Yangtze River Business Daily news ● Yangtze River Business Daily reporter Cai Jia
Chongqing Shanwaishan Blood Purification Technology Co., Ltd. (hereinafter referred to as "Shanwaishan"), a former new three-board hemodialysis service provider, has taken a substantial step forward in the IPO of the Science and Technology Innovation Board with the blessing of Hillhouse.
A few days ago, the IPO application of the Shanwaishan Science and Technology Innovation Board was officially accepted by the Shanghai Stock Exchange, and Hillhouse directly held 12.96% of the company's shares through its subsidiary Zhuhai Xiuheng, making it the third largest shareholder.
Shanwaishan was named "the first in the market share of domestic blood purification equipment", but it had been in a state of loss due to the low sales scale and high investment, until last year, when it turned a loss into a profit of 20.6167 million yuan.
Nevertheless, with the continuous expansion of sales scale, payment collection and inventory problems have made the net cash flow generated by the operating activities of Shanwaishan has been a net outflow, with a total of -56.6735 million yuan in the past three years. As of the end of June this year, the balance of the company's accounts receivable was 122 million yuan, accounting for 92.43% of the current revenue.
The Yangtze River Business Daily reporter combed and found that the main income of the mountain comes from blood purification equipment and consumables, of which most of the consumables sold by the company come from outsourcing. During each reporting period, the sales of blood essence consumables purchased by the company accounted for 100%, 100%, 99.71% and 96.51% respectively. Under the background of the two-invoice system and volume procurement, the gross profit margin of the consumables business in Shanwaishan is lower than that of its peers. The company intends to raise funds through the IPO to build its own production line to solve this problem.
It is worth mentioning that from 2018 to the first four months of 2021, the company has always had the situation that some sales commissions of some sales business personnel have been paid from service provider accounts, with a total amount of more than 7.4 million yuan. Since May this year, Shanwaishan has been rectifying this.
Last year's profitable operating cash flow continued to be negative
According to the data, Shanwaishan was first established in 2001, is a national high-tech enterprise specializing in the research and development, production and sales of blood purification equipment and consumables, and providing chain hemodialysis medical services. In August 2016, Shanwaishan was listed on the national SME share transfer system, and in October 2018, it terminated its listing and turned to the science and technology innovation board IPO.
According to reports, as of now, the blood purification equipment in the mountains outside the mountain has been installed at home and abroad for more than 10,000 units, and the terminal installation capacity has been realized in more than 1,000 hospitals across the country. In August 2021, the company was certified by the China Medical Device Industry Association as "the leading domestic manufacturer of high-end blood purification equipment" and "the market share of domestic blood purification equipment ranks first".
The mountains outside the mountains have also gained the pursuit of capital. In October 2020, Zhuhai Xiuheng, a subsidiary of Hillhouse, acquired 6.4839 million shares of the company held by Huagai Chengxin at a price of 15.42 yuan per share, with a total expenditure of about 99.98 million yuan.
Up to now, Gao Guangyong, the controlling shareholder and actual controller of Shanwaishan, directly holds 32.34% of the company's shares, and the total proportion of voting rights in the company is 36.01%. Zhuhai Xiuheng directly holds 12.96% of the company's shares, is the third largest shareholder, its executive partner is Hillhouse Tiancheng Phase III, and the main shareholders are Hillhouse companies.
However, the Yangtze River Business Daily reporter noted that due to the low scale of sales in the early stage, continuous investment in research and development and larger investment in brand promotion in the early stage, there was an unrepaired loss in the mountains, and it was not until last year that it turned a profit.
From 2018 to the first half of 2021, Shanwaishan achieved operating income of 114 million yuan, 142 million yuan, 254 million yuan and 132 million yuan respectively, net profit attributable to shareholders of the parent company (net profit, the same below) - 27.0638 million yuan, -33.9928 million yuan, 20.6167 million yuan and 3.9971 million yuan, net profit attributable to the mother after deducting non-recurring gains and losses - 30.2612 million yuan, -35.6907 million yuan, 14.9992 million yuan, 3.3749 million yuan. As of the end of June this year, the undistributed profit of the consolidated caliber of Shanwaishan was -48.4662 million yuan.
Despite the turnaround, the profit quality of the mountain still needs to be improved. During each reporting period, the net cash flow generated by the company's operating activities was -16.9954 million yuan, -10.5002 million yuan, -18.5715 million yuan and -10.6064 million yuan, which continued to be negative and accumulated at -56.6735 million yuan.
Shan Waishan said that with the continuous expansion of the company's production and operation scale, raw material procurement and product preparation have increased accordingly, accounts receivable have also increased, and there is a certain time difference between upstream and downstream payment and collection settlement, resulting in negative net cash flow generated by the company's operating activities.
As of the end of each reporting period, the balance of accounts receivable of Shanwaishan was 48.5398 million yuan, 55.9854 million yuan, 88.8575 million yuan and 122.0542 million yuan, accounting for 42.64%, 39.34%, 34.93% and 92.43% of the operating income of the current period, respectively.
As of the end of June this year, the total assets of Shanwaishan were 636 million yuan, the current assets were 362 million yuan, and the proportion of accounts receivable and inventory balances in current assets reached 32.71% and 18.94% respectively.
The sales rate of 19% has been issued a sales commission through the service provider
Blood purification equipment and consumables are currently the main source of income for Shanwaishan.
According to the prospectus, in the first half of this year, the three major sectors of blood purification equipment, blood purification consumables and medical services in Shanwaishan achieved revenue of 79.144 million yuan, 27.6227 million yuan and 24.231 million yuan respectively, accounting for 60.01%, 20.94% and 18.37% of the revenue, respectively; the gross profit was 43.0132 million yuan, 8.9966 million yuan and -1.0208 million yuan, accounting for 83.3%, 17.42% and -1.98%.
The Yangtze River Business Daily reporter noted that as one of the core businesses of Shanwaishan, from 2018 to the first half of 2021, the gross profit margin of the company's blood purification equipment was 51.83%, 47.86%, 59.45%, and 54.35%, respectively, maintaining a high level.
In the same period, the gross profit margin of blood purification consumables in Shanwaishan was 37.27%, 36.46%, 33.98% and 32.57%, respectively, and the average gross profit margin of comparable listed companies in the same industry was 45.92%, 47.53%, 45.02% and 48.32%, respectively, which were higher than the blood purification consumables business of Shanwaishan.
It is worth noting that most of the blood purification consumables sold in Shanwaishan at present come from outsourcing. During each reporting period, the sales of blood essence consumables purchased by the company accounted for 100%, 100%, 99.71% and 96.51% respectively.
Under the purchase mode, because some of the distribution consumables are not purchased directly from the manufacturer but sign contracts with other agents, with the wide promotion of the "two-invoice system" of consumables throughout the country and the continuation of volume procurement, this will have an impact on the sales and price of the company's consumables.
Therefore, the plan to raise no more than 1.247 billion yuan through the IPO, of which 863 million yuan will be used for blood purification equipment and high-value consumables industrialization projects to expand product production capacity. The project is expected to produce 24 million copies (sticks) of blood purification consumables per year after completion, and 12,500 sets of blood purification equipment per year.
At the same time, Shanwaishan said that with the company's next step dialysis consumables such as dialyzers, perfusions, pipelines and other self-produced dialysis consumables listed one after another, the "two-invoice system" will have less impact on the sales of the company's self-produced consumables in the future, and may even have a more positive impact on the sales of consumables.
Shanwaishan further disclosed that during each reporting period, the company's R&D investment was 8.7861 million yuan, 16.5144 million yuan, 19.7618 million yuan and 13.4571 million yuan, accounting for 7.72%, 11.6%, 7.76% and 10.19% of the revenue in each period, respectively. In comparison, the company's sales expenses are higher, with 28.0114 million yuan, 35.8169 million yuan, 48.8959 million yuan and 24.7607 million yuan, accounting for 24.6%, 25.17%, 19.22% and 18.75% of the revenue, respectively.
It is worth mentioning that in the past, there was a situation where some sales commissions of some sales business personnel were paid from the service provider's account, and the company mainly issued tax-inclusive commission bonuses after comprehensively determining the specific amount based on the actual sales situation in the corresponding year and combined with the payment collection. From 2018 to the first four months of 2021, the company issued sales commission bonuses of 726,900 yuan, 1,564,100 yuan, 4,024,200 yuan and 1,093,200 yuan through service providers, totaling 7,408,400 yuan.
Shan waishan said that since May 1 this year, the company has made a comprehensive rectification, and has not issued sales commission bonuses to sales personnel through service providers, and the above-mentioned sales personnel have made personal income tax declarations and payments for their sales commission bonuses.
Editor-in-charge: zb
This article originated from the Yangtze River Business Daily
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