Recently, Brayton Technology Co., Ltd. (hereinafter referred to as "Brayton") submitted a prospectus to be listed on the Hong Kong stock IPO.
Titanium Media APP noticed that Brayton has been losing money every year, and the more it loses, the more it loses, with a total loss of 500 million yuan in the past three years. At the same time, in the case of spending 150 million yuan on research and development, the company's gross profit margin not only did not increase, but fell to 2%.
spent 150 million yuan on research and development, but the gross profit margin dropped to 2%
Founded in 2016, Breton is a clean energy solutions provider focused on designing, developing, and commercializing construction machinery powered by new energy sources.
From 2021 to 2023 (hereinafter referred to as the "reporting period"), Brayton achieved operating income of 200.574 million yuan, 360.106 million yuan, and 463.738 million yuan respectively, and lost 97.467 million yuan, 178.101 million yuan, and 229.414 million yuan during the year.
From the product point of view, Brayton mainly has new energy loaders, new energy wide-body dump trucks, new energy tractors, spare parts and accessories, etc., the details are as follows:
It can be seen that the new energy loader is the main source of Brayton's performance income.
Titanium Media APP noticed that the gross profit margin of Brayton products seems to be low. During the reporting period, Breton's gross profit margin was 3.7%, 2.3% and 2% respectively, which continued to decline.
It should be noted that during the reporting period, Breton's R&D expenses were 32.719 million yuan, 44.855 million yuan, and 68.562 million yuan respectively, totaling about 150 million yuan. In other words, Brayton "smashed" 150 million yuan in research and development, and the company's gross profit margin not only did not increase, but also fell to 2%. With such R&D strength, people can't help but wonder, is Brayton really engaged in R&D?
In terms of R&D employees, as of the end of 2023, the number of R&D personnel in Brayton is 95. At the same time, the employee cost in Brayton's R&D expenses was 38.9 million yuan. (Note: Brayton's self-stated employee costs in this part mainly include salaries, social security, housing provident fund, benefits and payments settled by equity and related to equity incentives.) ）
In particular, Breton stated in the declaration draft that the company's R&D expenses in 2023 are mainly due to the increase in the number of employees and the increase in the cost of raw materials and consumables. In other words, Brayton's R&D expenses in 2023 are not related to the payment related to equity incentives.
This also means that if the number of R&D personnel and employee costs in 2023 are calculated, the average salary of the company's R&D personnel in 2023 will be 409,500 yuan. Based on the 2% gross profit margin of Leboton, is the salary of R&D personnel too high?
The net operating cash outflow was 755 million yuan
In terms of cash flow, Brighton's operating cash flow is also poor. During the reporting period, the net cash flow generated by Bolton's operating activities was -271.363 million yuan, -290.421 million yuan and -193.686 million yuan respectively, totaling about -755.47 million yuan, that is, Bolton's annual operating cash was a net outflow.
In addition, as of 2023, Breton's cash and cash equivalents will be 422.072 million yuan, which also means that if the company's net operating cash outflow in 2023 is 193.686 million yuan, Breton's cash will be consumed in about 2 to 3 years.
It should be noted that the reason for the above situation in the net cash flow generated by Breton's operating activities may be related to the company's surge in trade receivables. As of the end of 2021, the end of 2022, and the end of 2023, the net accounts receivable of Brayton trade were 114.176 million yuan, 233.417 million yuan, and 374.089 million yuan respectively, with an average annual compound growth rate of 81%, and the average annual compound growth rate of the company's revenue during this period was 52.05%, in other words, the growth rate of net trade accounts receivable far exceeded the growth rate of revenue.
In addition, during the above time period, the amount of provision for the loss of trade receivables of Borayton was -17.4853 million yuan, -44.2038 million yuan and -76.9794 million yuan respectively. At the same time, the turnover days of Borretton trade receivables were 124 days, 176 days and 239 days respectively, and the realization time continued to be longer. This begs the question of whether Breton has eased its credit policy to boost revenues. (This article was first published in Titanium Media APP, author|Deng Haotian)