Yongdong Chemical: The revenue is very rich net profit very bony feeling

IPO Research Center Shanxi Yongdong Chemical Co., Ltd. (hereinafter referred to as "Yongdong chemical") announced the prospectus (the report), ready to give a hand in the capital market. Yongdong Chemical was founded in 2000, is located in Shanxi province Yuncheng Jishan County West Society Industrial Zone, the main manufacturing, sales of carbon black and coal chemical products, the founder of the Liu Futai. At present, the company's total equity of 74 million yuan, the company's actual control of Liu Fu too second son Liu Dongliang, Saiho couple. Under the influence of the downstream market tire industry underemployment, the carbon black market is still in a vicious competition stage, the product price is low, Yongdong chemical future earnings prospects are not clear, which makes its IPO prospects cast a shadow. Weak city expansion prospects difficult at present, the domestic carbon black market has been continuously depressed, carbon black sales prospects are not optimistic. In this case, Yongdong Chemical industry has chosen to reverse the expansion of the city, its prospects are not optimistic. In recent years, despite the cost of carbon black manufacturers more stable, but downstream tires, rubber products business start-up rate and demand has been depressed, carbon black prices all the way down. Yongdong Chemical Products Sales price trend also reflects such changes, showing a declining trend year. Prospectus data indicate that 2011-2013 years, Yongdong chemical rubber Carbon Black Unit sales price of 5867.27 yuan/ton, 5126.27 yuan/ton and 5098.25 yuan/ton, conductive carbon black unit sales price of 8243.97 yuan/ton, 7917.93 yuan/ Ton and 7753.40 yuan/ton, the price of two main products has fallen by 13.1% and 5.95%. Industry analysts say the market downturn is hard to end in the short term. Market analysis data show that China's tire production totals of 336.2 million, compared with the same period last year only slightly up 4%. Overcapacity in the tire industry has not changed, and the market is likely to continue to weaken in the next few months. In this case, the market price of carbon black will remain weak due to the limited procurement of downstream enterprises, and it is possible to continue the correction. According to market organization statistics show that the current Shandong region, Jiangsu and Shanxi and other three major carbon black production areas near the cost line, vicious competition has been a phenomenon. Data show that the mainstream carbon black in Shandong 6500~6600 Yuan/ton, Jiangsu carbon black price mainstream negotiations price of 6800 yuan/ton, Shanxi region carbon black market price mainstream negotiations 6000~6100 yuan/ton. In addition, the overall operating rate of the industry is low, only about 80%. It is understood that yongdong chemical rubber carbon black products are mainly faced with domestic and foreign tire manufacturers. In the face of this situation, Yongdong chemical incredibly optimistic that: the rapid development of the tire industry is conducive to the company to play a scale advantage, improve market share, conducive to the company to improve product prices, and further share industry profits. In the market is in a downturn, yongdong chemical still make such judgments, I do not know whether it is intentional or unintentional, but quite some "open your eyes lie" means. The profitability of the decline in the face of declining product prices in the situation, Yongdong chemical method is not much, resulting in its profit levelFalling. In recent years, although Yongdong chemical revenue has been growing, but the net profit has been declining, revenue growth has not led to profit growth, its essence is only "puffiness". Prospectus information shows that 2011-2013 years, Yongdong Chemical net profit of 65.4895 million yuan, 59.6802 million yuan and 50.1434 million yuan, the year down, three years decline to 23.43%! In contrast to the decline in net profits, Yongdong's chemical business receipts have continued to rise. Prospectus data show that 2011-2013 years, Yongdong Chemical main business income reached 744.3163 million yuan, 722.8583 million yuan and 823.963 million yuan, three years rose to 9.67%. Revenue growth, but net profit has slipped, indicating that the profitability of yongdong chemical industry is weakening. Analysis of the reasons for the decline of Yongdong chemical profit, the most important is the fall in product prices, followed by fluctuations in the price of raw materials, labor costs increase, financial costs and management costs rise, and many other adverse effects. However, this also reflects in some way the fact that, faced with many unfavorable factors, yongdong Chemical industry is not too many ways. And from the current point of view, the upstream raw materials market prices are still volatile, the price still exists rebound pressure, and downstream enterprises procurement capacity is limited, the market did not appear real warmer signs, then yongdong chemical and what to ensure the steady growth of performance? There is also an inability to ignore the fact that the yongdong chemical industry in recent years, the increase in revenue is also very limited, 2012 years or even a small drop in 2013, although rebound, but the extent is not large. So how does it guarantee a steady increase in performance after the IPO? This is another unknown. Overtime to be a potluck it is understood that yongdong chemical industry and most private enterprises are no different, staff overtime is very serious. Although Yongdong Chemical repeatedly claimed not to violate the laws and regulations, but this disregard for the health of employees and blindly pursue profits, is not a mature business practices. Data indicate that in 2011-2013 years, Yongdong chemical production staff overtime to 118,001 hours, 114,532 hours and 136,136 hours, the corresponding number of overtime is 195, 217 and 193, if according to the number of working days 243 days, 2011-2013 years , each person's overtime is up to 2.49 hours, 2.17 hours and 2.90 hours per day. According to such working hours, it is almost impossible for each production person to go on and off work in accordance with the 8-hour system prescribed by the State, and under normal circumstances, must accept the "10-hour work system" and endure the pain of overtime. Yongdong Chemical claims that the company advocated overtime culture legal compliance, there is no labor disputes or disputes. And the Jishan County Labor Inspection Brigade in early 2014 with the "proof": Yongdong chemical on January 1, 2010 to the beginning of the date of this certification, no labor disputes or disputes, not in violation of the labor law related laws and regulations have received any administrative punishment. But overseas research institutions have shown that long-term overtime over 2 hours will bringno small harm. British researchers, people who work 10 hours or 11 hours a day are more likely to have serious heart problems, including heart attacks, compared with people who work seven hours a day, and the 11-year study, which covers 6,000 British civil servants, suggests a clear correlation between the two, which experts say may be caused by stress. Although Yongdong chemicals insist that employees work overtime, but also repeatedly indicated that they have paid overtime costs, but the relevant data show that yongdong chemical treatment of their own production staff, not generous shot. Data show that 2011-2013 years, Yongdong chemical for the production staff paid overtime pay of 1.4735 million yuan, 1.6644 million yuan and 1.789 million yuan, from the surface to see the rise year by decade, but the unit hourly wage is not rising and falling. 2011-2013 years, Yongdong chemical paid to production personnel of the hour work is 12.48 yuan/hour, 14.53 yuan/hour and 13.14 yuan/hour, in the 2013 price rise, overtime wages actually shrink.