Shensi electronic growth is worrying inventory explosion was accused of blindly expanding production

China Network Finance July 22 News recently, the Intelligent identity authentication terminal manufacturer-Shandong Shensi Electronic Technology Co., Ltd. (hereinafter referred to as "Shensi electronic") pre-disclosed the prospectus, the company intends to land in the capital market. However, there are indications that the net profit growth stagnation, inventory surge in the shensi of electronic fatigue, at this time IPO financing expansion capacity is accused of blind decision-making. 2004 Shensi Electronics set up, May 2011 officially into a limited company, the main business for the Intelligent Identity authentication terminal and industry application software research and development, production, sales and service, product market share in the forefront. The proverb has the cloud, the opportunity always favors the person which prepares, this sentence in Shensi Electron obtains the full embodiment. Shensi Electronics Chairman Wang Jichun after several failures, and finally catch up with the second generation of identity card popularization tide, its main business--intelligent identity authentication system in the market, and hence fame, into ten years gold development period. And the release of the prospectus, Shensi electronic mysterious business data was finally opened, the past Glory has ceased, the performance growth has stalled. 2011-2013, the Shensi electronic revenue is 171 million yuan, 202 million yuan and 212 million yuan respectively, corresponding net profit is 30.2744 million yuan, 33.3987 million yuan and 35.6453 million yuan respectively. It is noteworthy that Shensi electronics, although revenue and net profit both rise, but 2013 its revenue growth rate of less than 5%, net profit growth also fell, and even operating profit fell 3%. Shensi Electronics in the prospectus, frankly, do not rule out the future period of operating performance can not continue to grow, and may even be listed in the year the operating profit decline more than 50% risk. In addition, China Network Financial reporter also noted that, in the case of weak profit growth, shensi electronic option at this time IPO to raise capital expansion, and in recent years the surge in inventory balances investors feel worried about whether it has the ability to digest new capacity. The investment project shows that the Shensi electronic proposed 20 million shares, raising a total of 148 million yuan, of which 103 million yuan for the construction of Intelligent identity authentication terminal and industry solutions production and research projects, the remaining 45 million yuan supplementary liquidity. After the completion of the project, each year will add various types of intelligent identity authentication terminals and industry application software 110,000 sets of capacity. However, the reporter noted that over the past three years the inventory of Shensi electronics has been pushed higher. During the reporting period, its inventory balance was 27.87 million yuan, 21.94 million yuan and 39.6 million yuan, the balance of Shensi electronic inventory increased by 80.51% in 2013 compared with the end of 2012, and the ratio of inventory to total assets rose from 18.41% to 27.31%. Shensi Electronic said that, at the end of 2013, the increase in inventory balance is mainly based on orders and market future supply, the appropriate increase in the safety module and other major raw materials procurement, resulting in large inventory amount. However, the reporter found that the growth of raw materials only on the one hand, the inventory of goods (finished products) also showed a sharp increase. But Shensi Electronics also recognizes the risk, which it says in the prospectus, such asFruit industry demand changes, competition intensity increases, shensi electronics may face the risk of overcapacity, resulting in the fund-raising investment projects can not achieve the expected return. Industry insiders also believe that the new 110,000 capacity is more like betting, Shensi Electronics should look for new marginal effect, by expanding the market to drive product sales, but from the prospectus does not see the relevant signs.