Fuzhou Dahua Intelligent Technology Co., Ltd. (Dahua Intelligent) has once again been investigated for financial fraud, and after the news spread, the stock price of the company plummeted.
On July 28, Dahua Intelligent issued a public announcement regarding the receipt of a “Notice of Filing” from the China Securities Regulatory Commission. The announcement stated that the company recently received the “Notice of Filing” from the China Securities Regulatory Commission, citing suspected violations of illegal disclosure of information by the company, and accordingly, the company has been filed against in accordance with relevant laws and regulations.
The announcement also stated, “During the investigation period, the company will actively cooperate with the investigation work of the China Securities Regulatory Commission and strictly fulfill its disclosure obligations in accordance with relevant laws, regulations, and regulatory requirements.”
Following the announcement, on the 29th, Dahua Intelligent’s stock opened at a limit-down, closing at 4.45 yuan per share, down 9.92%.
On July 29, it was revealed by “Yicai”, a financial news outlet, that a staff member from Dahua Intelligent’s securities department mentioned that the filing was related to previous regulatory penalties.
At the end of last year, Dahua Intelligent failed to disclose significant contracts, financial support, related-party transactions, resulting in a fictitious profit totaling 289,100 yuan in 2022 and 29.2937 million yuan in 2023. After the incident was exposed, the company was ordered to make corrections, and responsible personnel were called in for regulatory inquiries. Subsequently, the company adjusted 12 sets of financial report data all at once.
“Yicai” reported that Dahua Intelligent has been in consecutive losses in net profit after deduction for seven years from 2018 to 2024, accumulating losses of nearly 3.5 billion yuan. The company is expected to incur a loss of 55 million to 75 million yuan in non-recurring net profit in the first half of this year. The reasons for the losses include intense market competition in the TV motherboard business sector, overall decline in revenue scale, product gross profit margin; abandoning non-strategic business lines in unclear markets, which has increased short-term expense; disposal of subsidiary companies with losses in non-strategic directions, resulting in significant non-recurring gains and losses.
Public information indicates that Fuzhou Dahua Intelligent Technology Co., Ltd. mainly engages in the research and development as well as production of electronic components, focusing on the field of non-contact IC cards and electronic tags, with products covering low to ultra-high frequency bands, used in scenarios such as electronic payment cards, logistics tracking, and the Internet of Things.
At 9 a.m. Beijing time on July 30, Dahua Intelligent’s stock opened at 4.45 yuan per share, with a total market value of 5.105 billion yuan.