(Yicai Global) July 26 -- Nobody leaked inside information on Beingmate Baby and Child Food Co. [SHE:002570] before its stock price plummeted on July 11, chairman Wang Zhentai said at an investor briefing yesterday.
The 10-percent dive came just one day before the company suspended trading and three days before it slashed its first half earnings forecast, contrary to market expectations. It cut its estimated profit of CNY20 million (USD2.96 million) to CNY50 million to a loss of between CNY350 million and CNY380 million.
An investigation showed that the company hadn't put together its semi-annual financial report before the share price fell, Wang said, adding that the five biggest sellers that day were not institutional seats for securities trading.
Given the huge difference between the two forecasts, and the massive decline in share price just days before, a number of investors were concerned the company had leaked insider information.
However, Wang blamed the change on policies. Some milk powder firms dumped a large number of goods during the period, impacting the company's traditional sales channels which represent a higher portion of sales, he said. This resulted in fewer shipments and a lower operating income than originally anticipated.
The company is selling upstream assets that are in a deficit in a bid to improve performance, Huang Tao, general manager, said at the meeting, which is why trading was suspended on July 12. Beingmate will do its best to make a profit in 2017, he added.
In line with China's stock market provisions, if the company does not make a profit this year, its shares will be slapped with a delisting risk warning next year.