Everbright Tongchuang IPO: High asset -liability ratio, "three consecutive declines" during the reporting period of gross profit margins

The asset -liability ratio is higher than the peers, and the gross profit margin of the Everbright Tongchuang has declined year after year, and it does not rule out the possibility of continued decline in the future.

On July 7, 2022, Shenzhen Everbright Innovation Materials Co., Ltd. (hereinafter referred to as "Everbright Tongchuang"), which is mainly based on consumer electronics protection and functional products, has successfully met in the GEM.

It is reported that the IPO Everbright Tongzhong issued 19 million shares, accounting for 25%of the total share capital after the issuance, and was sponsored by Oriental Securities underwriting. In addition, Everbright Tongchuang raised funds of 851 million yuan, mainly used for the construction project of Everbright Tongchuang Consumer Electronics Protection and Functional Product Products, Everbright Tongchuang Research and Development Technology Center, Enterprise Management Information Upgrade Construction Project, and supplementary flow of flow Fund items.

At the same time, the prospectus also shows that Everbright Tongchuang's asset -liability ratio is high, the debt repayment capacity is poor, and the company's gross profit margin is "three consecutive declines" during the reporting period. The company's profitability is worrying.

In response to the above issues, I found that the interview letter to the Everbright Datong was requested to be explained, but as of press time, Everbright Tongchuang did not give a reasonable explanation.

The asset -liability ratio is high, and the debt repayment capacity is poor and unsatisfactory

The prospectus shows that Everbright Tongchuang products are mainly consumer electronics protection and functional products. They are widely used in consumer electronics products and components such as personal computers, smartphones, and smart wearable devices. The company's customers are mainly consumer electronics terminal brands, manufacturing service providers, and component manufacturers.

It is worth noting that the debt status of Everbright and Tongchuang is worrying. The prospectus shows that from 2019 to 2021 (hereinafter referred to as the "Reporting Period"), the asset-liability ratio (merger) of Everbright Tongchuang was 46.40%, 51.81%, and 54.88%; while the same period of the same industry was comparable The average value is 34.23%, 35.38%, and 27.97%, respectively. The asset -liability ratio of the Everbright Tongchuang is much higher than the average level of the peers.

Picture source: prospectus

In response to the reasons why the asset -liability ratio is higher than the peers, Everbright Tongchuang said in the prospectus that because the company is a non -listed company, the financing channels are relatively single, so the scale of liabilities is relatively large.

In addition, due to the high asset -liability ratio of Everbright Tongchuang, the company had to use loans to achieve the transfer of funds. The prospectus shows that during the reporting period, Guang Datong's financial expenses were 1.297 million yuan, 26.6861 million yuan and 20147,900 yuan, respectively, of which the net interest expenditure was 1.6795 million yuan, 2.846 million yuan, and 7.219 million yuan. In recent years Interest expenditure continued to rise. Some people in the industry said that the soaring interest cost means that the company's financial conditions are not excellent. High amount of liabilities not only put greater pressure on the company's funds, but also need to pay a large amount of interest fees for financing institutions. To a certain extent, the profits of Guangdongchuangchuang were affected.

Picture source: prospectus

So what is the debt repayment capacity of Guangda Tongchuang? The prospectus shows that from 2019 to 2021, the company's mobile ratio is 1.81, 1.47, and 1.45, respectively, and the average flow ratio of peer companies is 3.20, 2.35, and 4.32, respectively; the speed ratio is 1.64, 1.29 and 1.28, respectively. The average speed ratio is 2.89, 2.08 and 3.99, respectively. Whether it is the mobile ratio or the rapid ratio, there is a big gap between the Everbright and the same industry and the company in the industry.

Picture source: prospectus

Industry insiders pointed out that the asset -liability ratio is at a high level, and insufficient debt repayment capacity will cause the company's funds to undergo a lot of pressure. Once the company's capital chain breaks, it will bring a fatal blow to Guangdatongchuang. It is worth mentioning that Everbright created the IPO to raise 200 million yuan to supplement mobile funds, and the company's "lack of money" is evident.

The "three consecutive declines" during the reporting period of slowing in the gross profit margin of revenue

During the reporting period, Everbright Tongchuang's operating income was 664 million yuan, 831 million yuan, and 995 million yuan, respectively, with a year -on -year growth rate of 34.39%, 25.19%, and 19.74%. 10,000 yuan and 129 million yuan, a year-on-year growth rate of 77.92%, -8.39%, and 36.74%, respectively.

From the revenue data of Everbright Tongchuang, it can be seen that although the company’s operating income during the reporting period has increased year after year, the growth rate has slowed down, and the net meal of Guang Datong's home of Datong has declined. The company's performance is not so stable.

Picture source: wind

Everbright and weak performance may be related to the continuous decline of the company's gross profit margin. The prospectus shows that from 2019 to 2021, the company's main business gross profit margin was 43.10%, 37.12%, and 33.19%, respectively. In the past three years, the company's gross profit margin fell 10 percentage points.

It is worth mentioning that the main products of Everbright Tongchuang include two types of protective products and functional products. Among them, the gross profit margins of protective products are 32.62%, 30.92%, and 31.18%, showing a slow downward trend. In addition, the gross profit margin of functional products has declined obviously. During the reporting period, it was 65.63%, 47.59%, and 36.38%, respectively. Thirty percentage points fell during the reporting period.

Picture source: prospectus

In response to the reasons for the decline in gross profit margin, Everbright Tongchuang stated in the prospectus that due to the factors such as downstream customers' needs, the company's protective products and functional products revenue accounted for some changes during the reporting period; the price of raw materials fluctuated. Factors such as exchange rate fluctuations, market competition, human costs, and product structure, the gross profit margin of the company's protective products and functional products during the reporting period has changed a certain change. However, it was found that the network noticed that according to the third round of inquiry letters disclosed by the company on June 24, 2022, the company's functional products mainly include three types of smart wearables, personal computers, and smartphones. Among them, smart wearables The gross profit margin of products is the most obvious.

Everbright Tongchuang said in the response to the inquiry letter that due to the changes in the demand for the end market market market market market, the decline in the demand for end customers has caused manufacturing service providers to decline in the demand for smart wearing functional products; at the same time, it is produced by downstream customers to produce Influence such as the base layout and epidemic situation, the company's sales of smart wearable functional products in 2021 declined with downstream customers' sales of intelligent wearable functional products, which also led to the decline in the gross profit margin of the company's functional products.

It is worth noting that not only the gross profit margin achieved a "three -way decline" during the reporting period, but also the gross profit margin of the functional products of Everbright and the same creation also trended further. Everbright Tongchuang said in the inquiry letter that from January to May 2022, the company's functional product gross profit margin was 29.77%, a decrease of 6.61 percentage points from 2021. Some people in the industry said that due to the various factors such as the epidemic and exchange rate, the gross profit margin of the functional product of Datong Creation in the first five months of 2022 has fallen again, and it does not rule out the possibility of further decline in the future. The company's continuous profitability in the future is not optimistic.

(Reporter: Luo Xuefeng Finance Researcher: Liu Bei)

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