In 2017, Fiberhome Research released a short-selling report on Cogobuy Group, calling Cogobuy a "scam of the century that spanned 10 years". Then the two sides went through the process of questioning, clarifying, and questioning again. One of the doubts in Fiberhome Research is that from 2011 to 2016, there was a gap of RMB 1.9 billion between Cogobuy's net profit and net cash flow from operating activities.
With the passage of time, the renamed Ingdan Innovation wants to spin off its business and list it on the GEM, but there is still a huge difference between the net profit and the net cash flow generated by operating activities, and the gap between the two is as much as 1.8 billion during the reporting period. Generally speaking, the net profit and the net cash flow generated by operating activities are relatively similar, indicating that the company is operating well, while the net profit is higher than the net cash flow generated by operating activities for a long time, indicating that there is a problem in the ability to collect and liquidate. Ketong Technology's net profit has been high for many years**, so the net cash flow generated by operating activities should show the same trend. Therefore, we calculate the difference between net profit and net cash flow from operating activities.
The results show that in the past three and a half years, the net cash flow generated by operating activities has been negative every year under the condition that the net profit of Ketong Technology has increased year after year, and the total difference between the two in three and a half years is as high as more than 1.8 billion. From the perspective of changes in the assets of Ketong Technology, only inventory, Ketong Technology increased by 4.6 billion yuan and accounts receivable increased by 500 million yuan during the reporting period.
Ketong Technology said that the increase in inventory is due to the strong downstream demand and the increase in stocking, and the second is because of the existence of first-class business rebates. However, the growth rate of Ketong Technology's main business income is far behind the increase in inventory. If it is due to strong demand, it is reasonable to stock appropriately.
However, is it in line with normal business practices for Ketong Technology to increase inventory at a rate far exceeding the main business income? Because a large amount of inventory not only occupies capital, but also has the risk of loss and discount.
When analyzing the inventory situation of Cotone Technology, the inventory value disclosed by Cotone Technology is also different in different application materials.
What is the reason for such a large difference in inventory between the two? Obviously, it shouldn't be because of rounding or accidentally making a mistake.