Hongming Co., Ltd. IPO: The main business gross profit margin has declined and the new mask machine business is not high

Hongming's performance has slowed down in recent years, the main product customers have insufficient demand, and the new mask machine business may be difficult to sustain. In addition, the company's direct material cost is high, suppliers are more concentrated, and the gross profit margin of the main business has declined in recent years.

On May 12, 2022, Guangdong Hongming Intelligent Co., Ltd. (hereinafter referred to as: Hongming Co., Ltd.) was successfully met at the GEM of the Shenzhen Stock Exchange. On June 24, the company has submitted registration.

The prospectus shows that Hongming's shares plan to publicly issue shares of not more than 12.5 million shares, and the proportion of issuance shares accounts for not less than 25%after the issuance of the issuance. It is expected to raise 283 million yuan, of which 183 million yuan are used for production center construction projects, 54 million yuan for marketing centers, and 46 million yuan for R & D center construction projects.

Consultation of the prospectus found that Hongming's performance growth has slowed in recent years, the main product customers have insufficient demand, and the new mask machine business may be difficult to sustain. In addition, the company's direct material cost is high, suppliers are more concentrated, and the gross profit margin of the main business has declined in recent years. In response to the above situation, it was found that the network sent an interview letter to the public mailbox to send an interview letter to the request to explain the doubt. As of the press press, Hongming shares did not give a reasonable explanation.

Fixed product line Customer demand insufficient mask machine business is not high

According to public information, Hongming Co., Ltd. is a special packaging equipment manufacturer integrating R & D, production and sales. The main products include various automated packaging equipment and packaging supporting equipment. The production of various boutique packaging boxes and plasma molding products such as boxes.

From 2019 to 2021, Hongming's revenue achieved revenue of 265 million yuan, 308 million yuan and 324 million yuan, respectively, with a year-on-year growth rate of 22.94%, 16.35%, and 4.92%. , 61 million yuan and 067 million yuan, a year -on -year growth rate of 0.94%, 2.98%, and 10.44%, respectively.

Source: Wind (Hongming shares)

Analysts point out that although Hongming's performance has continued to grow in recent years, the growth rate has slowed down. What is pleased is that the growth rate of net profit still maintains a growth trend. It should be noted that after the deduction of 2020 unless normal profit or loss, the net profit of Hongming shares was RMB 41 million, a year -on -year decrease of 29.76%.

Further look at the main business income composition of Hongming Co., Ltd.: The company's products mainly include four categories: automated packaging equipment, packaging supporting equipment, spare parts and other, mask machines and supporting equipment. Among them, automated packaging equipment and its supporting equipment are the company's main products.

From 2019 to 2021, automated packaging equipment achieved revenue of 191 million yuan, 197 million yuan, and 230 million yuan, accounting for 72.08%, 64.01%, and 71.32%of the main business revenue. The proportion of main business revenue was 24.74%, 21.94%, and 25.07%of the main business revenue, respectively.

In this regard, industry insiders said that Hongming's main business is highly concentrated and single, and the customers are used as paper packaging box manufacturers. The downstream industry has large space and low concentration. In addition, the customer's purchase demand for packaging equipment has a large degree of adjustment, which makes the company's packaging equipment lower. Insufficient customer demand is a big problem for Hongming.

Source: prospectus (Hongming shares)

In addition, in early 2020, in order to cope with the major contagious epidemic in the new type of coronary virus pneumonia, Hongming Co., Ltd. added the product line of the mask machine. In 2020, the company's mask machine business realized revenue of 35.474 million yuan, accounting for 11.54%of the company's main business revenue; the revenue of the mask machine business in 2021 was 24.844 million yuan, accounting for 0.77%of the company's main business revenue.

Hongming shares frankly in the prospectus that the related business of mask machines has a certain impact on the company's production and operation. With the gradual improvement of the domestic epidemic, and the rapid increase in the capacity and supply of masks, the domestic mask market has gradually become saturated, the market demand of the mask machine has fallen rapidly, whether the business has uncertainty, and the company's existence due to mask machine -related business cannot be unable to fail Continuously leads to the risk of decline in future operating performance.

Suppliers are more concentrated in the main business gross profit margin decline

With the expansion of Hongming's business scale, the main business costs have increased year by year. Among them, direct materials are standard parts, non -standard parts, electrical components, steel, etc., and their costs account for a high proportion of main business costs. From 2019 to 2021, the cost of direct materials was 120 million yuan, 140 million yuan, and 148 million yuan, respectively, accounting for 81.67%, 79.99%, and 80.03%of the main business revenue, respectively.

Source: prospectus (Hongming shares)

Hongming shares in the prospectus, and the servo drives and servo motors in the company's outsourcing products mainly use the Japanese Akawa brand and purchase from Shanghai Fanghe Electric Co., Ltd. Equipment Co., Ltd. procurement; industrial lenses and industrial computers are mainly purchased from Dongguan Sanrui Automation Technology Co., Ltd. for domestic brands.

From 2019 to 2021, Hongming shares purchased from the top five suppliers including the above-mentioned enterprises, respectively, 43 million yuan, 50 million yuan, and 57 million yuan, respectively, accounting for 31.59%and 30.08%of the main business revenue, respectively. And 31.14%. The top five suppliers account for relatively high suppliers in Hongming. If the changes in suppliers will affect the company's operations. Source: prospectus (Hongming shares)

In fact, Hongming's main business gross profit margin has declined in recent years. From 2019 to 2021, the company's main business gross profit margin was 44.64%, 43.26%, and 42.84%, respectively, and the gross profit margin of the main business after the mask machine business was 44.64%, 39.08%, and 42.58%, respectively.

Source: prospectus (Hongming shares)

Faced with the declining gross profit margin, Hongming shares made a risk prompt in the prospectus. "With the intensification of market competition, the company may adjust the pricing strategy and price level of the product, which leads to the reduction of the company's product price and further reduction of gross profit margin. Impact, if the procurement price of raw materials increases overall, the company's gross profit margin is risky. "

(Reporter Luo Xuefeng Financial Researcher Chen Kangli)

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