SMM: on July 21, Tibet Qomolangma Resources Co., Ltd. received a letter of inquiry on the information disclosure of the 2019 annual report of Tibet Qomolangma Resources Co., Ltd. (Shanghai official letter  No. 0865) issued by the Shanghai Stock Exchange. The full text is as follows:
In accordance with the requirements of the "content and format Standards for Information Disclosure of companies publicly issuing Securities No. 2-content and format of Annual reports" (hereinafter referred to as "format Standards No. 2"), Shanghai Stock Exchange Industry Information Disclosure guidelines and other rules, after the post-examination of the company's 2019 annual report, in order to facilitate the understanding of investors, the company is requested to further supplement the disclosure of the following information in the light of the situation of the industry and the operation of the company.
I. on production and operation
1. The situation of trade business. According to the annual report, the company started trading business in the fourth quarter of 2019, with annual commodity trading revenue of about 499 million yuan, corresponding costs of about 500 million yuan and a gross profit margin of-0.33%. Please disclose that: (1) combined with the business model, upstream and downstream conditions and core competitiveness of the trading business, explain the main considerations for the company to carry out trading business in the fourth quarter of 2019; (2) combined with the types of products involved in the trading business, price fluctuations and comparable companies and other factors, explain the reasons why the trading business failed to achieve profitability this year; (3) to explain whether the scale of the trade business matches the changes in inventory and freight, and whether the income from the trade business is accounted for by the total amount method, in the light of the cash and goods circulation links and the delivery of documents in the trade business, whether it conforms to the relevant provisions of accounting standards.
2. Customer change. According to the annual report, the company's largest customer from 2016 to 2018 is Wanxiang Resources, and its sales revenue accounts for more than 90% of the total revenue. In 2019, the company's largest customer became Glencore, and formed a large number of accounts receivable. Wanxiang Resources is no longer a corporate customer. Please make additional disclosure: (1) list the names of the top five customers, sales amount and product sales volume of the company in the past three years; (2) combine the above-mentioned information with the transaction form between the company and customers, the specific situation of Wanxiang resources, etc., explain the reasons and rationality of the changes in the company's important customers, and whether it affects the continuous operation of the company; (3) combined with the business model of the company and the situation of the comparable company, explain the reason and rationality of the concentration of customers and suppliers.
3. Gross profit margin. According to the annual report, the company's operating income from the mining business in 2019 was about 1.754 billion yuan, down about 14.24 percent from the same period last year, and the net profit belonging to shareholders of listed companies was about 600 million yuan, down 33.37 percent from the same period last year. The gross profit margin of the company's mining business is 67.58%, which has continued to decline in recent years. The company is invited to comprehensively analyze the reasons for the high gross profit margin of mining business and the continuous decline in recent years in the light of the factors such as mineral processing recovery, ore grade, unit comprehensive cost, metal price fluctuation and comparable companies in the same industry.
II. On the financial situation
4. Interest expense. According to the annual report, the financial expenses of the company for the current period totaled 88.3309 million yuan. Of this total, the interest income was 13.4557 million yuan, and the exchange loss was 10.5993 million yuan, which was larger than the exchange gain of 102 million yuan in 2018. Please disclose that: (1) combined with the changes in the company's currency fund balance, deposit mode and interest rate, explain the rationality of the company's interest income level; (2) explain the calculation process of the company's exchange profit and loss by combining the exchange rate fluctuation of RMB against the US dollar and RMB against Somoni, the time point of the company's foreign exchange settlement, etc., and quantitatively analyze the reasons and rationality of the large fluctuations in exchange gains and losses.
5. Monetary funds. According to the annual report, the company's monetary fund balance at the end of 2019 was 206 million yuan, a decrease of 1.009 billion yuan from the end of 2018, a decrease of 83.08%, mainly due to the company's repayment of short-term loans. Of the company's 206 million yuan of monetary funds, 159 million yuan is restricted. Please provide additional disclosure: (1) list the bank branches, amount, loan purpose, fixed number, interest rate, guarantee and other details of the company's repayment of short-term loans in 2019, and explain the reasons and rationality of large-scale repayment of bank loans in 2019; (2) combined with the use of the company's funds, restricted scale and business model, explain the reasons and rationality for the company to maintain high monetary funds and long-term and short-term loans in the previous period.
6. Other receivables. According to the annual report, the company indirectly holds a corresponding interest in the lithium salt lake assets of LIX through the acquisition of a 100 per cent stake in SDLA through a 45 per cent stake in Everest Hong Kong. The acquisition is financed by the company's financial support to Everest Hong Kong, of which the company performs a financial assistance of US $93.0285 million corresponding to a 45 per cent stake and advances US $98.7015 million on behalf of other shareholders. At present, there are 1.339 billion yuan of other receivables on the book. Please disclose that: (1) combined with the acquisition capital arrangement, the board seat and control arrangement of the company in the SDLA Lithium Salt Lake assets, etc., it shows that the company adopts the form of financial assistance rather than equity capital increase.
The main considerations of investment; (2) to explain the reasons why other shareholders of Qomolangma Hong Kong do not provide financial assistance in different proportions according to the contents of the payment agreement, the repayment period and arrangement, and the collection measures. (3) combined with the capacity construction of SDLA Lithium Salt Lake assets, business model, local industry policies and product prices, etc., explain the operation progress of SDLA Lithium Salt Lake assets, and explain whether there is impairment risk in other receivables of the company.
7. A project is under construction. The annual report shows that during the reporting period, your company is under construction for 50, 000 tons of crude lead smelting project, and the progress of the project is 99.95%, which is slower than that of 92.85% of the previous year. The amount of consolidation in this period is 0 yuan, and the balance at the end of the period is 476 million yuan, exceeding the budget. In the light of the progress and availability of the project, please explain the accuracy and rationality of the transfer amount in this reporting period, and whether there is any delay in carrying forward the fixed assets.
8. Please check whether there are any errors or omissions in the quarterly financial data on page 8 of the annual report and the change ratio of the current amount on page 19 of the cost analysis table over the same period last year, and if so, please correct them.
In view of the above-mentioned problems, in accordance with the requirements of the format Standard No. 2 and the guidelines on Industry Information Disclosure of the Shanghai Stock Exchange, if the company considers that it is not applicable or is really inconvenient to disclose for special reasons, it shall state the reasons why it cannot be disclosed.
Please disclose immediately after receiving this inquiry letter, and reply to our department in writing and disclose it before July 28, and at the same time revise and disclose the periodic report as required.
It is hereby announced.
Tibet Everest Resources Co., Ltd.
Board of directors
July 22, 2020
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