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Source: Lanfu Finance
The Science and Technology Innovation Board Listing Committee of Shanghai Stock Exchange is scheduled to hold the 24th Listing Committee Review Meeting on April 12, 2021, to review the IPO application of Jiangsu Jindik Biotechnology Co., Ltd. (hereinafter referred to as Jindik).
Jindik is a biopharmaceutical enterprise focusing on the research, development, production and sales of human vaccines. The company's main products (including those under research) include 10 human vaccine products for the prevention of five indications, including influenza, rabies, chickenpox, herpes zoster and pneumonia. Among them, there is one marketed product, which is a tetravalent influenza virus split vaccine.
Jindik plans to issue no more than 22 million ordinary shares to the public this time, accounting for no less than 25% of the total shares of the company after the issue citic securities Serve as a sponsor.
The company plans to adopt the fifth set of listing standards of the Science and Technology Innovation Board, that is, the estimated market value is not less than 4 billion yuan. The main business or products need to be approved by the relevant national departments. The market space is large, and has achieved phased results. Enterprises in the pharmaceutical industry need to have at least one core product approved for phase II clinical trials, and other enterprises that meet the positioning of the science and technology innovation board need to have obvious technical advantages and meet the corresponding conditions.
Jindik is expected to raise 1.6 billion yuan, of which 600 million yuan will be used for the construction project of new tetravalent influenza virus split vaccine workshop, 400 million yuan will be used for innovative vaccine research and development projects, and 600 million yuan will be used to supplement working capital and repay bank loans.
The prospectus disclosed that the controlling shareholders and joint actual controllers of Jindik were Yu Jun and Zhang Liangbin. Yu Jun directly holds 40.9838% of the shares of Jindik, and Taizhou Tongze, as the executive partner, directly holds 1.80% of the company's shares; Zhang Liangbin directly holds 40.9838% of the shares of Jindik, and his Taizhou counterpart as the executive partner directly holds 1.80% of the company's shares.
Yu Jun directly and indirectly controls 42.7838% of the shares of Jindik, and Zhang Liangbin directly and indirectly controls 42.7838% of the shares of Jindik. They control 85.5676% of the shares of the company in total, and are the controlling shareholder and joint actual controller of the company. Yu Jun and Zhang Liangbin are both Chinese nationals and have no right of permanent residence abroad.
From 2018 to 2020, Jindik realized operating revenue of 0 yuan, 67151300 yuan and 589098700 yuan respectively, net profits attributable to owners of the parent company were - 28013100 yuan, - 19037700 yuan and 154979400 yuan respectively, and net cash flows from operating activities were - 35478400 yuan, - 54048200 yuan and 109455500 yuan.
From 2018 to 2020, Jindik received cash of 113000 yuan, 7382100 yuan and 296022600 yuan respectively from selling goods and providing services.
According to the prospectus, Jindik began to generate main business income in November 2019. In 2019 and 2020, the company's main business income was 67094700 yuan and 589098700 yuan respectively, all from the sales of four valent influenza vaccine products, and the main business income to cash ratio was 0.11 and 0.50.
The Company expects to realize an operating revenue of about 23 million yuan to 31 million yuan in the first quarter of 2021, a net profit attributable to shareholders of the parent company of - 8 million yuan to - 3 million yuan, and a net profit attributable to shareholders of the parent company of - 8.2 million yuan to - 3.2 million yuan after deducting non recurring profits and losses. In the same period in 2020, the company's operating income was 41.1490 million yuan, the net profit attributable to shareholders of the parent company was 4.1687 million yuan, and the net profit attributable to shareholders of the parent company after deducting non recurring profits and losses was - 3.5632 million yuan. Compared with the same period of last year, the operating income of Jindik in the first quarter of 2021 decreased, and the amount of loss expanded to a certain extent.
In 2018, Jindik's products were all in the stage of research and development and trial production, and they had not yet been marketed. In 2019 and 2020, the gross profit margin of the only product of Jindik - tetravalent influenza vaccine was 84.36% and 87.49% respectively, and the comprehensive gross profit margin was also 84.36% and 87.49%. The average gross profit margin of comparable companies in the same industry was 87.91% and 89.74%.
The prospectus disclosed that the current production capacity of Jindik's tetravalent influenza vaccine production workshop is 10 million doses/year, however, in 2019, the current production capacity of Jindik Biology was only 1.3526 million doses, and the capacity utilization rate was only 13.53%; In 2020, the output will be 5117200 doses, and the capacity utilization rate will be only 51.17%.
Jindik still plans to raise 600 million yuan this time for the new tetravalent influenza split vaccine workshop. After the construction is completed, the company will have an annual production capacity of 22.5 million adult vaccines and 7.5 million children's vaccines. Whether this new capacity can be digested by the market in a timely manner deserves attention.
In terms of product sales, there were 5 enterprises approved to issue tetravalent influenza vaccine in China in 2020, with a total of 33.5823 million doses approved. Among them, the number of tetravalent influenza vaccine batches issued by Hualan vaccine was 20.624 million, accounting for 61.41% of the total number of tetravalent influenza vaccine batches issued in China, which was the market leader, while the number of vaccine batches issued by Jindik accounted for only 12.63%.
In terms of product price, in 2019 and 2020, the unit price of the four valent influenza vaccine of Jindik will be 121.36 yuan/dose and 123.15 yuan/dose, while the unit price of the four valent influenza vaccine of Hualan will be 108 yuan/dose and the unit price of the pre filled injection product will be 128 yuan/dose. Therefore, the SSE asked Jindik to explain the reason why the unit price of influenza vaccine was higher than that of Hualan vaccine.
According to the Huaxia Times, investors in the medical industry said that as more and more influenza vaccine enterprises obtain registration approval, the market competition will become increasingly fierce. Although China's influenza vaccine market has a large space, enterprises that have achieved a certain market share will have more advantages in terms of trust and channels. Jindik had no products on the market before 2019, and the vaccine would not be marketed until November 2019, which may be a gap with the leading enterprises in terms of capacity and capacity utilization, channel and vaccination site construction.
Jindik disclosed in the prospectus that from 2018 to 2020, the company returned a total of 75200 vaccine products, and the company resold 16400 vaccine products that met the resale standard after performing the necessary inspection procedures. In 2020, the unit sales price of Jindik tetravalent influenza virus split vaccine will be 123.15 yuan/dose. If calculated based on this unit sales price, the sales value of 75200 vaccine products returned will be 9.2609 million yuan.
It is worth noting that the founders of Jindik all quit on the eve of the company's IPO declaration. When Jindik Co., Ltd., the predecessor of Jindik, was founded, Hou Yunde, Fu Zengwu, Zhao Jing, Wang Zhiwu, Zhou Hua and Taizhou Huajian Venture Capital Co., Ltd. (hereinafter referred to as Huajian Venture Capital) made capital contributions, with shareholding ratios ranging from 25% to 10%. Among the above founders, Fu Zengwu, Wang Zhiwu, Zhou Hua and Huajian Venture Capital had withdrawn before the reporting period (i.e. before 2017), and the other two shareholders Hou Yunde and Zhao Jing withdrew from Jindik in 2018 and 2020 respectively.
On February 5, 2018, Hou Yunde transferred all his 5.00% equity of Jindike (corresponding to the registered capital of 2.5 million yuan) to Yu Jun, Zhang Liangbin, Zhang Jianhui, Nie Shenqian and Xia Jianguo at a price of 5.25 million yuan. On May 24, 2020, Zhao Jing transferred all 3.95% of the company's equity (corresponding to the registered capital of 2.41 million yuan) to Yu Jun, Zhang Liangbin, Zhang Jianhui and Nie Shenqian at a total price of 62 million yuan.
Based on Zhao Jing's transfer price, Jindik's valuation before IPO was about 1.57 billion yuan. Only two months after Zhao Jing quit, on June 15, 2020, Jindik Limited held a founding meeting to carry out share reform, and signed a coaching agreement with CITIC Securities on July 6. According to the application draft of the prospectus, Jindik plans to use the fifth set of listing standards, with an estimated market value of no less than 4 billion yuan.
It can be seen that Zhao Jing's early exit will miss the listing dividend of Jindik. However, the founding team members of the company had all left before the IPO, and the reason is still unknown.
In addition, in the prospectus, there are 7 core journal papers published by Jindik employees with Jindik as their research unit, of which 5 papers, such as "Development of Inactivated Vaccine for Disintegration of Tetravalent Influenza Virus", are co signed by Zhao Jing. Jindik said that Hou Yunde and Zhao Jing, the founders of the company, served as the chairman and general manager respectively, and made contributions to the company's early product research and development. Both of them have retired due to age, physical condition and other reasons, which will not have a significant adverse impact on the company's continuous innovation and R&D capability, but may lead to the risk that the company's R&D capability is limited and the product R&D progress is less than expected.
The prospectus disclosed that Jindik had borrowed funds from related parties, with a total of 110.85 million yuan, and returned all the borrowed funds by debt to equity swap and cash before June 30, 2020.
According to the International Finance Daily, Yu Jun, the actual controller, borrowed 142.75 million yuan from Jindik in the reporting period. Looking at Yu Jun's resume, he started working in 1992. In addition to his position as chairman and general manager of Jindik in June 2015, he has worked as a technician and production manager for the remaining 23 years. The highest position is deputy general manager or chief engineer.
Where did Yu Jun get the above 142.75 million yuan from Jindik? If Yu Jun earns all the above funds by "working", his average after tax annual salary needs to reach 5.287 million yuan, and it will last for 27 years. According to the prospectus, Yu Jun's salary as chairman of the board of directors of Jindik in 2020 was 1.2088 million yuan.
Judging from the top five customers of Jindik, most of Jindik's major customers are disease prevention and control centers at county level or in third and fourth tier cities (hereinafter referred to as "CDC"). Among them, the top five customers of the company in 2019 are Fengcheng CDC, Jiangxi Yudu CDC, Zaoyang CDC, Suixian CDC and Laohekou CDC. In 2020, the top five customers of the company will be changed to Shanghai Pudong New Area Disease Control Center, Wuxue City Disease Control Center, Hanshou County Disease Control Center, Chenzhou Beihu District Disease Control Center and Binyang County Disease Control Center, which is totally different from 2019.
From 2018 to 2020, Jindik's R&D expenses were 12077300 yuan, 23753900 yuan and 28533100 yuan respectively, and the R&D expenses accounted for 35.37% and 4.84% of the operating revenue in 2019 and 2020, respectively. In 2019 and 2020, the company's sales expenses were 25972700 yuan and 209132700 yuan respectively, accounting for 38.68% and 35.50% of the operating income.
As of December 31, 2020, Jindik has 11 patent authorizations, including 10 utility models and 1 invention patent. The number of invention patents is less than 5, which does not meet the corresponding requirements for scientific innovation attributes of invention patents.
In terms of financial data, the total assets of Jindik at the end of each period from 2018 to 2020 were 311385100 yuan, 397299200 yuan and 777975900 yuan respectively. The current assets are 13171000 yuan, 95340800 yuan and 522785600 yuan, accounting for 4.23%, 24.00% and 67.20% of the total assets respectively.
At the end of each period from 2018 to 2020, Jindik's monetary capital was 3.6747 million yuan, 7.5519 million yuan and 88013800 yuan respectively, accounting for 27.90%, 7.92% and 16.84% of current assets. Bank deposits were 3.6722 million yuan, 7.5222 million yuan and 88.057 million yuan respectively. The Company's monetary capital balance increased significantly, mainly due to the increase in cash inflows after the revenue was generated in November 2019.
At the end of 2019 and 2020, the book value of the Company's transactional financial assets was 9.13 million yuan and 40 million yuan, respectively, accounting for 9.58% and 7.65% of current assets, which were mainly bank financial products held by the Company to improve the income level of funds.
At the end of each period from 2018 to 2020, Jindik's total liabilities were 400.7272 million yuan, 505.679 million yuan and 535.4715 million yuan respectively, including 382.8839 million yuan, 488.5587 million yuan and 509.0742 million yuan of current liabilities, accounting for 95.55%, 96.61% and 95.07% of the total liabilities, respectively.
In 2018 and 2019, Jindik's current liabilities were much higher than current assets, and this situation would not improve until 2020, when current liabilities were slightly lower than current assets.
Jindik's current liabilities mainly consist of short-term borrowings, other payables and accounts payable. At the end of each period from 2018 to 2020, Jindik's other payables were 312.0913 million yuan, 397.2839 million yuan and 167.0531 million yuan, mainly shareholder loans, external unit loans and promotion service fees. The amount of accounts payable was 37.2281 million yuan, 26.0567 million yuan and 25.0836 million yuan, respectively.
At the end of each period from 2018 to 2020, Jindik's short-term borrowings were 30 million yuan, 56911300 yuan and 296747500 yuan, mainly mortgage loans and guaranteed loans. It is worth noting that compared with the company's monetary capital of 3.6747 million yuan, 7.5519 million yuan and 88.0138 million yuan in the same period, Jindik's own funds are far from enough to pay its short-term borrowings.
At the end of each period from 2018 to 2020, Jindik's asset liability ratio was 128.69%, 127.28% and 68.83% respectively, and the average asset liability ratio of comparable companies in the industry in the same period was 32.27%, 22.06% and 15.93% respectively. Compared with 2020 alone, Jindik's asset liability ratio is also about 53 percentage points higher than the average level of comparable companies in the same industry.
Over the same period, the current ratio of Jindik was 0.03, 0.20 and 1.03 respectively, and the quick ratio was 0.03, 0.16 and 0.96 respectively. The average current ratio of comparable companies in the same industry is 2.61, 3.46 and 5.68, and the average quick ratio is 2.39, 3.13 and 5.39. Jindik ranks the bottom among the debt repayment indicators of comparable companies in the same industry.
At the end of 2019 and 2020, the book value of the accounts receivable of Jindik was 59.549 million yuan and 354.9507 million yuan respectively, growing very fast, accounting for 88.75% and 60.25% of the current main business income. As of December 31, 2020, the balance of accounts receivable of Jindik overdue for 0-6 months was 12.2461 million yuan, and that overdue for 6-12 months was 12.79 million yuan. As of December 31, 2020, 96.69% of the Company's accounts receivable were within the credit period.
At the end of each period from 2018 to 2020, the book value of Jindik's inventory was 2.8872 million yuan, 18.4236 million yuan and 33.2505 million yuan respectively. At the end of 2020, the inventory balance of the company increased by 80.48% compared with the inventory balance on December 31, 2019. Jindik said that the main reason was that in the fourth quarter of 2020, the company increased the stocking of production materials in 2021, purchased packaging materials such as borosilicate glass injection bottles and other production materials, and the turnover materials increased significantly; In 2021, the company will carry out the product process validation of the tetravalent influenza virus split vaccine pre filling syringe packaging line, so some tetravalent influenza vaccine stock solution will be produced by the end of 2021, with a large growth in the product.
At the end of 2019 and 2020, the turnover rate of accounts receivable of Jindik was 2.66 and 2.84 respectively, and the turnover rate of inventory was 0.98 and 2.85 respectively. The average turnover rate of accounts receivable of comparable companies in the same industry is 2.17 and 2.32, and the average turnover rate of inventory is 0.78 and 0.75.
Biopharmaceutical enterprises raised 1.6 billion yuan and two actual controllers held shares with considerable risk
Jindik is a biopharmaceutical enterprise focusing on the research, development, production and sales of human vaccines. The company's main products include 10 kinds of human vaccine products with 5 indications, such as influenza, rabies, chicken pox, herpes zoster and pneumonia. The company has one product on the market, which is a tetravalent influenza virus split vaccine.
The prospectus shows that the controlling shareholders and joint actual controllers of the company are Yu Jun and Zhang Liangbin. Yu Jun directly holds 40.9838% of the shares of Jindik, and Taizhou Tongze, as the executive partner, directly holds 1.80% of the company's shares; Zhang Liangbin directly holds 40.9838% of the shares of Jindik, and his Taizhou counterpart as the executive partner directly holds 1.80% of the company's shares.
Yu Jun directly and indirectly controls 42.7838% of the shares of Jindik, and Zhang Liangbin directly and indirectly controls 42.7838% of the shares of Jindik. They control 85.5676% of the shares of the company in total, and are the controlling shareholder and joint actual controller of the company. Yu Jun and Zhang Liangbin are both Chinese nationals and have no right of permanent residence abroad.
Jindik said that the company has the risk that the controlling shareholders and actual controllers may exert improper influence by exercising the voting rights at the shareholders' meeting, which may damage the interests of the company's public shareholders. If the relationship between the two parties changes in the future, it may have an adverse impact on the stability of the company's control.
Jindik is expected to raise 1.6 billion yuan, of which 600 million yuan will be used for the construction project of new tetravalent influenza virus split vaccine workshop, 400 million yuan will be used for innovative vaccine research and development projects, and 600 million yuan will be used to supplement working capital and repay bank loans.
The first quarter of this year saw poor performance after turning loss into profit in 2020
From 2018 to 2020, Jindik realized operating revenue of 0 yuan, 67151300 yuan and 589098700 yuan respectively, net profits attributable to owners of the parent company were - 28013100 yuan, - 19037700 yuan and 154979400 yuan respectively, and net cash flows from operating activities were - 35478400 yuan, - 54048200 yuan and 109455500 yuan.
From 2018 to 2020, Jindik received cash of 113000 yuan, 7382100 yuan and 296022600 yuan respectively from selling goods and providing services.
According to the prospectus, Jindik began to generate main business income in November 2019 and continued to grow. In 2019 and 2020, the main business income was 67094700 yuan and 589098700 yuan respectively, all from the sales of quadrivalent influenza vaccine products. The main business income ratio was 0.11 and 0.50.
The Company expects to realize an operating revenue of about 23 million yuan to 31 million yuan in the first quarter of 2021, a net profit attributable to shareholders of the parent company of - 8 million yuan to - 3 million yuan, and a net profit attributable to shareholders of the parent company of - 8.2 million yuan to - 3.2 million yuan after deducting non recurring profits and losses.
In the same period in 2020, the company's operating income was 41.1490 million yuan, the net profit attributable to shareholders of the parent company was 4.1687 million yuan, and the net profit attributable to shareholders of the parent company after deducting non recurring profits and losses was - 3.5632 million yuan. Compared with the same period of the previous year, the operating income in the first quarter of 2021 decreased, and the amount of loss expanded to a certain extent.
Rely on low capacity utilization rate of single product and still expand production
In 2018, Jindik products were in the stage of R&D and trial production, and the products had not been sold on the market. There was no sales revenue. During this period, the main expenses were operating expenses and R&D investment, and the company was in a loss state. In November 2019, the company's quadrivalent influenza vaccine products went on sale and began to generate operating income.
In 2019 and 2020, the gross margin of the four valent influenza vaccine of Jindik was 84.36% and 87.49% respectively, and the comprehensive gross margin was also 84.36% and 87.49%. The average gross margin of comparable companies in the industry was 87.91% and 89.74%.
The prospectus disclosed that the current production capacity of Jindik's tetravalent influenza vaccine production workshop is 10 million doses/year, however, in 2019, the current production capacity of Jindik Biology was only 1.3526 million doses, and the capacity utilization rate was only 13.53%; In 2020, the output will be 5117200 doses, and the capacity utilization rate will be only 51.17%.
Jindik plans to raise 600 million yuan this time for the new tetravalent influenza split vaccine workshop. After the construction is completed, the company will have the production capacity of 22.5 million adult vaccines and 7.5 million children's vaccines annually. Whether this new capacity can be digested by the market in a timely manner deserves attention.
The unit price of the product is higher than that of Longtou Hualan Vaccine
Jindik said in the prospectus that in 2019 and 2020, the company issued 1.3496 million doses and 4.2403 million doses of tetravalent influenza virus split vaccine in batches, ranking second and third in the number of domestic tetravalent influenza vaccines issued in batches.
In 2020, there were 11 enterprises approved to issue influenza vaccines in China, with a total of 57.5199 million doses approved. Among them, 5 enterprises (Hualan Vaccine, Changchun Institute and Beijing Sinovac) were approved to issue trivalent influenza vaccine and tetravalent influenza vaccine at the same time, with a total of 33.5823 million doses.
In 2020, the number of tetravalent influenza vaccine batches issued by Hualan Vaccine was 20.624 million, accounting for 61.41% of the total number of tetravalent influenza vaccine batches issued in China, ranking the market leader, while the proportion of Jindik was only 12.63%.
In terms of price, in 2019 and 2020, the unit price of Jindik's four valent influenza vaccine was 121.36 yuan/dose and 123.15 yuan/dose, while the unit price of Hualan's four valent influenza vaccine penicillin bottle product was 108 yuan/dose and the unit price of pre filled injection product was 128 yuan/dose. Therefore, Shanghai Stock Exchange asked Jindik to explain why the unit price of influenza vaccine was higher than that of Hualan vaccine.
Jindik said that compared with similar domestic products, the company uses an optimized three-step purification process in the preparation and production of tetravalent influenza virus split vaccine, which adds a step of process to the commonly used purification method in the preparation of split influenza vaccine, and can more effectively remove ovalbumin impurities in the virus culture matrix, It can effectively improve the purity of hemagglutinin, the effective ingredient of the vaccine. The product quality has advantages, and the product cost is slightly higher. For this reason, the price of the company's tetravalent influenza vaccine is slightly higher than that of other products of the same dosage form in the market.
According to the Huaxia Times, investors in the medical industry said that as more and more influenza vaccine enterprises obtain registration approval, the market competition will become increasingly fierce. Although China's influenza vaccine market has a large space, enterprises that have achieved a certain market share will have more advantages in terms of trust and channels. Jindik had no products on the market before 2019, and the vaccine would not be marketed until November 2019, which may be a gap with the leading enterprises in terms of capacity and capacity utilization, channel and vaccination site construction.
Over 70000 vaccines "returned"
According to the China Business Daily, the production and sales of influenza vaccines are seasonal, and vaccine products can be marketed only after the completion of production and inspection and the completion of batch issuance by the Chinese People's Inspection Institute.
Therefore, in the domestic market, the influenza vaccine produced in 2019 will be sold from the second half of 2019 to the first half of 2020, and the influenza vaccine produced in 2020 will be sold from the second half of 2020 to the first half of 2021.
According to the reply of Jindik in the first round of inquiry, as of June 30, 2020, the company had 58700 remaining products that had not been sold to the outside world. The inventory falling price reserves have been fully withdrawn for related products.
Jindik said that from 2018 to 2020, the company had 75200 vaccine products returned. After internal evaluation, audit and other procedures, the company resold 16400 vaccine products that meet the resale standard after performing the necessary inspection procedures.
In 2020, the unit sales price of Jindik tetravalent influenza virus split vaccine will be 123.15 yuan/dose. If calculated based on this unit sales price, the sales value of 75200 vaccine products returned will be 9.2609 million yuan.
Founder quits on the eve of IPO declaration
According to the prospectus, Jindik Co., Ltd., the predecessor of Jindik, was established in December 2008 by Hou Yunde, Fu Zengwu, Zhao Jing, Wang Zhiwu, Zhou Hua and Taizhou Huajian Venture Capital Co., Ltd. (hereinafter referred to as Huajian Venture Capital), with the shareholding ratio of relevant personnel and institutions ranging from 25% to 10%.
Among the above founders, Fu Zengwu, Wang Zhiwu, Zhou Hua and Huajian Venture Capital had withdrawn before the reporting period (i.e. before 2017), and the other two shareholders Hou Yunde and Zhao Jing withdrew from Jindik in 2018 and 2020 respectively.
On February 5, 2018, Hou Yunde transferred all 5.00% of Jindik's equity (corresponding to the registered capital of 2.5 million yuan) held by him to Yu Jun, Zhang Liangbin, Zhang Jianhui, Nie Shenqian and Xia Jianguo at a price of 5.25 million yuan. Yu Jun, Zhang Liangbin, Zhang Jianhui, Nie Shenqian and Xia Jianguo each contributed 1.05 million yuan to transfer 1.00% of the equity, and other shareholders waived the preemptive right.
On May 24, 2020, Zhao Jing transferred all 3.95% of the company's equity (corresponding to the registered capital of 2.41 million yuan) to Yu Jun, Zhang Liangbin, Zhang Jianhui and Nie Shenqian at a total price of 62 million yuan. Based on Zhao Jing's transfer price, Jindik's valuation before IPO was about 1.57 billion yuan.
Only two months after Zhao Jing quit, on June 15, 2020, Jindik Co., Ltd. held a founding meeting to carry out share reform, and signed a coaching agreement with CITIC Securities on July 6. According to the application draft of the prospectus, Jindik plans to use the fifth set of listing standards, with an estimated market value of no less than 4 billion yuan.
It can be seen that Zhao Jing's early exit will miss the listing dividend of Jindik. However, the founding team members of the company had all left before the IPO, and the reason is still unknown.
According to Tianyan, Zhao Jing is currently the legal representative and chairman of Beijing Jindik Biotechnology Research Institute (with no equity relationship with Jindik), holding 26% of shares and Hou Yunde 25% of shares. Zhao Jing also holds 50% equity of Shanghai Jiecha Medical Equipment Co., Ltd. as a supervisor.
In the prospectus, there are 7 core journal papers published by Jindik's employees with Jindik as their research unit, of which 5 papers, including the Development of Disinfected Tetravalent Influenza Virus Split Vaccine, are co signed by Zhao Jing.
Jindik said in the prospectus that Hou Yunde and Zhao Jing were the founders of the company and served as the chairman and general manager respectively, making contributions to the early product development of the company. The two people gradually sold their shares of the company from September 2012, and completely quit in February 2018 and May 2020 respectively. Hou Yunde and Zhao Jing have retired due to their age and physical condition. The retirement of the two will not have a significant adverse impact on the company's continuous innovation and R&D capability, but may lead to the risk that the company's R&D capability is limited and the product R&D progress is not as expected.
Where do shareholders invest in Jindik?
During the reporting period, Jindik borrowed funds from related parties, totaling 110.85 million yuan, and returned all the borrowed funds by debt equity swap and cash before June 30, 2020.
According to the International Finance Daily, Yu Jun, the actual controller, borrowed 142.75 million yuan from Jindik in the reporting period.
It should be noted that in May 2020, Jindik increased its capital by Yu Jun, Zhang Liangbin, Zhang Jianhui and Nie Shenqian with a total of 180 million yuan of creditor's rights held by them to Jindik.
Looking at Yu Jun's resume, he started working in 1992. In addition to his position as chairman and general manager of Jindik in June 2015, he has worked as a technician and production manager for the remaining 23 years. The highest position is deputy general manager or chief engineer.
So, where did Yu Jun get the above-mentioned 142.75 million yuan from Jindik? The International Finance Daily made a calculation that if Yu Jun earned all the above funds by "working", his average after tax annual salary needs to reach 5.287 million yuan, and it will last for 27 years.
According to the prospectus, Yu Jun's salary as chairman of the board of directors of Jindik in 2020 was 1.2088 million yuan. This has to be puzzling. How on earth did Yu Jun earn 142.75 million yuan and borrow the above funds from Jindik?
Major customer changes
According to the top five customers of the company, the top five customers of Jindik are mostly disease prevention and control centers at county level or in third and fourth tier cities (referred to as "CDC").
Among them, the top five customers of the company in 2019 are Fengcheng CDC, Jiangxi Yudu CDC, Zaoyang CDC, Suixian CDC and Laohekou CDC.
By 2020, the top five customers of the company will be changed to Shanghai Pudong New Area Disease Control Center, Wuxue City Disease Control Center, Hanshou County Disease Control Center, Chenzhou Beihu District Disease Control Center and Binyang County Disease Control Center.
Jindik's top five customers in 2020 are totally different from those in 2019. Jindik said that the influenza outbreak is seasonal, so the sales of influenza vaccines are seasonal. Influenza vaccine sales in the Northern Hemisphere generally go from north to south in September. The market demand is large in autumn and winter when influenza is high, and the sales in the spring of the next year are gradually decreasing. The company's products have been on sale since November 2019, and the influenza vaccination in the north is nearing the end, so the first batch of products of the company are mainly concentrated in East and Central China, namely Jiangxi, Anhui, Hubei, Hunan and other places.
In 2020, Jindik products will be inoculated in central China, where the sales revenue will reach 228.1697 million yuan, mainly in Hunan. Due to the impact of the COVID-19 epidemic, the vaccination work was suspended in many CDC. The company returned the 6765900 yuan vaccine products issued at the end of 2019 through consultation with some CDC, and distributed them to the CDC of Hunan Province for centralized vaccination of primary and secondary school students.
Sales expenses soared, R&D expenses remained unchanged, only one invention patent
From 2018 to 2020, Jindik's R&D expenses were 12077300 yuan, 23753900 yuan and 28533100 yuan, respectively. The R&D expenses accounted for 35.37% and 4.84% of the operating revenue in 2019 and 2020, respectively.
In 2019 and 2020, the company's sales expenses were 25972700 yuan and 209132700 yuan respectively, accounting for 38.68% and 35.50% of the operating income.
In 2019 and 2020, the average R&D expense ratio of comparable companies in the same industry was 7.15% and 8.29%, and the average sales expense ratio was 39.85% and 38.37%.
As of December 31, 2020, Jindik had 11 patent authorizations, all related to the company's main business. Among the above patents, the company has 10 utility models and 1 invention patent, and the number of invention patents is less than 5, which does not meet the corresponding requirements for scientific innovation attributes of invention patents.
Monetary capital will increase significantly in 2020
At the end of each period from 2018 to 2020, Jindik's total assets were 311385100 yuan, 397299200 yuan and 777975900 yuan respectively. The current assets are 13171000 yuan, 95340800 yuan and 522785600 yuan, accounting for 4.23%, 24.00% and 67.20% of the total assets respectively.
The Company's current assets mainly consist of monetary capital, trading financial assets, accounts receivable and inventories.
At the end of each period from 2018 to 2020, Jindik's monetary capital was 3.6747 million yuan, 7.5519 million yuan and 88013800 yuan respectively, accounting for 27.90%, 7.92% and 16.84% of current assets. Bank deposits were 3.6722 million yuan, 7.5222 million yuan and 88.057 million yuan respectively. The Company's monetary capital balance rose significantly, mainly due to the increase in cash inflows after the revenue was generated in November 2019.
At the end of 2019 and 2020, the book value of the Company's transactional financial assets was 9.13 million yuan and 40 million yuan, respectively, accounting for 9.58% and 7.65% of current assets, which were mainly bank financial products held by the Company to improve the income level of funds.
Current liabilities in 2018 and 2019 are much higher than current assets
At the end of each period from 2018 to 2020, Jindik's total liabilities were 400.7272 million yuan, 505.6790 million yuan and 535.4715 million yuan respectively. The current liabilities of the Company were 382.8839 million yuan, 488.5587 million yuan and 509.0742 million yuan, accounting for 95.55%, 96.61% and 95.07% of the total liabilities, respectively.
In 2018 and 2019, Jindik's current liabilities were much higher than current assets, and this situation would not improve until 2020.
Jindik's current liabilities mainly consist of short-term borrowings, other payables and accounts payable.
At the end of each period from 2018 to 2020, the company's short-term borrowings were 30 million yuan, 56.9113 million yuan and 296.7475 million yuan, mainly mortgage loans and guaranteed loans. It is worth noting that during the same period, the company's monetary capital was 3.6747 million yuan, 7.5519 million yuan and 88013800 yuan respectively. Jindik's own funds were far from enough to pay its short-term borrowings.
At the end of each period from 2018 to 2020, Jindik's other payables were 312091300 yuan, 397283900 yuan and 167053100 yuan, mainly shareholder loans, external unit loans and promotion service fees. In the same period, the amount of accounts payable of the Company was 37.2281 million yuan, 26.0567 million yuan and 25.0836 million yuan respectively.
The asset liability ratio is about 53 percentage points higher than that of peers, and the debt repayment index ranks the bottom
At the end of each period from 2018 to 2020, Jindik's asset liability ratio was 128.69%, 127.28% and 68.83% respectively, and the average asset liability ratio of comparable companies in the industry in the same period was 32.27%, 22.06% and 15.93% respectively.
Compared with 2020 alone, Jindik's asset liability ratio is also about 53 percentage points higher than the average level of comparable companies in the same industry.
At the end of each period from 2018 to 2020, the current ratio of Jindik is 0.03, 0.20 and 1.03 respectively, and the quick ratio is 0.03, 0.16 and 0.96 respectively. The average current ratio of comparable companies in the same industry is 2.61, 3.46 and 5.68, and the average quick ratio is 2.39, 3.13 and 5.39, significantly higher than that of Jindik.
Accounts receivable exceeding 350 million yuan in 2020
At the end of 2019 and 2020, the book value of the accounts receivable of Jindik was 59.549 million yuan and 354.9507 million yuan respectively, growing very fast, accounting for 88.75% and 60.25% of the current main business income.
As of December 31, 2020, the balance of accounts receivable of Jindik overdue for 0-6 months was 12.2461 million yuan, and that overdue for 6-12 months was 12.79 million yuan. As of December 31, 2020, 96.69% of the Company's accounts receivable were within the credit period.
At the end of 2019 and 2020, the turnover rate of accounts receivable of Jindik was 2.66 and 2.84 respectively, and the average turnover rate of accounts receivable of comparable companies in the same industry was 2.17 and 2.32.
80% increase in inventory in 2020
At the end of each period from 2018 to 2020, the book value of Jindik's inventory was 2.8872 million yuan, 18.4236 million yuan and 33.2505 million yuan respectively.
At the end of 2020, the inventory balance of the company increased by 80.48% compared with the inventory balance on December 31, 2019. Jindik said that the main reason was that in the fourth quarter of 2020, the company increased the stocking of production materials in 2021, purchased packaging materials such as borosilicate glass injection bottles and other production materials, and the turnover materials increased significantly; In 2021, the company will carry out the product process validation of the tetravalent influenza virus split vaccine pre filling syringe packaging line, so some tetravalent influenza vaccine stock solution will be produced by the end of 2021, with a large growth in the product.
In the first half of 2020, Jindik's new inventory falling price reserves were 1.1342 million yuan, mainly because the company's quadrivalent influenza vaccine began to be marketed in November of 2019, and the influenza vaccine has strong seasonality and timeliness. Influenced by the superposition of epidemic factors in the first half of 2020, there were a small number of unsold quadrivalent influenza vaccines at the end of the 2019-2020 influenza season, The Company fully accrues inventory falling price reserves; In August 2020, the Company destroyed the above inventories and wrote off the inventory falling price reserves originally accrued.
At the end of 2019 and 2020, the inventory turnover rate of Jindik was 0.98 and 2.85 respectively, and the average inventory turnover rate of comparable companies in the same industry was 0.78 and 0.75.
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