Yi Hua Real estate barely over line experts question the evasion of financial fraud to add to the price

--Zhao Lin April 29, Yi Wah Real Estate (000150) released its 2008 annual report. Since the Yi-Hua real estate has previously in the share reform commitment, if the 08 net profit of less than 80 million yuan, the company will be unlimited sales of the conditions of the circulation of shareholders additional Shang 34.02 million shares, that is, 10 shares to send 2.7 shares.　　The first three quarters of this year to achieve net profit of 20.327 million yuan, from the company commitment of 80 million yuan has a considerable gap, the market believes that the possibility of triggering Shang is very large. However, according to the 2008 annual report of the IKEA real estate, the income of 493 million yuan and net profit of 82.014 million Yuan were realized in 2008. This is surprising--because of the reluctance to cross the line, the company does not have to add to the price, some originally expect the company to pursue the price and enter the entry of the unusual anger, have questioned the Yi Wah real estate fraud suspicion-relative to 34.02 million of the price, large shareholders need to pay 180 million yuan in cash With the closing price of April 30 at $5.29, it is clearly a more sensible choice to make the quarter's profit 60 million (at 48% per cent of the equity investment, and 60 million to pay only 31.2 million, or 0.6*0.52). For investors to question the "IKEA real estate development revenue in the last quarter of fraud", there are insiders said that "do not understand the accounting characteristics of the industry."　　But the reporter noted that the Charlot, who had been the author of this newspaper, had found clues from historical financial data and questioned whether the company was suspected of financial fraud. It goes back 2007 years. When, the Yi Hua real estate carries on the share reform, the company holding shareholder Yi Hua Group to the company in the next three years operating performance has made the pledge: when one occurs, will circulate the stock to add to the price once 34.02 million shares, 10 shares circulation shares to obtain 2.7 shares. If the asset replacement is completed by the end of 2007, the net profit of the asset delivery to the end of 2007 is less than 70 million Yuan/12*m (where M is the actual number of months for the asset to the listed company), or 2008 years below 80 million yuan, or 2009 less than 90 million yuan,　　Or 2007 years or 2008 years or 2009 earnings are issued non-standard unqualified audit opinion, not timely disclosure of annual reports. 2008, under the influence of macro-control and other factors, real estate industry struggling, into the trough, the company's performance can not "Meet the target", chasing the price close at hand. But surprisingly, the results of the final publication not only "Meet", but only just "meet the standards." According to public information, Yi Hua real estate 2008 years ago three quarter to achieve income of 120 million yuan, the fourth quarter to achieve revenue of 373 million yuan, the first quarter of 2009 to achieve income of 9.8 million yuan. For the fourth quarter by leaps and bounds of business income, many investors expressed doubt, but in the interview, there are industry insiders on this analysis: Real estate sales and income to confirm the existence of a certain time lag, this is a unique phenomenon of real estate industry. Generally speaking, the real estate income confirmation point is to the developer to the industryThe main key is quasi, so the real estate income recognition time has a great elasticity, and the fluctuation amplitude is also big. According to the annual report of Ikea real estate disclosure, the company's 08-year performance barely over the line is the key to the holding subsidiary of Guangdong Yihua Real Estate Development Co., Ltd. in Shantou Chenghai District "Jia name" and Longhu District "Yi Yue Ya Xuan" two projects (real estate) successfully completed and handed in the building. Among them, "Yi Jia name" completed an area of 184137 square meters, "Yi Yue Ya Xuan" completed an area of 51308.68 square meters. The reporter immediately on the network on the above two real estate search, the results found that some owners complained in March this year, "Ikea construction slow, delayed delivery", it is said that "Yi Wah real Estate promised to use the garden December 28, 2008, but until the end of March this year, bamboo racks still not demolished, the elevator is not installed."　　"However, according to the 08 annual report of the Ikea property, it is worthwhile to investigate whether the completed delivery of the property is really in line with the qualifying conditions." In addition, the so-called "financial uncovering black experts" from the company's historical financial report found clues, and frankly Yi Hua real estate in the naked financial fraud. The following are the reasons for the claim: the author, when browsing the annual report of Yi-Hua real estate, found that Guangdong Yi-Hua 2007 was deemed to be a merger of the enterprises under the same control, so the purchase law was used.　　The biggest characteristic of the purchase law is that it needs to revalue the assets of the acquired enterprise on the purchase day, adjust the value of its assets from the book value to the fair value, and then the fair value of the purchase day shall prevail. To give a simple example, IKEA, real estate business input cost is 400 million, but the market value of 800 million, if the use of equity pool law, then the company can achieve the sale of property 400 million, but if the purchase method, because the cost has been transferred to 800 million, if the final sale price is 800 million, then realize the profit is 0;　　If the final selling price is 600 million, then the loss is 200 million. Guangdong Yi-Hua is the only real estate business entity, Guangdong Yi-Hua still according to the book value of profit and loss, but the preparation of the annual report of the IKEA real estate must be on the book value of Guangdong Province on the basis of the profit and loss adjustment for the fair value of profit and loss. Yi Hua Real estate to buy Guangdong Yi Hua Day is September 30, 2007, at this time is the highest price of house prices, the value of Ikea is absolutely not lower than the later market value, that is, according to common sense, in this case, under the purchase of Guangdong Yi Hua 2007, 2008 reported only loss, will not be profitable,　　Then the IKEA real estate 2007 113 million yuan net profit, 2008 82 million yuan net profit again from where? The author also traces back to the Ikea real Estate 2007, found that the Yi-Hua real estate in the purchase date to Guangdong Yi Hua merger costs can be described with shameless, I think this is naked financial fraud. 2007 reported that the Guangdong Ikea in the purchase date of September 30, 2007 net assets of only 130 million yuan, but the evaluation of 623 million yuan, evaluation value of 3.79 times times premium, that is, the Yi Hua group in the Guangdong Yi Hua into the Ikea real estate when the acquisition of 379%Excess income. Guangdong Yi Hua Net Assets evaluation value of 623 million yuan, deduction of deferred income tax liabilities of 123 million yuan, the fair value of the adjusted Guangdong Ikea net assets is 500 million yuan, but because the combined cost of only 384 million yuan, the difference of 95 million yuan in accordance with the accounting regulations to account for 07 profit and loss, which led to the 2007, the realization of China's real estate net profit 113 million　　After the non-recurrent profit and loss, the company achieved net profit of only 30 million yuan in 2007, that is, the 30 million yuan is also very article. Since the Ikea property did not disclose the purchase date of Guangdong Yi-Hua fair value adjustment, however, in 2007 and 2008 respectively, the fair value adjustment of the annual report was disclosed, and we will find that the Dou property will allocate a premium of $500 million to the outer sandy land parcel, which has a book value of 200 million yuan, But the fair value nearly 700 million yuan, but to the other 100 million yuan development cost and the development product, basically does not have the premium, the book value is equal to the fair value. That is, on September 30, 2007, IKEA real estate knew that the market value of IKEA was above $300 million, but it still had a value of $56 million as its market capitalisation (60 million yuan), and the cost allocation of such a merger was obviously to depress development and development costs and raise the value of the land to be developed. Why does Yi Hua real estate have to do this? Because the IKEA group has made a commitment to the 2007-2009 IKEA real estate performance, if the development cost or the development of product value adjusted up, equal to the cost, then the profit pressure is very large, The book value adjustment under the purchase law is actually the realization of the outstanding gains on the day of purchase, only by means of equity transfer rather than by the sale of assets.　　It can be said that if there is no Yi Hua group and the Yi Hua real estate artificially depressed Guangdong Yi Hua development costs and products, then Yi Hua Real Estate 2008 will lose no doubt. Knowing that such a cost allocation would arouse the suspicion of regulators, auditors and investors, why does Ikea prefer to opt for a buying law or an equity pool? This is also very simple, if the Yi-wah real estate to Guangdong Yi-Hua merger using equity pool law, Because the combined cost of 384 million yuan is higher than the book value of 254 million Yuan, Yi Hua real estate in 2007 not only can not increase the combined income of 95 million yuan, but also to reduce capital accumulation of 254 million yuan. That is, if the equity pool method is adopted, then the net assets of Ikea real estate will be less than 350 million yuan under the purchase law, and the IKEA real estate in the end of 2007, the net assets of only 548 million yuan, if less than 350 million yuan, the net assets per share from 1.6 yuan to 0.6 yuan. In order to increase the non-recurrent returns of 2007, also in order to increase the net assets per share, Yi-hua Real estate has chosen not under the same control of the merger of enterprises in Guangdong Yi Hua, but in fact, the author believes that the merger according to international rules is the use of purchasing law, but according to Chinese rules can only use the equity pool, is the same control However, in order to increase income and assets, Yi-Hua real estate has a far-fetched understanding of the same control and non-identicalA control of the so-called length of time concept. The biggest flaw in purchasing law is to adjust the book value of assets to fair value, in particular, if the target company is a real estate company, the price of excess purchase can not be placed in the goodwill, this timely Chinese real estate only take the risk, the cost of the merger for a purposeful distribution, because the land to be developed to become a profit early,　　To put the excess purchase price in the land to be developed, it actually has a trouble, the value of 700 million yuan in the current market price of the plot? Should 2008 be prepared for impairment? As long as this block of land to reduce the value of more than 2.5 million Yuan, Yi Hua Group will have to offer a value of 180 million yuan on the price. Reporter on this matter, the company called Yi Wah Real Estate, a woman surnamed Zhang said to reporters, "the company restructured, hired a professional evaluation agency, all procedures in line with the relevant provisions." She also said that the questioning of the company was "entirely a subjective judgment of the author and not a fact".　　The Economist will continue to report on the further development of the incident. 2007 report on the fair value of Ikea real estate project in Guangdong Province, China 2008 year report on the fair value adjustment of Ikea real estate project in Guangdong Province