Yamada Green Resources Limited – Material Variances in FY2024 Financial Statements

Key Facts:

1. Material Variances
   The report highlights material variances between the unaudited and audited financial statements for the fiscal year ended June 30, 2024. These variances relate specifically to the Statement of Financial Position.

2. Significant Changes

   • Investment in Subsidiaries: The company reported a difference in the valuation of its investment in subsidiaries. The audited value was RMB 89,283,000, compared to the unaudited value of RMB 115,846,000, resulting in a variance of RMB 26,563,000 (a 22.9% difference).
   • Accumulated Losses: The audited figure for accumulated losses is RMB 102,011,000, compared to the unaudited figure of RMB 75,448,000. This variance is due to a fair value adjustment.

3. Fair Value Adjustment
   The fair value adjustment of RMB 57,554,000 relates to interest-free debts carried over several years. This adjustment was not initially recognized during the unaudited statements.

4. Impairment of Investment
   The report disregarded an impairment loss of RMB 30,991,000 for the company’s investment in Fujian Wangsheng Industrial Co., Ltd. There was no indicator of impairment as of the reporting date, resulting in no need for this loss to be recognized.

5. Net Loss Impact at Company Level
   The variances resulted in a net increase in loss at the company level by RMB 26,563,000.

6. No Financial Impact on Group Level
   The changes have no financial impact on the overall group’s financial position.

Key Points for Investor Actions:

1. Material Variances: Investors should note the significant differences between unaudited and audited figures, particularly the increased losses and adjustments made.

2. No Group-Level Impact: While the company-level losses have increased, this does not affect the financial position of the Group as a whole.

Special Notes for Investors:

• Interest-Free Debts: The fair value adjustments on interest-free debts highlight a potential long-term financial management issue, which may warrant investor attention.
• No Indicators of Impairment: The disregard of impairment for investments in Fujian Wangsheng Industrial Co., Ltd. suggests confidence in the valuation and future prospects of that investment.

Dividends:

The report does not mention any dividends for shareholders for the FY2024.

Special Actions to Improve Profitability:

• No special actions or strategies to improve profitability are mentioned in the report. The focus is on correcting financial variances and adjustments.

Recommendations for Investors:

• For Current Stockholders:
  Investors holding the stock should monitor future reports closely for any further adjustments or variances. The lack of group-level impact is reassuring, but the increase in company-level losses may indicate a need for cautious optimism.

• For Potential Investors:
  Those not holding the stock might consider waiting for further clarification on the company’s financial health and future profitability plans. While there is no group-level impact, the variances could indicate underlying issues that may require resolution.

Disclaimer:

This recommendation is based on the content of the report provided. It should not be taken as formal financial advice. Investors should conduct further research and consult financial professionals before making any decisions.