Xinchen Technology's left glove is now increasing on its right hand, and its net profit has been declining year after year
Interface News Reporter | Hu Zhenming
Interface News Editor |
After the close of trading on December 5, Xinchen Technology (300542. SZ) announced that its shareholder Li Fuhua, a shareholder of more than 5%, and Zhang Yansheng, a shareholder and director of more than 5%, respectively implemented and completed the shareholding reduction plan of Xinchen Technology shares, and just a few days ago, Xinchen Technology issued the "2023 Plan for Issuing A Shares to Specific Objects", which intends to increase no more than 89 million shares and raise no more than 580 million yuan.
According to the "Announcement on the Completion of the Implementation of the Share Reduction Plan for Shareholders Holding More than 5% of the Shares" disclosed on December 5, on May 10, 2023, Xinchen Technology announced Li Fuhua's shareholding reduction plan of no more than 3 million shares of Xinchen Technology directly held by him through centralized bidding and block trading. At present, the shareholding reduction plan has been implemented, and Li Fuhua will reduce his holdings of 1.9563 million shares in a centralized bidding transaction from June to November 2023, with an average price of 14.87 yuan per share, and cash out 29.0902 million yuan.
According to the "Announcement on the Completion of the Implementation of the Share Reduction Plan for Shareholders and Directors Holding More than 5% of the Shares" disclosed at the same time, on April 15, 2023, Xinchen Technology disclosed that Zhang Yansheng planned to reduce his direct holdings of Xinchen Technology by no more than 3 million shares through centralized bidding and block trading. At present, Zhang Yansheng's shareholding reduction plan has been implemented. From October to November 2023, Zhang Yansheng cumulatively reduced his holdings of 2.8619 million shares of Xinchen Technology through centralized bidding transactions, and cashed out a total of 38.4353 million yuan at an average price of 13.43 yuan per share.
In fact, since 2023, among the directors, supervisors, senior executives and important shareholders of Xinchen Technology, Jiang Linhua, Yang Hanjie, Xu Lianping, Tang Ruomei and many others have reduced their holdings of Xinchen Technology. They reduced their shareholdings, and Xinchen Technology's operating performance in recent years has not been very satisfactory.
From 2020 to 2022, Xinchen Technology's operating income was 1.149 billion yuan, 1.061 billion yuan and 1.455 billion yuan respectively, and the operating income in the first three quarters of 2023 was 849 million yuan, with no obvious downward trend, however, the net profit attributable to the parent company in the same period was 68.2787 million yuan respectively. 63.5822 million yuan and 52.1316 million yuan, showing a continuous downward trend, in addition, the net profit attributable to the parent company in the first three quarters of 2023 will be -19.4048 million yuan, showing a loss.
Xinchen Technology's profit in recent years. Image source: Choice
As of September 30, 2023, Xinchen Technology's total assets were 1.474 billion yuan, of which shareholders' equity was 601 million yuan, and the asset-liability ratio was 59.20%, a new high since 2020. At the end of each year from 2020 to 2022, Xinchen Technology's asset-liability ratio continued to rise, at 33.79%, 45.80% and 52.85%, respectively.
The capital structure of Xinchen Technology in recent years. Image source: Choice
With the financial industry as the core, Xinchen Technology's main business covers professional information solutions and services in air traffic control, government agencies, large and medium-sized state-owned enterprises and institutions, and provides multi-level industry information services such as software development, system integration, and professional and technical services.
At the end of each year since 2020, Xinchen Technology's monetary funds have been around 300 million yuan, and the monetary funds on September 30, 2023 are 245 million yuan. In fact, in the past five fiscal years, Xinchen Technology has not raised funds through allotments, additional issuances, issuance of convertible corporate bonds, etc., and the previous raised funds have been received for more than five fiscal years.
In the context of long-term non-implementation of refinancing, recently, Xinchen Technology released the "2023 Issuance of A-share Shares to Specific Objects", which intends to issue no more than 89 million shares (including the number of shares) to specific objects, and the total amount of funds raised is expected to not exceed 584.6088 million yuan (including the number of shares), after deducting the issuance costs, the actual net funds raised will be used for the new generation of bank digital intelligent platform project, intelligent airport take-off and landing safety management system R&D and upgrading project, R&D center construction project and supplementary working capital. It is worth noting that, in addition to supplementing working capital, most of the funds raised by Xinchen Technology in this private placement are intended to be invested in R&D-related projects.
The fundraising and investment projects of this additional issuance. Image source: Xinchen Technology announcement
The new generation of bank digital intelligent platform project plans to invest 366 million yuan, using 270 million yuan of raised funds. In this project, Xinchen Technology plans to decorate the existing site and build a R&D office area and demonstration center, purchase advanced software and hardware equipment, and increase investment in R&D resources, of which the investment in software and hardware equipment reaches 227 million yuan. The construction period is three years, the after-tax internal rate of return is expected to be about 14.51%, and the after-tax payback period (including the construction period) is 6.96 years.
The investment in the new generation of bank digital intelligence platform project. Image source: Xinchen Technology announcement
Xinchen Technology plans to invest 145.608 million yuan in the R&D and upgrading project of intelligent airport take-off and landing safety management system, of which 94.7892 million yuan is planned to be used to raise funds, and plans to decorate the existing site and build R&D office areas and demonstration centers, purchase advanced software and hardware equipment, expand the scale of the R&D team, upgrade and iterate on the basis of the company's existing technology and product system, and realize the R&D, upgrading and industrial application of the intelligent airport take-off and landing safety management system.
In this project, the investment in software and hardware equipment is also the largest investment, with an investment of 80.9392 million yuan. Xinchen Technology expects that the after-tax internal rate of return of the R&D and upgrading project of the intelligent airport take-off and landing safety management system will be about 14.74%, and the after-tax payback period (including the construction period) will be 6.92 years.
The third fund-raising project is the R&D center construction project, with a planned investment of 111.5212 million yuan. The project will procure professional R&D equipment, build a reliable R&D environment, and continue to introduce excellent R&D talents, and in-depth research and development of large models, metaverse digital humans, digital yuan, green finance, and low-altitude defense systems based on the use of emerging technologies such as artificial intelligence models, big data, and blockchain. The construction period is two years.
The R&D center construction project plans to use 74.6449 million yuan of raised funds, of which 72.4449 million yuan is invested in software and hardware equipment, which is also the largest investment in the project.
Xinchen Technology's R&D investment in recent years. Image source: Xinchen Technology announcement
On the whole, the above three fundraising projects are all R&D-related projects, with a total investment of 623 million yuan, which will significantly increase the scale of R&D investment. From 2020 to 2022, Xinchen Technology's R&D investment was relatively stable, with 148 million yuan, 153 million yuan and 157 million yuan respectively, without significant growth, and the proportion of R&D investment in operating income fluctuated between 10% and 15%.