Observation of IPOs | 80% of Revenue "Relies" on Huawei, Information Technology Services: 5 Subsidiaries "Operating without Certificates", Administrative Penalties Pile Up

  Shenzhen-based Infosys Technology Co., Ltd. (Infosys Technology), a company listed on the Northbound Interconnection Stock Market, has recently received its third round of questioning from the securities regulatory body. Note that this round of questioning focuses on four core issues: the impact of dependence on a single large customer on the company's continuous operation; the stability and true nature of the company's profitability; the administrative penalties incurred by the company due to the lack of relevant certificates or licenses; and the effectiveness of the company's internal control mechanisms.

  According to the company's financial reports, in 2020, Huawei accounted for 80% of Infosys Technology's revenue. In addition, the company has five subsidiaries operating without proper certificates or licenses, which have been subject to administrative penalties. This raises concerns about the stability and true nature of the company's profitability.

  The securities regulatory body has also questioned the company's financial reports and internal control mechanisms. Specifically, the regulator has requested clarification on the following points:

• The reasons for the significant increase in the company's revenue from Huawei cloud services;
• The impact of the administrative penalties incurred by the company's subsidiaries operating without proper certificates or licenses;
• The effectiveness of the company's internal control mechanisms in preventing and detecting irregularities;
• The reasons for the significant decline in the company's revenue from traditional IT services;

  It remains to be seen whether Infosys Technology can withstand the scrutiny of the securities regulatory body and answer these questions convincingly.