The Great Wall information performance quality doubt: or by linked transaction paper wealth

The Great Wall information performance is doubtful: or by related transaction achievements "paper wealth" our reporter He Wenying last year, the stock price rose as high as 249% of the Great Wall of cattle stock News recently published 2013 annual report. During the reporting period, the company realized operating income of 1.657 billion yuan, an increase of 10.32%, net profit of 95.06 million yuan, an increase of 41.38% year-on-year. The company said that during the reporting period, the company's three major business of financial electronics, High-tech Electronics, medical Electronics presented a good development trend, achieve a faster growth. However, the reporter found that in the background of the report, the Great Wall of information profit quality is worth considering. At the same time, the company's annual relationship with the controlling shareholder and its associated parties is a huge amount of controversy. A number of financial indicators deteriorated although the Great Wall information 2013 net profit achieved nearly 50% growth, but its operating activities generated by the net cash flow has exposed the company's net profit is not high. Earnings show that the company's operating activities in the past three years of cash flow generated a rapid decline in the trend. The net cash flow from operating activities in 2011 was 150 million yuan, which fell to 39.17 million yuan in 2012, and to 2013 the target was low to $57.91 million. From 2011 to 2013, the net profit achieved by the company was 43.33 million yuan, 67.24 million yuan and 95.06 million yuan respectively, and the net profit cash content corresponding to the nearly three years was 346.5%, 58.3% and 60.9% respectively. The Great Wall information indicates that the net amount of cash flow generated by operating activities is reduced by 247.82%, mainly the effect of inventory and account receivable increase. The annual report shows that the company's inventory at the end of 2013 was 345 million yuan, an increase of 49.6% per cent, the amount of accounts receivable is 442 million yuan, a year-on-year increase of 51.6%, the growth rate is significantly higher than the increase in operating income. At the same time, the company's inventory turnover and accounts receivable turnover has declined year-on-year. 2012 Great Wall Information inventory turnover rate of 6.24, 2013 fell to 4.54; 2012 receivable turnover is 5.79, 2013 to 4.52. In this respect, the Great Wall information Dong Wang Yanfa told reporters: "As far as I know, inventory and Accounts receivable increase is the general phenomenon of the industry companies." Our company's clients are mainly banks and the military, so there is little likelihood of bad debts. "However, according to the company's latest quarterly report, Accounts Receivable are still in a fast-growing situation, and cash flow has not been effectively improved." In the first quarter of 2014, the company accounts receivable at the end of the balance of 553 million yuan, the beginning of the increase of 111 million yuan, the growth line is close to the whole year, the net cash flow generated by operating activities is-219 million yuan, reduced by 14.35% over a year earlier. The amount of related transactions is significant, it is noteworthy that the Great Wall information each year with its controlling shareholder China Electronic Information Industry Group Co., Ltd. and its associated party transactions are less than tens of millions of of the amount of billion. Annual reports show that 2011-2013 companies and controlling shareholders and theirRelated parties generated by the associated transaction amount of 107 million yuan, 39.19 million yuan and 177 million yuan respectively. In addition, the company in 2011 with the relevant party China Electronic Finance Limited liability company signed the "Financial Services Agreement", launched a capital settlement business, each year with the company's capital transactions in more than billion. The regulation of profit by listed companies through related transactions has always been a chronic disease of the capital market, and it is also a matter of great concern to the SFC [Weibo]. One of the means of manipulating profits with affiliated transactions is the related purchase and sale, that is, there is a large proportion between listed companies and affiliated enterprises in the purchase and sale, more for the listed companies from the associated side of Low-cost purchase, and then sold at high prices. And this violation of market law is mostly "paper wealth", Accounts receivable high hanging, there is no real cash inflow. It is worth mentioning that the Great Wall information in the past two years will be part of the accounts receivable without recourse factoring business, perhaps to improve the operational cash flow dilemma. 2012 Annual report shows that the company will be 68.71 million of the accounts receivable through no recourse factoring to the Construction Bank of Beijing Branch; in 2013, the company will be 98.56 million of the accounts receivable through the non-recourse factoring transferred to the above-mentioned related party China Electronic Finance Limited liability company. Famous finance and taxation expert Ma Jinghao in the 11th issue of the board of Directors magazine in 2012 published a review article "turnover rate behind the Book of Secrets," the article said: "Fictitious income listed companies are often reflected in the rapid increase in accounts receivable, the turnover rate of accounts receivable plummeted; inventories increased sharply and inventory turnover declined sharply. It should be noted that the listed companies will also worry about the turnover of accounts receivable and the sharp decline in inventory turnover will arouse investors ' suspicion, so it is possible to transfer accounts receivable to other receivables, prepaid accounts. Therefore, the large current account of the listed companies should be extra careful, do not be fooled. ”