Producer: Sina Finance Listed Company Research Institute
Author: Kun
In the situation of continuous losses of a group of computer vision peers, Geling Shentong once achieved the first profit in 2022, but failed to extend the profit to the second year.
Recently, Geling Shentong released its 2023 annual report and 2024 first quarter report. In 2023, Geling Shentong will achieve an operating income of 262 million yuan, a year-on-year decrease of 25.84%, which is the first time that the company's revenue scale has shrunk since the disclosure of results, and the net profit attributable to the owners of the parent company in the same period will be -90.3332 million yuan, a significant decrease of 376.97% year-on-year compared with the net profit attributable to the parent company of 32.6149 million yuan in the same period last year, and the barely realized profit has not been extended to the second year.
In the first quarter of 2024, the performance of Geling Shentong will continue to decline, with an operating income of only 31 million yuan, a year-on-year halving of 54.51%, and a net profit attributable to the parent company of -27.3732 million yuan in the same period, a significant decrease of 3210.88% compared with the same period last year.
It should be noted that in 2022, Geling Shentong will be able to achieve profitability, and because the company has more than 1.3 billion funds in financial management that year, it will achieve interest income of 33.2361 million yuan, exceeding the net profit attributable to the parent company that year. In 2023, Geling Shentong will also continue to manage money, with financial management funds exceeding 2.1 billion yuan, and achieving interest income of 40.8284 million yuan that year, significantly exceeding that of 2022, and financial expenses will increase by 20% year-on-year.
In addition to the obvious decline in income, the management expenses and R&D expenses of Geling Shentong have also increased significantly, and it is obviously unsustainable to rely on compressing expenses to expand profit margins. What's more, in 2023, Geling Shentong's large customers will also be more concentrated, with the top five customers accounting for more than 9% of the revenue, and the first largest customer accounting for 82.62%.
Income shrank by a quarter, and the "financial management method" failed, turning from profit to loss
Since applying for listing and disclosing results, although the scale of Geling Shentong's performance has hovered at hundreds of millions of yuan, it has maintained relatively sustained growth, not to mention taking the lead in turning losses into profits in 2022.
However, the performance of Geling Shentong in 2023 has put a question mark on the sustainability of the previous turnaround. In 2023, Geling Shentong will achieve an operating income of 262 million yuan, a year-on-year decrease of 25.84%, and the scale of revenue will shrink for the first time. Not only that, in 2023, Geling Shentong will fall into a loss again, achieving a net profit attributable to the owners of the parent company of -90.3332 million yuan, a significant decrease of 376.97% year-on-year compared with the net profit attributable to the parent company of 32.6149 million yuan in the same period last year.
In the first quarter of 2024, Geling Shentong's performance not only failed to improve, but also continued to decline. The operating income in the current period was only 31 million yuan, a year-on-year decrease of 54.51%, and the net profit attributable to the parent company in the same period was -27.3732 million yuan, a significant decrease of 3210.88% compared with the same period last year.
At that time, there were many doubts about the "moisture" behind Geling Shentong's profitability. In 2022, Geling Shentong will have a total of 1.369 billion yuan in bank wealth management, of which 992 million yuan will be raised (more than half of the 1.826 billion yuan raised by its listing), 377 million yuan of its own funds, and 655 million yuan of outstanding balance. Financial expenses were -32.3767 million yuan, a year-on-year change of -771.39% compared with 3.7155 million yuan last year.
In 2023, Geling Shentong's financial management efforts will be further deepened. According to the financial report, in 2023, Geling Shentong will have a total of 2.169 billion yuan of funds in bank financial management, of which 766 million yuan will come from raised funds, 1.403 billion yuan will come from its own funds, and the unexpired balance will be 1.089 billion yuan. In 2023, Geling Shentong's financial expenses will be 38.54 million yuan, an increase of nearly 20% compared with 32.38 million yuan in the same period last year, of which the interest income will be 40.83 million yuan, which is also significantly higher than the 33.24 million yuan in the same period last year.
Source: Company announcement
In other words, if the above-mentioned financial interest income is not realized, the net loss of Geling Shentong in 2023 may exceed 100 million yuan.
In 2023, the revenue scale of Geling Shentong fell sharply by a quarter year-on-year, and in addition, the reduction of expenses is also the reason why Geling Shentong turned losses into profits last year, sales expenses and management expenses continued to decrease, and the year-on-year increase in R&D expenses also decreased significantly. In 2023, Geling Shentong's sales expenses decreased by 19.39% year-on-year, while administrative expenses increased by 18.82%.
In addition, Geling Shentong, which has entered the large model, has also increased its investment in R&D expenses recently, compared with the single-digit growth of R&D investment in the previous two years, and the R&D expenses in 2023 will be 184 million yuan, a year-on-year increase of 39%. In the first quarter of 2024, 44 million yuan will be invested, a year-on-year increase of 33.48%.
The largest customer accounted for 82.62% of the revenue and has given up all the gains in 2023
The revenue shrank by a quarter, not only failed to continue the profitability of the previous year, but the current Geling Shentong is also facing the problem of a high concentration of large customers.
According to the financial report, in 2023, the sales of the top five customers of Geling Shentong will be 240 million yuan, accounting for 91.56% of the annual revenue. Among them, the sales to the largest customer, Agricultural Bank of China Co., Ltd., were 217 million yuan, accounting for 82.62% of the annual revenue, while the total revenue of the remaining four customers accounted for 8.94%. In other words, the income scale of Geling Shentong in 2023 is basically supported by the Agricultural Bank of China.
Source: Company announcement
Compared with the previous year, Geling Shentong has always had the problem of a relatively concentrated large customer, but no year can be more concentrated than 2023. From 2018 to 2020, the company's sales revenue to the top five customers accounted for 78.23%, 67.55% and 57.57% of the main business income in the current period, respectively, and rose to 74.54% in the first half of 2021, and the sales of the top five customers in 2022 reached 315 million yuan, accounting for 89.07% of the total annual sales. Until 2023, it will account for more than ninety percent.
From this point of view, individual large customers have a significant impact on the income of Geling Shentong, and once the loss of large customers occurs, the performance of Geling Shentong will face unbearable consequences.
Not only is the risk higher, but the concentration of large customers has also had a negative impact on the company's collection. Due to the over-reliance on individual customers, Geling Shentong's bargaining power is difficult to say, and the ability to collect payments has gradually deteriorated. From 2020 to 2023, the turnover days of accounts receivable of Geling Shentong will be 90.44 days, 180.23 days, 207.66 days, and 203.93 days respectively, and the collection speed will be significantly slower.
The performance has declined again, and it is difficult to be optimistic about the ability to rely on the operation of large customers, and the investors of Geling Shentong naturally "vote with their feet". At the beginning of 2023, Geling Shentong took advantage of ChatGPT to achieve a wave of stock price rise, and once rose to 54.29 yuan per share in April 2023. However, when the boom flattened, Geling Shentong, which did not have the support of a strong performance core, quickly retreated, and even gave up all the gains since 2023. Up to now, Geling Shentong's share price is even less than 14 yuan per share, which is more than 60% compared with the listing price of 39.49 yuan two years ago.