Company dynamics:
[Rapid Innovation Terminates IPO on the Main Board of the Shenzhen Stock Exchange]
On May 11, the website of the Shenzhen Stock Exchange disclosed the decision to terminate the review of the initial public offering of shares of Shenzhen Feisu Innovation Technology Co., Ltd. (hereinafter referred to as "Feisu Innovation") and listing on the main board. Feisu Innovation focuses on the R&D, design and sales of core equipment and general accessories in the field of network communication, providing one-stop supply of communication equipment, general accessories and system solutions for global customers. Its sponsor is China Merchants Securities Co., Ltd., and the sponsor representatives are Yang Meng and Liu Xingde.
[Gangdi Technology IPO update to submit relevant financial information]
On May 12, according to the official website of the Shenzhen Stock Exchange, the IPO of Wuhan Gangdi Technology Co., Ltd. (hereinafter referred to as "Gangdi Technology") has updated and submitted relevant financial information. Gangdi Technology is a high-tech enterprise focusing on product development, production and sales in the field of industrial automation, including automation drive products, intelligent control systems, and management system software. It is understood that Gangdi Technology was approved at the meeting on January 5 this year, and it is also the first IPO company to be held this year.
[Shanghai Stock Exchange terminates the IPO review of Hengda Intelligent Control Science and Technology Innovation Board]
On May 11, the Shanghai Stock Exchange terminated its issuance and listing review due to the withdrawal of the issuance and listing application of Zhengzhou Hengda Intelligent Control Technology Co., Ltd. (hereinafter referred to as "Hengda Intelligent Control") and its sponsor. Hengda Intelligent Control has long focused on the field of intelligent coal mining system, specializing in the research and development, production and sales of coal intelligent mining control system technology and products.
Corporate Public Opinion:
[Haochuang Ruitong GEM IPO: The average salary of personnel is generally low, and it is suspected that expenses are undercounted and profits are inflated]
On April 25, the Shenzhen Stock Exchange issued an announcement to suspend the review of the issuance and listing of Haochuang Ruitong. Haochuang Ruitong's IPO plans to raise 476.5364 million yuan, of which 156.9906 million yuan will be used for the production and construction project of intelligent ring main unit, 102.5233 million yuan will be used for the production and construction project of intelligent column switch, 117.0226 million yuan will be used for the construction project of intelligent power distribution R&D center, and the remaining 1000000 yuan will be used to supplement working capital. The sponsor is Changjiang Securities, and the auditor is Dahua Certified Public Accountants.
According to the prospectus and relevant public information, except for R&D personnel, the average salary of other types of work is far lower than the industry average. According to the prospectus information, there are 10 directors, supervisors and senior managers of Haochuang Ruitong, who will receive a salary of 3.9673 million yuan in 2023, with an average salary of 396,700 yuan/year/person, while the average salary of the entire management personnel in 2021 and 2022 will be 144,900 yuan/year/person and 158,700 yuan/year/person respectively, which is almost 50% lower than the average salary of industry managers.
In addition, the number of management personnel in 2021 and 2022 will be 39 and 35 respectively, and we can assume that the average salary of directors, supervisors and senior executives in 2021 and 2022 will be roughly the same as in 2023, and the average salary will be 144,900 yuan/year/person and 158,700 yuan/year in 2021 and 2022, and the remaining management personnel in 2021 and 2022 will be 29 and 25 people, and the average salary will only be 60,000 yuan/year/person. It means that the remuneration of other management personnel is not as good as that of production personnel, only slightly higher than the average salary of Cangzhou City, which is obviously not in line with business logic, and the issuer is likely to undercount the remuneration of management personnel and inflate profits. (Source: Valuation House)
[Operating cash flow continues to be negative, Taihu Yuanda Beijing Stock Exchange IPO]
Taihu Yuanda applied for the IPO of the Beijing Stock Exchange, and in terms of performance, Taihu Yuanda performed well. Its revenue growth rate in 2021 and 2022 will remain around 30% for two consecutive years, and the company's net profit growth rate in 2022 will exceed the revenue growth rate. It is worth noting that despite the continuous growth of Taihu Yuanda's performance, the operating cash flow continued to be negative during the reporting period. From 2020 to 2023, the net outflow of operating cash flow of Taihu Yuanda will be 118 million yuan, 207 million yuan, 151 million yuan, and 166 million yuan respectively, and the net outflow will be 642 million yuan in four years.
Regarding the continuous outflow of the company's operating cash flow, Taihu Yuanda explained that the company included the cash obtained from the discounting of commercial bills of general grade as cash inflow from financing activities, resulting in the continuous outflow of the company's operating cash flow. After Taihu Yuanda eliminated the bill discounting items, the net cash flow generated by the company's operating activities in each period of the reporting period was 5.2131 million yuan, 16.399 million yuan and 47.8893 million yuan respectively, all of which were positive. In addition, the company's accounts receivable are also the main factors leading to the lack of cash in daily operations.
From 2020 to 2023, the company's accounts receivable balance will be 166 million yuan, 218 million yuan, 270 million yuan, and 273 million yuan respectively, showing a growing trend. According to the first round of inquiry letters, Taihu Yuanda is currently mainly selling on credit, and most of its customers have long account periods, while upstream suppliers have low credit lines and short credit periods, resulting in tight working capital. It is worth noting that the bad debt provision ratio of accounts receivable for 1-2 years is 30%, which is the highest among comparable companies, higher than the 10% of Zhongchao New Materials, Zhizheng Shares, Hangzhou High-tech and 11.60% of Wanma Shares. (Source: Under the Sycamore Tree V)
[IPO of Boyuan shares: overcapacity gross profit margin has declined year after year, and future performance growth may become a "blank check"]
After nearly two years of fierce battles, Boyuan shares, which started its listing in June 2022, finally submitted its registration to the exchange on March 4, 2024, and it seems that it is only one step away from obtaining registration approval for successful listing. However, with the recent tightening of supervision and the substantial increase in the threshold for listing on the GEM, the gross profit margin of Boyuan shares has declined year after year, and the increase in revenue and profit in 2023 may become obstacles to its registration approval.
In 2021, 2022, and 2023 (hereinafter referred to as the "reporting period"), the operating income of Boyuan Co., Ltd. will be 524 million yuan, 798 million yuan, and 1.025 billion yuan respectively, a year-on-year increase of 52.29% compared with 2022, and the growth rate in 2023 has slowed down to 28.44%. Net profit also grew sluggishly, with 103 million yuan, 176 million yuan, and 182 million yuan respectively, up 70.70% year-on-year in 2022, but only 5.77 million more in 2023 than in 2022, almost flat. Obviously, Boyuan shares will be in a state of increasing revenue but not profits in 2023.
Boyuan shares in the cost of increasing at the same time the gross profit margin declined. During the reporting period, the operating costs of Boyuan shares were 347 million yuan, 518 million yuan and 739 million yuan respectively. In 2023, the cost growth rate (42.81%) of Boyuan shares will be 1.5 times the revenue growth rate (28.44%). At the same time, the company's comprehensive gross profit margin in each period was 33.82%, 35.18%, and 27.89% respectively, a decrease of 7 percentage points in 2023 compared with 2022, and fell below 30% for the first time. In this regard, Boyuan Co., Ltd. said that the decline in gross profit margin in 2023 is affected by the high price of fertilized iodine and the rising cost of organic iodide.
If the market price of iodine falls sharply, the price of the company's products will also fall, and there is a risk of a decline in gross profit margin, in other words, if the market price of iodine rises, the company's product price and gross profit margin should rise. In the risk warning, Boyuan attributed the reason for the low gross profit margin in 2023 to the high price of refined iodine, and there is an obvious conflict between the two statements. According to Boyuan, in 2022, it is the rising iodine market price that will bring about an increase in gross profit margin. However, in 2023, although the growth rate of iodine market prices will slow down but still rise, the gross profit margin of Boyuan shares will decline due to the higher purchase price of refined iodine. In this regard, it is speculated that the dividends brought by the rise in iodine market prices to Boyuan shares may have reached a bottleneck, and it is difficult for the product pricing of Boyuan shares to continue to follow the increase in iodine market prices to make synchronous changes. In the future, regardless of whether the market price of iodine rises or falls, the company's gross profit margin may decline further. (Source: Huacai Information)