Every reporter: Zhang Mingshuang Every editor: Wen Duo
Following Hangzhou Iron and Steel Co., Ltd. (600126. SH, share price of 5.04 yuan, market value of 17.021 billion yuan), Feida Environmental Protection (600526. SH, share price of 4.83 yuan, market value of 4.285 billion yuan), Hangzhou Iron and Steel Group Co., Ltd. has the opportunity to add another listed company - its indirect control of Zhejiang Yatong New Materials Co., Ltd. (hereinafter referred to as Yatong New Materials) is applying for the IPO of the Science and Technology Innovation Board of the Shanghai Stock Exchange.
From 2020 to 2022, more than 70% of the company's main revenue and about 60% of its gross profit came from two major products: electronic-grade tin solder and homogeneous catalyst. However, the "Daily Economic News" noticed that the gross profit margin of these two major products showed a downward trend year by year.
Image source: Screenshot of the company's prospectus (declaration draft).
Consolidated the precious metal catalyst business of the controlling shareholder
Before 2021, Zhejiang Yatong Welding Materials Co., Ltd. was the predecessor of Yatong New Materials, mainly engaged in brazing materials and high-performance metal alloy powder business. In November 2021, the company completed the share exchange integration and reorganization with Zhejiang Micro Catalytic New Materials Co., Ltd. (hereinafter referred to as Micro Catalysis), an enterprise under the same control, thereby increasing the precious metal catalyst business.
Financial indicators show that in the year before the restructuring (2020), Micro Catalyst accounted for 47.33%, 32.69% and 57.50% of Yatong Limited in terms of operating income, total profit and total assets, respectively, and the assets and business scale after the restructuring were significantly enhanced.
Yatong New Materials said that the non-ferrous metal connection materials and precious metal catalyst business are downstream applications in the non-ferrous metal materials industry, and there is also a strong correlation and synergy in the industrial chain.
At the same time, in order to achieve the independence of the company's assets and business, in November 2021, Yatong Co., Ltd. acquired the patents related to brazing materials, precious metal catalysts and high-performance metal alloy powder business of Zhejiang Metallurgical Research Institute Co., Ltd. (hereinafter referred to as Metallurgical Institute), the direct controlling shareholder, and introduced Hu Wenhao, Wu Bing, Chen Huiru and other management personnel from the Metallurgical Institute, and the labor relations of the above-mentioned personnel were adjusted to Yatong New Materials.
It is worth noting that before November 30, 2022, due to the establishment of state-owned enterprises and the restrictions on total wages, Yatong New Materials had labor dispatch employment, and the proportion of labor dispatch employment at the end of each period from 2020 to 2022 was 58.33%, 62.24%, and 0.00% respectively, and more than 10% of labor dispatch employees existed before November 30, 2022.
On December 22, Yatong New Materials replied to the reporter of "Daily Economic News" by email, saying that the company's labor dispatch personnel are mainly engaged in auxiliary production, research and development, management, etc., and do not involve the company's core links.
After November 30, 2022, Yatong New Materials rectified this situation, and from December 1, 2022, the company no longer has a labor dispatch employment situation. From 2020 to the end of 2022, the number of regular employees of the company was 75, 74 and 185 respectively, and the number of employees increased significantly at the end of 2022.
The gross profit margin of the two core products declined slightly last year
From 2020 to 2022, Yatong New Materials achieved operating income of 382 million yuan, 588 million yuan and 640 million yuan respectively, and net profit of 20.0411 million yuan, 33.7056 million yuan and 44.7265 million yuan respectively.
Image source: Screenshot of the company's prospectus (declaration draft).
Among the three main businesses, brazing materials are the main source of income for Yatong New Materials, accounting for 66.13%, 69.02% and 65.85% of the main business income from 2020 to 2022.
According to the brazing materials market research report released by Berges Consulting, the global and Chinese brazing materials market will reach 60.884 billion yuan and 39.629 billion yuan respectively in 2022, and the company's brazing materials business operating income in 2022 will be 419 million yuan, with a market share of 0.69% and 1.06% in the global and Chinese brazing materials markets, respectively.
Yatong New Materials said: due to the domestic brazing material market is relatively scattered, the downstream application field is wide, and the number of brazing material enterprises
At the same time, the low-end market size of brazing materials is larger than that of the high-end market, and the company mainly focuses on the high-end market in the field of brazing materials.
In terms of specific product classification, from 2020 to 2022, the revenue of electronic-grade tin solder products in the brazing materials business accounted for 44.85%, 49.24%, and 47.47% respectively, and the revenue of homogeneous catalyst products in the precious metal catalyst business accounted for 23.89%, 25.77%, and 29.37% respectively, and the two major products contributed about 70% of the main business income. At the same time, the gross profit of the above two products also accounts for about 30% of the main business income respectively, and the total contribution is about 60% of the gross profit.
However, the gross profit margin of these two products generally showed a downward trend. From 2020 to 2022, the gross profit margins of electronic-grade tin solder were 10.99%, 10.95% and 9.42%, respectively, and the gross profit margins of homogeneous catalyst products were 21.67%, 20.38% and 19.88%, respectively.
Image source: Screenshot of the company's prospectus (declaration draft).
It can be seen that the gross profit margin of electronic grade tin solder products in 2021 will be basically the same as in 2020, and will decrease by 1.53 percentage points in 2022 compared with 2021. Yatong New Materials replied to the reporter of "Daily Economic News" that the main reason is: "In the whole year of 2021, tin prices are in a steady upward trend, and in the second quarter of 2022, they are in a situation of sharp decline. The company's products mainly use the pricing method of 'raw materials + processing fees', and the product pricing is relatively lagging behind when there is no corresponding material stocking, due to the relatively high time of the company's tin inventory and high cost price, in the case of a rapid downward trend in the price of materials and products, the cost of raw materials for the product is higher than the lagging product pricing, and the gross profit margin has been reduced. ”
In addition, Yatong New Materials replied that the gross profit margin of homogeneous catalyst products was relatively stable.
From the perspective of the company's overall gross profit margin, the company's gross profit margin from 2020 to 2022 will be 16.72%, 16.00%, and 16.54% respectively. Yatong New Materials also pointed out the risks of declining gross profit margins of negotiated pricing products and fluctuations in raw material prices.
National Business Daily