(Yicai Global) May 3 -- China Hongqiao Group Ltd. [HKG:1378], whose financial stability is currently being threatened by short-selling reports, said its profit double last year in its annual financial report published yesterday.
Net profit surged to CNY7.2 billion (USD1 billion) from CNY3.6 billion in 2015, the report shows. Operating revenue climbed to CNY61.4 billion, up 39 percent.
In February, Emerson Analytics Co. published a short-selling report saying the Zouping, Shandong-based group had become the world's largest aluminum producer after raising CNY5.2 billion since it floated in 2011. After investigating, Emerson said that Hongqiao has concealed costs of CNY21.6 billion since it went public, by forging financial reports and cheating subsidies. The agency went on to estimate that profit is less than was claimed. The group subsequently suspended stock trading.
Fitch Ratings Inc. last week lowered the firm's rating by two grades after it failed to publish its 2016 annual report before the end of March.
On April 27, auditor Ernst & Young LLP resigned when it failed to reach an agreement with Hongqiao on an independent investigation. The group then took on Baker Tilly Hong Kong as its new auditor.