Recently, Shandong Yinovi Polyurethane Co., Ltd. (stock abbreviation: Yinov; stock code: 834261. BJ) has published its 2023 annual report. In 2023, INOVI will achieve an operating income of 6.296 billion yuan, a year-on-year decrease of 0.20%, a net profit attributable to the parent company of 127.28 million yuan, a year-on-year decrease of 33.36%, and a net profit attributable to the parent company of 112.8484 million yuan, a year-on-year decrease of 38.97%.
However, in the case of a sharp decline in Yinovi's performance in 2023, the remuneration of its directors and supervisors has doubled. Before listing, its capacity utilization rate was less than 7%, but it still had to raise funds to expand production.
Source: Photo.com
The performance has declined sharply, but the remuneration of directors and supervisors has doubled
On April 3, 2023, INOV was listed on the Beijing Stock Exchange. Recently, INOV released its 2023 annual report. In 2023, INOVI will achieve an operating income of 6.296 billion yuan, a year-on-year decrease of 0.20%, a net profit attributable to the parent company of 127.28 million yuan, a year-on-year decrease of 33.36%, and a net profit attributable to the parent company of 112.8484 million yuan, a year-on-year decrease of 38.97%.
In fact, this is the second consecutive year that INOV's revenue and performance have declined year-on-year. In 2022, INOVI will achieve an operating income of 6.308 billion yuan, a decrease of 20.92% compared with its operating income of 7.977 billion yuan in 2021, and a net profit attributable to the parent company of 191.0009 million yuan, a decrease of 18.80% compared with its net profit attributable to the parent of 235.2334 million yuan in 2021.
Yinuowei said that the company's performance in 2023 will decline, mainly affected by factors such as intensified competition in the chemical industry and weak downstream demand, and the company's gross profit from sales will decrease by 42.6394 million yuan compared with 2022. At the same time, in 2023, INOV's management expenses will increase by 30.3327 million yuan compared with 2022, and the investment income will decrease by 21.8938 million yuan compared with 2022, which will have a negative impact on its performance in 2023.
The annual report shows that in 2023, Yinuowei's management expenses will be 120.5533 million yuan, of which the employee salary will be 91.4838 million yuan, an increase of 27.0169 million yuan compared with the employee salary of 64.4669 million yuan in its management expenses in 2022. In other words, in 2023, the increase in INOV's management expenses will mainly come from the increase in the remuneration of its management personnel.
According to the annual report, in 2023, the 13 directors, supervisors and senior executives of INOVI will receive a total salary of 24.98 million yuan from the company, while in 2022, the total remuneration of 14 directors, supervisors and senior executives of INOVI from the company will only be 11.1877 million yuan. In other words, in 2023, in the case of a sharp decline in the company's performance, the remuneration received by the directors, supervisors and senior executives of INOVI from the company will increase by 123.3%.
Specifically, Xu Jun, chairman of INOVI, will receive a salary of 3.7215 million yuan in 2023, an increase of 116.3% compared with his salary of 1.7203 million yuan in 2022, Li Jian, director and general manager, will receive a salary of 4.9164 million yuan in 2023, an increase of 281.3% compared with his salary of 1.2894 million yuan in 2022, and Dong Jianguo, director and deputy general manager, will receive a salary of 3.9039 million yuan in 2023, an increase of 193.0% compared with his 2022 salary of 1.3324 million yuan; Deputy General Manager Chen Hailiang received a salary of 3.7524 million yuan in 2023, an increase of 243.1% compared with his 2022 salary of 1.0936 million yuan, director Xu Fengyiru received a salary of 1.5335 million yuan in 2023, an increase of 108.4% compared with his 2022 salary of 735,900 yuan, and Song Bing, chief financial officer, received a salary of 2.8854 million yuan in 2023, an increase of 205.9% compared with his 2022 salary of 943,400 yuan. Gao Zhensheng, secretary of the board of directors, will receive a salary of 1.0922 million yuan in 2023, an increase of 54.6% compared with his salary of 706,400 yuan in 2022, and supervisor Rong Zhang will receive a salary of 1.6235 million yuan in 2023, an increase of 258.0% compared with his salary of 453,500 yuan in 2022.
The capacity utilization rate is less than 7%, and it is necessary to raise funds to expand production
INOV is mainly engaged in the research and development, production and sales of polyurethane raw materials and EO, PO and other downstream derivatives products. According to INOV's prospectus, from 2019 to the first half of 2022, the design production capacity of INOV's main products was 443,000 tons, 498,000 tons, 716,800 tons, and 371,500 tons, respectively, and the output was 343,400 tons, 399,900 tons, 474,700 tons, and 193,700 tons, respectively, and the capacity utilization rate was 77.52%, 80.30%, 66.22%, and 49.53% respectively.
INOV raised funds through IPO to build the "340,000 tons of polyurethane series products expansion project", which will add 160,000 tons/year of polyester production capacity, 60,000 tons/year of TPU production capacity, 20,000 tons/year of microporous elastomer production capacity, 40,000 tons/year of adhesive production capacity, 50,000 tons/year of CPU production capacity, and 10,000 tons/year of separation TDI production capacity.
According to the prospectus, from 2019 to the first half of 2022, the parent company of INOV has a design capacity of 60,000 tons, 60,000 tons, 62,100 tons, and 32,500 tons of TPU, with an actual output of 38,700 tons, 38,200 tons, 46,700 tons, and 22,100 tons, and a capacity utilization rate of 64.50%, 63.67%, 75.20%, and 68% respectively. According to the reply to the second round of inquiries, from 2019 to the first half of 2022, the parent company of INOV has a design capacity of 100,000 tons, 100,000 tons, 104,200 tons, and 55,000 tons of polyester respectively, and its polyester output is 61,900 tons, 74,600 tons, 84,100 tons, and 36,500 tons respectively, and the capacity utilization rate is 61.90%, 74.60%, 80.71%, and 66.36% respectively.
In other words, a variety of products in INOV's fundraising project are already in a state of low capacity utilization. In this regard, in the first round of inquiry, the Beijing Stock Exchange asked INOVI to explain the reasons and reasonableness of expanding the production capacity of the above-mentioned products, whether there is overcapacity in related products, and whether the company has excessive investment or expansion in combination with the reasons for the low overall capacity utilization rate during the reporting period.
In this regard, INOVI replied that the products with low capacity utilization rate of INOV's parent company are mainly TPU, pavement materials and polyester, mainly due to the recent large increase in production capacity of TPU, pavement materials and polyester, and the new production capacity of the above-mentioned products is still in the climbing stage and has not been fully released.
Yinuowei said that in order to seize the opportunity, the company gradually abandoned the past "small steps and slow walking" expansion method, but moderately advanced capacity expansion, for the future development of part of the production capacity space. In the short term, there may be overcapacity in related products, but in the long run, the fundraising project will be of great strategic importance to the company, so the company does not have overinvestment or expansion.
However, on April 10, 2024, just over one year after its listing, INOV issued the "Announcement on the Extension of the Company's Fundraising and Investment Projects", stating that according to the implementation progress of the fundraising and investment projects, after careful analysis and careful research, in order to safeguard the interests of all shareholders and the company, it is planned to adjust the time for the fundraising and investment projects to reach the predetermined usable state, from December 31, 2024 to June 30, 2026.
As of March 31, 2024, the company's "expansion project with an annual output of 340,000 tons of polyurethane products" has invested a total of 100.164 million yuan in raised funds, and the investment progress is 34.85%. The company adjusts the product layout and production plan according to market demand, and adjusts the construction progress of the fundraising project according to the overall production plan, and it is expected that the original planned completion date of the fundraising project will be delayed.
According to the data of Choice Financial Terminal, the issue price of INOV listed on the Beijing Stock Exchange was 10.81 yuan/share, the former right was 9.71 yuan/share, the lowest price on the listing day was 8.98 yuan/share, and the closing price on the listing day was 10.17 yuan/share. After listing, the share price of INOV touched a minimum of 5.38 yuan / share, and the closing price on April 16 was 6.88 yuan / share, down 44.6% and 29.1% respectively from the issue price.