(Source: Panoramic Vision)
Economic Observer Online reporter Huang Yifan Intern reporter Wang Fang The IPO of Nanjing Quanfeng Automotive Precision Technology Co., Ltd. (hereinafter referred to as "Quanfeng Auto") has taken a step forward. Recently it updated the IPO prospectus statement and updated the results for the full year 2017.
The reporter discovered that Quanfeng Auto's operational cash flow fell sharply in 2017 compared to a year ago, and that trade receivables also increased, with an increase of nearly 130% in the two years of the reporting period. Another detail is that the return of goods has increased considerably in the past three years and that the number of returns has increased by 2.62 times in 2015-2017.
For these questions, the reporter called Quanfeng Auto to communicate, but no reply was received from the time of the press.
Debtors rose by almost 130%
According to the prospectus, Quanfeng Automobile plans to increase 652 million yuan, of which 552 million yuan will be used for the annual production of 1.5 million sets of auto parts projects and 100 million yuan of additional liquidity. Quanfeng Motor said that after the project is completed, it will add 1.2 million sets of automatic transmissions and 300,000 sets of new automotive parts for energy.
The predecessor of Quanfeng Automobile was Quanfeng Limited, which was established in 2012. On November 23, 2016, Quanfeng Limited was changed into a company on shares and Quanfeng Motor was founded. The company is mainly active in the field of research and development, production and sales of important car parts and is mainly used in medium-sized and high-quality cars. Quanfeng Automobile also produces some parts and components for the washing machine.
According to the disclosure, Quanfeng Precision holds 48% of the shares and is the controlling shareholder of the company. Pan Longquan indirectly controlled 79.04% of Quanfeng Automobile through Quanfeng Precision and Quanfeng China Investment and was the actual controller of the company. Pan Longquan is currently a permanent resident of Hong Kong and has a permanent residence permit in New Zealand.
Based on revenues from sales, the development of the Quanfeng car shows an upward trend. In 2015-2017, Quanfeng Automobile achieved an operating profit of 591 million yuan, 699 million yuan and 923 million yuan, and the net profit for the same period was 38,938 million yuan, 55,279 million yuan and 75,272 million yuan.
However, the net cash flow generated by the company's operations did not succeed in maintaining its growth trend. According to the prospectus, the net operating cash flow for 2015-2017 amounted to 67.354 million yuan, 88.7007 million yuan and 21.45 million yuan respectively, while the net cash flow from operating activities sharply decreased in 2017, a decrease of 75.92% year-on-year. year. Net growth in revenue growth did not coincide.
In addition, the debtors of the company also rose. In 2015-2017, the book value of the debtors of Quanfeng Auto was 131 million yuan, 186 million yuan and 301 million yuan, 41.14%, 49.20% and 51.15% of the current assets respectively. It has grown by almost 130% in the year. In the same period, the debtor rate was 4.56 times / year, 4.42 times / year and 3.79 times / year respectively, a declining trend.
In this respect Quanfeng Automobile explained in the prospectus that the increase in the debtor balance is mainly due to the rapid growth of the company's business activities. Sales in the second half of 2017 increased compared to the second half of 2016 and the corresponding debtors The balance of the increase was larger.
A PE person from East China pointed out that the net profit growth in revenues, but the simultaneous decrease in operating cash flow and the increase in receivables indicate that the company's right to speak to downstream customers is weaker, which a less positive signal.
From the date of signing the prospectus, Quanfeng Auto has handled 10 bank mortgages and the subject of the mortgage is the industrial establishment of the company, whose assets are the most important business assets. Quanfeng Motor said that the operating cash flow is in good shape, but if the company can not repay the bank loan due to sudden reasons or poor management, this will have a negative impact on the production and operation of the company.
The amount of exchange has increased enormously
According to the prospectus, the car customers of Quanfeng have a high concentration. During the reporting period, the company's five largest customers were relatively stable and the Valeo group and the Bosch group consistently ranked among the top two. In 2015-2017, the turnover of the five largest customers was 85.53%, 79.15% and 81.11% respectively, and it is expected that the sales share of the top five customers will remain at a high level in the future.
Quanfeng Auto explained that the main reason for the high concentration of customers is that the market structure of monopolistic competition between the first-line suppliers of car parts has arisen. According to Quanfeng Automotive, the company has no significant dependence on large customers due to the low risk of product replacement and the customer structure of the company.
At the same time Quanfeng Automobile recognizes in the prospectus that if the main customer demand of the company decreases, the customer's qualifications for the supplier certification of the company change and the customer demand can not be met due to the quality of the delivery of the product or timeliness , the customer turns to other requirements. The purchase of products by the company or the failure of the company to expand new customers as planned may have a material adverse effect on the business, activities and financial position of the company, which in turn leads to a strong decrease in the profit of the company.
It is worth noting that in the past three years the number of returns and exchanges of Quanfeng vehicles has increased considerably. According to the prospectus, the number of exchanged and exchanged goods in 2015-2017 was 92,800, 201,300 and 335,800 respectively, an increase of 2.62 times in two years, and the value returned was 1,847,500 yuan, 3,577,900 yuan and 1,080,400 yuan, respectively. It represented 0.31%, 0.54% and 1.17% of sales and increased by 4.85 in four years.
The loss of the main customers in each period was 255,500 yuan, 171,200 yuan and 554,400 yuan, representing 0.04%, 0.02% and 0.06% of the operating result of each period. Among them, in 2017, the third largest customer BorgWarner Group returned 116,600 units, representing 5.47 million yuan, representing 3.63% of the purchase price in the same period.
Given the high return in 2017, Quanfeng Motor said that this is mainly caused by the occurrence of defects such as scars, scratches, notches and chromatic aberrations in a small number of products. This appearance does not affect the performance of the product. After the surface treatment it can be sold twice. The reporter, however, discovered that the specifications of the secondary sales products had not been explained in the prospectus.
Chen Baosheng, vice president of China Venture Capital Committee, told reporters that "from the perspective of the industry trend, whether it is based on the consideration of the sailing range of new energy vehicles or the continuous improvement of emission standards of traditional vehicles in different countries, The light-weight production of cars is a comparison.The big trend, which will promote the development of auto parts with magnesium-aluminum alloy, and regardless of national politics or the law of industrial development, is the improvement of the industrial a certain direction, including the China Association of Automobile Manufacturers The goal is: by 2020 the CR30 value of parts and components of the CR30 will increase from the current 20% to 30%, by 2025 the CR30 parts and component group account for more than 40% of the output value. "He told reporters that the industry is the head for enterprise and it is a requirement to manage and control their own business risks. The trend of the industry itself is good: if the risk and quality can be controlled, the chance will be greater than the challenge.