Sichuan Zigong Transportation Machinery Group Co., Ltd. (hereinafter referred to as "Yunji Group" or "the Company") announced on the evening of April 3 that the company accepted a number of institutional investors on the same day. In the survey, the transport group revealed that the company's current orders in hand exceed 2 billion yuan, from the first quarter of this year's orders are continued to improve, the company has sufficient order reserves, the demand for orders has also shifted to higher quality orders, and the orders in 2024 will have a relatively large increase on the basis of 2023.
Screenshot of the announcement of the transportation group
The following are the main contents of the investor relations activities:
1. The company's accounts receivable will increase significantly in 2023, and how to plan after that?
Answer: The company's accounts receivable have risen sharply and are related to the company's business model, customer type, delivery cycle, etc.:
The first is related to the company's business model. The company's business model is to design, develop and produce customized products according to the characteristics of customer needs. In most cases, the company's customer is the role of the general contractor or the owner, and the company's bulk material conveying system is a part of the overall project of the downstream owner, and the overall project construction, acceptance and settlement progress of the owner will affect the settlement between the customer and the company to a certain extent. If the overall project is carried out according to the expected plan, the settlement between the customer and the company is basically in line with the contract, and the accounts receivable will be collected quickly. However, in the process of overall project implementation, there are many uncontrollable factors, such as project land acquisition, civil engineering plan adjustment, and other related project delays, which can lead to the extension of the overall project period, which in turn affects the customer's payment to the company.
Second, it is related to the type of customer. There are many central enterprises and large state-owned enterprises among the company's customers, and after the product acceptance of such customers, their internal request for instructions, signing and approval and other payment procedures are more complicated, resulting in the actual payment progress delayed compared with the contract.
The third is related to the delivery cycle of the company's products. The company's product delivery cycle is relatively long, and customers pay according to the node. Coupled with the type of customer, the company may not collect the payment in strict accordance with the node.
In general, the above factors affect the recovery of accounts receivable, but based on the relatively high-quality customer group, the company's accounts receivable risk is controllable. However, in view of the high proportion of accounts receivable and the large amount, the company's management attaches great importance to it and has been seeking various solutions, and in 2023, the company has established a special agency for the collection of accounts receivable, which is responsible for the collection of accounts receivable, and the effect is relatively obvious. Since the beginning of this year, the company has held a number of special meetings, introduced a number of measures, increased incentives and assessments, and promoted the recovery of accounts receivable. At the same time, the company will also try to further reduce the balance of receivables through financial leasing (manufacturer leasing) and other means.
2. Where is the core competitive advantage of the company's business, and will the second growth curve be considered?
Answer: (1) The core competitive advantages of the company's business are mainly in the following aspects:
First, team advantage: we have a close-knit, sophisticated and young management team;
Second, R&D advantages: We have a strong R&D foundation and have created a high-quality R&D team, which is very strong in the industry;
Third, market and competitive advantage: the company has focused on the development of belt conveyors for decades, and has created a lot of excellent achievements in the industry, created a number of "world's first" and "Asia's first" projects, and accumulated a good reputation;
Fourth, qualification advantages, we have one of the few first-class general contracting qualifications in the industry, which is also an outstanding competitive advantage for us.
(2) Whether to consider the second growth curve:
After years of accumulation, the company's main business has developed well, and the chairman and management team have been committed to pursuing better development and returning shareholders. Therefore, we have been actively seeking and exploring greater development opportunities. The company now has abundant cash on the books, the main business is operating well, and while basing itself on the main business, it seizes the opportunity of strict IPO to actively promote and build the second growth curve.
3. What is the situation where the major shareholder now holds convertible bonds?
Answer: The company's operating conditions are good, the orders are sufficient, the management is full of confidence in the high growth of performance, and the major shareholders and actual controllers have no plans to reduce their holdings.
4. In recent years, the company has made great changes in the proportion of the main business composition, whether it is according to the product classification or according to the regional classification.
Answer: the company closely follows the national "One Belt, One Road" strategy, focusing on going out, building materials, steel and other industries are in a low boom situation, for us will have some impact, our development direction, focus on stabilizing the domestic market at the same time, more to develop overseas markets.
In overseas markets, the company will have a new layout this year, especially in Southeast Asia, Africa, South America and Australia. In the previous public disclosure, we have obtained large orders in Guinea, and we also have relevant layouts in Australia and Southeast Asia.
This year, we have made special sales arrangements for coal, electric power, metallurgy and other mining industries in the entire company's internal meeting, and set up a professional special team to promote, and the results have been good.
5. The company's bonds have been issued since September last year, and the company's stock price has been rising since February this year.
Answer: The irrational decline of the previous year, the company's senior management is very concerned, since February, the company's stock price has been repaired to a certain extent, and the company's value has been reflected to a certain extent. The company's main business is developing well, the cash flow is abundant, there are many opportunities for future development, and the management is full of confidence in the future performance, and has not made downward revisions before, and will not consider forced redemption at present.
6. How does the company get orders and what is the expectation for orders in 2024?
Answer: (1) After decades of development, the company is one of the leading enterprises in China's conveyor industry, and we mainly obtain orders from the following two aspects:
First, the traditional advantageous partners, including Sinoma, Sinosteel, China Metallurgical and other large central and state-owned enterprises, have maintained long-term cooperation, customers have a high degree of recognition and recognition of our high-quality technical capabilities and delivery capabilities, and have a certain guarantee for continuous and stable orders;
Second, to participate in the open competition in the market, the company has been deeply involved in the industry for many years, our computing technology and design capabilities are very prominent, and the industry is also developing in the direction of high volume, large bandwidth and high environmental protection requirements. A few hundred meters, now we can do more than 10,000 tons of volume, the distance can be more than thirty or forty kilometers, our technical reserves in the high-end market of the industry, competitors are few, our technical competitive advantage and the advantage of delivery capacity, will be in the open market competition, more owners of the favor.
(2) Regarding the expectation of orders in 2024, we currently have orders in hand of more than 2 billion yuan, and the orders in the first quarter of this year continue to improve, we have sufficient order reserves, and the demand for orders has also shifted to higher-quality orders, and the orders in 2024 will have a relatively large increase on the basis of 2023.
7. The company has paid a high proportion of dividends in 2023, will it be sustainable in the future, and what is the plan for future repurchases?
Answer: (1) The company implemented a dividend plan of 10 distributions of 2.5 this year, and the dividend amount accounted for about 40% of the net profit of the year, and the repurchase plan of 1-200 million yuan was announced in the early stage, which has now begun to be implemented, and the dividend ratio is still relatively large. Now the company's business continues to be healthy and improving, with the progress of overseas layout, we have established new companies in Singapore and Australia, and about 70% of the orders in hand are export orders, and the orders are sufficient, which can continue to ensure the high growth of future performance. Therefore, our continuous dividends can be guaranteed. Rewarding shareholders is an important part of this, and we hope to share this with our investors.
(2) The first repurchase and the repurchase progress as of March 31 have been announced in the early stage, and we will proceed in an orderly manner according to the share repurchase plan.
8. What are the reasons for the decline in gross profit margin in 2023 and the outlook for gross profit margin in 2024?
Answer: (1) The gross profit margin is mainly affected by the following aspects:
First, product structure, the company's main products include general belt conveyors, tubular belt conveyors, horizontal turning belt conveyors, the latter two have higher technical difficulty requirements, and the gross profit margin is higher than that of general belt conveyors. According to the actual situation of customers, the types of product structures adopted by the company are not the same, which will have a certain impact on the gross profit margin;
Second, the production organization model is divided into the self-made part (core components) and the outsourced supporting part, of which the self-made part is more, the gross profit margin will be relatively higher. The company organizes production according to customer needs every year, but the proportion of self-made parts and supporting parts of different customers is different, which will affect the gross profit margin level to a certain extent;
Third, there will be a cycle for the signing and execution of the contract, and if the price of raw materials fluctuates significantly, it will also have an impact on the gross profit margin, but it is generally within the controllable range.
(2) Gross profit margin outlook in 2024: In order to improve gross profit margin, the company has made a layout in many aspects: first, continue to strengthen research and development. Enhance the added value of products by improving the technical level of products; second, optimize the production layout. The company has established a second production base in Caofeidian, Tangshan. There are many iron and steel production enterprises in the region, and the cost of raw material procurement can be greatly reduced through direct purchase from manufacturers; at the same time, Tangshan Caofeidian has the location advantage of being adjacent to the port, which will greatly reduce the transportation cost of products, especially for export products; Third, strengthen internal control, the company has introduced a lot of excellent procurement personnel this year, and improve gross profit margin by strengthening internal control.
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Review: Tan Lugang
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