Jinfu Science and Technology Co., Ltd. (referred to as Jinfu Science and Technology) is an enterprise specializing in plastic anti-theft bottle caps. Its main business is the development, production and sale of plastic packaging products such as plastic anti-theft bottle caps. The main products are bottled pure water, mineral water, syrup, jelly, edible oil and other valve caps.
Dont underestimate the production of bottle caps. This is the small bottle cap, which brings about net profit of nearly 100 million yuan for Jinfu Technologies every year.
From 2016 to 2018, the companys revenue was 456 million yuan, 498 million yuan and 568 million yuan, respectively. The net returns to the mother were 866 million yuan, 552 million yuan and 855 million yuan, respectively. Recently, Jinfu Technologies submitted to the Securities Regulatory Commission the prospectus for initial public offering of shares, and plans to raise funds in A-share listing to continue to expand capacity and further improve performance.
High risk of customer concentration
Jinfu Technologies can make small bottle caps into big businesses, and its secret book is that it has formed a stable cooperative relationship with high-quality key customers.
Firstly, the packaging drinking water market in China has the characteristics of high concentration and oligopoly. In 2018, two brands, Nongfu Shanquan and Huarun Yibao, accounted for more than 40% of the domestic bottled water market share, and together with other brands, such as Jingtian, Kangshifu, Wahaha and Coca-Cola, accounted for about 80% of the domestic bottled water market share.
Secondly, food and beverage enterprises attach great importance to product safety, which is the key factor for their survival and development. Considering the direct contact between plastic bottle caps and contents, in order to ensure the safety and reliability of products, beverage enterprises will choose safe, stable and batch suppliers when choosing suppliers of plastic anti-theft bottle caps. Once the two sides form a cooperative relationship, they often have strong stability.
Jinfu Technologys customers are mainly concentrated in the packaging and drinking water industry. The company has stable production capacity, and the safety of products is constantly improving. The companys main customers are Huarun Yibao, Jingtian, Coca-Cola, Danone and so on. These customers have the characteristics of better reputation and timely repayment. The cooperation between Jinfu Science and Technology and its main customers has lasted for more than ten years.
Establishing a long-term and stable cooperative relationship with high-quality customers is not only the advantage of Jinfu Technology, but also leads to high customer concentration of Jinfu Technology, which faces the risk of high customer concentration.
From 2016 to 2018, the total sales of Jinfu Technologies to the top five customers were 414 million yuan, 459 million yuan and 516 million yuan, accounting for 90.73%, 92.13% and 90.74% of revenue respectively. Among them, the sales revenue of Huarun Yibao, the companys largest customer, was 267 million yuan, 257 million yuan and 270 million yuan, accounting for 58.45%, 51.70% and 47.47% of the companys revenue, respectively. ?
Thanks to the binding with high-quality customers, Jinfu Technologies has been operating well in recent years.
From 2016 to 2018, the companys asset-liability ratio was 46.92%, 27.77% and 19.40% respectively, which decreased year by year, and was lower than the average of Zijiang (600210.SH), Zhongfu (000659.SZ) and Xinlian Zhitong.
During the same period, the companys liquidity ratios were 1.06, 1.89 and 2.99, respectively, and the quick ratios were 0.70, 1.08 and 1.95, showing an upward trend year by year, and higher than the average level of the same industry companies, showing that the companys debt-paying ability is better and its financial situation is stable.
From 2016 to 2018, the net cash flow generated by the companys business activities was 111 million yuan, 184 million yuan and 119 million yuan respectively, which also maintained basic stability.
Over the same period, the companys combined gross profit rate was 37.59%, 33.35% and 29.81%, respectively, showing a downward trend. In response, the company explained that the rise in raw material prices led to a decline in the companys gross interest rate. But especially in the past three years, the companys gross interest rate has always been higher than that of the counterparts in the same industry.
Fund-raising continues to expand
According to the data of China Beverage Industry Association, in 2017, the population of bottled drinking water in China accounted for more than 30% of the total population. With the improvement of peoples income and healthy consumption concept, the packaging drinking water market in China will continue to develop steadily, which will provide a broad market space for the further expansion of the bottle cap industry.
Jinfu Science and Technology Project raised 490 million yuan in this listing, of which 293 million yuan was used for the expansion project of plastic bottle cap production base to increase production equipment and expand production capacity for a production base in Ningxiang County, Changsha City. At present, the companys main customers are concentrated in South China, Central China and East China. The expansion of production capacity will help the company further develop its market in North China and Southwest China.
In addition, the company is increasing its R&D efforts through cooperation in R&D and other ways. The ongoing research and development projects include: food packaging safety risk assessment of laser caps, feasibility assessment of nano-materials used in caps, etc., striving to make small plastic caps have a higher technological content.