Sustainability of profitability is questioned, Jingfeng Mingyuan IPO is no
One of the domestic LED driver chip design companies, Shanghai Jingfeng Mingyuan Semiconductor Co., Ltd. (hereinafter referred to as "Jingfeng Mingyuan") first application was rejected, missed A shares.
On May 2, the official website of the China Securities Regulatory Commission disclosed Jingfeng Mingyuan, and the company plans to issue no more than 15.4 million shares on the Shanghai Stock Exchange. However, according to the "Announcement on the Review of the 113th Meeting of the 17th Session of the 18th Audit Committee of the 19th CBR" issued by the CSRC on the evening of July 31, the first launch of Jingfeng Mingyuan was not approved.
According to public information, Jingfeng Mingyuan's main business is the development and sales of analog and mixed-signal integrated circuits. The IPO company plans to raise 550 million yuan of funds, of which 140 million yuan will be used to supplement liquidity, and the rest will be invested in the development and industrialization of general LED lighting driver chips and intelligent LED lighting chip development and industrialization projects.
The official website of the China Securities Regulatory Commission showed that for Jingfeng Mingyuan, the audit committee mainly raised five inquiries.
Among them, Jingfeng Mingyuan accounted for a relatively high proportion of distribution income during the reporting period, and the discount sales revenue accounted for a relatively high proportion and the increase in the period led to the attention of the audit committee. At the meeting of the IEC, the representative of Jingfeng Mingyuan was asked whether the real sales of the dealers were realized; the reasons why the sales revenue of the discounts increased gradually and the annual discount rate increased gradually, whether the commercial discount at the end of the period was sufficient, commercial discounts Deal with issues such as accounting standards and tax-related laws and regulations.
In addition, during the reporting period, Jingfeng Mingyuan's comprehensive gross profit margin increased slightly, which was lower than that of comparable companies in the same industry. In this regard, the IEC requires the representative of Jingfeng Mingyuan to explain why the gross profit margin is lower than that of comparable companies in the same industry. The reason and rationality of the change in gross profit margin in 2017 compared with the average gross profit margin of comparable companies in the same industry, and Fabless The reason and rationality of the model gross profit margin is lower than the average level of comparable companies in the industry.
In addition, Jingfeng Mingyuan's inventory balance at the end of each reporting period increased gradually. The main inventory storage location was in the middle test factory and the sealed test factory warehouse. The inventory depreciation reserve accounted for less than the comparable listed company. The IEC requires Jingfeng Mingyuan to explain the reasons for the continuous increase of the inventory balance and the reason for the substantial increase in 2017; the reason for the lowering of the inventory is lower than the reason and rationality of the comparable listed companies in the same industry; and the management system, inventory system and execution of the inventory Happening.
In addition, in the history of Jingfeng Mingyuan, due to the existence of entrusted shareholding in equity incentives, Shanghai Jingzheru’s equity also has equity holdings. At the meeting of the Audit Committee, Jing Feng Mingyuan was asked to explain the background and reasons for the above-mentioned equity holdings, whether there were situations of circumvention or violation of laws and regulations; whether the equity incentives were processed by share-based payment, and whether the basis for determining the fair value was It is in compliance with the accounting standards; and whether the payment of the shareholding payment is fair or not, and whether there is a risk of legal disputes.
Finally, the IEC also requested Jingfeng Mingyuan to combine the performance of the same type of products at home and abroad, the competitive situation of the industry, and the situation of major competitors, indicating the company's competitive advantages and disadvantages, indicating the company's position in the LED driver chip segment. Whether profitability is sustainable.
According to the main problems of the inquiry of the audit committee, through the prospectus of Jingfeng Mingyuan, the distribution income, dealer inventory, the company's comprehensive gross profit rate change, inventory value, product price trend and accounts receivable, etc. With further understanding, the possible reasons for the failure of Jingfeng Mingyuan IPO were revealed.
The book value of inventory is high, and it will be affected by price in the future.
According to the prospectus, from the end of 2015 to the end of 2017, the book value of Jingfeng Mingyuan's inventories was RMB 41,770,800, RMB 38,896,500 and RMB 86,960,600 respectively, accounting for 15.15%, 13.94% and 23.72% of the total assets, respectively. The proportion of assets is 17.39%, 16.23% and 25.93%. As the company's business scale continues to expand, the absolute amount of inventory will also rise.
However, the chip is currently being updated at a faster rate. If the inventory price falls or cannot be sold smoothly in the future, it will have an adverse impact on the company's operating performance and cash flow. In fact, in recent years, Jingfeng Mingyuan is also under pressure from the falling prices of core products.
Its prospectus shows that from 2015 to 2017, the price of general-purpose LED lighting driver chips is 0.28 yuan, 0.22 yuan, and 0.22 yuan per piece respectively; the price of intelligent LED lighting driver chips is 0.38 yuan, 0.38 yuan and 0.34 yuan per piece. Product prices are on a downward trend.
Under the situation that the unit price of core products is declining, if Jingfeng Mingyuan cannot develop chips in other fields in time, in the increasingly fierce environment of lighting, the price of products will inevitably fall further. Jingfeng Mingyuan will face a decline in performance in the future.
Distribution revenues accounted for a high proportion, dealer inventory climbed
According to the prospectus, the total sales revenue of dealers in 2015-2017 was 284,463,300 yuan, 45,242,940 yuan and 5,509,944,000 yuan, accounting for 79.65%, 79.25% and 78.90% of Jingfeng Mingyuan's total operating income. Moreover, Jingfeng Mingyuan increased the discount ratio to dealers. The company adopted a gradual increase in the proportion of dealer discounts to adjust the reasonable profit margin of dealers.
According to the prospectus of Jinghui Mingyuan, according to the prospectus of Jinghui Mingyuan, the inventory quantity declared by the dealers at the end of 2015-2016 was 64,422,700, 79,969,900 and 14,310,300.
Data shows that at the end of 2017, dealer inventory surged by 64.108 million. If the price of the general-purpose LED driver chip is calculated in 2017, the newly added chip inventory of the dealer will bring the performance of Jingfeng Mingyuan to 14.103 million yuan.
The amount of accounts receivable is large, and the gross profit margin data is abnormal.
According to the prospectus, during the reporting period, Jingfeng Mingyuan accounts receivable were 27.31 million yuan, 65.06 million yuan, 81.56 million yuan, and 97.65 million yuan, accounting for 10.61%, 23.60%, 29.38% of the total assets at the end of the period, respectively. 31.06%, showing a trend of increasing year by year.
Although, during the reporting period, Jingfeng Mingyuan's accounts receivable were mainly aged within half a year and the company has formulated a reasonable bad debt provisioning policy and implemented it effectively, but if the company's downstream customers are not operating properly or due to other reasons, it is unable to pay the purchase price on time. It will have an adverse impact on the company's receivables collection, which will directly affect the subsequent profit level of Jingfeng Mingyuan.
At the same time, the gross profit margin of Jingfeng Mingyuan was lower than that of comparable listed companies during the reporting period. In 2016 and 2017, Jingfeng Mingyuan's comprehensive gross profit margin was 20.78% and 22.49%, respectively, up 0.49 percentage points and 1.71 percentage points over the same period. However, compared with peer listed companies, its comprehensive gross profit margin is still at a low level. The Silan Micro-New Year report shows that the overall gross profit margin of the company in 2016 and 2017 was 24.18% and 26.22%, up by -2.22 percentage points and 2.04 percentage points respectively over the same period. In the past two years, the gross profit margin of Silan Micro Products was 3.40 percentage points higher than that of Jingfeng Mingyuan and 3.73 percentage points.
It is also worth noting that from 2015 to 2017, Jingfeng Mingyuan's comprehensive gross profit margin has been increasing year by year. However, both Shilanwei and other counterparts have seen a slight decline in their gross profit margin in 2016. Inconsistent with the trend of changes in gross profit margins of peer companies is also one of the focuses of Jingfeng Mingyuan’s IPO challenged by the audit committee.
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