Hongtai Mining set of three major soft rib products customers too focused on the most risk

Mr Cheung Xinjiang Plate welcomes the second company to be listed in the year-Hongtai Mining (hereinafter "Hongtai"), today it will face the audit of the issuing Commission. Hongtai to produce iron powder for the main, 90% of the product provided to Army Day Steel (600581.SH, hereinafter referred to as "eight steel"), its operating conditions last year due to the decline in iron powder prices suffered by the decline.　　The first financial journal notes that it is not just revenue and accounts receivable, but also net operating cash flows. "The product customer is too concentrated is the biggest risk of hongtai, because the eight steel own iron ore, and you attach to it, this will lead to the loss of bargaining power."　　An iron ore industry researcher said. The "soft rib" of bargaining power or the main reason for the huge rise in accounts receivable at the end of last year. "The net decline in the company's operating cash flow is too fast (proving that it has not received cash), and it can be said that its 2009-year earnings are much more fluid."　　"A senior financial expert told reporters. 90% business relies on eight steel according to the prospectus (the report), Hongtai's reliance on the eight steel from 2007 to 79.97% to last 90.11%.　　And the eight steel itself owns Fuyun, the annual output in 2007 to reach 800,000 ~100 million tons. Although the demand for iron powder for the eight steel 8.3 million tons per year, but Hongtai is not its main supplier, 2007 ~2009 to the eight steel contribution accounted for only eight steel procurement of about 10%. "There is no shortage of suppliers, but if the loss of this customer, Hongtai mining can not continue to operate on the difficult to say."　　"said one Beijing steel industry analyst. The bottleneck of reserves and prospecting right is currently only 520,000 tons per annum. "With the current output and its projected net profit of 71.6189 million yuan this year, which means that the average net profit per ton of iron powder is about 137 yuan, the profit figure is likely to be lower in the next year or two." The iron ore industry analyst said, "the current three major mines (Rio Tinto, BHP, Vale) combined with production of nearly 200 million tons, is still climbing, expect oversupply in the next few years will be highlighted."　　"Compared to other iron ore listed companies, Hongtai market accounted for no advantage, Hongtai iron ore average grade of 37.1%, in the middle of the position, recoverable reserves of only 29.88 million tons, are all iron ore listed companies in the least reserves." Of the 16 prospecting licences owned by Hongtai and its subsidiaries, the earliest February 24 of this year has expired, the latest of which expires on January 25, 2013, and the expiry date of 15 licences is due in the next two years, and the richest Bad Backbrack iron ore will expire by the end of the year. "In general, prospecting is the first, after the exploration of the mining permit, to produce." To ensure continuous production after the expiry of these prospecting certificates, it is necessary to apply again, but this will increase the cost of the enterprise.　　"The iron ore industry analyst said. Cash flow tension is due to customer single, Hongtai bargaining power in the leeward, its last year accounts receivable almost all from the eight steel credit, Hongtai in the interpretation of accounts receivable turnover rate than the same industry lowWhen also said: "There are some sales and the use of eight steel credit settlement, so the final accounts receivable larger, and the same industry listed companies and customers to settle more than the use of bills, the end of accounts receivable smaller."　　"Unlike other peers ' settlement rules, it embodies the status of Hongtai in the game of eight-steel. Hongtai last year accounts receivable grew by 39 million yuan compared with 2007, resulting in its net operating activities last year only 7.38 million yuan.　　Last year, however, net profit was about the same as 2007. Hongtai's borrowing amount has increased in the past three years. The report, "Cash received from borrowings", is listed in the column, borrowing 56.98 million yuan in 2007, 110 million in 2008, and up to 215 million yuan last year.　　Without these loans, the net increase in cash and cash equivalents would be difficult. In the first quarter, Hongtai net profit was 11.07 million yuan, but promised to reach 71.61 million yuan this year.　　In other words, in the three quarters of this year, Hongtai must achieve a net profit of 82.68 million yuan. In addition to the 2008 years of soaring iron ore prices, Hongtai failed to meet the target in 2007 and three quarters of last year.