The year-on-year turnaround and net profit soared by more than 20 times, which is Sunflower (300111) handed over its 2023 financial report card on April 24. However, this does not become evidence that Sunflower has been "bitter and sweet", the company's net profit in 2023 will turn around, mainly by non-recurring profit and loss, if you look at the net profit after deducting non-recurring, Sunflower will increase and lose in 2023. Under the sluggishness of the main business, Sunflower will also plan cross-border photovoltaic in 2023, but it will fail in the end. Reflected in the financial statements, Zhejiang Longxiang New Energy Technology Co., Ltd. (hereinafter referred to as "Zhejiang Longxiang"), a holding subsidiary of TOPCon Battery that was acquired that year, will lose 5.7699 million yuan in 2023. At the same time, the company's administrative expenses increased by more than 45% year-on-year.
The net profit increased after deducting non-profits
The attributable net profit increased by 20 times year-on-year, but the net profit after deducting non-profits decreased by 1898.08% year-on-year, which is an unusual situation in Sunflower's financial statements in 2023.
Financial data show that in 2023, Sunflower will achieve an operating income of about 338 million yuan, a year-on-year increase of 0.76%, a corresponding attributable net profit of about 21.75 million yuan, a year-on-year increase of 2009.93%, and a corresponding net profit of about -15.69 million yuan, a year-on-year decrease of 1898.08%.
The reason for the above situation is the higher non-recurring profit and loss of sunflower in 2023. The main item affecting the increase in the company's non-recurring profit and loss is the reversal of impairment provisions for receivables that are separately tested for impairment. In 2023, the amount of the above projects will be 37.6328 million yuan, of which the accounts receivable of Jiangsu Zhenfa New Energy Technology Development Co., Ltd. will be 47.8155 million yuan, and the bad debt provision has been fully provided in the previous period, and 37 million yuan will be recovered in the current agreement, and 632,800 yuan of accounts receivable of other companies that have been separately accrued in the previous period will be recovered.
It is worth mentioning that from 2022 to 2023, the net profit of sunflowers after deducting non-profits has suffered two consecutive losses. Financial data show that from 2021 to 2022, Sunflower's operating income will be about 297 million yuan and 336 million yuan respectively, the corresponding attributable net profit will be about 53.42 million yuan and -1.139 million yuan respectively, and the corresponding net profit after deducting non-profits will be about 3.809 million yuan and -785,200 yuan respectively.
Xu Xiaoheng, an investment and financing expert, said that compared with the attributable net profit, the attributable net profit after deducting non-profit can better reflect the company's main business operation, and if the indicator continues to be negative, it means that the quality of the company's main business needs to be improved.
In response to the company's related questions, a reporter from Beijing Business Daily sent an interview letter to Sunflower, but as of press time, no reply from the company has been received.
Gross profit margin fell twice in a row
Sunflower, whose net profit has been losing for two consecutive years after deducting non-profits, has also seen a significant decline in gross profit margin from 2021 to 2023.
Oriental Fortune shows that from 2021 to 2023, the gross profit margin of sunflower will be 36.9%, 28.67%, and 24.8% respectively, declining year by year.
According to the data, Sunflower's main business focuses on the pharmaceutical field, mainly for the research and development, production and sales of anti-infective, cardiovascular, digestive system and other drugs, and the leading products cover anti-infective drugs, cardiovascular drugs, digestive system drugs and other fields. During the reporting period, the company's operating income was composed of APIs and preparations, of which clarithromycin APIs accounted for the main component, which was mainly sold to domestic and foreign manufacturers and traders producing clarithromycin preparations.
In 2023, the sales revenue of sunflower APIs will further increase to 227 million yuan, an increase of 14.86% over the same period of last year, accounting for 67.19%, and in terms of preparation drugs, the sales revenue of preparation drug products will be 108 million yuan, a decrease of 20.13% from the same period of last year, accounting for 31.79%.
In 2023, the gross profit margin of sunflower raw material products will be 15.82%, a year-on-year increase of 5.79%, and the gross profit margin of pharmaceutical products will be 43.95%, a year-on-year decrease of 10.52%.
Sunflower said that with the continuous implementation of the national volume procurement policy, the provinces have paid more attention to the national centralized procurement, and the sales weight of competing products in the centralized procurement area has increased year-on-year, and due to the fluctuation of market demand and the impact of centralized procurement price reduction, the sales unit price and sales volume of the company's preparation drug products clarithromycin tablets and lasidipine tablets have declined, resulting in a significant decline in the gross profit of the above products. In addition, with the company's in-depth promotion in the circulation market in the second half of 2023, the sales volume of azithromycin tablets and injections of pharmaceutical products have increased, and the sales revenue has increased by 45.59% over the same period of the previous year.
Cross-border PV failure
In 2023, Sunflower also crossed the border, but in the end it was unsuccessful. This crossover has also had an impact on the company's net profit in 2023.
Specifically, on February 27, 2023, Sunflower acquired 100% of the equity of Zhejiang Longxiang held by Feng Shichao and Zhu Xuefeng at a consideration of 0 yuan (the amount of capital contribution is 10 million yuan, and the actual payment is 0 yuan), and the above merger constitutes a merger not under the same control, and the company will include Zhejiang Longxiang in the consolidated statements since March 2023.
On March 14, 2023, Sunflower signed the "Investment Cooperation Agreement" with Shaoxing Binhai New Area Integrated Circuit Industry Equity Investment Fund Partnership (Limited Partnership) and Shanghai Longxiang Private Equity Fund Management Co., Ltd., under which the three parties plan to jointly invest in Zhejiang Longxiang, and operate the TOPCon high-efficiency solar cell project with the project company as the main body, and plan to build a production line with an annual output of 10GW TOPCon cells.
However, the project was eventually terminated. In February 2024, Sunflower signed the "Termination Agreement of the Investment Cooperation Agreement" with all relevant parties, deciding to terminate the project cooperation, dissolve and liquidate Zhejiang Longxiang, and cancel Zhejiang Longxiang.
The annual report shows that in 2023, Zhejiang Longxiang's operating income will be 0, and the net profit will be a loss, which will be -5.7699 million yuan. In addition, in 2023, the management expenses of sunflowers will be 45.7851 million yuan, a year-on-year increase of 45.41%, mainly due to the start-up expenses of Zhejiang Longxiang in the early stage during the reporting period.
Yuan Shuai, deputy secretary-general of Zhongguancun Internet of Things Industry Alliance, said that the photovoltaic industry, as a highly competitive and rapidly updated field, has high requirements for the technical strength, financial strength and market insight of enterprises. When cross-border enterprises enter this field, they often face greater market risks and uncertainties. In the face of market changes and industry competition, enterprises need to flexibly adjust their strategies to deal with potential risks and challenges.
It is worth mentioning that sunflowers are currently also crossing metal-based ceramics. The company is planning to jointly invest in the establishment of a project company with related parties and other investors to engage in R&D, production, sales and service related to metal-based ceramics. According to the company's 2023 annual report, as of the disclosure date of the report, the company's metal-based ceramic new materials business is still in the early stage of start-up.
Beijing Business Daily reporter Ding Ning