Yangtze River Business Daily reporter Xu Jia
Successfully turned losses into profits, Dike shares (300842. SZ) financial report still has a number of doubts.
According to the annual report, in 2023, Dike Co., Ltd. will achieve operating income of 9.603 billion yuan, a year-on-year increase of 154.94%, net profit attributable to shareholders of listed companies (net profit, the same below) of 386 million yuan, a year-on-year increase of 2336.51%, and net profit after deducting non-recurring gains and losses (net profit after deducting non-net profit, the same below) of 343 million yuan, a year-on-year increase of 2829.96%.
The Yangtze River Business Daily reporter noticed that with the rapid industrialization of N-type TOPCon batteries, the shipment of a full set of conductive silver paste products applied to the battery has increased rapidly and the sales proportion has continued to increase, which has greatly improved the operating performance of Dike shares. But on the other hand, in 2023, the company's net cash flow from operating activities will be -1.051 billion yuan, a year-on-year decrease of 433.82%, and the difference with the current net profit will be 1.437 billion yuan, and the company's net cash flow from operating activities for four consecutive years since 2020 will be negative, which is contrary to net profit.
Not only that, but there are also doubts about the deposit and loan situation of Dike shares. As of the end of 2023, the balance of monetary funds of Dike shares is 1.835 billion yuan. However, at the same time, the company's asset-liability ratio climbed to 80.22%, and the balance of short-term borrowings was 2.653 billion yuan, an increase of 1.093 billion yuan or 70% from the end of the previous year.
On April 17, the Shenzhen Stock Exchange issued an annual report inquiry letter to Dike shares, which required the company to explain the reasons and reasonableness of the large difference between the net cash flow and net profit of operating activities accumulated for many years, and also required the company to explain the specific reasons and reasonableness of borrowing large interest-bearing liabilities under the condition that the monetary funds are relatively sufficient.
Net cash outflow from operating activities for four consecutive years
According to the data, in the photovoltaic industry chain, photovoltaic conductive silver paste products are mainly used in the metallization of photovoltaic cells, and are the key materials for photovoltaic cells and even the entire photovoltaic products. The main product of Dike is the conductive silver paste of crystalline silicon solar cells. In June 2020, Dike shares were listed on the GEM.
The Yangtze River Business Daily reporter noticed that before and after the listing, Dike shares had maintained a steady improvement in operating performance for three consecutive years. From 2019 to 2021, Dike Co., Ltd. achieved operating income of 1.299 billion yuan, 1.582 billion yuan and 2.814 billion yuan respectively, a year-on-year increase of 56.23%, 21.71% and 77.96%, and net profit of 70.7042 million yuan, 82.0865 million yuan and 93.9357 million yuan, a year-on-year increase of 26.74%, 16.1% and 14.43%.
However, in 2022, Dike shares fell into the first loss after listing. In the current period, the company achieved operating income of 3.767 billion yuan, a year-on-year increase of 33.83%, and net profit and non-net profit were -17.3239 million yuan and -12.6439 million yuan respectively, a year-on-year decrease of 118.44% and 112%.
In addition to the exchange losses caused by foreign currency loans, in the macro environment of grid parity, cost reduction and efficiency improvement in the photovoltaic industry, many factors such as the profit contraction of silver paste products have become the main reasons for the performance loss of Dike shares.
Since 2023, with the increase in product shipments, Dike shares have successfully turned losses into profits. According to the annual report, in 2023, Dike will achieve operating income of 9.603 billion yuan, a year-on-year increase of 154.94%, a net profit of 386 million yuan, a year-on-year increase of 2336.51%, and a non-net profit of 343 million yuan, a year-on-year increase of 2829.96%.
It should be noted that despite the significant improvement in operating performance, the quality of the performance of Dike shares is not high. In 2023, the company's net cash flow from operating activities will be -1.051 billion yuan, a year-on-year decrease of 433.82%, and the difference with the current net profit will be 1.437 billion yuan.
Dike said that this is mainly because the company gives customers a certain period of account and customers mainly collect money with bank acceptance bills, and the company needs to pay for the goods in full or a short account period for the purchase of silver powder from suppliers, and the cash recovered from sales usually lags behind the cash paid for purchases. During the period, the company's business scale increased significantly, and the payment for goods prepared in advance increased accordingly, resulting in an increase in cash outflow from operating activities.
Since 2020, the net cash flow generated by the operating activities of Dike has been negative, with -521 million yuan, -259 million yuan, and -197 million yuan from 2020 to 2022, respectively. From this point of view, Dike has been in a state of net outflow of cash flow from operating activities for four consecutive years, with a cumulative net outflow of 2.028 billion yuan. During the same period, the company's total net profit was 545 million yuan.
On April 17, the Shenzhen Stock Exchange issued an annual report inquiry letter to Dike shares, first of all, requiring Dike shares to explain the reasons and reasonableness of the large difference between the net cash flow and net profit of accumulated operating activities for many years, and explain whether there is a situation that is far lower than the average level of the same industry, and whether the company's profit quality is significantly lower than that of companies in the same industry.
Gearing ratio climbed to 80.22%
The increase in the volume of main products has become a key factor for Dike to turn losses into profits in 2023.
Previously, Dike Co., Ltd. said that in 2023, the photovoltaic industry will continue to develop rapidly, and the company will continue to lead the development of N-type TOPCon technology based on the latest technology frontier in the market and is committed to improving the efficiency and reducing the cost of TOPCon metallization paste. With the rapid industrialization of N-type TOPCon batteries, the company has achieved a rapid increase in the shipment of a full set of conductive silver paste products applied to N-type TOPCon batteries and a continuous increase in the proportion of sales by virtue of the continuous leadership of TOPCon technology and products, which has greatly improved the company's operating performance.
According to the annual report, in 2023, Dike Co., Ltd. achieved sales of 1,713.62 tons of photovoltaic conductive silver paste, an increase of 137.89% over the previous year, of which 1,008.48 tons of a full set of conductive silver paste products used in N-type TOPCon cells were sold, accounting for 58.85% of the company's total sales volume of photovoltaic conductive silver paste products, which is in a leading position in the industry.
In 2023, the revenue of the main photovoltaic conductive silver paste business of Dike Co., Ltd. will be 9.078 billion yuan, an increase of 167.65% over the previous year, and the gross profit margin will be 11.66%, an increase of 2.07 percentage points over the previous year.
In the letter of inquiry, the Shenzhen Stock Exchange asked Dike to explain the reasons and reasonableness of the growth of photovoltaic conductive silver paste business revenue and gross profit margin, and asked the company to explain the future revenue change trend in combination with the competition in the photovoltaic market, whether it can maintain sustainable growth, and fully warn of risks.
The Yangtze River Business Daily reporter also noticed that there are also doubts about the deposit and loan situation of Dike shares. As of the end of 2023, the balance of monetary funds of Dike shares is 1.835 billion yuan, including 525 million yuan of bill pool margin and notes payable margin, and 1.073 billion yuan of letter of credit, loan and foreign exchange lock margin.
At the same time, as of the end of 2023, the asset-liability ratio of Dike shares climbed to 80.22%, compared with 58.85% and 71.83% at the end of 2021 and 2022, respectively. Among them, the balance of the company's short-term borrowings was 2.653 billion yuan, an increase of 1.093 billion yuan from the end of the previous year, an increase of 70%.
In this regard, the Shenzhen Stock Exchange requires Dike to explain the specific reasons and reasonableness of borrowing large interest-bearing liabilities under the condition that the monetary funds are relatively sufficient, in particular, whether it is in line with commercial practices, and whether there is capital occupation or external financial assistance. At the same time, the Shenzhen Stock Exchange also inquired about the reasons for the increase in the asset-liability ratio of Dike shares year by year and whether the company's financial operation is sound.
It is worth mentioning that at the end of last month, Dike shares also threw out a refinancing plan. The company intends to issue shares to specific targets in a simplified manner, and the total amount of funds raised will not exceed 265 million yuan, which will be invested in the expansion project with an annual output of 2,000 tons of conductive silver paste, the R&D and production project with an annual output of 50 tons of low-temperature conductive silver paste and supplementary working capital. Among them, Dike plans to use no more than 79 million yuan of raised funds to supplement liquidity.
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