According to the narrow market expansion of rice, the inefficient production efficiency is contrary to common sense

On the evening of April 12, the Securities and Futures Commission issued a notice saying that Sichuan Imikan Environmental Technology Co., Ltd. (hereinafter referred to as "the") IPO application was approved, the company plans to issue 19.6 million shares in the Shenzhen municipal gem.　　Last year, the company's operating income of about 180 million yuan, net profit of 31.01 million yuan, the basic income per share of 0.53 yuan, but the company is facing a small market, and in the market, foreign brands occupy an absolute advantage, the market share of nearly 80%, the company's future expansion resistance heavy. The market capacity is small, the position of foreign capital is firm, the company expands to face layer of resistance according to Mikang the main products are precision air-conditioning equipment, income accounted for 65%, margin accounted for 83%. Precision air-conditioning equipment can be used in the traditional communications, financial industry, as well as transportation, energy, cloud computing, data centers, disaster preparedness centers and other new areas, a wide range of applications. But if you look at sales, the company is facing a small market. According to the prospectus disclosed, 2009 domestic precision room air-conditioning market sales of only 2.734 billion yuan, accounting for the overall scale of domestic computer room 40 billion yuan 6.8%. According to the ICT industry forecast, the domestic precision room air-conditioning market demand by 2014 is only about 5.028 billion yuan. As a comparison, only the small profits of the company's computer room environmental engineering business, its 2009 overall market size of about 16 billion yuan.　　Although the company has achieved rapid growth in the past three years, the income compound growth rate reached 59%, but the main business market capacity is limited, future growth will encounter bottlenecks. Although the company said it is the largest domestic brand of precision room air-conditioning production enterprises, in a leading position, but in the market, foreign brands occupy an absolute advantage, the market share of nearly 80%. Among them, Libert, Stulz, Hiross, Canatal, Atlas five foreign brands precision room air-conditioning 2009 market share of about 52.88%, especially Emerson's Libert, Hiross, The three major brands in Atlas account for 33.9% of the market share. and Imikan 08-09 years in the entire precision room air-conditioning field market share of only 2.16% and 2.89%.　　Not only that, the dominance of foreign brands is also very solid, 07-09 years of market share of 78.03%, 79.95% and 76.49, basically no significant changes. The company currently has a precision air-conditioning equipment capacity of 1500 sets/year, the launch of the project will add 2000 sets/year capacity, the company is expected to 2014 its market share will reach 5.75%. Given the market capacity and the dominance of foreign investment, the forecast is over-optimistic. A set of precision air-conditioning equipment prices nearly 70,000 yuan, gross margin of nearly 50%, are significantly higher than the general central air-conditioning and home air-conditioning equipment. The reason is that the use of precision air-conditioning equipment requirements high, once the failure of the cost of loss is also high, downstream users of low price sensitivity. Although the company as a substituteTable of domestic brands with a certain price advantage, but not enough to quickly seize the share of foreign investment. What can be proven is that 09 before and after the telecom operators 3G Investment Peak, in the procurement of communications equipment, Huawei, ZTE and other domestic equipment manufacturers quickly increased market share and occupy a dominant position, and from the above data, in the computer room air-conditioning equipment procurement, the share of foreign capital is still solid. This shows the different competitive characteristics of different market segments.　　According to Mikang in the future expansion process will inevitably encounter many obstacles. High reliance on the communications industry and China Mobile will be adversely affected by the slowing of telecom investment. Finance and communication is the largest application field of precision room air-conditioning, with a market share of 22.6% and 20.41% respectively. The company's customers are mainly concentrated in the communications industry, 2008-2010, the company to sell precision air-conditioning equipment to China Mobile revenue accounted for the company's precision air-conditioning equipment sales revenue of 46.69%, 57.42% and 39.4%. And the company occupies China Mobile's room air-conditioning collection 40% share, is its main supplier in this field. But in the company disclosed the main customer, did not appear another two telecommunication operators China Telecom and the Chinese unicom figure. This partly shows the company's specific advantages in customer relationships, but a higher reliance on a single customer and industry necessarily leads to volatility of performance growth. Due to the domestic telecommunications industry's 3G investment Peak has passed, the future of the new engine room investment growth will significantly slow. In the first quarter of 11, the war communications, optical technology and other communications equipment company's revenue and earnings year-on-year growth has been a significant decline.　　Under unfavourable market conditions, the high growth shown before the listing of rice may be unsustainable. The long settlement cycle creates cash flow traps, operating cash negative flow may continue to exist for 08-10 years, the company's accounts receivable turnover of 1.99, 2.12 and 2.18, which means that after the sales confirmed the average collection period of six months. The company's explanation is that accounts receivable customers are mainly the subsidiaries of China Mobile, large data centers, medical institutions, government departments and other units, the payment of these customers generally need to perform the corresponding procedures, accounts receivable conversion to cash time cycle is relatively long; at the same time, the company in the process of developing new customers and new markets, Appropriate extension of credit term to key customers. Due to the slow turnover, accounts receivable accounted for a large amount of liquidity, 08-10 years accounted for the total assets of 39.07%, 41.22% and 44.32% respectively. This directly led to the company's operating cash negative flow. 08-10 years, the company achieved a net profit of 67.65 million yuan, and the same period of operating cash net flow is-8.88 million yuan.　　In the regulation form of net profit to operating cash flow, the increase of operating receivable item is the main difference source. Because the business model has not changed in the fast-growing process and the customer structure is relatively stable, this means that the cash flow trap that is caused by the long settlement cycle will persist,And may continue to expand. The consequence is to gobble up the company's operating capital, making the company's net profit growth impossible to bring about a corresponding cash inflow. The more rapidly the business grows, the stronger the company's thirst for money.　　Although the company's accounts receivable turnover has slightly improved in 08-10 years, but because the market is near oligopoly competition structure, as well as the main downstream customers strong position, it is difficult to shorten the account period to make obvious results. Sales grow far beyond equipment, personnel and inventory growth, increase production efficiency than common sense company liquidity accounted for the total assets ratio of 74%, is a light assets operating companies. 10 compared with 08, the company's sales revenue growth of 152%, its main products precision room air-conditioning sales from 08 666 sets of 1655 to 10, growth of 148%, and sales revenue growth matched. The substantial increase in production and sales needs the support of capacity, while the main factors of production are no more than fixed assets, employees, inventory and so on. However, the analysis of the company's operating data can be found that the growth rate of production factors significantly behind the growth of sales and marketing. 10 compared with 08, the company's net fixed assets grew by only 12%, the number of employees increased from 161 to 242, and inventories increased by 52%. This usually means that the output of unit production factors is greatly increased and productivity is improved. But the company's productivity improvement reached an alarming level, its per capita sales from 08 to 745,000 yuan in 10, increased by 67% in two years, the unit fixed asset output from 08 5.51 to 10 12.4 (also known as fixed assets turnover), increased by 125%. In the context of business model, product technology and so on, the speed of productivity improvement has gone beyond common sense. Investors should be more wary of the company's beautiful performance growth.