Oriental Garden Quarterly net profit plunged 70% suffered cushion

The "cushion-capital model" of Oriental Gardens is bringing a dilemma. According to data, as of November 19, Oriental Gardens fell 28% in the past year, while the Shanghai Composite Index rose 12%. The long-term decline in stock prices, in addition to bringing the market value of Oriental gardens seriously shrinking, but also the historical criticism of the "advance after the payment" business model more prominent in the public opinion of the tuyere. In order to help investors explore whether the valuation of listed companies is reasonable, "investor newspaper" reporter to the Oriental Garden "cushion Capital model" was dismantled. Due to the implementation of the "cushion funding model", Oriental garden in recent years, the accounts receivable has grown rapidly. According to wind data, At the end of 2007, the accounts receivable of the Oriental Garden was only 85 million yuan, and the inventory was only 96 million yuan. But as of September 30, 2014, the Oriental Garden accounts receivable has been as high as 3.696 billion yuan, nearly 7 years increased by 43 times times; inventories up to 5.686 billion yuan, up 59 times times from the end of 2007. Worryingly, the company's performance is slipping compared with the rapid increase in receivables and inventories. According to wind data, 2013 years ago in the three quarter, Oriental Garden owned by the parent company shareholders net profit of 504 million yuan, and 2014 years ago three quarters of its net profit is only 413 million yuan, down 18% year-on-year. The quarterly net profit in the three quarter of 2014 was down 70% per cent from a year earlier. As of November 19, the total market value of Oriental garden is 16.956 billion yuan. It reached a record high of $32.38/share (ex-reinstatement) on May 22, 2013, with a total market value of 28.375 billion yuan. This means that over a year, its total market value has fallen by 40%. Of the 7 garden-listed companies, the market value fell second, after the 44% decline in cloud investment. What is the reason for the market value of Oriental garden stocks to shrink and the performance is not improved? Why do companies often have inadequate liquidity? Have recent institutions given a "buy" rating to the end of the 94.84 million-share ban on placements by targeted additional agencies last year and the end of corporate equity incentives? November 14, "Investors," reporters on the relevant issues to the Oriental Garden online publicity of the Dong secret e-mail, but as of press, the Oriental Garden is still unable to give a reasonable explanation. The stock price is ready for the last year to put forward the optimism of investors, I am afraid will not think that the high inventory is buried in the future can be used to identify revenue and profits of the "honey." On the contrary, Oriental Garden's net profit fell 18% in the third quarter of this year. According to wind data, as at June 30, 2014, Oriental Garden was completed in the first half of 2014, the amount of inventory under the outstanding output value of the project is 5.1 billion yuan, the price is set to total 10.42 million yuan. Comparing the 2013 annual report data, it is not difficult to find that the 10.42 million Yuan is all 2013 years of reference. In the notes to the financial statements, the company explains: "At the end of each period, the company carries out impairment tests on the items that have been completed and not settled, based on the latest evidence obtained to estimateThe final project settlement amount, if the latest evidence estimates that the settlement amount is less than the project cumulative confirmed income amount, will reduce the estimated difference to the current operating income, on the contrary, does not do the accounting treatment. For items that have not been reduced to the above test and have not been settled for more than 2 years, they are prepared according to the aging method. According to the latest project progress announcement of Oriental Garden October 28, 2014, there are 20 key projects completed before the end of 2012. Among them, including Datong Wen Yinghu project (278 million yuan), Zhuzhou Shenlong City project (106 million yuan), Datong East Wall project (43 million yuan), Shandong Binzhou Garden (39 million yuan) and other 466 million yuan inventory balance in the past three years has not changed. Are there any evidence that the settlement is less than the cumulative amount of revenue identified by the project? If so, the company should reduce the current operating income and profits according to the corresponding difference, if not, I am afraid that the full amount of impairment should be prepared. Even in accordance with the age of accounting, only the above 466 million yuan in the inventory amount of age has been more than 2 years, according to the 2-3-year age of the proportion of 10%, the company should also be accounted for nearly 50 million of the assets impairment losses, not to mention the company in the first half of 2014 inventory balance has reached 5.1 billion yuan. One-quarter net profit plunged 70% some anomalous Oriental Garden 2014 three quarterly net profit plunged 70% year-on-year. However, in terms of operating income, Oriental Garden's quarterly business receipts in the three quarter increased 1.17% from a year earlier. What is the reason for the three-quarter net profit of Oriental gardens to fall so much? "Investors," reporter found that the reason for the decline in net profits in addition to operating costs increased by 15.2%, three costs (sales costs, management costs, Financial costs), the most important factor is that the value of impairment losses in the current period increased by 112% to 55.86 million yuan, compared with the same period last year, while the net profit of the company was only 52.11 million yuan in the quarter. According to the company's explanation, the three quarter of the Oriental garden assets impairment losses at the end of the total balance of 47.6%, the main reason is that during the reporting period, the expansion of the company's business, the end of the balance of accounts receivable increase, according to accounting policies for receivables assets impairment of the increase in reserves. Because the three quarterly bulletin of the Oriental Garden does not disclose the specific accounts receivable main arrears person, we can only be 2014 years in the first half of the six months of the public disclosure of Oriental Garden data analysis. According to the data, as at the end of June 2014, the first five of the amount of accounts receivable in Oriental Garden were Datong Garden Administration, Yingkou Coastal Development and Construction Co., Shenyang Valiant new City Investment Management Co., Ltd., Jinzhou World Garden Construction Management Co., Ltd., Binzhou Economic Development Zone Management Committee, the arrears were 499 million yuan, 420 million yuan, 404 million yuan, 238 million yuan, 186 million yuan, the total accounts receivable of the company are 13.53%, 11.4%, 10.94%, 6.45%, 5.05%. Interestingly, the 2013 annual Report of Oriental Gardens showed that as of 20At the end of 13, the first five of the accounts receivable in Oriental Garden were Datong Garden Administration, Yingkou Coastal Development and Construction Co., Ltd., Shenyang Valiant new City Investment Management Co., Ltd., Jinzhou World Garden Construction Management Co., Ltd., Yantai Laishan District Urban Administration, the arrears were 461 million yuan, 420 million yuan, 407 million yuan, 316 million yuan, 195 million yuan, accounting for the company's total accounts receivable is 13.32%, 12.14%, 11.76%, 9.13%, 5.62%. Compared to the two sets of data, it is not difficult to find that, in addition to the fifth list changes, the remaining four outstanding persons are the same; from the amount of arrears, in addition to the first of the Datong City Garden Authority, the amount of arrears increased slightly, but the amount of other arrears has been reduced. A sudden sharp increase in the number of receivables in the company after six months is a bit unusual. Go all the way bear institutions but began to look good after 2012 years after the right to the stock price as high as 585.78 yuan! This is "garden first share" Oriental garden once created miracle. However, with the Oriental Garden "cushion funding model" by the market question, since May 21, 2013, "Order-equity incentive-financing-high transfer" This "Oriental routine" seems to be unsustainable, its share price began to go all the way bear. As of November 19, the closing price of Oriental Gardens was only 16.81 yuan. This not only means that the Oriental garden has completely fallen out of the first echelon of the camp, but also means that at the end of last year, 25 yuan/share of the institutions involved in the directional issuance of the total hold-up. However, some of the oriental landscape companies are not in conformity with the fundamentals of the phenomenon is also quietly happening. According to wind data, since August 24, 2014, there have been agencies to the Oriental Garden issued a "strong bullish" new rating. Among them, China Galaxy Securities analyst in the title "Oriental Garden: Profit quality improvement at first, two equity incentive escort and then growth" Report: "Based on corporate strategic planning and recent orders in the case, we forecast the company 2014/15/16 annual EPS (earnings per share) of 0.97 yuan/1.32 yuan /1.86 Yuan, the next 3 years compound annual growth rate of 30.68%, according to industry comparable valuation and company growth, to give the company 2014 25 times times PE, the target price of 24.25 yuan, first coverage to give ' recommended ' rating. "According to the" Reception research, communication, interview and other activities registration form "announced by the Oriental Garden for half year report, the field research time of the Galaxy Securities to Oriental Garden is April 24, 2014. According to the "investor newspaper" incomplete statistics, on April 24 and May 9, Oriental Garden hosted the Galaxy, Guotai, Wanguo [Weibo], including a total of 10 institutions of the field survey. As of October 27, a total of 7 institutions to the Oriental Garden issued a rating, the overall rating of "bullish". From the main positions, as of September 30, there are 6 main institutions (5 funds, 1 sunshine Private) to hold Oriental garden, positions total 32.88 million shares, accounting for the circulation of a shares 7.26%. Among them, 6 institutions in addition to a small amount of reduction, the other5 of them invariably to increase the warehouse, the Sunshine Private equity win 2nd trust than June 30 shareholding increased 1.01 million shares, the total number of shares reached 21.31 million shares. It is worth mentioning that on the evening of April 16, after the publication of the "Worst" quarterly bulletin, the Oriental Garden announced that some of the company's directors, supervisors, senior managers and some employees, to pass the "Shandong Trust-Heng Win 2nd Collection Fund Trust Program (Inquiry Trust products)" The total amount of overweight is not less than 2% of the company's total share capital, up to 4.9% of the company's total share capital. As of November 7, some executives and staff of Oriental Garden Company have completed plans to raise stakes in the company. However, according to the agreement, this part of the holding time must not be less than 6 months. Wind data also shows that November 18, 94.84 million shares of targeted additional institutions will usher in the lifting of the period, as well as Oriental Garden on the 55 of the rights of the right to apply for the application has also completed the relevant registration procedures, and the CSRC review without objection. Perhaps, after a long period of "Bear Road", the sky above the Oriental garden, there are some "mountain rain to come" weather.