Reporter | Zhao Yangge
Changhong Energy (836239. NQ) is definitely a star in the selection layer, the issue price of 22.58 yuan at the beginning of the year, most of the year down now the stock price has reached the 110 yuan line, an increase of nearly 4 times, so that the investors who were allocated at that time made a lot of money. However, the growth of Changhong Energy is inseparable from the "care" of related parties.
<h3>Related Party Transactions</h3>
Changhong Energy was established on October 30, 2006 with a registered capital of 693 million yuan, and the controlling shareholder, Changhong Group, holds 60.28% of the company's shares.
Changhong Energy is mainly engaged in the research and production and sales of environmentally friendly zinc-manganese batteries and high-rate lithium-ion batteries, of which alkaline zinc-manganese batteries and cylindrical high-rate lithium-ion batteries are the mainstays. The company's zinc-manganese battery products as a necessity, widely used in consumer electronics, electric toys, smart household products, household medical and health equipment, wireless security equipment, outdoor electronic equipment, wireless communication equipment and other downstream fields; the company's high-rate lithium-ion batteries are mainly used in power tools, garden tools and vacuum cleaners and other subdivisions. Changhong Energy's alkaline zinc-manganese batteries account for about 63% of revenue, and lithium-ion batteries account for about 30%.
From 2017 to 2020 and the first half of 2021, Changhong Energy's revenue was 814 million yuan, 1.071 billion yuan, 1.417 billion yuan, 1.952 billion yuan and 1.397 billion yuan, and the net profit was 54.0331 million yuan, 61.8734 million yuan, 105 million yuan, 162 million yuan and 127 million yuan, respectively. Its gross profit margin is also stable and rising, at 20.59% in 2017 and 25.57% in the first half of 2021.
However, it should be pointed out that behind the beautiful financial data, whether it is sales or procurement, Changhong Energy's related party transactions are not a small proportion.
In 2017, 2018, 2019 and January to June 2020, the amount of the company's related sales was 169.6311 million yuan, 196.0002 million yuan, 201.0986 million yuan and 64.7248 million yuan, accounting for 20.83%, 18.31%, 14.19% and 8.41% of the operating income in the same period, respectively; in 2017, 2018, 2019 and 2020 from January to June, The amount of the company's related procurement was 138.858 million yuan, 169.443 million yuan, 171.8173 million yuan and 71.5191 million yuan respectively, accounting for 21.47%, 20.01%, 15.73% and 12.36% of the operating costs in the same period, respectively.
For example, from the regular report, it can be seen that Changhong Energy will purchase from Sichuan Taihong Technology Co., Ltd., Shenzhen Feishi Battery Co., Ltd., Sichuan Changhong Packaging and Printing Co., Ltd., Wuxi Hyatt Power Accessories Co., Ltd., etc., and will sell to Shenzhen Feishi Battery Co., Ltd., Changhong Granbo Technology Co., Ltd., Sichuan Changhong Network Technology Co., Ltd., etc., and even in terms of accepting labor services, there are also Sichuan Changhong Electronic Holding Group Co., Ltd., Sichuan Changhong Minsheng Logistics Co., Ltd. and other related parties.
In addition, Changhong Energy has also carried out related party transactions such as deposit and loan business with Sichuan Changhong Group Finance Co., Ltd. (hereinafter referred to as Changhong Finance Company), which is a non-bank financial institution approved by the China Banking and Insurance Regulatory Commission and is supported by Sichuan Changhong (600839. SH) control. According to 2020 data, the capital transactions and interest between Changhong Energy and Changhong Finance Company are 2.063 billion yuan, and the bill business with Changhong Finance Company is 196 million yuan.
In addition, the situation in terms of accounts receivable cannot be ignored. At the end of 2017, the end of 2018, the end of 2019, the end of 2020 and the end of June 2021, the balance of the company's receivables (accounts receivable, notes receivable, and receivables financing total) was 188.6996 million yuan, 270.5662 million yuan, 309.4356 million yuan, 710.8543 million yuan and 1.064 billion yuan, accounting for 37.57%, 41.75%, 40.84%, 56.97% of the current assets, respectively. 54.13%, accounting for 23.17%, 25.27%, 21.84%, 36.42%, 76.17% of the current operating income, respectively, the proportion has continued to rise.
Countless
In addition to related party transactions, Changhong Energy and related parties are inextricably linked in terms of personnel, rental housing, and competition in the same industry.
Regarding the concurrent staffing:
From public information, Mo Wenwei, chairman of Changhong Energy, has been the head of energy and environmental protection BG of Changhong Group since October 2017; Shao Min, director of Changhong Group, has served as project manager, asset operation department manager, deputy director and minister of the asset management department of Changhong Group since April 2011; director He Xintan has served as the manager of the general management department, the deputy director and minister of the strategic management department of Changhong Group since April 2011 Lv Xinyan, Chairman of the Supervisory Board, has been the senior manager of the Compliance and Benefit Division of the Audit Department of Changhong Group since September 2016, Chen Juan, a supervisor, has been the audit manager of the Economic Benefits Audit Office of the Audit Department of Sichuan Changhong Audit Department since June 2014, and Zhong Fan, the secretary of the Board of Directors, has also served as the project manager of the Sichuan Changhong Asset Management Department from August 2013 to February 2018.
About renting:
Changhong Energy's attachment to Sichuan Changhong is obvious. For example, the provision of market premises.
The manual shows that the main production and operation site of Changhong Energy alkali manganese battery is located in Changhong Intelligent Manufacturing Industrial Park, Hebian Town, the core startup area of Mianyang High-tech Zone, which is the production site of Changhong, Sichuan, which is leased by the company. Changhong Intelligent Manufacturing Industrial Park is built by the company's related party Sichuan Changhong according to the needs of Changhong Energy, and after the completion of the construction, Sichuan Changhong will transfer the land and plant to Changhong Energy according to the principle of marketization.
According to Changhong Energy, the company has signed a lease agreement with Sichuan Changhong, and it is less likely that it will not be able to use the production site. However, if the lessor terminates the lease relationship, or if the lessor cannot continue to lease to the company due to the lack of property rights certificate, then Changhong Energy has the risk of causing certain economic losses due to relocation or affecting the company's normal production and operation activities.
About competition in the same industry:
Changhong Energy has competition with related parties in the same industry.
It is reported that Changhong Energy related party Changhong Granbo production and sales of cadmium nickel batteries (groups) and lithium-ion batteries (groups), Changhong power supply production and sales of cadmium nickel batteries (groups), silver zinc batteries (groups) and lithium-ion batteries (groups), and Changhong Energy's products belong to the same battery category, with certain similarities, although the products in performance, form, application areas, trademarks, production processes, major customers and suppliers and other aspects do not constitute major competition, but the risk of competition in the same industry always exists. Fortunately, Changhong Energy has received the commitment of Changhong Granbo, Changhong Power Supply and Changhong Group, and will not engage in business and business activities that constitute or may constitute competition with Changhong Energy in the future.
According to the data, Changhong Granbo is composed of Changhong Huayi (000404. SZ) control 74.47949%, Changhong power supply is controlled by Sichuan Changhong 80%.
About Trademarks:
At present, Changhong Energy's independent brand business of zinc-manganese batteries and some buckle-type, rechargeable and cylindrical lithium batteries are mainly implemented in China using the "Changhong" brand, facing end consumers, and the proportion of sales is not high, but one of the future development directions of Changhong Energy cannot be replaced in the short term.
So how long is the authorization period? According to the instruction manual, on January 2, 2019, Sichuan Changhong and Changhong Power signed the "Trademark License Contract", and Sichuan Changhong authorized the trademark with the registration number 1236920 to Changhong Power, and the scope of authorization and use was batteries and battery chargers, and the license period was from December 20, 2018 to December 20, 2021.
The prospectus said that Sichuan Changhong currently has no plans to transfer the above trademark to Changhong Energy. Fortunately, Sichuan Changhong issued a note saying that after the expiration of the authorization period, Changhong Energy can continue to authorize Changhong Energy, but once the balance is broken, Changhong Energy will not be able to continue to use the above trademarks free of charge, which will adversely affect its own brand business of zinc-manganese batteries.