Kang Yue Science and technology alongside Weichai survival receivables soaring liabilities twice times to peers

Kang Yue Technology performance growth has been declining, but also rely heavily on Weichai Holdings, in addition, the company's accounts receivable and inventories are increasing, asset-liability rate of high financial weekly reporter Yang Lui Mao/Shanghai report since June 2012 has been up to two years, Kang Yue Technology (300391) of the listing dream finally to achieve. July 24, 2014, Kang Yue technology to start online purchase, to be listed on the Shenzhen Exchange Gem, the sponsor for the Great Wall securities. The IPO price of the initial public offering is determined at 9.84 yuan/share, and the corresponding P/e ratio is 20.5 times times. However, the financial weekly reporter noted that at present, Kang Yue technology performance growth has been declining, and rely heavily on Weichai holdings of enterprises. In addition, the company accounts receivable and inventory increasing, the asset-liability rate is high, the future debt repayment risk can not be ignored. The net profit three even falls, the performance relies heavily on Weichai holding Kang Yue Science and technology main business for the internal combustion engine turbocharger development, the manufacture and the sale. Currently, Kang Yue invests directly in 84% of Kang Yue technology and is a controlling shareholder of the company. Guo Xilu for Kang Yue investment in the first major shareholder, holding Kang Yue investment 31.58% of the equity, is the company's actual control. June 2012, the Board of Auditors audit passed the Kang Yue technology of the first application, then, Kang Yue technology performance is in the stage of explosive growth. The prospectus (report) shows that 2009-2011, the Kang Yue technology operating income is 128 million yuan, 178 million yuan and 223 million yuan respectively, the net profit attributable to the parent company is 17.7705 million yuan, 30.8083 million yuan and 37.1332 million yuan respectively. In 2010 and 2011, corporate revenue growth reached 38.62% and 25.66%, with a net profit growth rate of 73.37% and 20.53%. But when Kang Yue technology is officially on the market, performance begins to show weakness. The newly disclosed prospectus shows that in 2012 and 2013, the company's operating income was 225 million yuan and 255 million yuan respectively, with a year-on-year growth of 0.9% and 13.33% respectively. The net profit attributable to the owner of the parent company was 35.478 million yuan and 34.9585 million yuan respectively, down 4.48% and 1.46% respectively. In this regard, Kang Yue Science and technology, the main reason is affected by the macroeconomic cycle, the national industrial policy and investment policies and the increase in corporate financial costs. The company also said that if the 2014 turbocharger product sales growth is not up to expectations, or the company's downstream industry market competition has led to a decline in product market prices, or the company's raw material prices have increased significantly and other force majeure factors, the company's product sales and performance caused a significant adverse impact, May lead to a company's 2014 operating performance risk of unsustainable growth. Recently, some bad signs have begun to show. According to the prospectus, net profits for Kang Yue technology revenues and ownership of parent companies fell by 2.48% and 16.33% in the first quarter of 2014, respectively, and the company alsoIn the first half of 2014, net profit attributable to the owner of the parent company was changed to 20%-0% year-on-year. From the point of view of net profit, the net profit of Kang Yue technology has been declining for 3 consecutive years since 2012. Worse, Kang Yue technology accounts receivable is accelerating expansion, but also the company's performance growth of the gold greatly discounted. 2011 to the end of 2013, the company accounts receivable net amount is 58.0228 million yuan, 78.0903 million yuan and 106.3968 million Yuan respectively, 2012 and the end of 2013 year-on-year growth of 34.59% and 36.25% respectively, far more than the same period of the company's operating income growth. In fact, back to the increasingly difficult behind, and Kang Yue technology business income concentration in some major customers, especially Weichai control enterprises have an inseparable link, including Weichai power (000338. SZ), Weichai power spare parts, Weichai New Energy, Weichai Road, Weichai, Wei Chai Yangchi and so on. In the past three years, Kang Yue technology to Weichai holding control enterprises, the North Steam Foton, Baoding Great Wall, on diesel power, a drag Luoyang, such as the first 10 customers sales amount, accounting for the current main business income ratio of 84.02%, 80.68% and 80.17% respectively. Among them, the total amount of sales to Weichai controlling company accounted for 34.33%, 32.74% and 36.57% respectively. Kang Yue Science and Technology explained that the company and Weichai Holdings in Shandong province Weifang, so with Weichai control enterprises from the earlier period of business cooperation and continued to date. The original Shouguang Supercharger factory (2001 by the Kang Yue Technology Acquisition) from 1999 onwards for Weichai Power engineering machinery engine supporting turbocharger, 2004 with the Weichai power of the southwest region business, the company began to Weichai Power engineering machinery engine supporting Turbocharger In 2003, the company began supporting Weichai Road in accordance with the vehicle engine, 2005, the company began supporting Weichai Chaiyang Diesel Engine, 2006 company began supporting Weichai new energy gas engine. After more than more than 10 years of development, Kang Yue technology is currently the Weichai control enterprises supporting turbocharger for the total number of supporting products of the company's 22.84%. The ratio of assets to liabilities is twice times that of peers. In addition to accounts receivable, Kang Yue Technology High inventory has attracted much attention. The stock of Kang Yue technology is mainly composed of raw materials, products and stock goods. From 2011 to the end of 2013, the net stock of the company was 40.4902 million yuan, 38.0394 million yuan and 42.3099 million yuan respectively, the proportion of current assets was 20.75%, 14.31% and 13.22% respectively. In this regard, Kang Yue technology in the prospectus explained that the main reason is that the host manufacturers generally implement zero inventory management, the requirements of parts suppliers in accordance with the On-line assembly plan timely supply parts and components, the company to meet customer needs, must provide security in accordance with Customer demand safety inventory protection; Also led to an increase in inventories. Kang Yue technology does not mean that as sales scaleRapid expansion, the company's final inventory balance grew faster. Inventory growth will occupy the company's liquidity, may result in inventory turnover decline, and affect the company's profitability. In the event of a sharp drop in the price of the company's product sales, the company's inventory will likely result in a loss of value. As accounts receivable and inventory occupy a large amount of capital, the risk of Kang Yue technology debt repayment is rising. From 2011 to 2013, the company turnover rate was 2.13 times times, 1.43 times times and 0.96 times times respectively, and the quick rate was 1.69 times times, 1.23 times times and 0.83 times times respectively. Consolidated Statements the asset-liability ratio was 56.16%, 57.63% and 64.91%, respectively. And the prospectus shows that in the same period, Bohai Pistons, Jiangnan Red Arrows, Granville Fu, such as the 8 listed companies in the asset-liability ratio of 30.18%, 31.15%, 32.25%, can be seen, Kang Yue technology assets and liabilities higher than the same industry companies a large section, of which 2013 unexpectedly reached the same industry company twice times. Kang Yue Technology argues that the turbocharger products mainly for the downstream internal combustion engine factory supporting, the host plant generally zero inventory management, the company and host plant mainly using the monthly settlement model, resulting in inventory and Accounts receivable large amount of funds, flow ratio, low speed ratio. In addition, the company is now in the rapid development phase, the capital demand, mainly rely on bank credit funds to meet capital expenditure and liquidity demand, resulting in higher asset-liability ratio. The prospectus shows that from 2011 to the end of 2013, the short-term borrowings from the Kang Yue technology doubled from $44.5 million to $89.5 million, then doubled to $208 million, accounting for 24.03%, 38.13% and 56.9% of the total liabilities of the company, and the long-term borrowings were 20 million yuan, 40 million yuan and 83.3 million yuan. This puts the company under huge financial pressure. From 2011 to 2013, the company's financial expenses were 13.1327 million yuan, 11.4982 million yuan and 11.1016 million yuan, which accounted for 35.37%, 32.41% and 31.76% of the net profit of the parent company in the same period. Kang Yue Technology said that in order to solve the production and operation of the necessary operating capital and Kang Yue Precision construction of the capital needs, the company significantly increased bank borrowings, resulting in a downward trend in the flow ratio, the pressure of corporate debt repayment increased. If the company fails to repay the maturing bank borrowings in time, it will have a significant impact on the operation of the company.