Oak shares: Cash flow plunge 99% Market Outlook pessimistic

If you can join the gem, on the scale of Liaoning Otis Co., Ltd. is said to be "big", the company's main products are poly-silicon cutting fluid and polyether monomer, its 2009 sales of more than 1 billion yuan, more than the listed gem company average size of 3 times times.　　Not only big, the company's high profit growth is bound to get a high P/E listing to lay the groundwork, 2009 company net profit rose 80%.　　However, the Austrian shares in the high profit growth, while some details have aroused our vigilance. In the case of sales growth of only 13%, receivables have climbed sharply, while operating cash flow has shrunk sharply.　　In the 2009, the company relied on a big increase in bank borrowing to keep its seemingly relatively abundant cash on hold.　　Moreover, there is still a large amount of the purchase and sale business of the stock and the controlling shareholder and other related parties, and there is no sign of the decrease.　　Company income slightly increased, receivables rose, operating cash flow plummeted, related transactions are large, all these signs, and we have seen before the listing requirements and financial fraud enterprises, the same. Market prospects pessimistic Austrian shares in Liaoyang, Liaoning Province, in July 2007 the overall change was established, and its predecessor, Liaoning Austrian Chemical Co., Ltd. was first established in January 2000.　　The company's controlling shareholder is the Austrian group, the actual control for Zhu Jianmin, Liu Chao, Dongchong and Dong Zhenpeng, the four-person shareholding ratio of 24.06%, 8.21%, 8.05% and 7.99%, the total holding of the Austrian group 48.31% Equity. 2009, The sales of poly-silicon cutting fluid accounted for 62.6%, this product is a kind of auxiliary materials used in the process of solar wafer cutting, the main customer is the domestic polysilicon manufacturer including LDK, while the ratio of polyether monomer sales is 32.6%, this product is mainly used in the synthetic concrete water-reducing agent, the main customer is the domestic concrete water reducer manufacturer.　　In addition, the company also has a small number of polyethylene glycol products used in polyester fiber modification, rubber plastic additives and other fields, sales accounted for about 4.6%. This shows that the company's sales growth prospects and upstream of the polysilicon industry and concrete industry is closely related, however, these two industries are now facing a more obvious overcapacity problem.　　This is also evident from the company's sales growth in 2009, the company's sales rose 13% year-on-year, the growth rate fell by nearly 70%. As early as August 2009, the State Council in the executive session of the "comments" pointed out that domestic polysilicon due to redundant construction caused overcapacity. To Wuxi Suntech, LDK representative of the polysilicon manufacturer's windfall myth stimulated a large number of domestic enterprises into the polysilicon industry, according to statistics, from 2005 to 2009, domestic polysilicon capacity expansion rate of more than 1000 times times, and with the 2009 foreign demand continued to shrink, polysilicon overcapacity problem highlighted,　　Prices are also falling rapidly. Although there is controversy over whether the polysilicon industry is really in excess in the industry, one thing is certain that in the countryIn the absence of a clear demand for the external photovoltaic industry, the domestic polysilicon industry in the next few years there is no obvious increase in the likelihood.　　The concrete industry has the same problem, in the past year of large-scale infrastructure construction process, the concrete industry also has a substantial expansion, and as the economic growth structure adjustment, the industry as a whole is likely to shrink. Therefore, in general, the two upstream industries of the Austrian shares in the next few years there is a large contraction may be, growth prospects are not optimistic, this is not good news for the growth of the company's product demand.　　[Page] 760,000 operating cash flow plummeted 99% 2009, the growth of the Austrian shares is not ideal, sales growth of 13% per cent year-on-year, as a company to be listed on the gem, such growth rate is difficult to say, even so, the company's sales are through a substantial increase in the amount of credit to achieve.　　We note that the company's sales growth of 13% at the same time, receivables and receivables are significantly increased, the year-end company's accounts receivable reached 222 million yuan, an increase of 156% per cent, should receive bills of 113 million yuan, the year-on-year increase of 15.5 times times. A mature company, will not arbitrarily change the customer's sales credit policy, moreover, such a large increase in credit, in our view, is the company's products lack the necessary competitiveness, so that the sales end does not have the right to speak the embodiment.　　What's more, let us worry more about the possibility of using receivables as a virtual increase in sales because of the incentives for high profit growth. Credit can not bring cash, from the 2009 situation, the company has lost the operation of hematopoietic function.　　According to the cash flow statement, the net cash inflow that the company achieved through operation last year was only 765,000 yuan, only 1.08% of that amount (69.98 million yuan) in 2008. In fact, if the company did not successfully borrow a large number of bank loans, the Austrian shares in the end of 2009 will appear very serious book Capital tense.　　Early last year, the company's book money has 164 million yuan, because the operation brought only 765,000 yuan of cash, while the company's investment net expenditure of 146 million yuan, which means, if the same size of the bank loan scale, the company to the end of the book only about 25.6 million yuan of funds, the year-on-year reduction of 84%. However, the company's new increase of 500 million yuan in bank loans, which greatly eased the book capital pressure.　　Perhaps, this is one of the important reasons for the company to seek a listing, financing is the important function of the capital market, this is understandable, but the problem is, if the company does not have the function of hematopoietic operation, from the vast number of investors may be the money will be wasted.　　Associated transactions occur frequently in the last three years, the company and the controlling shareholder and other related parties have related transactions occurred, according to the disclosure of prospectuses, mainly for the company for the Austrian group and its subsidiaries for procurement, as well as the company to purchase raw materials. 2007-2009 years, the company's related party sales of 59.41 million yuan, 93.18 million yuan and 65.74 million yuan, accounting forThe proportion of sales is 11.4%, 9.87% and 6.16% respectively, we believe that the listing of related party transactions of the normative requirements of the company to reduce the proportion of related party sales of the main pressure. In 2009 of the related party sales, there are 45.58 million Yuan Austrian group and its subsidiaries commissioned by the company to buy epoxy acetylene, sales price for the purchase cost per ton plus 50 yuan freight.　　The rest of the company to the relevant party sales of crystalline silicon cutting fluid and other products.　　In addition, the company 2007-2009 years of related parties to purchase the amount of 9.46 million yuan, 22.38 million yuan and 30.11 million yuan, accounting for total procurement of the proportion of 2.82%, 2.81% and 3.67% respectively, the purchase volume is rising trend. Although the prospectus attempts to confirm the fair price of the related party transaction, the related party transaction has always been a natural channel of interest delivery, and we are still concerned that such a related party trade fair will harm the interests of the minority shareholders.