According to the mid-term report of 2019, Shuobeide achieved a business income of 850 million yuan, an increase of 2.33% over the previous year, and a net profit of 93.6054 million yuan, an increase of 135.71% over the previous year. It can be seen that in the case of nearly stagnant revenue growth, Schuberts net profit has achieved a reverse attack. So how does it work?
After reviewing the report, the reporter of Red Week found that in the first half of 2019, its investment income was 70.1753 million yuan, accounting for 74.97% of the current net profit, while in the same period of last year, its investment income was zero. It is not difficult to see that it is with this part of the investment income that Schubert is able to hand in a good transcript.
Further, the huge investment income of Shuobeide in this period is actually the income from the sale of a part of the equity of its subsidiary company, Suzhou Kesunshine Electricity Technology Co., Ltd. (hereinafter referred to as Kesunshine Electricity). According to the information disclosed in the framework agreement for the transfer of shares, in 2018, Core Sunshine Electric realized a revenue of 299 million yuan, an increase of 20.25% over the previous year, and realized a net profit of 112.615 million yuan, which shows that its profitability is good.
It is doubtful that as one of the pillar subsidiaries of Shuobeides three main businesses, Kosunshine Electric has achieved good results in the past, which can be regarded as a high-quality asset, and Shuobeides choice to strip it this time is really puzzling.
According to the annual report, Shuobeide has three main businesses, namely, antenna, fingerprint module and chip packaging business. Among them, Kosunshine Electric is the main subsidiary company responsible for its packaging business. However, with the transfer of equity, the packaging business has been stripped to a great extent, which may result in its future revenue scale and net profit. No small impact. Its sale of Sunshine Electric Company has boosted the companys performance in the short term, but such performance growth is only a flash in the pan. How to increase its future performance is the real issue to be considered.
What is more puzzling is that Shuobeide has just completed the acquisition of some shares of Keyang Electric Company in 2018.
According to the data, in March 2018, Shuobeide paid 14.799.92 million yuan to transfer 5.05% of the shares held by Caohu Capital Investment Co., Ltd. in Keyang Electric Company. After the completion of the transaction, its holdings of Keyang Electric Company increased from 66.10% to 71.15%. According to the price at the time of the transfer, the overall valuation of Kesung Electric Company is 293 million yuan; 54.52% of the shares of Kesung Electric Company are sold at 149 million yuan, and the overall valuation is 273 million yuan, which is about 20 million yuan lower than that of the previous equity acquisition. We need to know that in 2018, the revenue of Cosco Sunshine Electric Company increased by 20.25%. Just one year after the last equity purchase, it sold most of its shares. And the value of the sale was lower than that of the purchase. Whats the reason? Was Schubert expensive at the time or cheaper today? Im afraid the reason for this also needs a reasonable explanation from the company.
Shortage of funds and high liabilities
In fact, the reason why Schubert sells high-quality asset division sunlight power is probably related to its lack of funds.
According to the mid-2019 report, Schuberts balance of currency funds was 319 million yuan, of which 78.1263 million yuan was limited and the available balance was 241 million yuan. However, during the same period, its book amount of short-term borrowing was as high as 535 million yuan, and its book available funds were only half of the short-term debt. As the companys daily operation also requires a lot of money, and with the growth of its main business is weak, the companys hematopoietic ability is also weakening. In the first half of 2019, the cash received for selling goods and providing services was 844 million yuan, down 15.41% from the same period last year. The net cash flow generated by its business activities was 73.5315 million yuan, down 63.15% from the net amount of 200 million yuan in the same period last year. It can be seen that its lower cash reserves and higher short-term liabilities are in sharp contrast, and the pressure of liabilities is greater.
From the perspective of business development, with the rapid arrival of the 5G era, major manufacturers are currently in a positive layout, which has led to the rapid development of the communications industry. Domestic and foreign manufacturers in the telecommunications industry have increased their capital investment, developed new products, expanded production capacity and increased market share. Schubert is also focusing on the development of 5G base station antenna field. In the fierce competition environment, it also needs to comply with the trend and increase R&D investment, which also requires huge capital investment.
Faced with the contradiction between the shortage of funds and the increasing demand for funds, the company will sell most of its shares at a discount and some of its fixed assets at a big sale. According to the data, on June 28, 2019, it issued a notice on the sale of assets, disposing of some idle production equipment of the company. The total amount was 35.235 million yuan. The net value of this part of assets was 43.69.72 million yuan. Therefore, the discount of the sale of assets was 19.37%, resulting in a loss of 84.622 million yuan.
However, even so, it seems unable to meet its huge funding gap. On July 2, 2019, Schubert issued a convertible corporate bond plan to issue six-year convertible corporate bonds with a face value of 100 yuan, raising no more than 237 million yuan. At present, the plan is still under review.
As of mid-2019, the assets-liabilities ratio of Shuobeide reached 62.02%. Compared with Shengli Communications, Changying Precision and Xinwei Communications, the assets-liabilities ratio of Shuobeide in the first quarter of 2019 was 32.65%, 54.1% and 47.32%, respectively, with an average value of 44.69%. It can be seen that Shuobeides assets-liabilities ratio is much higher than the industry average, and after its successful issuance of debt, The ratio of assets to liabilities will also rise further.
Revenue data in doubt
Not only is there a shortage of funds and a great pressure on debt, but there are also huge differences in Schuberts revenue-related data.
According to the financial report, Shuobeide achieved business income of 850 million yuan from January to June 2019. It did not disclose overseas income data. Considering VAT according to domestic income (VAT tax rate was reduced from 16% to 13% on April 1, 2019), after calculating VAT on a monthly average, its total tax-bearing business income was about 973 million yuan.
Generally speaking, the realization of business income will be reflected in cash inflows and changes in operational creditors rights in the relevant financial data. In theory, the final amount of business income with tax will be roughly the same as the total amount of changes between the two. What about the specific situation of Shuobeide?
Specifically, in the consolidated cash flow statement, from January to June 2019, its cash received by selling goods and providing services was 844 million yuan, while the advance receipts decreased by 337 million yuan in the same period. Considering this factor, the cash inflows related to revenue in the same period amounted to 845 million yuan, and the difference between tax revenue and tax revenue was 129 million yuan. On the other hand, because no cash has been received, this part of the difference will be reflected as new claims, which will be included in the balance sheet.
Looking at the balance sheet, the total amount of notes receivable and accounts receivable reached 510 million yuan at the end of June 2019, and 464 million yuan at the same period last year. After deducting the influence of the change of bad debts reserve of 31.503 million yuan, the balance sheet only increased by 49.5749 million yuan compared with the previous period. This result is 79.1376 million yuan different from the theoretical amount of 129 million yuan mentioned above. It means that there are 79.1376 million yuan of business income without the support of cash flow and operating creditors rights, and there is a suspicion of false increase.
In the first half of 2019, Schuberts revenue was not supported by relevant financial data, so what about its revenue in 2018?
In 2018, Shuobeide realized 1.722 billion yuan of business income, including 1.059 billion yuan of domestic income. This part takes into account the influence of VAT (VAT tax rate changed from 17% to 16% in May 2018). According to the monthly average, the amount of revenue with tax in that year was about 1.895 billion yuan.
In 2018, the amount of cash received from selling goods and providing services was 1.947 billion yuan, while the amount of advance receipts was reduced by 87.56 million yuan. Considering the influence of this factor, the cash inflows related to revenue in the current period amounted to 1.956 billion yuan, which was 60.7908 million yuan more than tax revenue. This means that the current period received the previous years returns. Operational creditors rights should be reduced by 60.7908 million yuan accordingly.
In the balance sheet, in 2017 and 2018, their receivables and accounts receivable were 658 million yuan and 464 million yuan respectively. After deducting the influence of bad debts preparation, the amount of receivables and accounts receivable decreased by 198 million yuan in 2018 compared with the previous year, which was 137 million yuan more than the amount of theoretical reduction. What happened to the 137 million operating creditors?
Unreasonable purchase data
In addition to the difference of business income, there are also many doubts about the purchase data of Schubert, which requires investors to be vigilant.
In 2018, Schubert purchased 423 million yuan from the top five suppliers, accounting for 40.43% of the total purchases. From this, the total purchases were estimated to be 1.047 billion yuan. Considering the change of VAT and calculating by monthly average, it is estimated that the purchasing amount with tax is 1.218 billion yuan.
In the consolidated cash flow statement, the amount of cash paid for goods and services in 2018 was 1.126 billion yuan, and the amount of prepaid accounts decreased by 27.227 million yuan. Considering this factor, the cash flow related to purchasing in the current period was 1.128 billion yuan, which was 89.268 million yuan less than the total purchasing amount, theoretically. This part will be reflected in the increase of operational debt.
In 2018, the total amount of accounts payable and notes payable of Shuobeide reached 464 million yuan. In 2017, the amount of the same project amounted to 355 million yuan, while the amount of operational debts related to procurement increased by 109 million yuan. The difference between this result and the theoretical increase of 89.268 million yuan is 19.572 million yuan, which represents the tens of millions of acquisitions of the company in the current period. The purchase amount is not supported by relevant financial data.
Accounting for its 2017 purchasing data in the same way, the discrepancy was further widened. In 2017, it purchased 551 million yuan from the top five suppliers, accounting for 37.78% of the total purchases. It was estimated that the total purchases was 1.458 billion yuan. Considering 17% VAT, it was estimated that the total purchases with tax was 1.705 billion yuan. In the same period, its cash for purchasing goods and accepting labor services was 1.342 billion yuan. After excluding the increase of 195.36 million yuan in advance payment, the difference between the total purchasing amount and the total purchasing amount with tax was 365 million yuan, which would theoretically lead to the increase of the same amount of operating debt. But doubtfully, its operating debts did not increase or decrease. At the end of 2017, the amount of notes payable and accounts payable was 355 million yuan, compared with 512 million yuan in the same period in 2016, a decrease of 157 million yuan, an increase or a decrease, which is different from the theoretical increase of 522 million yuan. It can be seen that there are doubts in the companys purchasing data for many years, and the reasons for the differences need the company to give a reasonable explanation. Source: Yang Qian_NF4425, Responsible Editor of Stock Market Weekly
Accounting for its 2017 purchasing data in the same way, the discrepancy was further widened. In 2017, it purchased 551 million yuan from the top five suppliers, accounting for 37.78% of the total purchases. It was estimated that the total purchases was 1.458 billion yuan. Considering 17% VAT, it was estimated that the total purchases with tax was 1.705 billion yuan.
In the same period, its cash for purchasing goods and accepting labor services was 1.342 billion yuan. After excluding the increase of 195.36 million yuan in advance payment, the difference between the total purchasing amount and the total purchasing amount with tax was 365 million yuan, which would theoretically lead to the increase of the same amount of operating debt. But doubtfully, its operating debts did not increase or decrease. At the end of 2017, the amount of notes payable and accounts payable was 355 million yuan, compared with 512 million yuan in the same period in 2016, a decrease of 157 million yuan, an increase or a decrease, which is different from the theoretical increase of 522 million yuan.