Haofan Biotech recently announced its 2023 financial report, with revenue and net profit both declining in the first year of listing. In terms of information disclosure of listed companies, the construction progress and cash flow of fundraising projects disclosed in the annual report are worth paying attention to.
Source: Photo.com
The performance fell by more than 20%, and the sales volume increased but did not bring revenue
According to the annual report, Haofan Biology (301393. SZ) main indicators will decline across the board in 2023. The company's operating income for the current period was 388.7949 million yuan, down 13.11% year-on-year, the net profit attributable to the parent company was 98.9738 million yuan, down 23.50% year-on-year, and the net profit not attributable to the parent company fell to 93.4266 million yuan, a decrease of 26.66%.
It is reported that the reporting period of the company's IPO prospectus (last draft) is 2019, 2020 and 2021, during which the annualized compound growth rate of operating income is 38.99%, the net profit attributable to the parent is 38.44%, and the net profit not attributable to the parent is 38.13%. In the prospectus (registration draft), the company announced the 2022 financial statements, with operating income continuing to increase by 21.12%, and net profit attributable to the parent company and net profit deducted from non-attributable to the parent increased by 16.13% and 17.21% respectively.
In the annual report released on April 9, Haofan Bio said that in 2023, the procurement demand of downstream customers for various products will decrease significantly, and the degree of market competition in the industry in which the company is located will increase compared with previous years, resulting in a continuous decline in sales prices and a large decline in operating income in the current period. The large decline in net profit was mainly due to the decline in gross profit margin, the increase in depreciation and amortization expenses due to the consolidation of some engineering projects, the increase in employee compensation due to the increase in personnel, and the increase in R&D expenses and advertising expenses.
Haofan Bio's product system is mainly based on peptide synthesis reagents, supplemented by general-purpose molecular building blocks and protein reagents. In 2023, peptide synthesis reagents will contribute 77.57% of the company's revenue, with sales of 301.5748 million yuan, a year-on-year decrease of 14.06%, and gross profit margin will also decrease by 3.93 percentage points, from 42.44% in the previous year to 38.51%. The revenue of general-purpose molecular building blocks accounted for 19.08%, and the sales volume was 74.1869 million yuan, an increase of 8.87% year-on-year, but the gross profit margin decreased by 4.75 percentage points to 38.35%.
In terms of production and sales, the production volume of Haofan Biotechnology in the current period was 931.41 tons, a year-on-year decrease of 8.95%, and the sales volume was 955.93 tons, an increase of 11.30% year-on-year.
The stock price broke by more than 40%, and the construction progress of the fundraising project became a mystery
On July 12, 2023, Haofan Biotech officially landed on the Growth Enterprise Market (GEM) with an issue price of 67.68 yuan per share, raising a total of 1.827 billion yuan, and after deducting the issuance expenses of 172 million yuan, the net amount of funds raised was 1.655 billion yuan, of which the over-raised funds reached 510 million yuan.
Haofan Biotech and the sponsor agreed that when the raised funds are less than 1.5 billion yuan, more than 1.5 billion yuan, less than 1.7 billion yuan, and more than 1.7 billion yuan, the sponsor underwriting rates are 6.70%, 7.35% and 8% respectively, and finally the company pays 146 million yuan of sponsorship and underwriting fees to Minsheng Securities at the rate of 8%.
After the listing of Haofan Biotech, the stock price touched as low as 36.51 yuan / share, and closed at 39.48 yuan / share as of April 15, 2024, down 41.47% from the issue price after resumption. At present, the company's total market value is about 4.3 billion yuan, compared with 11.1 billion yuan at the beginning of listing.
Source: Choice Financial Terminal
The company's IPO fundraising projects include the "100kg/year peptide and protein reagent R&D and production and headquarters construction project (phase I)" implemented by Haofan Biotechnology, the "annual output of 1002 tons of peptide reagents and pharmaceutical intermediates construction project" and "peptide and protein reagent R&D platform construction project" implemented by the subsidiary Anhui Haofan Biological Co., Ltd. (hereinafter referred to as Anhui Haofan), as well as supplementary working capital, with an investment scale of 250 million yuan and 545 million yuan respectively. 100 million yuan and 250 million yuan, both using raised funds for construction.
According to the 2023 annual report, the "100kg/year peptide and protein reagent R&D and production and headquarters construction project (phase I)" will invest 39.0637 million yuan in 2023, and a total of 101.5093 million yuan will be invested by the end of the period. Based on this calculation, a total of 62.4456 million yuan has been invested in the project before 2023. However, according to the details of the construction in progress disclosed in the prospectus, the balance of the project's construction in progress as of the end of 2022 has reached 78.1585 million yuan.
The 2023 annual report also shows that the "annual output of 1,002 tons of peptide reagents and pharmaceutical intermediates construction project" invested 60.9649 million yuan in the current period, and a total of 79.0867 million yuan was invested as of the end of the period, with an investment progress of 14.51%; The peptide and protein reagent R&D platform construction project invested 2.944 million yuan in the current period, and a total of 13.6376 million yuan was invested as of the end of the period, with an investment progress of 13.64%.
However, according to the announcement of Anqing High-tech Industrial Development Zone in February 2024, Anhui Haofan's annual output of 1,002 tons of peptide reagents and pharmaceutical intermediates construction project and supporting facilities have been completed, and the project has met the conditions for trial production. In addition, in November 2023, Tianyancha platform released the environmental protection acceptance report on the completion of the Anhui Haofan peptide and protein reagent R&D platform construction project.
It can be seen that the two major fundraising projects implemented by Anhui Haofan seem to have entered the completion acceptance and even trial production, and I wonder if it matches the construction progress of less than 15% by the end of 2023 disclosed in the annual report?
Cash flow is in doubt
According to the investment amount disclosed in the annual report, Haofan Biotech will invest a total of 102.9726 million yuan in the three major fundraising projects in addition to supplementary liquidity in 2023. At the same time, the company used 512 million yuan to purchase closed-end time deposit certificates, and as of the end of 2023, there are still 477 million yuan of deposit certificates that have not expired. Reflected in the cash flow statement, the company paid other cash related to investment activities in the current period of 512 million yuan for the purchase of closed-end time deposit certificates, and other cash received related to investment activities of 35 million yuan for the redemption of closed-end time deposit certificates.
According to the "Special Report on the Deposit and Use of Raised Funds in 2023" disclosed by Haofan Biotech, as of the end of 2023, the balance of bank wealth management products in the special account for raised funds was 442 million yuan, of which 357 million yuan and the maturity date of the 360-day closed fixed deposit certificate was July 28, 2024, so it is estimated that the purchase date should be the third quarter of 2023. However, according to the company's third quarter report for 2023, the cash paid in the first three quarters related to other investment activities was zero.
In addition to closed-end certificates of deposit, Haofan Biotech also purchased negotiable large-value certificates of deposit in 2023. According to the annual report, the opening balance of the company's trading financial assets was 60 million yuan, and the fair value change profit and loss was 224,300 yuan, the purchase was 165.533 million yuan, and the sale was 195 million yuan, resulting in the closing balance falling to 30.7573 million yuan. Reflected in the cash flow statement, the cash paid for investment in the current period was 165.533 million yuan, and the cash received from the recovery of investment was 195 million yuan. However, according to the company's third quarterly report, the cash paid for investment in the first three quarters of 2023 has reached 175.4518 million yuan, exceeding the annual outflow of the subject.
In addition, according to the "Special Announcement on the Occupation of the Company's Funds by Controlling Shareholders and Other Related Parties" disclosed by the company, the subsidiary Anhui Haofan has non-operating capital occupation of Haofan Biology, with a balance of 109 million yuan at the beginning of 2023, 654 million yuan in 2023, 88 million yuan in repayment, and 675 million yuan at the end of the period, which will be included in the "other receivables" account.
According to the "Notes on Main Items of the Financial Statements of the Parent Company" and the audit report disclosed in the 2023 annual report, Haofan Biotech had other receivables of 675 million yuan to Anhui Haofan at the end of the period, but the age of the accounts was less than 1 year, which obviously did not match the current amount of 654 million yuan disclosed by the company.