Tongda Chuangzhi has announced the 2023 annual report, the company's operating income, net profit attributable to the parent company, and non-net profit deducted have declined across the board, forming a significant difference from the rapid rise in pre-listing performance. In addition, the company's disclosure of R&D personnel identification, salary, dividends, etc. are also worth paying attention to.
Source: Photo.com
Performance "big change"
Tongda Chuangzhi (Xiamen) Co., Ltd. (stock abbreviation: Tongda Chuangzhi; stock code: 001368. SZ) went public on March 13, 2023, and on March 28, 2024, the company disclosed its 2023 annual report.
According to the annual report, in 2023, the company will achieve an operating income of 799 million yuan, a year-on-year decrease of 14.19%, a net profit attributable to the parent company of 101 million yuan, a year-on-year decrease of 23.18%, and a net profit of 89 million yuan, a year-on-year decrease of 28.14%.
In contrast, in the first three years of the prospectus reporting period (2019, 2020, and 2021), the company achieved operating income of 583.2698 million yuan, 692.5882 million yuan, and 950.4292 million yuan respectively, and realized net profit attributable to the parent company of 41.3132 million yuan, 90.2335 million yuan, and 131.3374 million yuan, and obtained net profit of 64.9826 million yuan and 81.7254 million yuan respectively. 122.4179 million yuan, the company's performance rose significantly.
In addition, in 2022, the company's net profit attributable to the parent company was 131.6277 million yuan, up 0.22% year-on-year, and the net profit attributable to the parent company was 124.3599 million yuan, a year-on-year increase of 1.59%, while in the second half of 2022, the company's net profit attributable to the parent company was 53.6428 million yuan, a year-on-year decrease of 14.07%, and the net profit attributable to the parent company was 49.3121 million yuan, a year-on-year decrease of 11.40%. It should be noted that the first half of 2022 is the last issue of the company's prospectus, and the company's performance has declined significantly since the second half of 2022.
In addition, the prospectus shows that in 2019, 2020 and 2021, the company's revenue in the third and fourth quarters accounted for 52.74%, 62.28% and 48.90% of the main business income respectively, while in 2022 and the second half of 2022, Tongda Chuangzhi's operating income was 931 million yuan and 372 million yuan respectively, and the revenue in the third and fourth quarters of 2022 accounted for only 39.93%. I wonder if the company's performance in the first half of 2022 is significantly better than that in the second half of the year, and whether it is in line with the company's normal revenue law?
The "big retreat" of related sales is closely related to major customers
Tongda Modern Home Furnishing (Hong Kong) Co., Ltd. (hereinafter referred to as Modern Home) is the controlling shareholder of the company, and Tongda (Xiamen) Technology Co., Ltd. (hereinafter referred to as Tongda Technology) and Tongda (Xiamen) Precision Rubber and Plastic Co., Ltd. are other enterprises controlled by the actual controller of the company.
According to the prospectus, in 2018, 2019, 2020 and 2021, the regular related sales of Tongda Chuangzhi to the above related parties were 176.1208 million yuan, 89.3591 million yuan, 138,400 yuan and 1.6613 million yuan respectively, and in 2018 and 2019, the proportion of the company's above-mentioned related sales to operating income was as high as 33.11% and 15.32% respectively.
In addition, in 2018, 2019, 2020, 2021, and 2022, Tongda Chuangzhi also purchased 3.5381 million yuan, 6.0689 million yuan, 4.4279 million yuan, and 4.3196 million yuan of goods from related parties, and accepted 8.1072 million yuan, 6.6403 million yuan, 822,300 yuan, and 806,300 yuan of labor services.
According to the 2022 and 2023 annual reports, the company has not had any related related sales.
Shenzhen Genting Information Technology Co., Ltd. (hereinafter referred to as Genting Information) is a customer expanded by Tongda Chuangzhi in 2019, and its main business is the design, R&D and sales of oral care products such as electric toothbrushes, oral irrigators, sterilization racks, and toothbrush travel boxes.
In 2020, 2021 and the first half of 2022, Genting Information was the company's fifth largest customer, and Tongda Chuangzhi mainly sold health care products such as electric toothbrushes and accessories, oral irrigators and accessories, and travel boxes to Genting Information, and purchased CPUs, batteries, PCB boards, etc. from Genting Information.
In 2019, 2020, 2021 and the first half of 2022, the company sold 9.7483 million yuan, 42.1419 million yuan, 53.0657 million yuan and 29.4446 million yuan to Genting Information respectively, and purchased 74,300 yuan, 1.1143 million yuan, 7.6604 million yuan and 557,300 yuan from Genting Information.
According to the prospectus, the company's sales to Genting Information are mainly health care products, and the gross profit margin of the products is lower than the gross profit margin of the company's customers except Genting Information. In the first half of 2019, 2020, 2021 and 2022, the gross profit margin of the company's sales to Genting Information was -5.11%, 6.91%, 15.19% and 8.84%, respectively, while the gross profit margin of sales to other customers was 26.23%, 27.41%, 25.38% and 24.99% respectively.
In addition, Wang Yanan, one of the actual controllers of Tongda Chuangzhi, is a director of Shenzhen Zhongnan Hongyuan Investment Holding Co., Ltd., and four private equity funds managed by Shenzhen Zhongnan Hongyuan Private Equity Venture Capital Fund Management Co., Ltd. (formerly known as Shenzhen Zhongnan Hongyuan Investment Management Co., Ltd.), a wholly-owned subsidiary of Shenzhen Zhongnan Hongyuan Investment Holding Co., Ltd., invested in Genting Information in December 2020, and as of the date of this Prospectus, held a total of 17.9775% equity interest in Genting Information.
The company said that when the four private equity funds took a stake in Genting Information in December 2020, they held a total of 20% of the equity of Genting Information, and the board of directors of Genting Information was four, and the four private equity funds jointly nominated one director. After the introduction of new shareholders in 2022, the four private equity funds hold a total of 17.98% of the equity of Genting Information, and the number of board members has been changed to 8, and the director jointly nominated by the four private equity funds is still 1. In summary, the four private equity funds cannot control Genting Information.
The company stated that none of the actual controllers of Tongda Chuangzhi participated in the investment decisions of the four private equity funds in Genting Information, nor did they participate in the operation and management decisions of Genting Information, nor did they serve as directors or senior managers of Genting Information, so they could not exert significant influence on Genting Information, and Genting Information did not belong to the related parties that should be identified according to substance over form.
However, a job posting seems to expose the inextricable connection between Tongda Chuangzhi and Genting Information.
According to the information of the 2024 recruitment of quality inspectors by Genting Information, the quality inspectors of Genting Information are mainly responsible for performing sampling inspections of finished products, inspection of assembly lines and outputting reports, and are responsible for regular or irregular spot checks and inspections of material suppliers and output sampling inspection reports. It should be noted that the working place of this position is the first phase of the Xiamen production base of Tongda Group, Haicang District, Xiamen.
Tongda Group Holdings Co., Ltd. (stock abbreviation: Tongda Group; stock code: 00698.HK) HK) is the indirect controlling shareholder of Tongda Chuangzhi, and the four brothers Wang Yayang (deceased), Wang Yayu, Wang Yahua and Wang Yanan, the actual controllers of Tongda Chuangzhi, are also the actual controllers of Tongda Group.
The identification of R&D personnel, salary, and dividends are also worth paying attention to
At the end of 2021 and the end of June 2022, the company's R&D personnel were 222 and 175 respectively, the company said that the main reason was that from January to June 2022, the structure of R&D personnel was gradually adjusted according to the needs of R&D projects, retaining middle and high-level technical personnel, compressing low-level technical personnel, and transferring some low-level technical personnel to the production department to improve the conversion rate and production efficiency of R&D results.
At the end of 2022, the company's R&D personnel rebounded to 213 people, including 131 college and below personnel, 76 technical secondary school and below, and 130 of the company's 222 R&D personnel at the end of 2021.
It is worth noting that, according to the Administrative Measures for the Identification of High-tech Enterprises, the proportion of scientific and technological personnel engaged in R&D and related technological innovation activities in the total number of employees of the enterprise in the current year shall not be less than 10%. In 2020, the company was recognized as a high-tech enterprise, valid until 2022, and in 2023, it was recognized as a high-tech enterprise again and enjoyed a 15% income tax rate, and at the end of 2023, the company's R&D personnel immediately rose to 254, including 150 people with college degree and below.
According to the company's 2022 annual report "Related Party Transactions", 6.1571 million yuan of remuneration will be paid to key management personnel in 2021, and the prospectus "Regular Related Party Transactions - Payment of Remuneration" shows that 8.0069 million yuan of remuneration will be paid to key management personnel in 2021.
Before and after listing, the actual controller family held 90% and 67.51% of the company's shares respectively, and in May 2021, the company paid a dividend of 50.4 million yuan, accounting for 61.67% of the net profit attributable to the parent company in 2020, and then the company raised 85 million yuan through IPO to supplement liquidity, and in April 2023, in the context of declining performance, the company plans to pay a dividend of 22.4 million yuan.
On March 3, 2024, the company announced that it intends to use no more than 300 million yuan of idle raised funds for cash management, and the company's IPO raised a total of 624 million yuan.