On the evening of June 13, Bohui Shares (300839) announced that the company would stop production of 400000 t/a aromatics extraction unit, 400000 t/a environment-friendly aromatics oil production unit and related supporting devices from June 12, 2024, based on the current operating capital difficulties.
Bohui Shares said that the main business of the company is R&D, production and sales of aromatic hydrocarbon series products used in various fields. The main business income of the company is from the products produced by the above devices. This shutdown will have an adverse impact on the company's operating income, cash flow and operating profit, and the time to resume production is still uncertain. Bohui Shares will take throttling measures and strengthen safety and environmental protection management to reduce impacts and losses.
According to the data, Bohui Co., Ltd. was established in October 2005. Its main business is R&D, production and sales of special aromatic hydrocarbon series products used in many fields. Its main products are heavy aromatic derivatives, white oil, base oil, oil agent, rubber plasticizer, asphalt, etc., which are mainly used in rubber, asphalt, modified materials, daily chemicals, textiles, energy storage materials, precision machinery and other fields, At present, it has an annual comprehensive processing capacity of nearly one million tons.
From the perspective of performance, Bohui shares began to suffer losses in 2023, and the losses in the first quarter of this year continue. In 2023, Bohui Shares will achieve an operating revenue of 2.778 billion yuan, down 6.32% year on year; The net profit attributable to the parent company was a loss of 203 million yuan, which was changed from profit to loss over the same period last year. In 2022, the company realized a net profit attributable to the parent company of 152 million yuan.
In the first quarter of 2024, Bohui Shares realized an operating income of 793 million yuan, up 90.69% year on year; The net profit attributable to the parent company was a loss of 99 million yuan, from profit to loss on a year-on-year basis; The net cash flow from operating activities was - 391 million yuan, which turned negative year on year.
Large losses due to supplementary payment of consumption tax
Looking back to the reason why Bohui Shares will change from profit to loss in 2023, the main reason is that the company's "heavy aromatics derivatives" products have been required by the tax bureau to pay about 500 million yuan of consumption tax as "heavy aromatics". After the implementation of this operation, Bohui Shares' performance will change from profit to large loss in 2023.
On the evening of March 29, Bohui Shares announced that the Company had recently received the Notice of Tax Matters from Xiepu Taxation Office of Ningbo Zhenhai District Taxation Bureau of the State Administration of Taxation, which indicated that the "heavy aromatics derivatives" produced and sold by the Company after July 2023 should be subject to consumption tax on heavy aromatics as required.
Bohui Shares said that "heavy aromatics derivatives" pay consumption tax as "heavy aromatics", which will have a significant adverse impact on the company's production of heavy aromatics derivatives devices, and affect the profits of Bohui Shares in 2023 and the first quarter of 2024 by about 300 million yuan and 200 million yuan respectively.
Shenzhen Stock Exchange issued a letter of concern on April 1, requesting Bohui Shares to explain the reasonableness of the expected "face change" in 2023 performance, and the amount and proportion of revenue from "heavy aromatics derivatives" and "heavy aromatics" products in 2023 and the first quarter of 2024.
According to the reply letter, the revenue of "heavy aromatics derivatives" and "heavy aromatics" products accounted for 74.76% and 75.70% respectively in 2023 and the first quarter of 2024.
At the same time, Shenzhen Stock Exchange also required Bohui Shares to explain the judgment basis and rationality of the company's "heavy aromatics derivatives" products' failure to pay consumption tax in the early stage in combination with the different links between "heavy aromatics derivatives" and "heavy aromatics" products, product classification and applicable laws and regulations for tax payment, and communication with tax authorities.
In the reply letter, Bohui Shares demonstrated from the aspects of product form, appearance, carbon number distribution, main components, product use and applicable laws and regulations for tax payment, and believed that the heavy aromatics produced and sold before July 2023 and the heavy aromatics derivatives produced after July 2023 are not required to declare and pay consumption tax.
The incident is still controversial
In the letter of concern, Shenzhen Stock Exchange required Bohui Shares to explain the earliest time when they learned about the payment of excise tax, whether the company fulfilled its obligation of information disclosure in a timely manner, and whether there were major defects in the company's internal control in financial management and information disclosure affairs management.
Bohui Shares has announced that the company has a big objection to the requirements of the Notice on Tax Matters. At present, a response team has been set up to hire professional tax agent firms and law firms to sort out and demonstrate relevant laws and regulations.
Previously, Dong Mi You Danhong of Bohui Shares said at the investor briefing that before and after the issuance of the Notice, he had repeatedly communicated with the competent tax authority about the existing objections, but the competent tax authority issued the notice to the company on March 27 because of the requirements of the municipal tax bureau.
According to the reply letter, Bohui Shares said that the competent tax authority had repeatedly communicated with the company on the process, classification, composition testing and other aspects of the product. On November 2, 2023, the company received a risk reminder from the competent tax authority, reminding the company that it had issued invoices for heavy aromatics derivatives. Heavy aromatics need to be taxed according to regulations, and the company has the risk of not paying the consumption tax in full.
On November 14, 2023, the staff of the competent tax authority went to the production site of Bohui Co., Ltd. to sample the heavy aromatics derivatives, sealed them and sent them to a third party for testing. Since then, the competent tax authority has not raised any objection, and the risk reminder is not a tax payment notice, so the company has not made risk reminder disclosure.
In its 2023 annual report, Bohui Shares said that the company has set up a response team to hire professional tax agent firms and law firms to sort out and demonstrate relevant laws and regulations, continue to maintain active communication with the tax authorities, and strengthen coordination and communication with other relevant departments.
Editor in charge: Peng Bo
Checked by: Wang Jincheng
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