Source: Times Business School
Author|Lu Shuoyi
Editor|Li Qiantao
On April 7, Zhejiang Zheneng Gas Co., Ltd. (hereinafter referred to as "Zheneng Gas") officially submitted an application for registration. However, Ally Machinery Co., Ltd. (hereinafter referred to as "Ally Machinery"), which passed the meeting 4 months earlier than Zheneng Gas, has not yet entered the registration process.
According to the official website of the Shenzhen Stock Exchange, on March 1, 2023, the IPO application of Ally Machinery was accepted, and half a year later, on September 21, 2023, Ally Machinery successfully passed the meeting, but there has been no new progress for more than half a year.
Times Business School found that in the first half of 2020-2023, Ally Machinery's revenue fluctuated greatly, and the stability of its performance was questioned by the Shenzhen Stock Exchange, and in addition, from 2019 to 2020, Ally Machinery also paid large dividends.
On April 16, Times Business School sent a letter to BAA Machinery to inquire about performance fluctuations and generous dividends, but as of press time, the other party has not replied. On April 17, Times Business School called the office of the secretary of the board of directors of BAA Machinery several times, but the phone was not answered.
The product broke the European monopoly
According to the prospectus, BAA Machinery is a supplier and service provider of overall solutions for wood-based panel production equipment, and its main business is the research and development, production, sales and service of wood-based panel production lines and supporting equipment.
It is worth mentioning that BAA Machinery claims that it has successfully broken the monopoly of European manufacturers in the mainland in the field of wood-based panel equipment manufacturing.
According to the prospectus, the domestic wood-based panel continuous flat pressing production line equipment market is mainly occupied by four companies: Dieffenbacher of Germany, Shanghai Wood-based Panel Machinery Factory Co., Ltd. (hereinafter referred to as "Shanghai Board Machine"), Schempelkamp of Germany and Ally Machinery, of which Shanghai Board Machinery is a holding subsidiary of Dieffenbach.
Specifically, the market share of Ally Machinery in China has been in the forefront of the industry.
According to the statistics released by the Forest Products Industry Planning and Design Institute of the National Forestry and Grassland Administration and the Forestry Engineering and Equipment Professional Committee of the China Forest Products Industry Association, by the end of 2022, there were 136 continuous flat-pressed fiberboard production lines and 92 continuous flat-pressed particleboard production lines in the country.
Among them, in terms of fiberboard production lines, Dieffenbacher (including Shanghai board machine) has 53, with a market share of 38.97%, ranking first in the industry, and Ally Machinery ranks second with 49, with a market share of 36.03%. In terms of particleboard production lines, Dieffenbacher (including Shanghai board machine) ranked first with 50 pieces, with a market share of 54.35%, and Ally Machinery ranked second with 22 pieces, with a market share of 23.91%.
Performance fluctuates
The products broke the monopoly of European manufacturers, but the performance was unsatisfactory.
According to the prospectus, from 2020 to 2022 (hereinafter referred to as the "reporting period"), the revenue of BAA Machinery was 348 million yuan, 522 million yuan, and 480 million yuan respectively, and the net profit deducted from the non-attributable parent was 55.0929 million yuan, 72.2749 million yuan, and 77.5379 million yuan respectively.
In each period of the reporting period, the year-on-year growth rate of revenue of BAA Machinery was -26.43%, 50% and -8.75% respectively, and the year-on-year growth rate of net profit excluding non-attributable to the parent company was -41.79%, 31.19% and 7.28% respectively. According to the forecast of BAA Machinery, in 2023, the year-on-year growth rate of its revenue and net profit deducted from non-attributable to the parent company will be 41.36% and 6.02% respectively.
It can be seen that the performance of BAA Machinery fluctuated greatly during the reporting period. Therefore, at the meeting, the stability of its operating performance was also questioned by the Shenzhen Stock Exchange.
Compared with its peers, the growth trend of revenue and net profit of BAA Machinery is not consistent.
BAA Machinery will Hongya CNC (002833. SZ), Nanxing Co., Ltd. (002757. SZ) is listed as a comparable company in the same industry. Wind data shows that from 2020 to 2022, the average year-on-year growth rate of revenue of comparable companies in the same industry was 34.59%, 35.26%, and -1.82%, respectively, and the average year-on-year growth rate of net profit excluding non-attributable to the parent company was 22.18%, 36.27%, and -12.26% respectively.
Regarding the reasons for the decline in revenue in 2022 and the growth of non-attributable net profit attributable to the parent company against the trend, Ally Machinery said in the prospectus that due to the insufficient on-site conditions of customers and other factors, the implementation progress of some of the company's production line projects was forced to be delayed, resulting in a decrease in sales of production line products and a decline in revenue that year. However, due to the impact of exchange rate fluctuations, the exchange gain and loss increased significantly in the year, offsetting the impact of the decline in revenue, resulting in a year-on-year increase in net profit for the current period.
In 2022, the exchange profit and loss of Ally Machinery will be -6.6741 million yuan, and compared with the same period last year, the net profit of Ally Machinery in 2022 will increase by 3.5063 million yuan, and the net profit of non-attributable to the parent will increase by 5.263 million yuan.
In order to maintain revenue growth, BAA Machinery also did not hesitate to reduce sales.
According to the prospectus, in each period of the reporting period, the comprehensive gross profit margin of BAA Machinery was 36.40%, 32.87% and 33.12% respectively, and in 2023, the comprehensive gross profit margin is expected to be 27.26%, a decrease of 9.14 percentage points compared with 2020.
For the problem that the gross profit margin is expected to fall below 30%, Ally Machinery said that the production line orders mainly accepted in the year were signed between June 2021 and September 2022, and the company gave certain preferential treatment to product pricing in order to ensure the stability of orders and avoid waste of resources in the case of comprehensive consideration of market development and customer repurchase, resulting in a decline in the comprehensive gross profit margin level of the year compared with the previous year.
Generous dividends approaching the regulatory "red line"
On March 15, the China Securities Regulatory Commission emphasized the need to strictly control the entry of issuance and listing, one of which is to emphasize that it should pay close attention to the sudden "clearance" dividends of enterprises before listing. On April 12, the Shanghai and Shenzhen stock exchanges preliminarily quantified "clearance" dividends, including "the cumulative dividend amount in the reporting period of three years accounted for more than 80% of the net profit in the same period".
Times Business School found that BAA Machinery also paid large dividends during the reporting period, and the proportion of dividends to net profit was close to the quantitative indicators of the exchange's "clearance" dividends.
According to the prospectus and inquiry responses, from 2016 to 2020, except for 2018, the annual dividend amount of BAA Machinery in the remaining four years was 16 million yuan, 80 million yuan, 20 million yuan, and 175 million yuan respectively, and the cumulative dividend amount in four years was 291 million yuan.
In the prospectus (declaration draft) reporting period (2019-2021), the net profit of Ally Machinery was 111 million yuan, 67.6389 million yuan and 83.8597 million yuan respectively, and the cumulative net profit in three years was 263 million yuan, while the cumulative dividend amount from 2019 to 2021 was 195 million yuan, accounting for 74.14% of the net profit in the same period, approaching the 80% red line initially set by the exchange.
It is necessary to be vigilant that after the large amount of dividends, its debt repayment indicators sounded the alarm.
According to the prospectus, at the end of each period from 2019 to 2022, the asset-liability ratios of BAA Machinery were 66.37%, 70.10%, 60.70% and 62.95%, the current ratios were 1.14 times, 1.06 times, 1.10 times and 1.17 times, and the quick ratios were 0.49 times, 0.39 times, 0.41 times and 0.50 times respectively. It can be seen that compared with 2019, after the large dividend in 2020, its debt ratio has increased, while the current ratio and quick ratio have decreased.
In comparison, at the end of the same period, the average asset-liability ratios of comparable companies were 24.64%, 23.79%, 33.90% and 33.93%, the average current ratios were 2.37 times, 2.55 times, 2.78 times and 3.05 times, and the average quick ratios were 1.82 times, 2.06 times, 2.22 times and 2.42 times, respectively.
For the current ratio, quick ratio is lower than the average of companies in the same industry, and the asset-liability ratio is higher than the average of companies in the same industry, Ally Machinery said in the prospectus that it is mainly due to the company's adoption of the production and sales model of "sales to production, payment before goods", and the production to acceptance cycle is longer, resulting in a large scale of advance receipts (contract liabilities).
(Full text: 2156 characters)