Skyworth Electric Co., Ltd. (“Skyworth Electric”), which was spun off from Skyworth Group, is impacting the A-share IPO, but the momentum is insufficient.
Skyworth Electric is mainly engaged in the research and development, production and sales of refrigerators, washing machines, tablet computers and other products. In the past two years, although operating income has been increasing, the net profit attributable to shareholders of the parent company (referred to as "net profit") has continued to decline.The net profit net of non-recurring gains and losses (referred to as "net of non-net profit") realized in 2021 is only about half of that in 2019.
Skyworth Electric's performance growth is more dependent on other income. In 2021, income including government subsidies and tax incentives will account for more than half of the total profit.
Financial anomalies are also one of the focuses of Skyworth Electric.On the book, the company is not short of money and has no debts, but the company's bills payable and accounts payable are as high as 2 billion yuan, accounting for 86.18% of the total liabilities.Why does Skyworth Electric have so many bills payable and accounts payable?
Skyworth Electric is also suspected of misappropriating money.Before the IPO, the company distributed a total of 280 million yuan in dividends from 2018 to 2020. In this IPO, the company plans to supplement the working capital with 240 million yuan in the fundraising, and there are obvious signs of misappropriation.
The market share of ice washing is less than 3%
When household appliances enter the stock era, they often win with scale and cost advantages.In this regard, Skyworth continues to make up for its shortcomings.
Skyworth Electric was established in April 2013, mainly engaged in the research and development, production and sales of refrigerators, washing machines, tablet computers and other products.At present, a business model of coordinated development of independent brands and ODMs has been formed.As of the signing date of the prospectus, the controlling shareholder of Skyworth Electric is Hong Kong Skyworth, and the company has no actual controller.
From the perspective of products, Skyworth's main products are refrigerators, washing machines, tablet computers and others, of which refrigerators and washing machines account for about 90% of the revenue.In 2021, the revenue of the company's refrigerators and washing machines will be 1.653 billion yuan and 1.726 billion yuan, respectively, accounting for 42.22% and 44.09% of the company's main business revenue, with a total of 86.31%.
It can be seen that Skyworth Electric is mainly engaged in the ice washing business in the white goods market. In this field, the market tends to be saturated, the competition is more intense, and the market concentration is rising.In the domestic market alone, Haier Electric, Hisense Home Appliances, Midea Group, Aucma, Omar Electric, etc. have all made in-depth layouts in the ice washing market, especially the two giants of Haier and Midea, with outstanding competitiveness.If Skyworth Electric wants to survive in the cracks, it has to work hard.
According to the data of the Prospect Research Institute, in the white goods market in 2020, the pattern of refrigerators and washing machines will be stable.The top three in the refrigerator industry are Haier, Midea, and Hisense Kelon, which together account for nearly 50% of the market share. The retail sales concentration of the TOP3 brands in the offline market is as high as 61%, a year-on-year increase of 2 percentage points.
According to public data, in 2020 and 2021, China's refrigerator output will be 90.1471 million units and 89.921 million units, a year-on-year change of 14.05% and -0.25%, and sales will be 84.47 million units and 86.433 million units.
In 2020 and 2021, Skyworth's refrigerator output will be 1,762,800 units and 1,581,300 units, respectively, with sales of 1,767,700 units and 1,565,900 units (with a small amount of outsourced procurement).Based on this calculation, in 2020 and 2021, Skyworth Electric's refrigerator output will account for 1.96% and 1.76% of China's total output, and sales will account for 2.09% and 1.81%.It can be seen that Skyworth's refrigerator market share is only about 2%.
In 2021, the output of domestic washing machines in China will be 86.18 million units, a year-on-year increase of 7.17%, and the sales volume will be 74.72 million units, a year-on-year increase of 6.2%.In 2021, Skyworth Electric's production and sales volume of washing machines will be 1.7189 million units and 1.7231 million units, accounting for 1.99% and 2.31% respectively.
The above data shows that Skyworth Electric, which focuses on the ice washing market, is not very competitive, and it can be said that it is surviving in the cracks.
Deduction of non-net profit dropped sharply by 50%
Sustainability of profitability is the focus of the IPO review by the Issuance Examination Committee. The operating performance of Skyworth Electric has been declining one after another, and its sustainable profitability is doubtful.
According to the prospectus, in 2018, the operating income and net profit of Skyworth Electric were 2.690 billion yuan and 58 million yuan respectively.From 2019 to 2021, the company's operating income was 3.685 billion yuan, 3.739 billion yuan, and 4.002 billion yuan, increasing for three consecutive years, with year-on-year growth rates of 37%, 1.46%, and 7.02%, respectively.The corresponding net profits were 169 million yuan, 148 million yuan, and 124 million yuan, with year-on-year changes of 190.32%, -12.18%, and -16.50%, declining for two consecutive years, with obvious features of increasing revenue without increasing profits.
The performance of deducting non-net profit is more obvious.In 2018, the company's non-deducted net profit was 32 million yuan, and from 2019 to 2021, it was 137 million yuan, 104 million yuan, and 69 million yuan, respectively, a year-on-year change of 326.41%, -24.43%, and -33.59%.Deducted non-net profit in 2021 is only about 50% of 2019.
Not only that, the company's performance depends to some extent on other income.From 2019 to 2021, the other income amounts were 36.3376 million yuan, 73.1095 million yuan, and 69.8016 million yuan respectively, accounting for 18.66%, 42.51%, and 53.33% of the total profits, respectively.Other income mainly includes government subsidies, value-added tax refund upon collection, tax refund, etc.
Why did the net profit drop one after another, and why did the deducted non-net profit drop sharply by 50%?
Skyworth's sales models are divided into four categories: direct sales, distribution, ODM and OEM.In recent years, the company's sales focus has gradually shifted to the ODM model.From 2018 to 2021, the revenue of Skyworth Electric relying on ODM sales increased year by year, which were 946 million yuan, 1.766 billion yuan, 2.026 billion yuan, and 2.272 billion yuan respectively, and the proportion of its main business income continued to expand, increasing from 35.84%. rose to 58.03%.Nearly 60% of its operating income comes from foundry, and the company has become a "foundry".
The top five customers of Skyworth Electric are mainly Xiaomi, JD.com, Gome, Yunmi, etc. Among them, the main customers of OEM are Xiaomi, Yunmi, Gome, and Beko Electric.In 2019, Xiaomi was the fourth largest customer, and in 2020, it was promoted to the third largest customer, and the company's sales revenue to it was 290 million yuan.In 2021, Xiaomi will become the largest customer, and the company's sales revenue to it will reach 536 million yuan, accounting for 13.40% of the company's total current sales.
Since last year, the price of raw materials has risen, including Gree Electric Appliances, Midea Group and other home appliance companies under pressure.Skyworth Electric is particularly evident.
The main raw materials purchased by Skyworth Electrical Appliances include plastic raw materials, isocyanates, compressors, motors, box and shell plates, etc. The direct materials account for more than 80% of the main business cost.Last year, the prices of raw materials generally increased. Correspondingly, from 2019 to 2021, the average sales unit price of the company's refrigerators and washing machines also increased.
Nonetheless, the company's gross profit margin continued to decline.From 2019 to 2021, the gross profit margins of its refrigerators were 15.06%, 12.82%, and 10.57%, respectively, and the gross profit margins of washing machines were 14.61%, 13.15%, and 11.91%. The gross profit margins of the two leading products continued to decline.
It is worth mentioning that from 2019 to 2021, under the ODM model, the company's gross profit margins are 13.72%, 12.29%, and 11.12%, respectively, and the direct sales gross profit margins are 24.49%, 21.68%, and 18.42%, respectively.The gross profit margin under the direct sales model is significantly higher than that of the foundry.
Three-year dividends and 72% of net profit
In this IPO, Skyworth Electric has signs of misappropriating money.
From the end of 2018 to the end of 2021, the asset-liability ratio of Skyworth Electric was 82.94%, 82.52%, 81.39%, and 78.61%, respectively. Even if it drops to less than 80% in 2021, it is still high.In the past four years, the asset-liability ratio of Skyworth Electric has exceeded the average of comparable companies in the same industry by more than 13 percentage points.
Skyworth Electric stated that the company's equity financing channels are limited, and companies in the same industry have effectively improved their capital structure and optimized various debt repayment indicators through equity financing during the listing process.
In fact, from the perspective of interest-bearing liabilities, Skyworth Electric has relatively sufficient funds.At the end of 2021, the company's book monetary funds were 339 million yuan and trading financial assets were 237 million yuan, mainly financial products, with a total of 576 million yuan.In addition, the company has 352 million yuan of 3-year time deposit certificates.Its broad money funds totaled 928 million yuan.The corresponding long-term and short-term debt is only 1.3345 million yuan.From these data, the company has no debt repayment pressure.
However, Skyworth Electric has abnormal operating liabilities.As of the end of 2021, the book value of the company's notes receivable and accounts receivable was 762 million yuan, and the corresponding notes payable and accounts payable were as high as 2.046 billion yuan.
Why are there so many bills and accounts payable?
In this regard, Skyworth Electric said that the main reason was that the company made full use of the credit period of suppliers, resulting in higher amounts of bills payable and accounts payable at the end of the period.In 2021, in response to the material price increase, advance stocking was carried out.
According to Skyworth Electric, the company's use of the supplier's account period, in fact, is equivalent to defaulting on the supplier's payment.
In this IPO, Skyworth Electric plans to raise 819 million yuan, of which 364 million yuan will be used for the construction of the production line expansion project with an annual output of 800,000 commercial freezers, multi-door refrigerators and 800,000 clothes dryers and Gemini washing machines, and 114 million yuan For the construction of the R&D center project, 100 million yuan will be invested in the efficient marketing network construction project, and 240 million yuan will be used to supplement working capital.
Judging from the above-mentioned 928 million yuan of broad money funds, the company can complete the construction of the IPO fundraising project without this fundraising, but from the 2.046 billion yuan in bills payable and accounts payable, it seems necessary.However, raising 240 million yuan to supplement working capital has been questioned.Because, before the IPO, the company has already paid huge dividends.
According to reports, in May 2018, May and December 2019, and July 2020, Skyworth Electric held four shareholder meetings, and distributed cash dividends of 120 million yuan, 30 million yuan, 50 million yuan and 80 million yuan to all shareholders respectively. RMB 280 million in cash dividends over the three years, accounting for about 72% of the net profit for the same period.
First, 280 million yuan was distributed through dividends, and then 240 million yuan of liquidity was supplemented through IPO fundraising. Skyworth Electric was suspected of deliberately misappropriating money.
