Source of this article: Times Business School Author: Lei Ying
Source: Times Business School
Author: Lei Ying
Edited by Sun Huaqiu
For IPO companies, the effective registration does not equate to a successful listing.
According to the official website of the Shenzhen Stock Exchange, Zhejiang Fute Technology Co., Ltd. (hereinafter referred to as "Fute Technology") applied for an IPO on the Growth Enterprise Market (GEM) and was registered on October 20, 2023. However, it has been more than half a year since the registration took effect, and Fute Technology has not yet been listed.
Times Business School found that during the reporting period (2020-the first half of 2023), the R&D expense ratio of Fute Technology fluctuated significantly, and the asset-liability ratio at the end of each period exceeded 66%, and the debt repayment pressure was greater.
On May 9th and 14th, Times Business School sent letters and calls to the office of the secretary of the board of directors of Fute Technology on issues related to the stability of cooperation with major customers and the fluctuation of R&D expense rates. As of press time, the company has not responded.
GAC Group and NIO are among the top five customersAccording to the prospectus, Fute Technology is mainly engaged in the research and development, production and sales of high-voltage power supply systems for new energy vehicles. During the reporting period, the sales revenue of the company's on-board high-voltage power supply system accounted for more than 92% of the main business revenue, and the sales of the top five customers accounted for more than 95%.
This means that the increase or decrease in orders from the top five customers has a greater impact on the company's performance.
In each period of the reporting period, the operating income of Fute Technology was 295 million yuan, 964 million yuan, 1.650 billion yuan and 874 million yuan respectively, and the net profit was -14.8137 million yuan, 56.746 million yuan, 86.7721 million yuan and 57.8212 million yuan respectively.
Among them, from 2020 to 2022, the company's revenue will grow at a compound annual growth rate of 136.60%, and its net profit will turn around in 2021. This is in line with the company's products from NIO (NIO.NYSE), GAC Group (601238. SH) is inseparable from the high growth of order revenue of its two major customers.
According to the prospectus, from 2020 to 2022, Fute Technology's sales revenue from NIO increased from 6.3242 million yuan to 398 million yuan year by year, with a compound annual growth rate of 692.86%; During the same period, the company's sales revenue from GAC Group increased from 161 million yuan to 651 million yuan year by year, with a compound annual growth rate of 101.10%.
During the reporting period, NIO climbed from the company's fourth largest customer to its second largest customer, while GAC Group remained the company's largest customer.
It is worth mentioning that both NIO and GAC Group have indirect access to Fute Technology.
The R&D expense ratio fluctuates widelyIn addition to the relationship with major customers, the R&D expense ratio of Fute Technology also fluctuates greatly.
According to the prospectus, from 2020 to the first half of 2023, the company's R&D expense ratios were 13.13%, 5.63%, 6.86%, and 11.15%, respectively, while the average R&D expense ratios of comparable companies in the same industry were 16.65%, 11.60%, 9.75%, and 11.09% respectively.
It is not difficult to find that from 2020 to 2022, the R&D expense ratio of Fute Technology continued to be more than 2.89 percentage points lower than the average of its peers. In the first half of 2023, the company's R&D expense ratio increased by 4.29 percentage points compared with 2022 and jumped above the industry average.
From the breakdown of R&D expenses, during the reporting period, employee compensation accounted for more than 72% of the company's R&D expenses.
According to the prospectus (previous draft), as of June 30, 2022, there were 364 R&D technicians of Fute Technology, accounting for 28.42% of the total number of employees; According to the prospectus (registration draft), as of June 30, 2023, the company's R&D technicians were 509, accounting for 36.23% of the total number of employees.
It is not difficult to find that at the end of the first half of 2023, the number of R&D technicians of Fute Technology increased by 145 year-on-year, a year-on-year increase of 39.84%.
In addition, in the first half of 2023, the company's R&D expenses will be 71.5153 million yuan, a year-on-year increase of 119.79%.
In the first round of inquiry letters, the Shenzhen Stock Exchange asked Foote Technology to explain the composition and average salary of personnel included in R&D expenses.
According to the reply document to the first round of inquiry letter (disclosed on September 27, 2022), in the first half of 2022, a total of 395 people (including 22 middle and senior personnel and 373 grassroots personnel) in the company's technology center department were included in R&D expenses, which was 31 more than the R&D technicians (364) in the same period announced in the prospectus (previous draft).
According to the company's first round of inquiry letter reply document (2023 semi-annual report financial data update), in the first half of 2023, the company's technology center department has a total of 511 people (including 23 middle and senior personnel, 488 grass-roots personnel) The salary is included in R&D expenses, which is 2 more than the number of R&D technicians (509) in the same period announced in the prospectus (registration draft).
In the first round of inquiry letters, the Shenzhen Stock Exchange asked Fute Technology to explain whether there was a situation where the wages of R&D personnel and production personnel were mixed, and whether the collection of R&D expenses was accurate.
The asset-liability ratio exceeded 70% for two consecutive yearsIn addition to the fluctuating R&D expense ratio, Foote Technology's high asset-liability ratio is also a cause for concern.
Last year, Daming Electronics Co., Ltd., which is also an auto parts company, planned to land on the Shanghai Stock Exchange, but it once caused heated discussions in the capital market due to its high debt (the asset-liability ratio was as high as 78.84% at the end of 2021).
In January this year, at the 13th annual meeting of Rongzhong Capital, Wu Xiaoqiu, dean of the National Institute of Financial Research of Chinese University, said that the money for the IPO is not the money for enterprises to enter the ICU, not the money to save lives, but the money for development.
On March 15, the China Securities Regulatory Commission issued a document pointing out that strict access to issuance and listing will improve the quality of listed companies from the source.
According to the prospectus, at the end of the reporting period, the asset-liability ratio of Fute Technology was 67.39%, 70.82%, 70.38% and 66.49% respectively, and the average asset-liability ratio of comparable companies in the same industry was 54.33%, 54.93%, 59.29% and 53.61% respectively.
It can be seen that during the reporting period, the asset-liability ratio of Fute Technology exceeded 70% for two consecutive years, and was more than 11 percentage points higher than the average of its peers.
From the perspective of debt details, as of the end of June 2023, about 9% of Fute Technology's liabilities are current liabilities, of which notes payable and accounts payable totaled 829 million yuan, an increase of 1.99 times from 288 million yuan at the beginning of the reporting period (the end of 2020), and short-term borrowings were 1.0011 million yuan.
From the perspective of monetary funds, as of the end of June 2023, the monetary funds of Fute Technology were 451 million yuan, which was far lower than the amount payable at the end of the current period.
At the same time, the Company's short-term solvency is weaker than that of its peers.
At the end of the reporting period, the quick ratio of Fute Technology was less than 1.03 times, while the average quick ratio of comparable companies in the same industry was higher than 1.13 times in all periods except 1.01 times in 2020, and the current ratio of the company was less than 1.35 times at the end of the same period, while the average current ratio of comparable companies in the same industry was higher than 1.45 times.
In this regard, Fute Technology said in the prospectus that the company's current ratio and quick ratio are lower than the average level of listed companies in the same industry, and the asset-liability ratio is high. If the operation of the company and its major customers fluctuates, especially when the company has short-term difficulties in repatriating funds, there may be certain short-term debt repayment risks.
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