Yangtze River Business Daily reporter Shen Yourong
Industry leader Muyuan Co., Ltd. (002714. SZ) received a letter of regulatory inquiry. The letter of inquiry is for the 2023 annual report of Muyuan shares.
The Yangtze River Business Daily reporter found that the Shenzhen Stock Exchange inquired about the liquidity problems caused by the rising asset-liability ratio of Muyuan shares, the rationality of "double high deposits and loans", breeding costs and gross profit margins, and huge related party transactions, and asked for specific explanations in combination with the industry situation.
As of the end of 2023, the asset-liability ratio of Muyuan shares was 62.11%, and the financial expenses of the year reached 3.054 billion yuan, both of which were the highest level in history. At the end of the period, the company's long-term and short-term debts totaled 74.650 billion yuan, an increase of 15.187 billion yuan from the end of the previous year.
In 2023, Muyuan Co., Ltd. will sell 63.816 million live pigs and achieve operating income of 110.861 billion yuan, a year-on-year decrease of 11.19%, the first decline in nearly 10 years; Net profit attributable to shareholders of the parent company (hereinafter referred to as "net profit") was -4.263 billion yuan, which was also the first loss in nearly 10 years.
Despite the obvious "pig cycle", in the past 10 years, Muyuan shares have never made an asset impairment provision, and in 2023, the company will rarely make a provision of about 200 million yuan for the first time.
At the end of 2023, the fixed assets of Muyuan Co., Ltd. reached 112.150 billion yuan, and the company did not make an impairment provision for fixed assets, which was also questioned.
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The debt ratio was 62%, a record high
Muyuan's annual report was again subject to regulatory inquiries.
On the evening of May 12, Muyuan shares disclosed the 2023 annual report inquiry letter issued by the Shenzhen Stock Exchange. The first question inquired by the Shenzhen Stock Exchange was the reasonableness and liquidity risk of "double high deposits and loans".
As of the end of 2023, Muyuan's asset-liability ratio was 62.11%, an increase of 7.75 percentage points from the end of the previous year and the highest level since its listing in 2014, the quick ratio was 0.23 times, down 25.81% year-on-year, and the EBITDA interest protection ratio was 3.88 times, down 62.29% year-on-year.
At the end of the period, the company's current liabilities were 94.659 billion yuan, current assets were 63.583 billion yuan, and current liabilities were 31.076 billion yuan more than current assets. Among them, the amount of short-term liabilities was 46.929 billion yuan, an increase of 60.91% year-on-year; The amount of non-current liabilities due within one year was 8.651 billion yuan, long-term borrowings were 9.863 billion yuan, and bonds payable were 9.207 billion yuan. The total long-term and short-term debt was 74.650 billion yuan, an increase of 15.187 billion yuan compared with 59.463 billion yuan at the end of the previous year.
At the end of 2023, Muyuan's monetary funds were 19.429 billion yuan, a decrease of 1.365 billion yuan from the end of the previous year. Among the 19.429 billion yuan of monetary funds, 5.653 billion yuan were restricted funds.
In addition, the company's accounts payable at the end of the period amounted to 23.463 billion yuan, and other payables amounted to 11.092 billion yuan.
In 2023, the company's financial expenses will be 3.054 billion yuan, and from 2020 to 2022, they will be 688 million yuan, 2.178 billion yuan, and 2.775 billion yuan respectively, increasing year by year.
Judging from the above financial data, Muyuan shares have greater financial pressure.
The Shenzhen Stock Exchange requires Muyuan to explain the reasons and reasonableness of holding monetary funds and long-term and short-term borrowings at the same time in combination with working capital needs and operating cash flow; For the debt repayment plan, source of funds and financing arrangements for the liabilities due within one year, explain whether there is uncertainty in the repayment of the above debts due in combination with the restriction of monetary funds, and analyze whether the company's debt structure and scale are stable and controllable in combination with the asset-liability ratio, cash flow, important income and expenditure arrangements, financing channels, capital costs, etc., quantitatively analyze the short-term and long-term debt repayment ability, and whether the company has liquidity risks.
The Yangtze River Business Daily reporter found that in response to the 2019 annual report and the 2021 annual report, the Shenzhen Stock Exchange has also successively issued inquiry letters to Muyuan Co., Ltd. to inquire about liquidity risks, "high deposits and loans" and other issues.
At present, the outside world is highly concerned, and whether Muyuan shares, which are frequently questioned by regulators, really have liquidity risks?
Huge related-party transactions are alleged to be the transfer of benefits
In addition to liquidity risks, Muyuan shares also have a lot of abnormalities.
At the bottom of the "pig cycle", the operation of breeding enterprises are under pressure, as a breeding leader, Muyuan shares can not be left alone, reducing costs and increasing efficiency has become the key word. The cost of Muyuan shares has obvious advantages, which raises doubts.
In 2023, Muyuan's breeding business will achieve operating income of 108.224 billion yuan, a year-on-year decrease of 9.62%, and a gross profit margin of 2.92%; The slaughtering and meat business achieved operating income of 21.862 billion yuan, a year-on-year increase of 45.79%, and the gross profit margin was 0.16%; The operating income of the trading business was 3.023 billion yuan, a year-on-year decrease of 45.13%.
The cost of the company's pig breeding business is mainly composed of feed, employee salaries, drug and vaccine costs, depreciation, etc., and the average complete cost of commercial pigs in 2023 is about 15 yuan/kg.
What is highly questionable is that there is a significant difference between the feed structure in Muyuan's pig breeding business and that of the same industry. The amount of soybean meal used in the company's feed accounts for only 7.3%, which is about half of the industry average of 14.5%. In 2023, the amount of soybean meal used in the company's feed will be further reduced to 5.7%.
Why is the proportion of soybean meal in the feed structure of Muyuan shares much lower than that of peers? Why is the gross profit margin of the company's breeding business significantly higher than that of comparable companies in the industry? The Shenzhen Stock Exchange requires Muyuan to explain its reasonableness in combination with the situation of comparable companies in the same industry.
The asset impairment of Muyuan shares has also been abnormal. Since its listing in early 2014, Muyuan has not made any provision for impairment of fixed assets and inventory. In 2023, the company will make an asset impairment provision for inventory for the first time.
According to the annual report data, the company's biological assets include consumable biological assets and productive biological assets, with a total book value of 41.965 billion yuan, accounting for 21.48% of the total assets. Among them, consumable biological assets include piglets, nursery pigs, fattening pigs and others, with a book value of 32.650 billion yuan at the end of the period, and a book value of 9.315 billion yuan at the end of the period of productive biological assets. The company made provisions of 43.0951 million yuan and 159 million yuan respectively for inventory decline of inventory commodities and consumable biological assets in the inventory.
Previously, the market had repeatedly questioned the asset impairment of Muyuan shares, but the company replied that "after testing, there is no sign of impairment".
The Shenzhen Stock Exchange requires Muyuan to explain the specific reasons and reasonableness of the sudden new provision for inventory price decline, and the adequacy of the provision for inventory price decline in the current period.
In 2023, the company did not make an impairment provision for fixed assets, which also attracted attention.
In recent years, the issue of related party transactions of Muyuan shares has been questioned, and the market has repeatedly questioned the company's transfer of interests through related party transactions.
In 2023, the amount of related party transactions arising from the purchase of goods and the receipt of labor services will be 3.492 billion yuan. Among the top five suppliers of related procurement, the procurement from Henan Muyuan Construction Engineering Co., Ltd., Henan Muyuan Equipment Co., Ltd., and Henan Zhengtai Muyuan Intelligent Electrical Technology Co., Ltd. is mainly engineering and equipment procurement; The procurement content from Henan Muyuan Logistics Co., Ltd. is mainly transportation services; The procurement from Henan Juai Digital Technology Co., Ltd. and its subsidiaries includes goods, platforms and other business services.
The Shenzhen Stock Exchange requires Muyuan to explain in detail the necessity of purchasing and selling only to related parties or mainly to related parties, the fairness of pricing, and whether there is any damage to the interests of listed companies and the transfer of benefits to related parties.
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