| In order to alleviate the degree of information asymmetry between listed companies and investors and release the earnings risks of listed companies in advance,China has introduced a earnings forecast system since 1998.After more than two decades of development and evolution,the earnings forecasting system has changed from the initial post-annual performance forecasting loss announcement system to the current year’s earnings forecasting system before the end of the current year.The disclosure also made more supplements,including changes in profit and loss,and excessive changes in performance.Although the earnings forecast system has been greatly improved and improved for more than two decades,there are still some shortcomings,such as the lack of necessary rewards and punishment mechanisms,lack of review and supervision before release,etc.The earnings forecast correction is helpless.The earnings forecast correction refers to the behavior of the listed company to significantly modify its previous performance forecast,which seriously undermines the role that the performance forecast should play.Therefore,this article will conduct in-depth research and discussion on the phenomenon of earnings forecast correction,with a view to making some suggestions in response to earnings forecast correction.The case company Chuying Co.,Ltd.selected in this article is a representative company in the pig breeding industry and was once called "China’s first pig stock" when it went public.From 2017 to 2018,the company frequently appeared in the earnings forecast correction,changing face five times in just two years,the frequency is very large.The company attributed the revision of the performance forecast to the downside impact of the industry,the pig price was less than expected,the country’s deleveraging strategy caused difficulties in financing,tight liquidity,and the African swine fever embargo affected sales.However,when we researched the young eagle agriculture and animal husbandry,we found that although there are various reasons for the earnings forecast correction,the manager Hou Jianfang has an unshirkable responsibility for the earnings forecast correction.As a young farmer and animal husbandry manager,Hou Jianfang,due to his past successful experience and long-term control of the enterprise,formed an overconfident personality trait,which led to his radical strategic choice.The investment decision-making has undergone a significant counter-cyclical expansion,and the financing decision-making has neglected the risk of high-debt financing.Its management level does not match the size of the rapidly expanding company,and the actual production capacity is much lower than expected.Eventually,the company is overwhelmed by high leverage,and the performance forecast has changed dramatically.The consequences of earnings forecast correction are undoubtedly serious,not only a serious damage to the capital market information disclosure order,but also damage to the company’s own credibility,but also to investors’ deception and interests.This paper analyzes the causes and consequences of the earnings forecast correction,and then proposes corresponding countermeasures for the earnings forecast correction,including improving the company’s decision-making level at the level of the listed company itself.To improve the performance forecast related system at the level of external supervision and management,and to improve its professional level and discrimination ability at the investor level,hoping that we can provide certain reference opinions for the development of China’s earnings forecast system... |
PDF Full Text Request