impairment loss of 254 million yuan from its subsidiary Jiangsu Shuntai."

In terms of business segments, Jinjia is mainly divided into packaging industry, new tobacco industry and other industries. Among them, the packaging industry is the company's revenue responsibility. In 2022, this business achieved revenue of 3.747 billion yuan, accounting for 72.21% of operating income, and a gross profit margin of 34.11%, a decrease of 3.58 percentage points from the same period last year; The new tobacco industry achieved revenue of 554 million yuan, accounting for 10.68% of operating income, and a gross profit margin of 7.04%, a decrease of 7.03 percentage points from the same period last year.

Looking to the future, Jinjia shares stated in the above-mentioned investor relations activity record: "On the one hand, the company continues to lay a solid foundation and develop its main business, adding new tobacco tracks to the existing basis, and creating a second growth curve. On the other hand, we must persist in technological innovation, accelerate transformation and upgrading, build high barriers to competition in the packaging sector, and gradually expand printing media from paper-based composite materials to new materials such as degradable, sustainable packaging, high-barrier, and polymers to adapt to new consumption needs; Actively explore opportunities for change in the field of packaging materials, and use technological breakthroughs to develop new consumer packaging business markets such as cold chain and steam-resistant."

Regarding the company's performance expectations this year, employees of the securities department of Jinjia Co., Ltd. said,"We will still maintain a stable operation."