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Yangtze River Business Daily reporter Zhang Lu.
Since the GEM IPO on July 27, 2022, Dongguan Liuchun Intelligent Technology Co., Ltd. (hereinafter referred to as "Liuchun Technology") IPO has not progressed for a long time. Not long ago, Liuchun Technology updated some of its financial data for the first half of 2023, but it has not yet submitted for registration.
It is reported that Liuchun Technology is an enterprise in the Apple industry chain. With the halo of "fruit chain" on its head, Liuchun Technology's performance has had a highlight moment, with a net profit of more than 100 million yuan in 2021. However, in 2022, the company's operating income and net profit will both decline.
On the other hand, the risks related to growth, independence and sustainability brought about by the deep dependence on the "fruit chain" have become the biggest obstacle to the IPO of Liuchun Technology. In recent years, the R&D expense rate of Liuchun Technology is lower than that of its peers, and the number of invention patents is also less than that of its peers.
The Yangtze River Business Daily reporter also noticed that in this IPO, Liuchun Technology plans to use 1200 million yuan of raised funds to supplement liquidity, and before the IPO, the company had a cash dividend of 61.19 million yuan, which raised questions about its "not wanting to research and development" but "keen on dividends".
In response to various questions, on February 24, a reporter from the Yangtze River Business Daily sent an interview letter to Liuchun Technology, but has not received a reply as of press time.
In 2022, revenue and net profit will both decline
Liuchun Technology is mainly engaged in the research and development, production and sales of precision functional devices for electronic products. With long-term accumulation of technical resources, rich production experience, and high-reliability product quality, the company has gradually developed into a second-class business recognized by Apple. Apple is also the main brand of the terminal application of Liuchun Technology products.
In terms of performance, from 2019 to 2021, Liuchun Technology's performance showed good growth, achieving operating income of 29.7 billion yuan, 40.4 billion yuan, 55.7 billion yuan, net profit was 03.1 billion yuan, 06.2 billion yuan, 10.8 billion yuan, with a compound growth rate of 37 percent in revenue and net profit01% and 8782%。However, in 2022, Liuchun Technology's performance has changed and its operating income has reached 54.9 billion yuan, net profit 07.8 billion yuan, down year-on-year. 8%。
The Yangtze River Business Daily reporter noticed that behind the ups and downs in performance is the high degree of binding between the company and Apple's industrial chain. At present, more than 80% of Liuchun Technology's gross profit comes from Apple.
According to the financial data of the reply to the inquiry letter, from 2020 to the first half of 2023, the sales revenue of functional devices used in the Apple brand of Liuchun Technology terminals was 28.7 billion yuan, 42.4 billion yuan, 41.4 billion yuan, 13.2 billion yuan, accounting for the proportion of main business income. 59%。
At the same time, from 2020 to 2022, Liuchun Technology's gross profit contribution based on Apple's industrial chain was 10.6 billion yuan, 17.7 billion yuan, 15.6 billion yuan, accounting for 76 percent of the gross profit of the main business in 20209% to 88 in 202294%, down to 83 in the first half of 202387%, which is still relatively high.
In addition to the high dependence on end customers, the company also has the problem of high concentration of direct large customers. From 2020 to 2022, the company's sales to the top five customers accounted for respectively. 63%。Among them, the largest customer of Liuchun Technology is Foxconn, and the sales amount to Foxconn from 2020 to 2022 is 14.3 billion yuan, 18.8 billion yuan, 0900 million yuan, accounting for the proportion of operating income respectively. 39%, the vast majority of which are products applied to the iPad series. It can be seen that the company's sales to large customers are declining.
From the perspective of profitability, in 2020 and 2021, the gross profit margin of Liuchun Technology will continue to rise, respectively. 11%, but in 2022 and the first half of 2023, affected by factors such as the termination of cooperation with Yecheng Technology and the market downturn, the gross profit margin of Liuchun Technology is on a downward trend, respectively. 93%。
The number of invention patents lags behind peers
The prospectus disclosed that in this IPO, Liuchun Technology plans to issue no more than 13.74 million new shares, and intends to raise 47.4 billion yuan, of which 28.9 billion yuan for the production project of precision functional performance parts of electronic products (relocation), 06.5 billion yuan for the construction project of R&D center, 1200 million yuan to supplement liquidity.
1.Behind the 200 million yuan fundraising replenishment is the fluctuation of Liuchun Technology's operating cash flow. From 2020 to the first half of 2023, the company's net cash flow from operating activities was -4142310,000 yuan, 10.8 billion yuan, 1200 million yuan, -4.63 million yuan.
It is worth noting that Liuchun Technology has paid dividends many times before the IPO. According to the prospectus, Liuchun Technology will pay cash dividends of 30 million yuan and 31.19 million yuan in 2019 and 2020 respectively, with a total dividend of 61.19 million yuan. The actual controllers of the company, Tang Shufang and Mo Shurun, directly or indirectly hold a total of 7204% of the shares, which means that most of the dividends go into the pockets of the actual controllers.
In addition, the Yangtze River Business Daily reporter noted that in the prospectus, Liuchun Technology said that after years of accumulation, the company has mastered the core technology of each production link of precision functional devices for electronic products, and a number of technologies are at the leading or advanced level in the industry. So, what is the company's R&D progress?
According to the prospectus, from 2020 to 2022, the R&D expenses of Liuchun Technology will be 1387520,000 yuan, 2,500330,000 yuan, 3076870,000 yuan, and the R&D expense rate was respectively. 61%, which is much lower than the average of comparable companies in the same period. 24%。Until the first half of 2023, the R&D expense ratio of Liuchun Technology has risen to 814%, higher than the industry average of 1 for the first time06 percentage points.
The Yangtze River Business Daily reporter found through comparison that the number of invention patents of Liuchun Technology is significantly lagging behind that of peer companies. According to the prospectus, as of the end of 2021, Liuchun Technology has a total of 91 authorized patents, including 5 invention patents and 86 utility model patents. In 2021, the number of invention patents of companies in the same industry Feirongda, Brake Power, Anjie Technology, Hengmingda, Lingyi Intelligent Manufacturing, Boshuo Technology and Darui Electronics will be 175, 10, 60, 10, 94, 8 and 10 respectively.
In the recently updated report, Liuchun Technology said that it is continuing to take measures such as strengthening market development, increasing R&D efforts, and expanding production capacity to continuously narrow the gap with competitors. As of December 31, 2022, the company and its subsidiaries have 8 invention patents and 124 utility model patents.
Income is highly dependent on the "fruit chain", and the innovation ability seems to be weaker than peers, what is the confidence of Liuchun Technology to break through the GEM?
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