CCTV Beijing, January 11 (Reporter Cao Qian, Intern Yang Jiehui) According to the announcement of the Beijing Stock Exchange on January 8, the "little giant of fasteners" Yuxing Fasteners (Jiaxing) Co., Ltd. (hereinafter referred to as "Yuxing shares") meets the issuance conditions, listing conditions and information disclosure requirements.
As the first company to pass the meeting of the Beijing Stock Exchange in 2024, CCTV Capital has paid attention to some problems exposed by Yuxing in the company's operation and open letter disclosure, which has aroused the attention of the market.
According to the prospectus, from 2020 to 2023, Yuxing's performance will be weak, revenue and net profit will decline, gross profit margin and R&D expense rate will be lower than the average level of the industry all year round, and at least 75% of the technical personnel will have a college degree or below. At the same time, in terms of information disclosure, Yuxing shares also have suspicious related party transaction data, inconsistent personnel information, and inconsistent senior management resumes with corporate public information.
Revenue and net profit both declined, and the gross profit margin was lower than the average of the industry
According to the prospectus submitted by Yuxing shares, from 2020 to 2023, Yuxing shares have shown weak performance, not only operating income and net profit have shown a downward trend, but the gross profit margin of products has declined significantly.
Let's start with revenue and net profit. From January to June 2023, Yuxing Co., Ltd. achieved operating income of 186 million yuan, a decrease of 20.79% compared with the same period last year, and the net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses was 11.9306 million yuan, a year-on-year decrease of 41.17%.
Image source: Yuxing shares prospectus
Looking back at the annual revenue in 2020, 2021, and 2022, they will be 410 million yuan, 454 million yuan, and 457 million yuan respectively. However, despite the company's revenue growth trend for three consecutive years, net profit still fluctuates.
In the same period, the net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses was 48.2154 million yuan, 43.3982 million yuan and 44.1059 million yuan respectively. Although there will be growth in 2022, the overall net profit will decline significantly.
Regarding the reasons for the decline in overall performance from January to June 2023, Yuxing explained in the third round of inquiries on the Beijing Stock Exchange that the downstream demand for commodity fasteners and construction machinery fasteners has decreased in stages, and the gross profit margin has declined due to factors such as high-priced raw material inventories, which has led to a large decline in performance in the first half of 2023.
Now, this trend of declining revenue and net profit may continue.
"Entering July-September 2023, the issuer's performance has gradually improved, with the scale of non-net profit increasing by 24.88% quarter-on-quarter, but due to the impact of the occasional peak in the third quarter of last year, the performance in the third quarter is still relatively declining. Yuxing shares said.
Yuxing Co., Ltd. expects that in 2023, it will achieve operating income of 381 million yuan, a decrease of 16.61% from the previous year, and a net profit of 34.0651 million yuan after deducting non-recurring gains and losses, a decrease of 22.77% from the same period last year.
Image source: Yuxing shares prospectus
Let's just look at the gross margin. From 2020 to January to June 2023, the gross profit margin of Yuxing's products was 22.67%, 19.26%, 19.6%, and 16.06% respectively.
Yuxing shares mentioned four comparable companies in the same industry in the prospectus, namely Feiwo Technology, Jinyi Industry, Qifeng Seiko and Rongyi Precision. The average gross profit margin of these comparable companies in the same period was 28.46%, 22.86%, 20.52% and 20.39%, respectively. Among them, Qifeng Seiko maintains a gross profit margin of about 30% all year round, which has an industry-leading advantage.
In contrast, the gross profit margin of Yuxing shares was lower than the average level of its peers in each reporting period, and was 5.79, 3.6, 0.92 and 4.33 percentage points lower in the same period.
The gross profit margin of special industry parts of Yuxing Co., Ltd. also showed a downward trend year by year, and the gross profit margin was 35.35%, 27.21%, 22.34% and 17.86% respectively in the same period.
In this regard, on January 8, the Listing Committee of the Beijing Stock Exchange raised an inquiry in the results of the first review meeting in 2024.
According to the Beijing Stock Exchange, the revenue of special industries such as wind power, construction machinery, and automobiles accounted for about 50% of the main business income, and the gross profit margin showed a downward trend.
The Beijing Stock Exchange requires Yuxing to quantitatively analyze the reasons for the continuous decline in gross profit margin in combination with the changes in the sales unit price, cost composition, raw material unit price, unit direct labor cost and unit manufacturing cost of special industry parts. Combined with the development of the downstream industry of special industry parts, the competition in the same industry, the issuer's product advantages and post-period sales revenue, new orders, changes in major customers, gross profit margin, etc., it shows whether the market in which the special industry parts are located is fiercely competitive, whether the issuer's market share is seized by competitors, and whether the gross profit margin continues to decline.
The rigor of the letter disclosure is insufficient, and there are contradictions in the resumes of senior executives
Some industry insiders pointed out that there may be inconsistencies or omissions in some information disclosures in the prospectus of Yuxing shares, such as the data of its related party transactions.
According to the prospectus, Haiyan Youxin Standard Parts Factory (hereinafter referred to as "Youxin Standard Parts Factory") is a company in which Zhu Xueping, the spouse and sister of Shen Liming, director of Yuxing Co., Ltd., once held 100.00% of the shares and was a related party of the company. In 2020 and 2021, Yuxing Co., Ltd. paid 3.9854 million yuan and 1.6649 million yuan respectively for nuts and processing fees to Youxin Standard Parts Factory.
Youxin Standard Parts Factory was established in 2006, and was operated by Zhu Yuequn, the spouse of director Shen Liming, in the early days, and the company's 2020 annual industrial and commercial annual report shows that the total operating income is only 3.7182 million yuan. At the same time, Haiyan Youxin was cancelled in 2021.
At the same time, there are also inconsistencies in the information on the appointment of relevant personnel in the prospectus.
For example, in the prospectus, it is stated in the "Basic Information of the Actual Controller of the Issuer" that Li Jinxiu served as a staff member of the procurement department of Yuxing Co., Ltd. from December 2019 to May 2022, that is, he is no longer a staff member of the procurement department. In the "top ten shareholders of the company before the issuance", Li Jinxiu still holds the position of a staff member of the procurement department.
In addition, the related parties of the Yuxing share prospectus may have missing information.
Tong Yuxin Culture Communication (Kunshan) Co., Ltd. (hereinafter referred to as "Tong Yuxin") is a company in which Chen Huafeng, the younger brother of Chen Huafeng, an independent director of Yuxing Co., Ltd., holds 100.00% of the shares and serves as an executive director. Yuxing Co., Ltd. identified Tong Yuxin as a related party, that is, Chen Huapeng is also a natural person affiliated with the company.
The Tianyan check shows that in addition to controlling Tong Yuxin, Chen Huapeng also controls another company, Shanghai Jiangshan Culture Communication Co., Ltd. (formerly known as "Shanghai Book and Culture Communication Co., Ltd.", hereinafter referred to as "Jiangshan Culture").
Image source: Tianyancha
This company was founded on January 13, 2017. On October 11, 2021, Jiangshan Culture underwent a change in equity, Zou Qiliang transferred 60% and 40% of the shares of Jiangshan Culture to Chen Huapeng and Zou Xiaolan respectively, and the legal representative of Jiangshan Culture was also changed to Chen Huapeng, who is currently the executive director of Jiangshan Culture and the actual controller of Jiangshan Culture.
According to the Relevant Provisions of Listed Companies on the Beijing Stock Exchange on the Identification of Related Parties and Related Party Transactions, the controlling shareholder, the directors, supervisors and senior management of the Company and their close family members control or serve as directors (except independent directors), senior management personnel or other enterprises other than the Company that have significant influence are affiliated legal persons of the Company.
Industry insiders pointed out that according to the relevant provisions of the "Relevant Regulations on the Identification of Related Parties and Related Party Transactions of Listed Companies on the Beijing Stock Exchange", Jiangshan Culture should also be identified as a related party of Yuxing shares, but Jiangshan Culture is not seen in the list of related parties in the prospectus of Yuxing shares.
What is more noteworthy is that there are also contradictions in the resume disclosure of Cai Xiang, director of Yuxing Co., Ltd., and Chen Huafeng, independent director.
Image source: Tianyancha
According to the prospectus, Cai Xiang successively served as director, chief financial officer and executive director of Zhejiang Longju Catering Group Co., Ltd. from April 2010 to January 2016. However, according to the company's public information inquiry, Longju Catering was established in December 2010, and Cai Xiang first served as a director of Longju Catering on December 16, 2010.
Image source: Tianyancha
Chen Huafeng worked at Liaoning Zhonghe Law Firm from August 1999 to March 2003. However, according to the company's public information inquiry, Liaoning Zhonghe Law Firm was established in May 2000, and Chen Huafeng started his tenure earlier than the company's establishment.
The R&D expense rate is not as good as that of peers, and 75% of the technical personnel have a college degree or below
Compared with comparable companies in the same industry in the same period, the overall growth trend of Yuxing shares in the R&D expense rate is not obvious.
According to the prospectus, in 2020, 2021, 2022 and from January to June 2023, the R&D expenses of Yuxing Co., Ltd. will be 12.5465 million yuan, 15.1402 million yuan, 16.1749 million yuan and 5.6063 million yuan respectively, accounting for 3.06%, 3.33%, 3.54% and 3.02% of operating income respectively.
Image source: Yuxing shares prospectus
Compared with the average of comparable companies in the same industry in the same period, the average R&D expense rate was 4.12%, 3.96%, 4.44% and 5.29%, respectively, showing an overall growth trend, while Yuxing shares were 1.06, 0.63, 0.9 and 2.27 percentage points lower respectively, and the overall R&D expense rate growth trend for the whole year of 2020-2022 is not obvious, and there will be a downward trend in the first half of 2023.
The explanation of Yuxing shares is that the company has been deeply engaged in the field of nut series products manufacturing for many years, and has formed a relatively mature technology and R&D model in the research and development of nut series products. The company can use the personnel, materials and equipment used in R&D relatively efficiently, and effectively control R&D costs while achieving R&D goals, so the R&D rate is smaller than the average level of comparable companies in the same industry.
Image source: Yuxing shares prospectus
Another concern the market has about the strength of its R&D team.
According to the prospectus, as of June 30, 2023, Yuxing has 70 technical personnel, accounting for 13.65% of the total number of employees, while the company has only 17 employees with a bachelor's degree or above. This means that at least 53 of the company's technical personnel have a college degree or below, accounting for more than 75% of the total number of technical personnel. (CCTV Capital Eye)
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