Dong: Huge correlated transactions support net profit rockets soar

Dong Power recently more than 4 layers of the lifting of the wave of the tsunami, and the annual report of the debut, causing widespread concern in the market. In addition to the lifting of the risk, the Beijing first certificate also found that the Dong electricity has a high proportion of related transactions, operating income and operating cash flow trend seriously deviated from the operating activities of cash flow of the perennial exhaustion, accounts receivable increase in successive years, and other anomalies, in addition, the Dong Annual report on its main business Beijing's first card reminds investors to be wary of related risks. First of all, the high proportion of Dong related transactions caused widespread market concern, but also attracted the attention of the SFC. April 8 This year, the China Securities Regulatory Commission issued the "decision not to approve Dong Technology Co., Ltd. issued a corporate bond application" (License (2014)381 number), the original article on: "Your company in 2010, 2011, 2012, the owner of the parent company in the net profit of 2 million yuan , 12 million yuan, 143 million yuan, 2012 net profit mainly from the entrusted management of 4 companies, Zhengzhou Asahi Optoelectronics Technology Co., Ltd., Xu Dong (yingkou) photoelectric Display Co., Ltd., Sichuan Xu Hong Optoelectronics Technology Co., Ltd., Shijiazhuang Asahi New Photoelectric Technology Co., Ltd. (hereinafter referred to as "custodian Company"). After completing the installation of some production lines of the hosting company, the company confirmed the 2012 annual, 2013 1 to September glass substrate equipment and technical service income of 639 million yuan, 344 million yuan, accounting for the corresponding period of the total operating income of 82.06%, 63.96%, And your company's accounts receivable from the end of 2012 to increase from 574 million yuan to the end of September 2013 794 million yuan. In the opinion of the Commission, the above situation is not in accordance with the provisions of article seventh of the pilot Scheme on corporate bond issuance. "The reasons for the SFC's rejection of issuing corporate bonds were not mentioned in the Dong announcement. Here we quote the SFC 49th to make the "corporate bond issue pilot Scheme" seventh for investors ' reference, the full text reads as follows: "The seventh article issuance company Bond, should conform to the following stipulation: (a) The company's production and operation conforms to the law, the administrative regulations and the company constitution stipulation, conforms to the national industrial Policy; (ii) The company's internal control system is sound, the integrity, rationality and effectiveness of the internal control system have no major defects; (iii) credit rating agencies with a good rating; (d) The company's most recent audit of net assets shall conform to the relevant provisions of the laws, administrative regulations and the China Securities Regulatory Commission; The average annual distribution of profits achieved in the last three fiscal years is not less than one year's interest on corporate bonds; (vi) After the issuance of the total amount of corporate bonds not more than the last net assets of 40%; financial company's cumulative corporate bond balance is calculated according to relevant regulations of financial enterprises. "The Dong of the net profit rocket is backed by a huge, interconnected deal." Dong 2013, the net profit attributable to the owner of the parent company was 369 million yuan, an increase of 158.86% per cent, and the introduction of a 10-share increase of 20-Share policy. The net profit of Dong 2010 is only 2 million yuan, 3 years net profit increase 184.5 times times, it is rocket speed. However, in 2012 and 2013, the proportion of Dong transactions accounted for the total annual sales of 84.2%, 76.8% respectively. Secondly, there are abnormal phenomena such as the Dong of operating income and the cash flow trend of operation activities, the exhaustion of cash flow of operating activities and the increasing of accounts receivable in successive years. Visible from table 1 and Figure 1, from 2011-2013, Dong electricity in operating income soared 7.92 times times, while operating cash flow has been negative, showing perennial exhaustion, and operating cash flow out of the company's volume from 2011 to 2013 increased by 998.41 times times, and operating income rocket soaring showed a very obvious departure. At the same time, Dong Electrical accounts receivable increase year after year, but with operating income to keep pace, 2013 accounts receivable is 2011 75.73 times times. Table 1 Dong for nearly three years financial data unit: The whole figure 1 Dong power nearly three years of major financial indicators change unit/metadata collation: Beijing first card Finally, Dong Annual report on its main business risk disclosure. As Dong report said, the company's TFT-LCD glass substrate products are still in the product certification period, has not formed a large volume sales, the company's main business is still glass substrate equipment and technical services business. However, in its 2013 annual report, the company explores the future risks of the company, but it is very clear that it is positioning itself as a glass substrate manufacturer, although the production of glass substrates in recent years has brought almost negligible revenues to the company. At the same time, the risk of the so-called "glass substrate equipment and technical services business" which brings huge revenues to the company is not kept silent, in addition, the Dong electric power to the investors concerned about the stability of the linked transactions, persistent problems, as well as the survival of the relevant party, etc. are also silent. In this situation, Dong rtvu talk about the future of Wuhu glass substrate production line, giving people the "fancies", gu about his sense. In a comprehensive view, Beijing's first certificate that Dong in recent years to achieve rocket-type growth is the reason is a large amount of related transactions, the company's main business operations risk disclosure evasive, these are worthy of rational investors to ponder.