Recently, Zhongke Xingtu Measurement and Control Technology Co., Ltd. (hereinafter referred to as "Xingtu Measurement and Control") disclosed a prospectus to be listed on the Beijing Stock Exchange, with a public offering of no more than 27.5 million shares. The company intends to raise 249,624,600 yuan this time, which will be used for the construction of commercial aerospace TT&C service center and station network (phase I), the development project of a new generation of AI-based insight software platform, the construction project of R&D center, and the replenishment of working capital.
Titanium Media APP noticed that during the reporting period, Xingtu TT&C changed its control, and the new controlling shareholder fully supported both the sales and procurement ends, and even started to do the project before the contract was signed. In terms of gross profit margin, the gross profit margin of Xingtu Measurement and Control continued to decline, and the gross profit margin between the company and the new controlling shareholder has also become a mystery to be solved.
There are a lot of related party transactions, and projects are started without signing contracts
Xingtu TT&C is an enterprise specializing in aerospace TT&C management and aerospace digital simulation around spacecraft on-orbit management and services.
From 2020 to 2022 and from January to June 2023 (hereinafter referred to as the "reporting period"), Xingtu Measurement and Control achieved revenue of 26.7724 million yuan, 104.2376 million yuan, 141.4649 million yuan and 61.4818 million yuan respectively, and net profit of 9.6153 million yuan, 34.8505 million yuan, 50.7487 million yuan and 11.1803 million yuan respectively, with continuous growth in performance.
It should be pointed out that during the reporting period, the control of Xingtu TT&C changed. In September 2020, Sifang Co., Ltd. transferred its 60% stake in Xingtu Measurement and Control to Zhongke Xingtu, so far Zhongke Xingtu has become the controlling shareholder of the company, and as of the signing date of the prospectus, Zhongke Xingtu holds 46.36% of Xingtu Measurement and Control, and is still the controlling shareholder of the company.
Titanium Media APP noticed that the reason why Xingtu Measurement and Control's performance maintained growth also depended on the new controlling shareholder. It is reported that from January to June 2021, 2022 and 2023, the sales revenue generated by Xingtu Measurement and Control to Zhongke Xingtu and its affiliates will be 38.1889 million yuan, 26.1007 million yuan and 6.3687 million yuan respectively, of which in 2021 and 2022, Zhongke Xingtu and its affiliates are the company's largest customers.
In addition to the sales side, in 2021, Xingtu TT&C purchased 7.8679 million yuan from Zhongke Xingtu, and in 2022, the amount purchased from Xingtu Space (an enterprise controlled by Zhongke Xingtu) was 7.9758 million yuan.
That is to say, after Zhongke Xingtu settled in Xingtu Measurement and Control, the sales side and the procurement side will provide assistance to it, especially in 2021 and 2022, the company's largest customer and largest supplier are Zhongke Xingtu or its affiliates. Such a situation raises doubts about the independence of the company.
Titanium media APP combed and found that there were also doubts in the two transactions between Zhongke Xingtu and Xingtu Measurement and Control. In 2022, Xingtu TT&C and Zhongke Xingtu signed a related project on the integration and application of direction information, which was signed in November 2022, but public information shows that the project has started in March 2022.
Coincidentally. In 2022, Xingtu TT&C also signed a project with Zhongke Xingtu on test verification and integration demonstration, which was signed in October 2022, and the project began in March 2022. This also means that before the contract has even been signed, Xingtu TT&C has already done a project for Zhongke Xingtu.
Gross profit margin is in doubt
Titanium media APP noticed that after Zhongke Xingtu settled in Xingtu Measurement and Control, although the company's performance is improving, the competitiveness of its products is declining. During the reporting period, the gross profit margins of Xingtu Measurement and Control were 66.88%, 55.2%, 56.92% and 54.38% respectively, showing a downward trend.
It is worth mentioning that during the reporting period, the average gross profit margins of comparable companies in the same industry of Xingtu Measurement and Control were 56.17%, 56.17%, 50.23% and 55.26% respectively.
This also means that in 2020, the gross profit margin of Xingtu Measurement and Control was more than 10 percentage points higher than the average of its peers, but in the first half of 2023, the gross profit margin has been nearly 1 percentage point lower than the average of its peers.
One of the factors leading to this phenomenon may be the company's concession to Zhongke Xingtu and its affiliates. During the reporting period, the gross profit margin of the transaction between Xingtu Measurement and Control and Zhongke Xingtu is as follows:
Except for the gross profit margin generated by the company to Xingtu Space in 2021 as high as 86.65%, and the gross profit margin generated by the Aerospace Institute of the Chinese Academy of Sciences in 2022 as high as 57.51%, the gross profit margin between Xingtu TT&C and Zhongke Xingtu and its affiliates in the rest of the time period is lower than that between other customers. At the same time, combined with the calculation of the amount, from 2021 to 2022 and from January to June 2023, Xingtu Measurement and Control will obviously give profits to Zhongke Xingtu and its related parties. (Note: In 2020, the transaction between Xingtu TT&C and Xingtu Space will only be 90,600 yuan, which will be ignored for the time being)
In addition, another major factor in the gross profit margin of Xingtu Measurement and Control being overtaken by peers may be due to the company's low R&D investment. During the reporting period, the R&D expense ratios of Xingtu Measurement and Control were 13.65%, 14.54%, 15.47% and 12.46% respectively, and the average values of comparable companies in the same industry were 16.16%, 15.21%, 16.17% and 28.3% respectively, and the R&D expense ratio was always lower than the average of its peers.
Interestingly, in the research and development of Xingtu measurement and control, Titanium Media APP also noticed a "peculiar" phenomenon. During the reporting period, the R&D personnel of Xingtu Measurement and Control are as follows:
This also means that with only 2 R&D personnel and an annual salary of less than 150,000 yuan, the company's gross profit margin can reach 66.88%, and with the increase in the number of R&D personnel and the sharp increase in employee salaries, the company's gross profit margin has always hovered around 54%-57%. (This article was first published in Titanium Media APP, author|Deng Haotian)