Zhengye Technology accounts receivable and inventory surge margin below average

"To give customers a longer period of credit, which is a company to expand their business, improve the performance of one of the usual methods." But this also has a certain challenge to the company capital circulation, also needs to undertake certain default risk. "Financial weekly IPO laboratory researcher Dai Jianmin/article due to wearable concept, the circuit board industry is concerned about the market. Pre-disclosure Company list, Zhengye technology is mainly engaged in printed circuit board (PCB) precision processing and testing equipment and ancillary materials. However, due to the downstream PCB customer accounts receivable longer, expand customers and other reasons, Zhengye technology to give customers a longer credit period, resulting in a proliferation of accounts receivable. At the same time, Zhengye technology inventory is also climbing year after the fall in product prices, inventory price is difficult to avoid. Gross margin below average level Zhengye technology predecessor was founded in November 1997, October 2009 as a whole change for the company Limited, the current registered capital of 45 million yuan. Zhengye Industrial is now holding Zhengye technology 80.99% Equity, for the company's controlling shareholders, Xu Dihua, Xu Guofeng, Xu Diming total of three people holding Zhengye industrial 65% shares for the company's actual control. The prospectus shows that Zhengye technology is a professional supplier of PCB precision processing testing equipment and auxiliary materials, mainly engaged in the research, production, sales and service of PCB precision processing and auxiliary materials. According to the CPCA published 2012 China printed circuit charts, the domestic industry leading position in the PCB manufacturing enterprises more than 90% for the company's customers. 2011-2013, the operating income of Zhengye technology is 225 million yuan, 251 million yuan and 264 million yuan respectively, net profit is 38.0938 million yuan, 41.7065 million yuan and 32.7652 million yuan respectively. After deducting the non-recurrent profit and loss, the net profit attributable to ordinary shareholders is 30.2298 million yuan, 31.6334 million yuan and 28.3679 million yuan. Although the operating income is increasing, but the net profit does not have the same change, but there is a certain degree of decline. From the composition of the income, PCB precision processing testing equipment and PCB precision processing auxiliary materials for Zhengye technology, the main products in 2013, the contribution of both the proportion of 42.34% and 57.66% respectively. However, from the breakdown of products, PCB precision processing and testing equipment and PCB precision processing auxiliary materials, the main product sales price has a certain degree of decline, may be caused by the company's net profit did not increase with the business income together with the reasons. PCB precision processing testing equipment, Esta equipment, Oxford equipment and equipment accessories sales prices in 2011-2013, there are varying degrees of decline. Among them, the sales price of equipment accessories from 2011 to 6,100 yuan to 2013 2,100 yuan. and equipment PCB precision processing auxiliary materials, in addition to precision photosensitive products, the rest of the filtration purification, precision positioning, special plastic and other products sales prices have declined. The prospectus shows that 2011-2013, Zhengye technology comprehensive gross profit margin of 41.31%, respectively, 39.93% and 36.83% present a declining trend. From the subdivision products, Zhengye technology production of PCB precision processing testing equipment from the nature of the products and instrumentation industry similar. From 2011 to 2013, the average gross profit margin of the industry was 50.71%, 48.91% and 47.4% respectively, while the gross profit margin of zhengye technology processing equipment was 47.6%, 53.83% and 41.15% respectively, lower than the industry average level. Zhengye technology explanation, the company's equipment has not reached the scale level, at the same time facing foreign manufacturers competition, the company through cost-effective products and improve services to expand customers. In addition, for the production of various industries to provide ancillary materials enterprises have a high gross profit margin, Zhengye technology PCB precision processing auxiliary material gross margin and similar to the company or even slightly lower. Accounts receivable, inventory continued to rise the prospectus shows that from 2011 to 2013, Zhengye technology accounts receivable is 86.7229 million yuan, 100.3712 million yuan, 131.7782 million yuan, accounting for the current period of business income of 38.7%, 40%, 50%, showing a rising trend. Zhengye Science and technology explanation, the end of 2013, the company accounts receivable balance growth of the main reason for the company's downstream PCB manufacturing industry loan recovery period is extended trend; the company's high technical content, high unit value of equipment sales faster growth, for unit value higher equipment sales, Customer one-time payment of all loans faced with a large amount of capital pressure, thus giving customers a relatively long period of credit; companies to expand BYD (002594, shares bar) and other customers, due to the strength of the customer funds, credit level, to give its long term. "To give customers a longer period of credit, which is a company to expand their business, improve the performance of one of the usual methods." But this also has a certain challenge to the company capital circulation, also needs to undertake certain default risk. "A private equity person in Shenzhen said. In addition, the Accounts receivable account for a longer period of time for the PCB industry general phenomenon. Downstream PCB manufacturing enterprise accounts receivable turnaround days generally about 80 days to 160 days, in order to adapt to the downstream PCB manufacturing industry, Zhengye technology accounts receivable turnover days generally about 110 days to 170 days. The prospectus shows that from 2011 to 2013, Zhengye technology accounts receivable turnover days are 118.12 days, 140.11 days, 165.54 days respectively, accounts receivable turnover rate of 3.09, 2.61, 2.20, showing a worsening trend year after day. In addition, from 2011 to 2013, the final balance of Zhengye technology inventory was 22.5653 million yuan, 36.4012 million yuan and 60.7777 million yuan respectively. NET inventories accounted for 13.57%, 17.25% and 23.62% per cent of current assets. In the same period, the inventory turnover of the company was 5.54, 5.12 and 3.43 respectively. Zhengye Scientific and technological explanation, in order to support the rapid growth of sales, raw materials accounted for a large number of species, the existence of economic procurement, processing and testing equipment production cycle longer, resulting in the production processMore goods. At the end of 2013, inventory growth is mainly because, according to the characteristics of the industry, increase the related products raw materials stock, and improve product safety inventory, in order to speed up delivery; the product is still in the acceptance period. However, when the market price appears to decline substantially, the risk of large inventory depreciation is unavoidable. The total transfer of the old share prospectus shows that Zhengye technology is to be listed on the gem, the issue of no more than 15 million shares, raised 184 million yuan, intended for three investment projects. Among them, the PCB precision processing equipment research and development and industrialization project to invest 81.5569 million yuan, electronic accessories (PCB precision processing auxiliary materials) production and processing projects to invest 42.3652 million yuan, and the use of 60 million yuan supplementary liquidity and repayment of bank loans. From the view of the shareholding structure, Zhengye technology includes Zhengye industry, Ming Zhong Industrial, Jia and Rong, Fortune Genesis and Fortune flourishing 5 legal shareholders and Xiao Bing 1 natural person shareholders. Zhengye Industrial Holdings 80.99% of the company's shareholding, for the company's controlling shareholders. Among them, Ming Enterprises hold 9.01% stake in the company, existing shareholders 34 people, are Zhengye science and technology management personnel, including directors, finance, research and development, production, personnel and other departments. Kerry and intermediation, Fortune Genesis, Fortune flourishing, Xiao Bing is in December 2010 to invest in Zhengye technology, respectively, costing 13.5 million yuan, 4.6 million yuan, 5.4 million yuan and 3.5 million yuan, access to Zhengye technology 5%, 2%, 1.7%, 1.3% of the equity. In addition, Zhengye technology all 6 shareholders are planning to transfer the old shares, in accordance with the shareholding ratio, Zhengye Industrial, Ming Chung Industrial, Kerry and intermediation, Fortune Genesis, Fortune flourishing, Xiao Bing old share transfer of the highest ceiling of 5.2077 million, 579,300, 321,500 shares, 128,600 shares, 109,300 shares and 93,600 shares. At present, there are 9 members of Zhengye Science and Technology Board, including 3 independent directors. In addition to a director Rough for the Fortune Genesis and Fortune, the nomination of the remaining directors are Zhengye industrial.