The declining trend of Xinxiang's rising profits is difficult to change the financial situation in 2013

Economic Herald Financial researcher Wang Pingfeng in May 2012 after the impact of the gem, Xinxiang Sunrise CNC Bearing Equipment Co., Ltd. (hereinafter referred to as "Xinxiang Rising") in the SFC recently disclosed its IPO prospectus (report). The company intends to land SSE Gem, proposed to issue 14 million shares, sponsoring institutions for Wanguo Securities. The Securities and Futures Commission disclosed that the IPO was caused by a large number of related transactions leading to the defect of the company's independence. Economic Herald financial researcher looking into the proposed prospectus found that after two years, the company reduced some of the related transactions, but the financial situation during the reporting period is rapidly deteriorating overall, growth and profitability of the future worrying. A serious backlog of inventory of the proposed prospectus shows that in 2011-2013, Xinxiang daily rise to achieve operating income of 311 million yuan, 343 million yuan and 196 million yuan, 2012 and 2013 year-on-year growth rate of 10.47%, -42.72%,2013 annual operating income decline is huge. At the same time, in 2011-2013, Xinxiang daily rise to achieve net profit of 67.6 million yuan, 71.51 million yuan and 29.22 million yuan, 2012 net profit year-on-year slightly increased by 5.78%, but the 2013 net profit fell by as much as 64.36%. Single from the entire financial statements, inventory backlog and product unsalable may be the cause of Xinxiang rising revenue decline. 2011-2013, the company's inventory balance of 149 million yuan, 157 million yuan and 192 million yuan, the proportion of current assets accounted for 54.11%, 46.88% and 56.09%, accounted for a relatively high. Among them, inventory and inventory of commodities, 2011-2013, respectively, 65.6915 million yuan, 79.1065 million yuan and 113.3254 million yuan, 2013 year-on-year growth of 43.26%. In addition, in 2011-2013, Xinxiang daily rise inventory turnover rate of 1.76 times/year, 1.42 times/year, 0.77 times/year, the decline year by day. In fact, Xinxiang daily stock balance and inventory of goods balance in 2010 only 76.3838 million yuan and 21.7954 million Yuan respectively, 2011 year-on-year growth of 95% and 201% respectively. Visible, Xinxiang Rising inventory backlog in the 2011 began to appear, and deteriorated year in, especially the inventory of goods unsalable, affecting the company's capital chain. From the company's cash flow can be seen in 2011-2013, the company operating activities generated by the net cash flow of 8.7 million yuan,-46.75 million yuan and 5.23 million yuan. Part of the order was canceled when the industry entered the trough. Review of the proposed prospectus found that Xinxiang rising in the reporting period of the overall deterioration of the financial situation, and the industry recession-related. The proposed prospectus, Xinxiang Sunrise is a professional bearing CNC equipment manufacturers, the machine tool industry, mainly for the downstream bearing manufacturing enterprises to provide production equipment. However, since the second half of 2011, China's machine tool industry growthMomentum gradually slowed, some heavy machine tools and low-grade machine tool market has slipped. Starting in 2013, the sales situation plummeted, some customers even canceled orders, the entire industry into a trough period. Xinxiang 2013 The main reason for the sharp decline in net profits is, in order to maintain market competitiveness, the company's two series of products sales price overall decline, while some orders were canceled, the company in accordance with the new customer requirements after the reorganization of the sale, increased product costs, affecting the level of the company's gross margin. China machine Tool Industry Association released 2013 Years of machine tool industry economic Operation Analysis report predicts that 2014 industry situation will not be significantly better, the whole year than 2013 will still have a certain decline, even if the optimistic estimate, and only with 2013 flat. For the industry's grim situation, in the industry in the enterprise more experience, Xinxiang Rising also in the prospectus to remind investors: "If the future macroeconomic can not maintain a sustained growth trend or downstream industry continues to be depressed, Xinxiang rising performance not only in the short term can not be a sharp rebound, or even may continue to lower, Do not exclude the company may be listed in the year operating profit decline of more than 50%, or even loss of the situation. ”