Financial reporter Liu Jian
The application for the initial public offering of no more than 12.84 million RMB ordinary shares by Xi'an Nova Nebula Technology Co., Ltd. (hereinafter referred to as Nova Nebula), a leading global video display and control company, has been deliberated and approved by the Listing Committee of the Growth Enterprise Market of the Shenzhen Stock Exchange, and has been approved for registration by the China Securities Regulatory Commission. On January 23, the company disclosed the letter of intent for listing, according to the plan, the company will hold an online roadshow on January 29 and subscribe on January 30. During the reporting period, Nova Nebula has grown steadily in revenue and net profit, and net profit is expected to double in 2023. As of the first half of 2023, the company's long-term borrowings are still 670.85 million yuan, and the company's asset-liability ratio is higher than the average level of comparable companies in the same industry.
The product helps the opening ceremony of the Winter Olympics to shine
Nova Nebula issued 12.84 million shares to the public, accounting for 25.00% of the total share capital after the issuance, and the total share capital after the public offering was 51.36 million shares. The funds raised are mainly used for the industrialization R&D base of Nova optoelectronic display system, the ultra-high-definition display control and video processing technology center, the upgrading and construction of the information system, the upgrading of the marketing network and the service system, and the planned use of 1.085 billion yuan is planned.
Nova Nebula was founded in Xi'an in 2008 and has grown into a highly competitive LED display solution service provider in the world. The company focuses on the research and application of core algorithms for video and display control, and provides users with professional software and hardware integrated solutions. The company's main products include LED display control system, video processing system and cloud-based information release and management system. The products have been widely used in command and dispatch centers, conference small spacing, advertising media, stage performances, virtual studios, traffic guidance, commercial displays, radio and television systems, high-end consumer displays and other markets.
The company has a prominent position in the industry. During the reporting period, the company served more than 4,000 customers around the world, including Leyard, Unilumin Technology, Absen, Qiangqiang Jucai, Lianjian Optoelectronics and other LED industry leaders, Hikvision, Dahua shares and other security industry leaders. Since 2019, the company's products have been used in large-scale events such as the 2019 celebration of the 70th anniversary of the founding of the People's Republic of China, the CCTV Spring Festival Gala from 2019 to 2022, and the 2022 Qatar World Cup, helping China to become a global leader in 5G+8K ultra-high-definition display, XR virtual reality fusion, digital intelligent display and other industries.
In February 2022, the company's products were used in the world's largest LED three-dimensional stage built for the opening ceremony of the Beijing Winter Olympics, with a dazzling giant LED screen on the ground of the Bird's Nest, with a display system area of 11,626 square meters, using 4 backup displays with high safety performance, equipped with AI, naked-eye 3D, 5G, 8K technology, with a total of more than 400 million pixels, equivalent to 16 4K ultra-high-definition displays, and 100,000 receiving cards.
In the screen war of the 2024 New Year's Day New Year's Eve party just past, Nova Nebula provided full-link display and control solutions for CCTV and many satellite TV parties, with cutting-edge innovative technologies such as 8K ultra-high definition, xR, and naked-eye 3D, so that the stage showed a full sense of science and technology.
Prior to this issuance, Yuan Shengchun directly held 30.77% of the company's shares and indirectly controlled 4.57% of the company's shares through Nuoqian Management and Qiannuo Management. Zong Jingguo directly holds 20.39% of the company's shares and indirectly controls 3.48% of the company's shares through Fanxing Management. Yuan Shengchun and Zong Jingguo together control 59.21% of the voting rights of the company, forming control over the company and becoming the controlling shareholders and actual controllers of the company. As of the date of signing of this prospectus, the company has 6 holding subsidiaries, 2 holding grandchildren and 9 shareholding subsidiaries.
Net profit is expected to double in 2023
During the reporting period (2020-2022 and the first half of 2023), the company's operating income was 985.0158 million yuan, 1584.0519 million yuan, 2173.9894 million yuan and 1329.5317 million yuan respectively, and the main business income was 967.6463 million yuan, 1566.2374 million yuan, 2152.4482 million yuan and 1313.9957 million yuan respectively, all showing a growth trend.
On the premise of fully considering the current operating conditions, the business plan, financial budget and various assumptions for 2023, the company has prepared the 2023 profit forecast report, which is expected to achieve operating income of 3.046 billion yuan in 2023, a year-on-year increase of 40.10%, an estimated net profit attributable to the parent company in 2023 will be 618 million yuan, a year-on-year increase of 100.56%, and a net profit deducted from non-attributable to the parent company in 2023 is expected to be 604 million yuan, a year-on-year increase of 103.20%.
The company said that during the reporting period, the company did not have a sales ratio to a single customer that exceeded 50% of the total sales for the current period or relied heavily on a small number of customers. The controlling shareholders, actual controllers, shareholders holding more than 5% of the shares, directors, supervisors, senior management and other core personnel of the company have no relationship with the above major customers.
During the reporting period, the company did not purchase more than 50% of the total procurement ratio from a single supplier or rely heavily on a small number of suppliers. Yuan Shengchun, one of the actual controllers of the Company, exerted significant influence on Xi'an Zhi Duo through Dazi Da, so Xi Zhi Duo and its affiliates are related parties of the Company. In addition, the controlling shareholders, actual controllers, shareholders holding more than 5% of the shares, directors, supervisors, senior management and other core personnel of the company have no relationship with the above major suppliers.
The proportion of inventory is relatively high, and long-term borrowings are still 670 million yuan
During the reporting period, the company's comprehensive gross profit margin was 48.66%, 45.37%, 46.59% and 49.40% respectively, which remained stable overall. The company's other business income accounts for a relatively low amount, the gross profit margin of the main business and the comprehensive gross profit margin are relatively close and the fluctuation trend is consistent, and the company's comprehensive gross profit margin is mainly affected by the gross profit margin of the main business. During the reporting period, the company's comprehensive gross profit margin was higher than the average gross profit margin of comparable companies in the same industry, but there was no significant difference. The difference in comprehensive gross profit margin between the company and comparable companies in the same industry is mainly due to the difference in product structure and customer structure.
It is worth noting that the number of the company's inventory is rising, and the proportion is also increasing. At the end of the reporting period, the book value of the company's inventory was 188.280 million yuan, 493.7455 million yuan, 828.9549 million yuan and 832.5637 million yuan respectively, accounting for 16.68%, 29.92%, 37.85% and 34.58% of current assets respectively. At the end of the reporting period, the company's inventory decline provisions were 14.7529 million yuan, 18.2196 million yuan, 35.0778 million yuan and 37.4086 million yuan respectively, accounting for 7.27%, 3.56%, 4.06% and 4.30% of the inventory book balance at the end of each period, respectively. If the market environment changes in the future, the company's products are unsalable or some raw materials are abandoned, resulting in inventory backlog, resulting in inventory impairment risk, which may have an adverse impact on the company's operating results.
Among them, at the end of the reporting period, the book balance of the company's raw materials was 103.3757 million yuan, 349.7122 million yuan, 584.2738 million yuan and 588.2299 million yuan respectively, accounting for 50.92%, 68.31%, 67.62% and 67.61% of the book balance at the end of the inventory period, accounting for a relatively high proportion. The company said that the company has increased the safety stock of raw materials accordingly under the condition of continuous growth in the scale of operation, and the supply of IC and other raw materials in the market is tight, and the company has made some strategic reserves of raw materials. In addition, at the end of the reporting period, the total book balance of the company's inventory commodities and issued commodities was 56.4325 million yuan, 93.8314 million yuan, 177.3469 million yuan and 195.2375 million yuan respectively, accounting for 27.79%, 18.33%, 20.53% and 22.44% of the total book balance at the end of the inventory period, accounting for a relatively high proportion.
In order to develop its business and expand its scale, the company borrowed long-term loans from banks. From January to June 2021, 2022 and 2023, the company borrowed 16,000,000 yuan, 225,000,000 yuan and 34,730,000 yuan of long-term loans from banks respectively. As of June 30, 2023, the company has repaid 61.45 million yuan, and the balance of long-term borrowings is 670.85 million yuan. Overall, the company's asset-liability ratio is low, the solvency is good, the working capital can meet the needs of repaying the due debts, the financial risk caused by debt pressure is small, and the company's liquidity risk is low. At the end of the reporting period, the company's current ratio and quick ratio were slightly lower than the average level of comparable companies in the same industry, and the asset-liability ratio was slightly higher than the average level of comparable companies in the same industry.
During the reporting period, the net cash flow generated by the company's operating activities was 63.2589 million yuan, 117.7736 million yuan, -90.2416 million yuan and -95.547 million yuan respectively, accounting for 57.12%, 55.66%, -29.28% and -40.55% of the current net profit respectively. In 2020, the Company's net cash flow from operating activities was much lower than its net profit for the period, mainly due to the increase in operating payables.