Huang group was founded in 2001 and listed on Shenzhen Stock Exchange in 2010. Its main business at the initial stage of listing was dairy industry, mainly producing milk (different from milk cow), yogurt and other products. Until 2014, dairy products accounted for about 90% of its revenue before cross-border M & A.
After entering 2014, Huang group began to actively seek cross-border and acquired a large number of companies outside the industry. The reason may be related to the fact that the companys operating performance at that time fell into the situation of increasing revenue but not increasing profit. According to the financial report data, although the growth rate of Huangs groups revenue was maintained at about 30% from 2010 to 2013, the growth rate of net profit attributable to the parent company was much less, and even 44% fell in 2012. More importantly, the gross profit margin of the main business decreased from 37% when it was listed in 2010 to 29% in 2013.
In the draft of M & A of that year, although Huangs group did not mention the embarrassment of its business performance at that time when describing the background and purpose of M & A, however, from a time point of view, its cross-border action just started when the gross profit rate of dairy industry dropped to the bottom and the film and television media industry was the hottest. Due to the cross-border M & A, the traditional dairy business of Huangshi group has been increasingly diluted. By the end of 2018, the proportion of revenue contribution of dairy business has decreased from 99% when it was just listed to about 50%.
Combing the cross-border M & A targets of Huangs group, we can find that it not only buys film and television media companies, but also involves information consulting industry, Internet software and service industry. However, in previous years, the two most expensive film and television media companies - Yujia film and television and Sheng shijiaoyang, however, these two companies caused great losses to the Huang group, which directly led to its huge losses in 2018.
According to the draft of merger and acquisition, Yujia film and television was acquired by Huangshi group in 2014 at a premium of RMB 580 million and a cost of RMB 683 million. At that time, the value-added rate of Yujia film and television assets was about 5 times; Sheng shijiaoyang was acquired in 2015 at a cost of RMB 780 million and a premium of RMB 547 million, with a value-added rate of 236%. Under these two high premium acquisitions, the goodwill of the group increased by more than 1 billion yuan.
According to the performance commitment agreement, shengshijiaoyangs performance commitments from 2015 to 2017 are 75 million yuan, 90 million yuan and 108 million yuan respectively. However, since 2016, its performance has not been up to standard. Xu Lailei, the former controlling shareholder of shengshijiaoyang, is required to compensate 32.94 million yuan to complete the performance commitment. By 2017, shengshijiaoyangs non net profit deduction is only 30.65 million yuan, far lower than the original commitment of 1.08 million yuan Billion yuan. Finally, in 2018, Shengshi was listed for transfer because it failed to fulfill its commitment performance for two consecutive years.
The reporter of red weekly roughly calculated the net profits contributed by the two target companies after the acquisition of the two companies by Huang group. Among them, Sheng shijiaoyang contributed about 200 million yuan of net profit (sold from 2015 to 2017, 2018), Yujia film and television contributed about 490 million yuan (to be stripped from 2014 to the first half of 2019, November 2019). Compared with the purchase price of 780 million yuan and 680 million yuan in that year, it has lost nearly 800 million yuan from the data alone.
Although the goodwill of Huangshi group once reached 1.22 billion yuan in 2016, accounting for more than 20% of the total assets, since 2017, its goodwill has been in continuous evaporation, only shengshijiaoyang goodwill decreased by 190 million yuan. In 2018, the goodwill of Huangshi group was significantly impaired again, and the value of goodwill dropped to 368 million yuan. The main reason for the impairment is that the goodwill of Yujia film and television decreased by 550 million yuan. You should know that in 2017, the net profit of Yujia film and television was still 160 million yuan, and the performance commitment was completed as scheduled. It is the sweet cake of the Huangshi group. But just after the performance commitment was completed, the company became the key object of goodwill impairment.
Sheng shijiaoyangs poor performance began to appear in the second year after its acquisition, while Yujia film and televisions performance changed suddenly after it just completed its performance commitment, which makes people full of doubts. Is there any water in the companys previous good performance? And is there any suspicion that Huangs group will take the opportunity to clean up the past risks by the end of 2018?
After the first loss of 616 million yuan due to goodwill impairment in 2018 and another loss of 3.27 million yuan in the first three quarters of 2019, the group started a new merger and acquisition in November 2019. The company announced the establishment of Taian digital intelligence city operation company in order to enter the offline tourism industry. However, Huangshi group has suffered heavy losses in the field of film and television. Will it repeat the same mistakes when it enters the industry of culture and tourism? Its worrying.
Abnormal revenue data
In addition to the previous years M & A is not smooth, red weekly combed the Huangshi groups revenue related data in recent five years, and found that even in extremely special circumstances, the Huangshi groups revenue data in 2018 is also very problematic.
The consolidated cash flow statement data of the same period shows that cash received from sales of goods and provision of services is RMB 2.578 billion. In addition, compared with the previous year, the advance receipts of the same period decreased by RMB 38.66 million. To hedge the impact of the advance receipts related to cash income in the same period, the cash inflow related to the revenue in 2018 was RMB 2.617 billion.
By cross checking the data of tax inclusive revenue and cash revenue in 2018, the cash revenue in 2018 is 141 million yuan more than the total revenue including tax. It should be noted that at this time, the revenue including tax is calculated according to the value-added tax rate of 6%, that is to say, in the actual situation, the cash income is only 141 million yuan more than the revenue including tax at most. Therefore, in theory, the receivables in 2018 should be reduced by up to 141 million yuan to meet the financial cross checking relationship.
In fact, in the balance sheet of 2018, the total amount of receivables (including bad debt reserves) and notes receivable of Huangs group is RMB 935 million, which is decreased by RMB 273 million compared with the same data at the end of the previous year, far exceeding the theoretical maximum value of RMB 141 million. In other words, in 2018, at least 132 million yuan of receivables decreased inexplicably, but why? This needs to be explained by the company.
Purchase data distortion
In addition to the abnormal data of revenue, if calculated according to the extreme situation of value-added tax rate, the reporter of red weekly found that the purchasing data of Huangshi group in 2018 was also abnormal.
According to the financial report, in 2018, Huangs group purchased 431 million yuan from the top five suppliers, accounting for 29.9% of the total purchase amount of the current period, so the total purchase amount of the same period was about 1.441 billion yuan. If the value-added tax rate is 17%, then the total tax inclusive purchase will be RMB 1.686 billion at this time. It should be noted that the value-added tax rate of some business purchases of Huangshi group will be lower than 17%, and from May 2018, the value-added tax rate of 17% has been reduced to 16%. Therefore, the actual total tax inclusive amount of Huangshi group in 2018 should be less than RMB 1.686 billion.
In the cash flow statement of Huangshi group in 2018, cash paid for purchasing goods and accepting labor services is RMB 2.118 billion. After excluding the impact of the new decrease of RMB 118 million in prepayment in that year, the cash expenditure related to procurement in that year has reached RMB 2.236 billion. By cross checking the tax inclusive purchase and cash expenditure, it can be found that the cash expenditure of Huangshi group in 2018 is RMB 550 million more than the tax inclusive purchase amount. Because the actual tax included procurement should be less, the theoretical difference between the cash expenditure and the actual tax included procurement should be greater than RMB 550 million, which means that the payable in the current year should be reduced by at least RMB 550 million to meet the financial cross checking relationship. In fact, looking at the financial report of Huangshi group, it can be found that in 2018, its payables were 376 million yuan, only 114 million yuan less than the previous year, which is a huge difference from 550 million yuan. The question is, why are procurement data so different in 2018? Source: Yang Qian, editor in charge of stock market red weekly
In fact, looking at the financial report of Huangshi group, it can be found that in 2018, its payables were 376 million yuan, only 114 million yuan less than the previous year, which is a huge difference from 550 million yuan. The question is, why are procurement data so different in 2018?