Enterprise dynamics:
[Rapid Innovation Terminates IPO of Shenzhen Stock Exchange Main Board]
On May 11, the website of Shenzhen Stock Exchange disclosed the decision on terminating the IPO of Shenzhen Feifei Innovation Technology Co., Ltd. (hereinafter referred to as "Feifei Innovation") and listing on the main board. Rapid innovation focuses on the R&D, design and sales of core equipment and general accessories in the field of network communication, and provides one-stop supply of communication equipment, general accessories and system solutions for global customers. Its sponsor is China Merchants Securities Co., Ltd., and the sponsor representatives are Yang Meng and Liu Xingde.
[Gangdi Technology IPO update and submission of relevant financial materials]
On May 12, according to the official website of Shenzhen Stock Exchange, the IPO of Wuhan Gangdi Technology Co., Ltd. (hereinafter referred to as "Gangdi Technology") has updated and submitted relevant financial information. Gangdi Technology is a high-tech enterprise focusing on product development, production and sales in the field of industrial automation. Its products mainly include automation driven products, intelligent control systems, and management system software. It is understood that Gangdi Technology will be approved on January 5 this year, and it is also the first IPO company this year.
[Shanghai Stock Exchange terminated the IPO review of Hengda Intelligent Control Technology Innovation Board]
On May 11, as Zhengzhou Hengda Intelligent Control Technology Co., Ltd. (hereinafter referred to as "Hengda Intelligent Control") and its sponsor withdrew their application for listing, the Shanghai Stock Exchange terminated its listing review. Hengda Intelligent Control has long focused on the field of intelligent coal mining system, specializing in the research, development, production and sales of coal intelligent mining control system technology and products.
Public opinion of enterprises:
[IPO of Haochuang Ruitong Growth Enterprise Market: the average salary of staff is generally low, and it is doubtful that expenses are underestimated and profits are inflated]
On April 25, Shenzhen Stock Exchange issued an announcement, deciding to suspend the listing review of Haochuang Ruitong. Haochuang Ruitong plans to raise 476.5364 million yuan in this IPO, of which 156.9906 million yuan is used for the production and construction project of intelligent ring network cabinet, 102.5233 million yuan is used for the production and construction project of intelligent column switch, 117.0226 million yuan is used for the construction project of intelligent distribution research and development center, and the remaining 100 million yuan is used to supplement the working capital. The sponsor is Changjiang Securities, and the auditor is Dahua Certified Public Accountants.
According to the prospectus and relevant public data, the average salary of Haochuang Ruitong for other types of work, except for R&D personnel, is far lower than the industry average. According to the information in the prospectus, there are 10 directors, supervisors and senior managers of Haochuang Ruitong, who will receive a salary of 3.9673 million yuan in 2023, with an average salary of 396700 yuan/year/person, while the average salary of the entire management personnel will be 144900 yuan/year/person in 2021 and 158700 yuan/year/person in 2022, which is almost 50% lower than the average salary of the industry management personnel.
In addition, the number of management personnel of Haochuang Ruitong in 2021 and 2022 will be 39 and 35 respectively. We can assume that the average salary of directors, supervisors and senior executives in 2021 and 2022 will be roughly the same as that in 2023. In 2021 and 2022, the per capita salary will be 144900 yuan/person and 158700 yuan/person respectively. In 2021 and 2022, the remaining management personnel will be 29 and 25, and the per capita salary will only be 60000 yuan/person. It means that the salary of other management personnel is not as good as that of production personnel, only slightly higher than the average salary of Cangzhou City, which obviously does not conform to the business logic. The issuer is likely to undercalculate the salary of management personnel and falsely increase profits. (Source: Valuation House)
[Operating cash flow continues to be negative, and Taihu Yuanda North Stock Exchange is IPO]
Taihu Yuanda applied for the IPO of Beijing Stock Exchange. From the perspective of performance, Taihu Yuanda's performance was relatively excellent. Its revenue growth rate in 2021 and 2022 remained at about 30% for two consecutive years, and the growth rate of the company's net profit in 2022 also exceeded the growth rate of revenue. It is worth noting that although Taihu Lake's impressive performance has increased year after year, its operating cash flow has remained negative during the reporting period. From 2020 to 2023, the net outflow of Taihu Yuanda's operating cash flow will be 118 million yuan, 207 million yuan, 151 million yuan and 166 million yuan respectively, with a net outflow of 642 million yuan in four years.
As for the continuous outflow of the company's operating cash flow, Taihu Yuanda explained that the company included the cash obtained by discounting commercial bills of general grade as the cash inflow of financing activities, resulting in the continuous outflow of the company's operating cash flow. After Taihu Yuanda excluded the bill discount, the net cash flows from the company's operating activities in each reporting period were RMB 5213100, RMB 16399000 and RMB 47889300, both positive. In addition, the annual increase of the Company's accounts receivable is also the main factor leading to the lack of cash in daily operations.
From 2020 to 2023, the balance of accounts receivable of the Company will be 166 million yuan, 218 million yuan, 270 million yuan and 273 million yuan respectively, showing a growing trend. According to the first round of inquiry letter, Taihu Yuanda is mainly selling on credit, most customers have long account periods, while upstream suppliers have low credit lines and short credit periods, which leads to a shortage of working capital. It is worth noting that the bad debt provision ratio of Taihu Yuanda's accounts receivable for 1-2 years is 30%, the highest among comparable companies, higher than that of CSL New Materials, Zhizheng Shares, 10% of Hangzhou Hi tech and 11.60% of Wanma Shares. (Source: V under Chinese parasol tree)
[IPO of Boyuan Shares: gross profit rate of overcapacity declines year after year, and future performance growth may become a "bad check"]
Boyuan Shares, which started its listing in June 2022, finally submitted to the Exchange for registration on March 4, 2024 after nearly two years of fierce competition. It seems that only one step away from the successful listing is to obtain the registration approval. However, with the recent tightening of supervision and the substantial increase of the threshold for listing on the GEM, the gross profit rate of Boyuan shares has declined year after year, and the increase of income in 2023 will not increase profits and other issues may become obstacles to its obtaining the registration approval.
In 2021, 2022 and 2023 (hereinafter referred to as the "reporting period"), the operating revenue of Boyuan Shares will be 524 million yuan, 798 million yuan and 1025 million yuan respectively, with a year-on-year growth of 52.29% compared with 2022. The growth rate in 2023 has slowed down to 28.44%. Net profit also grew weakly, with 103 million yuan, 176 million yuan and 182 million yuan respectively. In 2022, it rose by 70.70% year on year, while in 2023, it grew by 5.77 million yuan compared with 2022, almost flat. Obviously, Boyuan shares will be in a state of increasing income without increasing profits in 2023.
The gross profit rate of Boyuan shares decreased while the cost increased. During the reporting period, the operating costs of Boyuan were 347 million yuan, 518 million yuan and 739 million yuan respectively. In 2023, the cost growth rate of Boyuan Shares (42.81%) is 1.5 times of the revenue growth rate (28.44%). At the same time, the Company's comprehensive gross profit margin in each period was 33.82%, 35.18% and 27.89% respectively, which decreased by 7 percentage points in 2023 compared with 2022, and fell below 30% for the first time. In this regard, Boyuan Shares said that the decrease in gross profit margin in 2023 was due to the high price of fertilized iodine and the rising cost of organic iodide.
If the iodine market price falls sharply, the price of the company's products will also fall, and there is a risk that the gross profit margin will decline. In other words, if the iodine market price rises, the price and gross profit margin of the company's products should rise. In the risk warning, Boyuan Shares attributed the decline of gross profit rate in 2023 to the high price of refined iodine, and there was obvious conflict between the two statements. According to the description of Boyuan Shares, it is the rising iodine market price that will increase the gross profit margin in 2022. However, in 2023, although the growth rate of iodine market price is slowing down, it is still rising, and the gross profit margin of Boyuan Shares will decline because of the high purchase price of refined iodine. It is speculated that the dividend brought by the rise of iodine market price to Boyuan Shares may have reached the bottleneck, and the product pricing of Boyuan Shares is difficult to continue to make synchronous changes with the rise of iodine market price. In the future, no matter whether the price of iodine market rises or falls, the gross profit margin of the company is likely to decline further. (Source: Huacai Information)
