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The hidden risk of deteriorating performance of Hongtao shares has not yet been lifted? Bills receivable may become the next "thunderstorm point"

author:Finance

"Electric Eel Finance" Korean wind / text

On June 29, Shenzhen Hongtao Group Co., Ltd. (hereinafter referred to as "Hongtao Shares") issued the third indicative announcement on the suspension and maturity of the "Hongtao Bond". According to the announcement, on July 29, 2016, the company publicly issued 12 million convertible corporate bonds to the public, each with an issue price of 100 yuan and a total issuance of 1.2 billion yuan. The date on which the "HongTao Bond" will stop trading: July 15, 2022. After the cessation of trading and before the end of the conversion period (i.e. from 15 July 2022 to 28 July 2022), the holders of the "Hongtao Convertible Bonds" may still convert the "Hongtao Convertible Bonds" into shares of "Hongtao Shares" in accordance with the agreed conditions; The "Hongtao Convertible Bond", which has not been converted into shares as of the close of the market on July 28, 2022, will be redeemed at a price of 108 yuan per zhang (including the last annual interest, and the interest includes tax).

"Electric Eel Finance" research found that Hongtao shares since May 2015 the stock price continued to fluctuate downward, the lowest share price touched near the net assets per share, in addition, it was also found that the company's net profit for 2 consecutive years of loss, and the first quarter of 2022 net profit loss is expanding, the company's huge bills receivable and accounts receivable or will become the next "thunderstorm point".

Stock price declines as low as net assets per share Performance is still deteriorating

According to the stock price, the stock price of Hongtao shares has been all the way since the record high price of 21.15 yuan on May 25, 2015 (before the restoration), and on February 9, 2021, it created a historical low of 1.96 yuan / share in the past 8 years, as shown in the following figure.

Figure 1: Hongtao shares in recent years

Data source: Flush

From the above chart, it is not difficult to find that since May 2015, the company's stock price has been declining, and on February 9, 2021, it has created a historical low of 1.96 yuan / share in the past 8 years; And on April 27, 2022, it fell again to 1.98 yuan / share, and through the latest quarterly report, the company's net assets per share were 1.96 yuan / share, only a difference of two cents; As of June 29, the closing price of 2.44 yuan per share (the highest price since May 25, 2015) had a maximum decline of 88.46%. Although it rebounded slightly after April 27, 2022, the company's stock price is still in a downward trend.

It is reported that the main business of Hongtao Co., Ltd. is to undertake the design and construction of public decoration projects such as hotels, theater venues, office buildings, libraries, hospitals, and stadiums. And since 2014, the company has successively acquired and controlled the holding of China Equipment New Network, Cross-examination Education, Xueersen, and New Concept Investment, and the company's main business has increased the education business segment accordingly, focusing on the development of the secondary industry of vocational education.

The financial report shows that Hongtao shares have suffered a large net profit loss for 2 consecutive years, and the net profit loss in the first quarter of 2022 is likely to be further expanded, as shown in the following figure.

Table 1. Comparison table of the main financial report data of Honggong shares

Data from: the company's annual report

From the above table, it is not difficult to find that the net profit of Hongtao Shares in 2020 and 2021 is 350 million yuan and 220 million yuan, respectively, and the non-net profit loss is 356 million yuan and 329 million yuan, respectively.

In addition, Hongtao co., Ltd. achieved a total operating income of 457 million yuan in the first quarter of 2022, down 41.77% year-on-year; Attributable net profit loss of 79.5829 million yuan, down 1002.98% year-on-year; The loss of non-net profit after deduction was 82.9699 million yuan, down 1300.43% year-on-year.

Winning the bid for a number of engineering projects such as data centers may be difficult to change the decline in performance

On June 27, Hongtao also issued an announcement on winning the bid for the data center project. The announcement shows that the company recently won the bid for a number of engineering projects such as the data center, and the total amount of the winning bid was about 159 million yuan; Moreover, the company has recently signed a number of major engineering project contracts, with a total contract amount of about 192 million yuan, and the company said that if the project is successfully implemented, it will have a positive impact on the company's future operating performance, as shown in the following two tables.

Table 2. Hongtao co., Ltd. recently won the bid for a number of engineering projects such as data centers

Data source: company announcements

Table 3.Hongtao shares recently signed a number of major project contracts

Data source: company announcements

However, the study of Electric Eel Finance found that Hongtao shares mainly have two major sectors: traditional building decoration business and education business. The winning project belongs to the traditional building decoration business sector. Through the analysis of the latest annual report, it is understood that the company's winning bid for multiple projects is not a special event. The latest annual report shows that the company won the bid for a number of high-quality projects, and successively won the bid for more than 50 million high-quality projects such as Shenzhen Anju Group, ZTE, Zijin Mining, Suzhou Hengli, Midea, and Huawei; Throughout the year, it continued to win awards in terms of hotel performance, winning the bid for a number of high-quality high-end hotel projects such as Qingdao Jiaozhou Marriott, Xianyang Jinfangyuan Sheraton, zhejiang Xizi Hotel and so on.

Moreover, Hongtao Co., Ltd. achieved operating income of 2.591 billion yuan in 2021, of which 2.421 billion yuan came from the traditional building decoration business sector, accounting for 93.44% of the total revenue; The total amount of projects and contracts signed by the company on June 27, 2022 was about 351 million yuan, compared with the 2.421 billion yuan building decoration business last year, accounting for about 14.5%, or it is difficult to change the downward trend of performance.

In addition, the net profit attributable to shareholders of listed companies in 2021 was -220 million yuan. On the one hand, it is affected by the systematic impact of the general environment and the decline in the growth rate of the industry, on the other hand, the impairment loss of assets is a reason that cannot be ignored, as shown in the following figure.

Table 4.Statement of impairment losses of assets recorded by Hongtao shares in 2021

Data source: company announcements

From the above table, it was found that the bad debt loss of Hongtao shares was about 141 million yuan, followed by a goodwill impairment loss of 35.1607 million yuan, which was the main part of the company's asset impairment.

The study of Electric Eel Finance found that the bills receivable and accounts receivable of Hongtao Co., Ltd. in the first quarter of 2022 were about 2.602 billion yuan, and last year's annual report showed about 2.85 billion yuan, a decrease of only about 248 million yuan; In addition, the company has a goodwill of 31.7879 million yuan.

In short, the huge amount of notes receivable and accounts receivable and goodwill impairment is still a hidden risk buried in Hongtao shares, will the company's huge bills receivable and accounts receivable and goodwill risks erupt in the future, and will the performance of Hongtao shares suffer from goodwill amortization again? Electric Eel Finance will continue to pay attention to it.

This article is from Electric Eel Express

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