Jiayuan Technology's loss in the first quarter exceeded that of last year, and its operating cash flow exceeded its income for three consecutive years

Source of this article: Times Business School Author: Peng Chenyu

Source: Times Business School

Author: Peng Chenyu

Edited by Sun Yiming

On April 23, Jiayuan Technology (301117. SZ) disclosed its 2023 annual report and 2024 first quarter report. The financial report shows that in the first quarter of 2024, the loss of Jiayuan Technology's net profit attributable to the parent has exceeded that of last year.

According to the 2023 annual report, Jiayuan Technology is a provider focusing on network information security products and integrated informatization solutions, focusing on the fields of national defense and military industry, medical health and government services, mainly providing customers with "software and hardware integration" informatization integrated solutions for intelligent system construction and industry informatization customized applications.

On January 17, 2022, Jiayuan Technology launched a new investment in CITIC Securities (600030. SH), successfully landed on the Growth Enterprise Market of the Shenzhen Stock Exchange, and overraised 405 million yuan.

In terms of performance, in the first year of listing (2022), Jiayuan Technology's revenue, net profit attributable to the parent company, and net profit deducted from non-attributable to the parent company decreased by 14.93%, 33.32%, and 42.57% year-on-year respectively, with a large decline in performance.

In contrast, before listing, from 2018 to 2021, Jiayuan Technology's operating income increased from 103 million yuan to 317 million yuan year by year, with a compound annual growth rate of 45.46%, and during the same period, the company's net profit attributable to the parent company increased from 21.288 million yuan to 92.5009 million yuan year by year, with a compound annual growth rate of 63.20%, and the performance showed a high growth trend.

According to the latest annual report, in the second year of listing (2023), Jiayuan Technology's performance continued to decline, with operating income of 227 million yuan, down 15.63% year-on-year, and net profit attributable to the parent company of -5.3529 million yuan, down 108.69% year-on-year, ushering in the first loss of listing.

In the first quarter of this year, Jiayuan Technology's profit loss continued to further expand, with net profit attributable to the parent company and net profit deducted from non-attributable to the parent company falling by 288.85% and 479.41% year-on-year respectively. It is worth mentioning that in the first quarter of this year, Jiayuan Technology's net profit loss attributable to the parent reached 15.8053 million yuan, which has exceeded the loss of last year (5.3529 million yuan).

According to the 2023 annual report, the decline in Jiayuan Technology's revenue is mainly due to the decline in the company's network information security product revenue, and the downstream customers of this type of product are mainly special units, and the progress of some project bidding, contract signing, and acceptance in 2023 is relatively slow.

At the same time, Jiayuan Technology's operating cash flow situation is also worrying.

According to the financial report, from 2021 to the first quarter of 2024, the net cash flow generated by Jiayuan Technology's operating activities will be -50 million yuan, -191 million yuan, -52 million yuan, and -32 million yuan respectively, showing a continuous outflow trend.

In the same period, the net profit of Jiayuan Technology was 93.087 million yuan, 61.5083 million yuan, -5.7857 million yuan and -16.208 million yuan respectively, and the net operating cash flow was quite different from the net profit of the current period.

Regarding the above situation, Jiayuan Technology said in its 2023 annual report that it is mainly due to the increase in the company's business scale, on the one hand, the increase in unfinished projects, and on the other hand, it is greatly affected by the fluctuation of operating receivables and payables. In addition, because the company's downstream customers are governments, public institutions, state-owned enterprises and military units, such customers are subject to their payment approval process is more complicated, the payment cycle is generally longer, and the payment collection is relatively slow, resulting in the company's net cash flow from operating activities is negative and lower than the net profit.

In addition to poor profit performance, one of the actual controllers of Jiayuan Technology also recently resigned as deputy general manager.

On April 23, Jiayuan Technology announced that the company's board of directors received a written resignation report from Deputy General Manager Yin Mingjun on April 19. Yin Mingjun applied for resignation from the position of deputy general manager of the company for personal reasons, and will not hold any position in the company after his resignation.

It should be noted that Yin Mingjun and his spouse Wang Jin are the actual controllers of Jiayuan Technology.

According to the announcement on the resignation of the company's senior managers, as of April 23, Yin Mingjun indirectly controlled 2.43% of the equity of Jiayuan Technology through Chengdu Jia Duoji Business Information Consulting Center (Limited Partnership), and his spouse Wang Jin directly held 37.68% of the equity of Jiayuan Technology, and indirectly held 0.12% of the equity of Jiayuan Technology through Xiamen Jiade Chuangxin Venture Capital Partnership (Limited Partnership), holding a total of 37.80% of the equity of Jiayuan Technology.

As a result, Wang Jin and Yin Mingjun together control 40.23% of the company's equity. At present, neither of them has reduced their stake in the company.

In terms of stock price, as of the close of trading on April 23, Jiayuan Technology closed at 30.72 yuan per share, and the share price has fallen 33.68% from the issue price (before the resumption), with a total market value of 2.834 billion yuan.

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