A few days ago, Hymson (688559. SH) disclosed its 2023 annual report. In 2023, the company achieved revenue of 4.805 billion yuan, a year-on-year increase of 17.03%, net profit attributable to the parent company of 322 million yuan, a year-on-year decrease of 15.42%, non-net profit of 249 million yuan, a year-on-year decrease of 15.08%, and net cash flow from operating activities of -993 million yuan, compared with 489 million yuan in the same period of last year.
As for the increase in performance and no increase in profits, the company has said that it is mainly due to the increase in acceptance of customers and projects during the year, and the increase in revenue compared with the same period last year, and the continuous increase in product research and development investment and management reform, and the increase in overseas business expansion, the operating profit of this year decreased compared with the same period last year. In addition, the company's share payment expenses were 54.4918 million yuan.
In recent years, taking advantage of the east wind of new energy, the performance of Hymsing, as a manufacturer of power battery laser intelligent equipment, has also risen. In 2023, the company's revenue will hit a new high since its listing. However, Titanium Media APP noticed that under the beautiful revenue, the company's troubles in inventory, accounts receivable, asset-liability ratio and other aspects have appeared.
Or in order to cope with the worried financial situation and expand the business territory at the same time, the company is promoting nearly 2 billion yuan of private placement fundraising. However, judging from the situation of the fundraising project and the industry in which the project is located, the private placement seems to be suspicious.
Troubles with record revenue hits
Founded in 2008 and landed in the capital market in September 2020, Hymson is a manufacturer of laser intelligent equipment. The company's products are mainly used in three major fields: power batteries, 3C consumer electronics, and sheet metal processing. At the same time, the company is developing photovoltaic, new display and other fields.
In recent years, due to the rapid development of downstream industries such as new energy vehicles and consumer electronics, the upstream laser and automation equipment industry has flourished. Financial data show that from 2020 to 2023, the company's revenue will be 1.321 billion yuan, 1.984 billion yuan, 4.105 billion yuan, and 4.805 billion yuan respectively.
At the same time, with the growth of the company's business scale, its orders in hand are also relatively sufficient. According to the financial report, the company will sign new orders of about 4.8 billion yuan (tax included) in 2023, and as of the end of 2023, the orders in hand will be about 7.5 billion yuan (tax included).
However, while the company is on the fast track and has achieved good results, many of the risks behind it have also emerged.
First of all, in the process of company development, the need for capital is always a major bottleneck. Under normal circumstances, lithium battery equipment manufacturers have more advance funds in the early stage, long production cycle, coupled with accounts receivable cycle, the business cycle is usually 1.5 years to 2 years, which causes huge pressure on their funds. As of the end of 2023, the company's monetary funds were 1.059 billion yuan, short-term borrowings were 2.001 billion yuan, and notes payable and accounts payable were as high as 2.581 billion yuan.
At the same time, the company's asset-liability ratio has also increased year by year, and is significantly higher than the industry average. From 2019 to 2023, the company's asset-liability ratios will be 69.77%, 61.79%, 72.50%, 77.95%, and 78.48% respectively, and the average annual asset-liability ratio of the industry (Oriental Fortune Chioce data terminal) will be about 45%.
Secondly, the company also has a dependence on large customers. According to the financial report, the company's customers are mainly leading or well-known enterprise customers in consumer electronics, new energy batteries and other application fields. In 2023, the sales of the company's top five customers will be 2.944 billion yuan, accounting for 61.29% of the total annual sales.
Finally, the company's accounts receivable are also increasing. As of the end of 2023, the company's accounts receivable book balance was 1.525 billion yuan, an increase of about 40% from the beginning of the period. At the same time, the balance of accounts receivable aged more than 1 year was 596.161 million yuan, an increase of 266.1912 million yuan from the end of 2022, and the proportion of accounts receivable aged more than 1 year increased from 27.25% at the end of 2022 to 33.96%.
It should be noted that in 2023, the company has made a provision for bad debts of 173.2093 million yuan for accounts receivable aged more than 1 year, and if the accounts receivable aged more than 1 year cannot be recovered, it will have an adverse impact on the company's operating performance and operating cash flow.
The company's inventory also increased significantly. Financial data show that from 2020 to 2023, the company's inventory balances will be 907 million yuan, 1.879 billion yuan, 3.434 billion yuan and 4.852 billion yuan respectively. If the company's products fail to meet the acceptance standards agreed in the contract in the future, resulting in the inability to sell the inventory, or the performance of the inventory cannot meet the product requirements, and the value falls sharply, the company may face the risk of inventory price decline.
Suspicious fixed increase
In order to optimize the company's financial structure, the company will issue several announcements related to private placement in 2023. However, according to the annual report, there is still uncertainty about whether the fixed increase can be implemented.
It is understood that in September 2023, the company plans to raise no more than 2 billion yuan, of which 900 million yuan will be used for the Western Laser Intelligent Equipment Manufacturing Base Project (Phase I) (hereinafter referred to as "Project 1"), 550 million yuan will be used for the Hymson Laser Intelligent Center Project (hereinafter referred to as "Project 2"), and 510 million yuan will be used for replenishment.
After further studying the company's two major fundraising projects, Titanium Media APP found that there were many doubts.
According to the announcement, both the first and second projects have increased the production capacity of the company's laser and automation equipment in the field of lithium battery applications, but the situation of its related industries does not seem to be optimistic.
According to Gaogong lithium battery data, the output of new energy vehicles will reach 9 million in 2023, a year-on-year increase of about 34% compared with 2022, and this growth rate will be much lower than 57%. In other words, new energy vehicles are about to bid farewell to the era of explosive growth and usher in a stage of stable development. Moreover, the lithium battery with the previous surge in production capacity may face overcapacity, so the lithium battery equipment as its upstream will also face the pain of the industry cycle.
In this context, will the company's expansion lead to the inability to digest the new production capacity?
It is worth noting that the company only discloses the power power shipments in 2022 in the fixed increase plan. In fact, the Advanced Industry Research Institute has made a prediction on the power battery in 2023 before the company's fixed increase, and it is expected that the growth rate of power battery shipments will slow down that year, and the growth rate will continue to decline in 2024, with a year-on-year growth rate of 20%-30%. In addition, judging from the release of the fixed increase time, there has been data on China's power battery shipments in the first half of 2023, and the growth rate has also slowed down, but the company did not choose the latest data and related forecast data of the year.
In addition, the first project also adds the production capacity of laser and automation equipment in 3C consumer electronics and photovoltaic applications. In this regard, the company said that the new product line is an investment in its main business.
However, judging from the annual report, the lithium battery equipment business is still the company's core business. According to the financial report, power battery laser and automation equipment accounted for 76.60% of operating income, 3C consumer electronics laser and automation equipment accounted for 12.71% of operating income, and photovoltaic industry laser and automation equipment accounted for 0.3% of operating income.
From this point of view, the relevance and synergy between this new fundraising project and the company's main business are not very high, so does it comply with the relevant regulations that the raised funds are mainly invested in the main business?
More critically, since 2023, with various factors such as price reduction, oversupply, policy, and position concentration in the photovoltaic industry chain, worries have been permeating the entire photovoltaic equipment sector. Moreover, overcapacity in the PV industry may have become the consensus of the industry. Under such circumstances, is the capacity planning for the expansion of photovoltaic equipment reasonable, and is there also a risk of capacity digestion?
In addition, the construction content of Project 2 is more consistent with the construction content of the previous fundraising project, "Laser and Automation Equipment R&D Center Construction Project", and the company will extend the time for the previous fundraising project to reach the intended usable state to June 2024.
In the case that the pre-fundraising capacity has not yet been released and the current fundraising is similar to the pre-fundraising products, is the implementation of the "Project 2" fundraising project a duplicate construction and excessive financing?