Recently, Shenzhen Konghui Intelligent Co., Ltd. (hereinafter referred to as "Konghui shares"), which was originally listed on the New Third Board, submitted a prospectus to be listed on the Beijing Stock Exchange, with a public offering of no more than 14.19 million shares, and the company intends to raise 163.1077 million yuan for industrial computers and core components expansion construction projects, R&D center construction projects, and information construction projects.
In the same version of the declaration draft, the data "fight" between the company and related parties was verbally warned by the regulator for related party transaction violations. In terms of operation, although the performance of Konhui shares continues to grow, the competitiveness of products has always been weaker than that of peers, and the company has made profits in order to be on the list of BYD, but in the end it is still "abandoned" by BYD.
There are many suspicious related party transactions
Huikong Co., Ltd. is a high-tech enterprise specializing in the research and development, production and sales of industrial automation control products, which mainly include intelligent industrial computers, industrial control boards and related accessories, which are widely used in 3C product manufacturing, intelligent equipment, Internet of Things, new energy, machine vision, artificial intelligence, industrial automation and many other fields.
From 2020 to 2022 and from January to June 2023 (hereinafter referred to as the "reporting period"), Huikong Co., Ltd. achieved operating income of 155 million yuan, 209 million yuan, 259 million yuan and 166 million yuan respectively, and net profit of 15.4911 million yuan, 25.2538 million yuan, 29.3448 million yuan and 17.2477 million yuan respectively.
It is worth mentioning that although the performance of Konhui shares continues to grow, the quality of earnings is not high. During the reporting period, the net cash flow generated by the operating activities of Konhui Co., Ltd. was 9.3581 million yuan, 16.5277 million yuan, -6.7129 million yuan and -46.7988 million yuan respectively, totaling -27.6259 million yuan. At the same time, combined with the net cash flow and net profit generated by the operating activities of Konforeign Exchange in the same period, the ratios of the two can be calculated to be 0.6, 0.65, -0.23 and -2.71 respectively.
Titanium Media APP noticed that there are still a lot of related party transactions in Konhui shares, some of which are as follows:
Among them, the sales revenue generated by Konghui Co., Ltd. to Beijing Konghui Intelligent Co., Ltd. (hereinafter referred to as "Beijing Konghui") was 15.0071 million yuan, 10.0954 million yuan, 3.6371 million yuan and 660,300 yuan respectively.
It is worth mentioning that from 2020 to 2021, Beijing Konhui is still the top five customers of Konhui shares, the details are as follows:
Comparing the above two sets of data, it can be found that from 2020 to 2021, the difference between the two is 4.5021 million yuan and 3.0286 million yuan. Why is there a "fight" in the same version of the declaration draft?
It should be noted that on October 27, 2023, Konghui Shares, directors and senior management received a verbal warning from the National Equities Exchange and Quotations Company due to violations of related party transactions. What's more, on May 22, 2024, Beijing Konghui held a shareholders' meeting and resolved to cancel Beijing Konghui.
The R&D strength is weak, and it was cut by BYD
Titanium Media APP noticed that the competitiveness of Konhui's products is not high. During the reporting period, the gross profit margin of Konforeign shares was 30.88%, 28.64%, 26.67% and 28.56% respectively, and the average value of comparable companies in the same industry was 33.2%, 32.58%, 32.32% and 37.16% respectively, and the gross profit margin was always lower than the average of its peers.
The main factor leading to the above phenomenon is that the investment in research and development is not as good as that of peers. During the reporting period, the R&D expense ratios of Konhui were 4.68%, 4.8%, 4.15% and 4.39%, respectively, and the average values of comparable companies in the same industry were 12.72%, 12.24%, 13.48% and 11.76%, respectively, and the R&D expense ratio was significantly lower than the average of its peers.
In addition, the education of the R&D personnel of Konhui is not high. As of the end of 2020, the end of 2021, the end of 2022 and the end of June 2023, the R&D personnel of Konhui Co., Ltd. are 28, 23, 51 and 59 respectively, and the number of employees with bachelor's degree or above is 22, 30, 39 and 35 respectively, and more than 4 percent of the R&D personnel have a bachelor's degree or less.
In addition to research and development, profit concession is also one of the reasons for the low gross profit margin of Konforeign Exchange shares. Before 2022, BYD had never appeared in the top five customers of Kongoon, and in this year, BYD suddenly became the second largest customer of Kongoon, and became the company's largest customer from January to June 2023, with the specific transaction volume as follows:
It is worth mentioning that from 2022 to the first half of 2023, the gross profit margin of Konforeign Exchange Co., Ltd. to BYD will be 17.18% and 20.37%, and the gross profit margin of other customers in the new energy field will be 22.66% and 30.93%, a difference of 5.48 percentage points and 10.56 percentage points respectively.
Interestingly, even if the shares of Konhui gave BYD profits, it still did not seem to have been "recognized" by BYD. From the product point of view, the industrial computer has always been the most important product of Konhui, the details are as follows:
According to public information, as of the end of 2022 and the end of 2023, the sales of orders to be executed by BYD's industrial computers in hand were 81.8327 million yuan and 4.774 million yuan, of which the year-on-year decline in 2023 was 94.17%.
This also means that the company is about to be abandoned by BYD, and whether the company can maintain sustained growth in the future, Titanium Media APP will continue to pay attention. (This article was first published in Titanium Media APP, author|Deng Haotian)