The Chairman of Hongtao Group sent a message: We are on the verge of bankruptcy and cannot accept the "no opinion" in the 2023 annual audit report

Source: Ma Jinghao said accounting

Open letter of the chairman

　　 Dear all shareholders of Hong Tao and friends who pay attention to Hong Tao

Hello, everyone! I am Liu Nianxin, the chairman of Shenzhen Hongtao Group Co., Ltd. First of all, thank you for your long-term support and attention to Hongtao Group!

In recent years, under the influence of economic downturn, regulation of the real estate industry, epidemic impact and other factors, superimposed on the bank's pressure to cut off loans and the recovery of accounts receivable did not meet expectations, resulting in the liquidity difficulties of Hongtao Group and the survival crisis. Since the beginning of the spring of 2024, the crisis of Hongtao Group has escalated again, encountering malicious shorting of major funds, facing the risk of delisting at par value and other potential risks. In particular, recently, the market has had some misunderstandings and doubts about Hongtao Group. I think it is necessary to communicate with you frankly and share my feelings and thoughts on the current situation of Hongtao Group in this way.

　　 First, the past and current difficulties of Hongtao Group

Hongtao Group was founded in January 1985 and has experienced 40 years of ups and downs. The company was listed in Shenzhen Stock Exchange in December 2009, and the picture of ringing the big bell still floats in my mind. Along the way, the company has become a continuous leader in high-end architectural decoration industry, with nearly 40 Luban Awards and more than 160 decoration gold awards; Ranked for many consecutive years Chinese architecture Top three of the top 100 decoration companies; It has a good reputation in the high-end decoration market segment, and is known as the "Grand Theater Specialist", "State Guesthouse Specialist", "Five Star Hotel Expert", "Lobby King", etc. The company is a "time-honored brand" enterprise and a national high-tech enterprise in Shenzhen, and has won the national well-known trademark. The sweat of Hong Tao's people is scattered across the country. The company's landmark projects are all over the country, including the State Banquet Hall of the Great Hall of the People, Diaoyutai State Guesthouse, Hangzhou G20 Summit, Boao Forum for Asia, Guangzhou Grand Theater, Wuxi Lingshan Temple, Nanjing Niushoushan Mountain, Shenzhen T3 Terminal, Shenzhen New Convention and Exhibition Center, Shenzhen Stock Exchange Tower and other famous and landmark buildings; It is the only decoration enterprise that has participated in the main pavilions of the four national grand events (the Bird's Nest of the Olympic Games, the theme pavilion of the World Expo, the Guangzhou Asian Games, and the Shenzhen Universiade). With its professional ability and strength, it carries forward the spirit of craftsmanship to add glory to the country. With thousands of landmark and famous projects, it is a truly old brand enterprise.

However, in recent years, due to the downward pressure of the economy and the impact of the industry cycle, the real estate enterprises have repeatedly experienced thunderstorms. In addition, the epidemic situation in the previous years has affected the company's project progress. In addition, the construction decoration industry generally has the advance payment of funds in the early stage of the project. The company's accounts receivable are slowly collected, leading to the company's capital shortage. At the same time, the bank has taken a tightening credit policy for the real estate and building decoration industries, and some bank credits and loans that are due cannot be renewed, even requiring early repayment of loans. In the past five years, financial institutions have pumped more than 1 billion yuan of loans to Hong Tao, further worsening the company's cash flow, which makes it difficult for the company to maintain normal business operations.

　　 Second, my family and I are trying to help Hong Tao out of the predicament

In order to meet the capital needs of the company's development and rapid financing needs, my family and I have provided financial assistance of about 500 million yuan for the company for many times, and provided more than 1 billion yuan of guarantees. Most of the financial support I provided for Hongtao Group came from stock pledge and property mortgage.

I pledged to Guosen Securities As Hong Tao was unable to repay the shares in time, I was unable to buy back the shares as agreed in the stock pledge repurchase business transaction agreement, and Guosen Securities, the pledgee, carried out compulsory closing positions on some of my defaulting shares as agreed in the agreement; I made a guarantee for Hong Tao's payment obligation to purchase the real estate of Shenzhen Fangda Real Estate Development Co., Ltd. Later, because Hong Tao could not pay as agreed, I was faced with 48929745 shares pledged in Guosen Securities by the court. For Hong Tao, I am on the verge of ruin.

In addition, I borrowed money from my relatives and friends, mortgaged and sold my house and children's property, and invested all of it in Hong Tao's business. As a major shareholder of the company, I never reduced my shareholding in the company when my personal economy was most difficult. Hong Tao is like my own child. I have spent all my money to protect Hong Tao.

　　 Third, the "unqualified opinion" in the 2023 annual audit report is unacceptable

Hongtao Group has been operating for 40 years and listed for 14 years. Liu Nianxin has achieved "five no's":

First, there is no capital occupation by major shareholders but long-term borrowing of 500 million yuan to help the company;

Second, there is no illegal guarantee;

Third, there has never been insider trading;

Fourth, the individual shareholding of the actual controller has not cashed out a penny since it was listed 14 years ago;

Fifth, there was no financial fraud, because I, as the actual controller, did not cash out, and there was no motivation and demand for fraud.

Whether Hong Tao is a good company and Liu Nianxin is a good person, I am willing to accept the supervision of shareholders and the society.

　　 Fourth, I personally do not have the subjective and intentional intention of malicious delisting

Recently, the company's share price has fallen for 10 consecutive trading days due to various factors. In particular, the court has launched a pre reorganization of the company, and the temporary manager has entered the site to carry out substantive work. With the company's continuous release of favorable announcements, the share price has again experienced an unexpected continuous decline, and a large number of sales have been blocked every day. It is obvious that there are some main funds that are maliciously short. Some investors and We Media did not know the truth, fabricated false information such as "Hong Tao Chairman Liu Nian set up a new bureau to cash out", "Hong Tao Group's malicious delisting" and spread the influence. I was deeply disappointed and anxious after learning that. For some investors' suspicions and accusations that we set up a bureau to cash out and maliciously led to the delisting of the company, it is totally out of thin air. I myself have no intention or behavior of malice leading to the delisting of the company. On the contrary, I have always supported Hong Tao and tried to keep the status of Hong Tao's A-share listed company from delisting. I hope to lead the company to go on, resolve debts through restructuring, restore the main business, do a good job in operation and management, and give investors the best return. I know that the biggest loss in judicial reorganization is the actual controller, but in order to save Hong Tao, although we still have net assets, I am willing to enter judicial reorganization to bring new life to Hong Tao.

　　 Fifth, for the future of Hong Tao, we will march forward bravely

First, the brand value of Hongtao includes the value of full license construction qualification, the brand value of great appeal, the market value of many landmark projects, and the talent value of many elites. We firmly believe that Hongtao has the cornerstone of nirvana and rebirth.

Second, Hong Tao's strength lies in: the company's book net assets exceed 1.5 billion yuan, and has 450000 square meters of industrial land in Longhua, Shenzhen, Yunfu, Tianjin and other places; There are more than 70 properties with an area of more than 260000 square meters in Shenzhen Luohu/Futian/Nanshan and all over the country. Due to the long purchase time, the revaluation value of the assets is extremely high.

Third, new opportunities lie in: through judicial restructuring, Hong Tao actively introduces external industrial investors, and strengthens industrial coordination and transformation. In recent years, we have been trying to cooperate with external investors. Recently, the company signed the Voting Rights Entrustment Agreement with Yinggu Energy Technology (Zhejiang) Co., Ltd., which is a formal agreement rather than an agreement of intent. Yinggu focuses on the upstream and downstream industries of new energy, including wind power solar energy For photovoltaic power generation and energy storage related businesses, their associated or controlling companies have built wind farms, which will create strategic synergy with Hongtao Energy in the future in terms of new energy. We hope that through our cooperation with Yinggu, we can empower Hong Tao's main business and improve his ability to continue as a going concern.

As the chairman of Hongtao Group, I firmly believe that under the leadership of the local government and the correct guidance of the regulatory authority, Hongtao Group can overcome the current difficulties, successfully complete restructuring, resume sustainable operation, achieve long-term and stable development, and create greater value for investors.

In the face of market uncertainty and various doubts and challenges, we will face them bravely and overcome them together. I will convey to all investors the firm confidence of me and the management team, and believe that the market will give an answer to let the stock price return to rationality.

　　 Finally, I wrote a calligraphy "Confidence is more expensive than gold" to encourage everyone ！