A lawyer’s letter was sent from a distance, banging and ringing, asking to ＂investigate civil and criminal responsibilities＂

One really dares to accuse, and the other really dares to send it.

Because of a manuscript on 26th, we received a lawyer’s letter from Shanghai Branch of Junhe Law Firm entrusted by Pong Pong (China) Co., Ltd.

According to the lawyer’s letter, on October 26th, 2022, the "New Economy IPO" published an article entitled "Hidden Corner under the Epidemic Situation: Low-key IPO of Shanghai Epidemic Protection and Supply Unit, with a gross profit margin as high as 70%". According to the lawyer’s letter, Pong-Pong/Junhe Law Firm believes that when analyzing the financial data of the prospectus, the article indicates that the high gross profit margin of Pong-Pong in the education field is not normal, and implies that Pong-Pong is not normal. These contents have not been investigated, which are seriously inconsistent with the facts and derogatory.

Bang bang/Junhe Law Firm believes that,The article has brought a great negative impact on the commercial reputation and market image of pong, and caused great losses, which seriously violated the reputation right of pong.

Then, Pang Pang Xiang/Jun He Law Firm put forward three requirements:

1. We issued an apology statement in WeChat official account within 2 working days after receiving the lawyer’s letter, asking us to explain that the content of the previously published article on the gross profit margin of pong ring was not investigated and did not conform to the facts; In addition, I asked for an apology to pong.

2. Stop spreading or publishing "false, inaccurate" information about pong.

3. If the above two items are not implemented, the civil and criminal responsibilities of the "new economy IPO" will be investigated.

Frankly speaking, it’s not the first time I’ve received a lawyer’s letter from a new economy IPO, but it’s the first time I’ve seen such impudence as banging. One really dares to accuse, and the other really dares to issue it! We are almost scared to draft an apology letter. However, before writing an apology letter, we would like to discuss a few questions with Pang Pang Xiang/Jun He Law Firm:

1) The lawyer’s letter said that our abnormal evaluation of the gross profit margin of Pong Pong Ring was not investigated, which constituted insult and slander, but neither Pong Ring nor Junhe Law Firm provided the real reason for the gross profit margin as high as 40%. The phrase "strong bargaining power" was mentioned in the prospectus, and the lawyer’s letter did not mention it at all. Why did Pong Ring get a gross profit margin far exceeding that of a large number of catering supply chain giants at home and abroad?

There are only overbearing accusations, but there is no solid evidence. In our view, this is tantamount to hooliganism, just like the phrase "strong bargaining power";According to this touching logic, can Somali robbers also say that highway robbery is a kind of "strong bargaining power"?

2) Junhe Law Firm misunderstood our point of view. Our article does mention the following words,

"Commercial bargaining power is usually reflected in the core competitiveness of products, that is, exclusive products with unique formulas or technical content, which often gives suppliers the pricing power to the demand side; Another situation is brand premium, that is, the price floating effect brought by the brand’s own aura, but this generally exists in higher-priced consumer goods or luxury goods.

In kindergartens and school canteens, the core requirements for suppliers’ ingredients are safety and health. There is no exclusive product or core formula for basic ingredients, and there is little brand premium. Compared with other companies, there is no competitive advantage in the supply of basic catering ingredients provided by pong, so it is impossible to form exclusive barriers. Then there are only two possibilities to obtain such a high gross profit margin: one is to exclude competition by other means and realize the de facto regional monopoly; The second is to sacrifice food safety and food quality in exchange. "

According to Junhe Law Firm, we are "suggesting that the banging has eliminated competition by other means, realized de facto regional monopoly, or sacrificed food safety or food quality in exchange for higher gross profit margin".

Actually, it’s not. We only make an appropriate logical reasoning based on the general knowledge in the real business field and the real information disclosed in the prospectus. This logic is suitable for all enterprises in the catering and even retail fields, which is also the basic law that normal business activities should follow. We are opposed to sitting in the right place, and we don’t think there is a surreal existence beyond gravity.

In our opinion, Pong Pong and Junhe Law Firm should take back this lawyer’s letter and promise not to send us similar unfounded allegations. Of course, if Bang Bang can produce strong evidence that its core competitiveness has won it a high gross profit margin of 40%, then we will be happy to apologize publicly.

We are willing to wait for this moment.

This article first appeared on WeChat WeChat official account: New Economy IPO. The content of the article belongs to the author’s personal opinion and does not represent Hexun.com’s position. Investors should operate accordingly, at their own risk.