A few days ago, 3Trees (603737. SH) disclosed its 2023 financial report.
The company's operating income was 12.476 billion yuan, an increase of 10.03% year-on-year, the net profit attributable to the parent company was 174 million yuan, a year-on-year decrease of 47.33%, and the non-net profit was 44.0348 million yuan, a year-on-year decrease of 80.13%. At the same time, the company plans to distribute a cash dividend of 1.60 yuan (tax included) for every 10 shares, with a total cash dividend of about 84 million yuan, accounting for about 48.59% of the net profit attributable to the parent company.
Titanium Media APP noted that the reason why the company increased revenue but did not increase profits was mainly due to the increase in expenses caused by personnel investment and marketing activities and the increase in asset impairment provisions in the current year. Although the company's operating income continues to grow, the new round of growth has not been able to solve the quality problem, and its accounts receivable are still high. In addition, the company's share price has been tumbling in recent years and now appears to be well below the purchase price of its employee stock ownership platform.
Net profit reversed, accounts receivable hidden "thunder"
3Trees' main business is the R&D, production and sales of architectural coatings (wall coatings), waterproofing materials, floor materials, wood coatings, thermal insulation materials and thermal insulation integrated boards, and Kiev materials.
In 2023, although the company's operating income is as high as 12.476 billion yuan, and hit a record high, the net profit is only 174 million yuan, a year-on-year decrease of 47.33%, and the profitability has returned to six years ago, in 2017, the company's operating income was 2.6 billion yuan, and the net profit was 170 million yuan.
Titanium Media APP found that the reason why the company increased revenue but did not increase profits was mainly due to the increase in period expenses caused by personnel investment and marketing activities and the increase in asset impairment provisions.
According to the financial report, in 2023, the company's sales expenses will be 2.123 billion yuan, a year-on-year increase of 23%, management expenses will be 678 million yuan, a year-on-year increase of 26%, and financial expenses will be 174 million yuan, a year-on-year increase of 27%. It can be seen that the company has failed to control the growth of expenses in operation and management.
In addition, due to the downturn in real estate and the thunderstorm of developers, a large scale of accounts receivable has been formed under the company's name, and there is a situation of bad debts. As of the end of 2023, the company's receivables mainly include notes receivable of 29 million yuan, accounts receivable of 3.564 billion yuan, and other accounts receivable of 396 million yuan, totaling more than 4 billion yuan, accounting for 28.21% of the company's total assets of 14.138 billion yuan at the end of 2023, which is large and relatively high. According to the financial report, in 2023, the company's credit impairment amount will be 355 million yuan.
It is understood that Evergrande owes more than 700 million yuan, Sunac owes 170 million yuan, and Blu-ray Development owes nearly 48 million yuan. After careful investigation, it is found that in 2023, the book balance of the company's accounts receivable aged less than one year will be 2.939 billion yuan, accounting for 60%, compared with 70% in the same period last year. At the same time, the company's accounts receivable turnover days are increasing, while the accounts receivable turnover ratio is also decreasing. From the end of 2016 to the end of 2023, the company's accounts receivable turnover days increased from 40.33 days to 114.57 days, and the accounts receivable turnover ratio decreased to 3.2 times, which is significantly lower than the industry average and industry median.
In addition, some other assets under the company's name are also impaired. For example, due to the thunderstorm of some developers, they were unable to pay the company for the goods, so they had to take out part of the real estate to pay off the debt. As a result, on the company's financial statements, the accounts receivable to the developer are turned into purchase money. In 2023, the prepaid purchase price under the company's name has accumulated to 330 million yuan.
And these purchase funds were even impaired, resulting in a loss of 70 million yuan in profits that year. Taking Evergrande as an example, in 2021, Evergrande owed the company about 180 million yuan for goods, and because there was no money to pay, it used 49 properties to pay off the debt. In order to get these houses, in addition to the payment of 180 million yuan, the company also paid Evergrande 200,000 yuan of "deposit of intention to work to housing", 2.88 million yuan of "deposit for house purchase", and 780,000 yuan of "house purchase difference".
However, Evergrande did not transfer the 49 sets of mortgaged properties to the company's name, but resold them to others. As a result, the company not only failed to recover the payment of 180 million yuan, but also did not get 49 properties, and later paid an additional 3.86 million yuan in deposits, deposits, and price differences to Evergrande, but there was no return. In this regard, on March 12, the company has filed a lawsuit against Evergrande.
The stock price plummeted, trapping its own employees
Before June 2021, the stock price of Three Trees, which rose rapidly, was one of the few super bull stocks in the A-share market that could rise more than tenfold in less than three years.
However, after hitting an all-time high of $134.63 in mid-2021, the company's share price has fallen all the way. Even though the company's operating income hits a record high in 2023, its stock price still has no intention of turning back. As of midday on April 23, the closing price of the company's shares was 31.58 yuan, down 2.23%, with a total market value of 16.6 billion yuan.
The company's stock price has been falling endlessly, which has also made investors complain. "The 47 yuan book is very uncomfortable, I can't imagine how those 80 yuan, or even hundreds of yuan, can survive!" said a shareholder in the Oriental Fortune Stock Bar.
In fact, the company's stock price fell the most, and those employees who participated in the fourth and fifth phases of the employee stock ownership plan were also injured the most. As of December 31, 2023, among the top ten shareholders of 3Trees, these two phases of employee stock ownership plans ranked the third and fourth largest shareholders through chioce's financial end.
It is understood that there are thousands of employees in total, and the price of holding shares is generally higher than 80 yuan, and the cost of holding shares in the fifth phase is even more than 100 yuan. According to the announcement, the company's employee stock ownership plan was originally set to have a three-year duration. In October 2023, the fourth phase will be liquidated and terminated, and employees can get back the principal and income.
However, the company extended its duration by another year to October 12, 2024. Now, in the face of the stock price in the early 30s, compared with the original holding cost of 80 yuan, the fourth floating loss is more than 50%. As for the fifth phase of the employee stock ownership plan, if nothing else, it will also expire in the first half of 2024.
If the company's stock price does not recover by then, the loss of the reduction will be compensated by the company's chairman Hong Jie according to the 10% investment rate of return, which is the agreement between Hong Jie and the shareholding employees.
"When will the fourth and fifth installments be paid? There is no way but to wait? Will we have to notify the extension in a few months?" a netizen who participated in the employee stock ownership plan complained on the social platform.
Behind the extension of the company's employee stock ownership plan is the company's tight financial pressure.
As of the end of 2023, the company's asset-liability ratio reached 80.88%, which is down from 82.01% at the end of 2022, but still high. At the same time, the company's current assets are 7.375 billion yuan, of which monetary funds are 1.712 billion yuan, current liabilities are 9.475 billion yuan, of which short-term borrowings are 1.31 billion yuan, and the balance of non-current liabilities due within one year is 777 million yuan. (This article was first published on the Titanium Media App, by Zhai Zhichao)