"Electric Eel Finance" article / Li Ruifeng
On July 10, the IPO of Yingke Xinchuang (Xiamen) Technology Co., Ltd. (hereinafter referred to as Yingke Xinchuang) on the Growth Enterprise Market of the Shenzhen Stock Exchange updated the registration draft. According to the prospectus, Yingke Xinchuang was established in 1989 and is a high-tech enterprise specializing in the research and development, production and sales of in vitro diagnostic products. The Company's products cover the fields of infectious diseases, blood grouping, respiratory tract, digestive tract, cardiac markers, eugenics, drug abuse and immune diseases in clinical applications. The company's operational headquarters and main production facilities are located in Xiamen, which are mainly responsible for the research and development, production and sales of POCT, enzyme-linked immunoassay and biochemical products.
When reading the listing information provided by the company, "Electric Eel Finance" noticed that in this IPO, Yingke Xinchuang plans to use 150 million yuan to raise funds to supplement liquidity, and the company has paid cash dividends of 2.4 billion yuan in the past few years, and the annual salary of its chairman and general manager exceeds one million. In addition, the company's R&D expenses are significantly behind the average of comparable companies in its peers, and also lag behind the company's sales expense ratio, and its gross profit margin is also behind the average gross profit margin of comparable companies in its peers. The capacity utilization of the two major products of Yingke Chuangxin is not high, how to digest the new production capacity in the future? It's worth paying attention to.
Cash dividends of 240 million and another 150 million will be raised
In this IPO, Yingke Xinchuang plans to raise 1.11 billion yuan, of which 250 million yuan will be used for the construction project of Xiamen R&D center, 260 million yuan for the construction project in Suzhou R&D, 60 million yuan for the construction project of Beijing R&D center, 270 million yuan for the construction project of in vitro diagnostic product production base, 120 million yuan for the construction project of regional marketing training customer experience center, and 150 million yuan for supplementing working capital.
It can be seen that Yingke Innovation will use 150 million yuan of raised funds to supplement liquidity, accounting for 13.5% of the company's total raised funds. However, it is worth noting that from 2020 to 2023, the company has made three cash dividends, with cash dividends of 35 million yuan, 45.3761 million yuan and 156.072 million yuan in 2020, 2021 and 2023, respectively, totaling 236 million yuan.
ACCORDING TO THE PROSPECTUS, FRANK NONG WANG-LU, JOHN GONG LU, SEAN WANG-LU AND MICHAEL WANG-LU ACHIEVED JOINT CONTROL OVER THE COMPANY THROUGH THE "CONCERTED ACTION AGREEMENT", AND CONTROLLED 98.41% OF THE ISSUER'S SHARES THROUGH INTCO HOLDINGS, WHICH IS THE ACTUAL CONTROLLER OF THE ISSUER. All four are United States nationals.
在英科控股董事中，FRANK NONG WANG-LU与JOHN GONG LU系兄弟关系，SEAN WANG-LU 与MICHAEL WANG-LU系兄弟关系，FRANK NONG WANG-LU 与SEAN WANG-LU及MICHAEL WANG-LU系父子关系，JOHN GONG LU与SEAN WANG-LU及MICHAEL WANG-LU 系叔侄关系。 LIANG CHEN为英科控股董事 FRANK NONG WANG-LU 配偶之弟。
It can be seen that more than 98% of the above-mentioned cash dividends of 236 million yuan fell into the pockets of the actual controller's family. And it is worth noting that the remuneration of the chairman and general manager of the company is more than 1 million yuan.
IN 2023, THE COMPANY'S CHAIRMAN SEAN WANG-LU WILL BE PAID A SALARY OF 1.18 MILLION YUAN, ITS DIRECTOR AND GENERAL MANAGER JIAO LUMIN WILL BE PAID 1.0307 MILLION YUAN, AND ITS DIRECTOR AND DEPUTY GENERAL MANAGER LAI HONGMEI WILL BE PAID 981,100 YUAN.
From 2021 to 2023 (hereinafter referred to as the reporting period), the total remuneration of the senior management of Intech was 5.75 million yuan, 6.33 million yuan and 6.31 million yuan respectively, accounting for 4.11%, 3.06% and 3.06% of the company's total profit in the current period.
R&D expense ratio and gross profit margin lag behind peers, and sales expense ratio is "leading"
According to the prospectus, as of December 31, 2023, INTCO Innovation and its subsidiaries have a total of 91 domestic patents, including 24 invention patents, 59 utility model patents, and 8 design patents.
It is worth noting that the most recent invention patent of INTCO Innovation was obtained in February 2020, which is a new coronavirus antibody detection kit, and the company has not obtained an invention patent since then, which means that the company has not obtained an invention patent in the last four years.
During the reporting period, the R&D expenses of Yingke Innovation were 53.0304 million yuan, 73.8648 million yuan and 75.5734 million yuan respectively, accounting for 8.75%, 9.46% and 9.66% of the current operating income respectively.
The R&D expense ratio of INTCO Innovation lags significantly behind that of comparable companies in the same industry. During the reporting period, the R&D expense ratios of comparable companies in the same industry were 11.84%, 9.01% and 16.41%, respectively.
In addition, it is worth noting that the R&D expense ratio of INTCO Innovation is significantly lower than the company's sales expense ratio, which was 16.47%, 13.48% and 16.18% respectively during the reporting period, which is much higher than the company's R&D expense ratio. It can be seen that the company has a situation of "emphasizing marketing over R&D".
As of June 2023, INTCO Innovation has 181 R&D personnel, accounting for 16.79% of the total number of employees.
During the reporting period, the gross profit margin of Yingke Chuangxin was 57.28%, 54.11% and 56.90% respectively, and the average gross profit margin of comparable companies in the same period was 65.14%, 63.79% and 67.53% respectively.
How to digest the newly recruited capacity due to low capacity utilization?
According to the prospectus, in this IPO, Yingke Innovation plans to use 270 million yuan for the construction project of in vitro diagnostic product production base, accounting for 24% of the total funds raised. It's worth paying attention to.
What's more noteworthy is that the current capacity utilization rate of Intech is not high. During the reporting period, the capacity utilization rate of the company's POCT was 98.24%, 174.38% and 107.59% respectively. However, the capacity utilization rate of the company's two products is not high, and the capacity utilization rate of enzyme-linked immunoassay is 78.69%, 74.66% and 73.14%, respectively. The capacity utilization rates of biochemistry were 51.77%, 52.38% and 58.87%, respectively.
During the reporting period, the revenue from POCT accounted for 64.22%, 61.75% and 73.05% respectively, while the revenue from enzyme-linked immunoassay accounted for 30.71%, 21.94% and 21.43% respectively in the same period. The proportions from biochemistry were 3.16%, 2.21% and 2.33%, respectively.
It can be seen that the capacity utilization rate of the first major product of INTCO Innovation is relatively high, but the capacity utilization rate of the second and third largest products is not high. How to digest the new production capacity in the future? It's worth paying attention to.
During the reporting period, the inventory turnover ratios of Intech Innovation were 2.5, 3.08 and 2.64 respectively, which was not much different from the average inventory turnover ratio of comparable companies in the same industry.
At the end of the reporting period, the book value of the company's inventory was 101.6579 million yuan, 130.7743 million yuan and 118.6152 million yuan respectively, accounting for 15.25%, 14.21% and 13.61% of the total assets at the end of each period, and the inventory decline provision was 2.0471 million yuan, 1.8035 million yuan and 4.624 million yuan respectively.
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