On April 17, Chunguang Technology welcomed the "Four Consecutive Boards", and its stock price hit a new high in the past year!
In the context of the continuous decline of micro-cap stocks, the stock price of Chunguang Technology, which has a total market value of less than 2.5 billion, has continued to rise, making the company "panic". In the stock bar, there are still investors who question, is the company ushering in "spring"?
In the face of this situation, Chunguang Technology hurriedly issued an announcement on abnormal fluctuations in stock trading and a risk warning announcement for stock trading. Up to now, the company's production and operation activities are in normal order, and the market environment and industry policies have not undergone major adjustments. In addition, there is a risk of a significant decline in the company's performance.
2023 is expected to underperform
In fact, Chunguang Technology harvested the first recent price limit on April 1, 2024, and after 6 trading days of shock adjustment, Chunguang Technology ushered in another wave of four-board price limit, with a cumulative increase of 49.33% this month.
Chunguang Technology's recent stock price performance is so strong, or it may be related to a piece of news. At the "Household Appliances Trade-in and Green Circulation Theme Activity", six associations, including the China Household Electrical Appliances Association, issued the initiative of "Promoting the Trade-in of Household Appliances and Promoting the Renewal of Consumption Cycle". Chunguang Technology, which is deeply involved in the field of household appliances, has been favored by market funds.
According to public information, Chunguang Technology is a national high-tech enterprise specializing in R&D, production and sales of clean electrical hoses, accessories and complete machines. After years of development, the company has independently developed more than 10 series of hundreds of products such as central vacuum cleaner hoses, blow molding hoses, winding hoses, extrusion hoses, blister hoses, conductive hoses, etc., which are widely used in vacuum cleaners, garment steamers, dishwashers and outdoor cleaning, industrial dust removal systems and other fields.
According to reports, the technical strength of Chunguang Technology is relatively leading, and the company's independent research and development of integrated extrusion tube forming equipment, telescopic tube automatic rotation coding equipment, multi-functional conductive composite hose production equipment, high-strength central vacuum hose forming technology, etc., have filled the gap in the industry.
As a national specialized and new "little giant" enterprise and an invisible champion in Zhejiang Province, Chunguang Technology's technical strength has been widely recognized. However, the company's performance in recent years has not been satisfactory.
From 2020 to 2022, Chunguang Technology achieved revenue of 854 million yuan, 1.295 billion yuan and 1.921 billion yuan respectively, and net profit attributable to the parent company of 142 million yuan, 110 million yuan and 98.3447 million yuan respectively. It can be seen that although Chunguang Technology's revenue has maintained stable growth in the past three years, its net profit has been declining year by year, and there has been a situation of increasing revenue but not increasing profits.
Chunguang Technology also pointed out in the stock trading risk warning announcement that the company expects to achieve a net profit attributable to the parent company of 27.5 million yuan to 41.2 million yuan in 2023, a sharp decline year-on-year. In the short term, the share price of Chunguang Technology has risen significantly, and there may be a risk of decline, and the company also reminds investors to invest rationally and pay attention to preventing investment risks.
In the field of clean electrical appliances, profitability is declining
According to the official website, Chunguang Technology was founded in 2000, formerly known as Shanghu Town Chunguang Plastic Factory, and moved to Jinhua in 1996. After years of development, the company successfully landed in the capital market in 2018.
After receiving the help of capital, Chunguang Technology gradually expanded to the field of clean electrical accessories, and further extended to the field of clean electrical appliance production, and deeply implemented the dual-line development strategy of "CGH" accessories brand and "Shangteng" complete machine brand.
With the improvement of people's awareness of health and environmental protection, more and more consumers have begun to pay attention to household cleaning and air quality, and the development of clean appliances has ushered in a huge market demand. According to the data of the Prospective Industry Research Institute, the market size of China's clean appliances is expected to rise steadily from 2021 to 2026, reaching 85.2 billion yuan by 2026.
It can be said that the transformation of Chunguang Technology can be said to be at the right time. However, Lanfu Finance and Economics found that the profitability of Chunguang Technology's clean electrical appliance business has declined, and the gross profit margin of this business will be 14.31% in 2022, a year-on-year decrease of 6.39 percentage points.
In terms of products, in 2022, the gross profit margin of Chunguang Technology's cleaning electrical hoses will be 27.63%, a year-on-year decrease of 1.93 percentage points, the gross profit margin of cleaning electrical accessories will be 20.14%, a year-on-year decrease of 1.35 percentage points, and the gross profit margin of cleaning electrical appliances will be 7.6%, a year-on-year decrease of 0.57 percentage points.
In 2023, whether the profitability of Chunguang Technology's clean electrical products will improve will need to wait for the release of the company's annual report to know. It is understood that Chunguang Technology will disclose its 2023 annual report on April 20, 2024, and the first quarter report of 2024 on April 30.
In addition, Chunguang Technology's sales gross profit margin is also declining quarter by quarter, and is far lower than the industry average. In 2022, Chunguang Technology's gross profit margin will be 14.31%. In the first, second and third quarters of 2023, the company's gross profit margin will be 13.76%, 12.97% and 12.59% respectively.
Entering the overseas market, the current proportion of revenue is still low
It is understood that in order to be close to customers and respond quickly to customer needs, Chunguang Technology has also set up production bases in Malaysia and Vietnam, in order to form a layout advantage of fast response speed and strong delivery capacity.
Recently, Chunguang Technology is still expanding the layout of overseas markets. IN DECEMBER 2023, CHUNGUANG TECHNOLOGY ANNOUNCED THAT IT INTENDS TO USE ITS OWN OR SELF-RAISED FUNDS THROUGH ITS WHOLLY-OWNED SUBSIDIARY CHUNGUANG INTERNATIONAL SINGAPORE PTE. LTD set up a wholly-owned subsidiary, Shang Teng (Vietnam) Industrial Co., Ltd. (tentative name), in Vietnam and invested in the construction of a clean electrical production base, with an estimated total investment of about 185 million yuan.
For this layout, Chunguang Technology said that based on the current international trade situation, the changing trend of the global industrial chain and supply chain, and the future business development plan, the company hopes to establish a long-term and stable production base in Vietnam, expand the scale of operation, and enhance profitability.
The progress of the project is not known for the time being, but Chunguang Technology's current overseas revenue proportion is still low. According to the 2023 semi-annual report, Chunguang Technology's overseas business achieved revenue of 211 million yuan, accounting for 23.66%. Combined with the case of inter-segment offsets, this proportion may be even lower.
On the whole, there are many problems in Chunguang Technology's own operation, and the future development expectations may need to be appropriately reduced. While the stock has been highly sought after recently, many fundamental performances don't seem to be enough to support its streak of gains. Maybe after the madness, it's another piece of chicken feathers.