The second season of Cixing shares: M & A rebirth?

Cixing shares 300307, ​​after the stock market went public, the image of high growth was changed, the performance continued to decline, the stock price continued to fall, and the major shareholders were hugely cashed out. In the second half of 2016, the company entered the mobile Internet field through acquisition, but the two companies acquired have many doubts.

The author of this journal is a long way to go

Cixing Co., Ltd. (300307.SZ) is mainly engaged in the research, development, production and sales of computer knitting machinery. Claiming to be "high-quality products + high-level services" has broken the leading position in the domestic market that has long been monopolized by a few internationally renowned companies. After the IPO raised funds of 2.135 billion yuan in 2012, it quickly began to change face, face, and change face.

According to the prospectus, the annual sales income of the fundraising project is 4.78 billion yuan, the total annual new profit is 1.081 billion yuan, and the net profit is 811 million yuan. In April 2013, Cixing Co., Ltd. issued an announcement to substantially reduce the total investment, sales revenue and net profit of the fundraising project. However, the fundraising project that should have been completed late was delayed until the end of 2016, and some of the fundraising projects are expected to be delayed until 2018. Cixing shares explained in the 2016 annual report that the investment progress of each project is significantly lower than the promised investment progress, mainly since 2012, the domestic and international economic downturn has led to a decline in market demand for the downstream knitting industry. Until the first half of 2017, the fundraising project finally blossomed, contributing nearly 40 million yuan.

In March 2012, Cixing shares were listed with a total market capitalization of RMB 14.035 billion. After the performance changed face, the stock price dipped. On February 23, 2018, the total market value of Cixing shares was only 5.59 billion yuan, shrinking by 60%, and investors suffered heavy losses.

However, after the expiration of the original shareholders' three-year lock-up period (ie March 28, 2015), the original shareholders headed by major shareholders began to enjoy reducing their holdings, reducing their holdings and then reducing their holdings. Up to now, the actual controllers and their companies have accumulated a total of 1.8 billion yuan. At present, the actual controller's remaining stock market value exceeds 3 billion yuan.

After the listing, the performance has plummeted.

The operating income of Cixing shares decreased sharply from 3.323 billion yuan in 2011 to 750 million yuan in 2015. The decline in net profit was even more alarming. From 2012 to 2014, net profit decreased by 58.70%, 26.47% and 224.84% respectively. In 2011, the net profit was as high as 918 million yuan, and the net profit rate of sales was as high as 27.64%. In such a fiercely competitive environment, the profitability of Cixing shares is quite amazing. I am afraid that there is no second place for such a high net sales rate.

The production model of Cixing and the buyer's credit method adopted in sales are similar to those of listed companies in the domestic construction machinery industry. Different from the fierce competition of Cixing shares, Sany Heavy Industry 600031, stocks (600031.SH) and Zoomlion 01071, the main products of the stock bar (000157.SZ) are not strong in domestic competitors, even then, in The best performance in 2011, the two companies operating income is 14 or 15 times of Cixing shares, but the net profit margin of sales is only 18.44%, 17.64%, far less than Cixing shares. The same industry's Jingwei Textile Machinery (000666.SZ) had revenues of about 3 times that of Cixing in 2011, a net profit margin of only 4.79%, and a gross profit margin of 15% for textile machinery.

In 2014, Cixing shares directly lost 348 million yuan. Although the operating income continued to decline in 2015, after the big shower in the previous year, the company achieved a profit of 102 million yuan in 2015.

In 2016, operating income finally rose to 1.098 billion yuan, an increase of 46.52%; net profit of 124 million yuan, an increase of 20.97%. Continued profitability since 2015 provides strong support for the original shareholders, especially the major shareholders.

The large amount of interest income and non-operating income brought by huge amounts of raised funds have become the cover of Cixing. From 2012 to 2016, Cixing's accumulated profit was 537 million yuan, with an average annual profit of 107 million yuan, one-ninth of the time before listing. In 2011, the financial expenses were 25.76 million yuan. After the IPO, a large amount of interest income led to a negative financial expense. From 2012 to 2016, the financial expenses accumulated to -275 million yuan, and the non-operating income was 219 million yuan. Since the listing of Cixing shares, it has been the largest. Part of the profit comes from here.

According to the prospectus, the knitting machinery industry also has a certain seasonality due to the seasonality of the knitting industry. From April to November each year, there are more export orders, the industry is in the peak season of sales, the knitting machinery industry is in the upstream of the knitting industry, the sales season will be advanced, and the company enters the sales season from February to October every year. This explanation is not unreasonable. In the second half of 2011, market demand declined, and operating income in the second half decreased compared with the first half. But after the listing, the differentiation is very obvious. In the first half of the year, the operating income was far more than the second half of the year, and the net profit was the second half of the second. From 2012 to 2016, the accumulated operating income in the first half of the year accounted for about 60% of the same period of the year, with a total realized profit of 649 million yuan, while the accumulated loss in the second half was 112 million yuan. The difference is so big that it seems to be far-fetched to use only the explanation of the prospectus.

Casual asset impairment loss

The industry's first buyer credit model has caused the performance of Cixing shares to break out before the IPO. This model has numerous powders and more than 70% of its revenue comes from the buyer's credit model. But the risk is also very large, which is equivalent to giving customers a high leverage. The prospectus describes how to control risk and how bad debts are lost. From the accrual of asset impairment losses, from 2008 to 2011, the asset impairment losses totaled 33.18 million yuan, of which 9.54 million yuan in 2011, accounting for 0.29% of operating income, while Sany Heavy Industry was 0.79%. Section 0.55%. Deliberately mentioning asset impairment losses masks huge risks.

After the listing, the risk is revealed. The amount of the first year of listing (2012) amounted to 53.86 million yuan, followed by up to 160 million yuan in 2013 and the peak of 476 million yuan in 2014. Although it has declined since then, it still has reached more than 100 million yuan. From 2012 to 2016, Cixing shares accumulatively accumulated asset impairment losses of 945 million yuan, accounting for 14.04% of the accumulated operating income for the same period, while the proportions of Sany Heavy Industry and Zoomlion were 1.53% and 2.85% respectively. The production model of Cixing and the buyer's credit method adopted in sales are similar to those of Sany Heavy Industry and Zoomlion. Why is the loss of Cixing shares far greater than the latter? Moreover, the latter's buyer credit model continues, and Cixing shares terminated the model in 2016. Before the IPO, the buyer's credit model was like installing a rocket to Cixing's performance. The operating income surged from 302 million yuan in 2008 to 3.323 billion yuan in 2011, and the net profit surged from 33.71 million yuan to 918.33 million yuan. Excessive sales, ultimately by the capital market to pay.

If the asset impairment loss is used well, the profit can be adjusted as needed.

In 2016, Cixing shares terminated the buyer's credit model. In the performance forecast for the first half of 2016, Cixing said that in view of the company's significant reduction in the sales scale of the buyer's credit model in the past two years and the cessation of this business model in 2018, the company has substantially reduced the provision for asset impairment losses. Profits increased significantly compared with the same period of the previous year, and the net profit attributable to shareholders of listed companies increased by 40%-50% compared with the same period of the previous year.

In fact, the profit for the first half of 2016 was 112 million yuan, an increase of 27.73 million yuan year-on-year, an increase of 32.85%. Significant reductions in asset impairment losses have contributed. In the first half of 2015, the asset impairment loss was 66.19 million yuan. In the first half of 2016, the asset impairment loss was only 29.46 million yuan. Cixing was explained as the termination of the buyer's credit model. However, the asset impairment loss in the second half of 2016 was as high as 117 million yuan, an increase of 74.75 million yuan. Since the buyer's credit model was terminated, the asset impairment losses in the first half of 2016 also decreased sharply. Why did the sudden surge in the second half of the year? In 2016, the annual asset impairment loss amounted to 147 million yuan, an increase of 38.02 million yuan year-on-year. The four categories of asset impairment losses, inventory depreciation losses, impairment losses on fixed assets, and impairment losses on intangible assets increased year-on-year.

Mergers and acquisitions again reborn?

In the first half of 2016, operating income and net profit increased significantly year-on-year, but in the second half of the year, profits decreased sharply, only one-tenth of the first half. Don't look at the profit of 12.07 million yuan in the second half of 2016. This is the result of Cixing's efforts to pay 1 billion yuan, otherwise it will lose money in the second half.

In the second half of 2016, Cixing Co., Ltd. acquired Hangzhou Duoyile Network Technology Co., Ltd. (hereinafter referred to as “Duoyile”) and Hangzhou Youtou Technology Co., Ltd. (hereinafter referred to as “Yuetou Technology” for RMB 400 million and RMB 600 million respectively. ) 100% equity, into the mobile Internet. In 2016, the two companies contributed a total of 82.634 million yuan in operating income, accounting for 7.52% of the annual operating income of Cixing. The total net profit contributed was 36.115 million yuan, accounting for 29.08% of the annual net profit of Cixing.

In the first half of 2017, Cixing's operating income increased by 30%, and the disposal of fixed assets gained 66.906 million yuan. Thus, the net profit in the first half of the year seems to grow well, with an increase of 54.31%, while the non-recurring gains and losses are only 0.66%. Duoyi and Youtou Technology jointly contributed a net profit of 60,534,400 yuan, accounting for one-third of the total. In the first half of 2016, Dolly and Optimus Technology have not been acquired. If this factor is excluded, the non-net profit in the first half of 2017 will fall by more than 50%.

Cixing shares expects to increase its operating income and net profit in 2017, especially the net profit, which has increased significantly compared with the same period of last year, mainly due to the rapid growth of the company's mobile Internet business revenue and profits, and the disposal of idle industrial buildings. And the increase in non-operating income from industrial land.

Duoyi puzzle

When Duoye was established, its registered capital and paid-up capital were 100,000 yuan, of which He Lannian invested 60,000 yuan and Qian Huafang invested 40,000 yuan. In January 2016, He Lanwo transferred the 25%, 27.5% and 7.5% shares of the company she held to Huangshan Changxin Investment Co., Ltd. (hereinafter referred to as “Huangshan Investment”), which was established on January 4, 2016. Registered capital of 5 million yuan, Tang Yan holding 90% of shares, Tang Hao holding 10% of shares), was established on January 7, 2016 in Hangzhou Huiyou Network Technology Co., Ltd. (hereinafter referred to as "Hangzhou Huiyou", registered capital of 5 million Yuan, Hu Wei invested 3 million yuan, Shi Zhengyi invested 2 million yuan) and was established on January 7, 2016 in Hangzhou Jiyou Network Technology Co., Ltd. (hereinafter referred to as "Hangzhou Jiyou", registered capital of 5 million yuan, Jiang Yanzhen invested 149.1 10,000 yuan, Yang Jun invested 1.704 million yuan, Hu Wei invested 1.805 million yuan), Qian Huafang transferred 40% of the company's shares to Hangzhou.

At that time, the company increased its registered capital by 9 million yuan, of which Huangshan Investment, Hangzhou Huiyou and Hangzhou Jiyou respectively subscribed the corresponding funds. In February 2016, Huangshan Investment transferred its 2.174% stake in the company to Hangzhou Qiaochi Technology Co., Ltd. (hereinafter referred to as “Hangzhou Qiaochi”), which was established on December 28, 2015, with a registered capital of 5 million yuan, Zhang Meiying. With a capital contribution of 250,000 yuan and Gu Qiaoyu contributing 4.75 million yuan, Hangzhou Jiyou also transferred 0.5435% of the company's shares to Hangzhou Qiaochi. Then, Duoyi accepted the Hangzhou Meizheng Antian Equity Investment Partnership (hereinafter referred to as “Hangzhou Meizheng”), which was established on September 22, 2015, as a new shareholder, which increased its capital by 4.8 million yuan. After the above equity transfer, capital increase and payment by the company's shareholders, the registered capital of Duoyile was changed to 10.87 million yuan, and the paid-in capital was changed to 6.17 million yuan.

The founder He Lan, Qian Huafang did not enjoy the huge profits of Duoye’s 400 million yuan price.

In February 2016, Duoyi merged with Hangzhou Taiku Technology Co., Ltd. (hereinafter referred to as “Taiku Technology”) for RMB 5.347 million. In February-March 2016, Taiku Technology contributed 7.88 million yuan in revenue and contributed 3.77 million net profit. yuan. Taihuo Technology, whose profitability is so strong, can recognize the fair value of net assets less than 7 million yuan. And the multi-right music is even more powerful. This merger not only did not produce goodwill, but generated non-operating income. The merger cost was less than the portion of the fair value of the identifiable net assets of Taikuo Technology acquired in the merger. Non-operating income. The mixed net profit of Duoyi in January-March 2016 was 5,227,900 yuan, of which the parent company had a loss of 184,200 yuan. All profits came from the sole subsidiary Taikuo Technology. In other words, Duoyi spent more than 5 million yuan to buy Taiku Technology, and relied on the latter to sell to Cixing shares for 400 million yuan.

In January 2013, Taiku Technology was established in Hangzhou by Hangzhou Skye Network Technology Co., Ltd. (hereinafter referred to as “Sky Network”), Hu Wei and Cheng Na. In September 2015, Skye Network became the sole shareholder. Sky Eye Search shows that Skye Network was established in 2005. It was officially listed on the NASDAQ Exchange in 2010. The stock code: MOBI is the first mobile Internet company listed in the US. According to reports, Skye has developed into a mobile Internet application platform enterprise. The number of users at home and abroad has reached 1.2 billion, and the number of downloads has exceeded 11 billion, ranking third in the world. It has five subsidiaries, including Qianlong Technology, Magic Technology, Taiku Technology, Dawn Technology and Powerplay, and is involved in many fields including board games, traffic management, multimedia operations, and overseas markets.

So, is Taiku Technology a Taikuo technology acquired by Duoyi? In addition, Tang Yan has been a director of Skye Network since 2007. Is this Tang Yan and Huang Yan’s major shareholder Tang Yan the same person?

Youtou Technology, the same routine

The formula of Youtou Technology is the same as that of Duoyi.

Also in February 2016, Youtou Technology merged with Hangzhou Miwan Network Technology Co., Ltd. (hereinafter referred to as “Mi playing network”) for 2.95 million yuan. Youtou Technology's profit for the first three months of 2016 was 6.31 million yuan, nearly 90% from the network. Also relying on the amazing profitability of the network to play the network, the company invested in the company's 600 million yuan.

At the time of the establishment of Youtou Technology, the registered capital and paid-in capital were both 500,000 yuan, of which Jingting invested 200,000 yuan, accounting for 40%, and Shen Tuqiuyun invested 300,000 yuan, accounting for 60%.

In January 2015, Jing Ting transferred 10% and 12.9% of the shares held by the company to Yuan Weijun and Tang Yan respectively, and Shen Tuqiuyun transferred the 0.78% stake in the company he held to Tang Yan. Thereafter, in August 2015, Shen Tuqiuyun transferred the 37.22% and 22% equity of the company it held to Hangzhou Yougang Investment Management Co., Ltd. (hereinafter referred to as “Hangzhou Yougang”), which was established on August 7, 2015. , registered capital of 5 million yuan, Liu Yuyang holding 100%) and Hangzhou Friendship Investment Management Co., Ltd. (hereinafter referred to as "Hangzhou Friendship", established on August 7, 2015, registered capital of 5 million yuan, of which Liu Yuyang invested 3,113,800 yuan). During the period, Youtou Technology once again increased its registered capital by 1.2 million yuan, and the company's registered capital and paid-in capital were changed to 1.75 million yuan.

By January 2016, Jingting transferred its 2.5%, 0.925%, 2.375%, and 11.3% shares to Hangzhou Baimen Investment Management Co., Ltd., which was established on June 11, 2014. Called "Hangzhou Baimen", registered capital of 5 million yuan, Zhang Jun holding 99.80%, Zhang Guangren holding 0.20%), Hangzhou Qiaochi, Hangzhou Friends and Hangzhou Yougang, Tang Yan will hold 11.388% stake in the company 2% equity and 0.292% equity were transferred to Huangshan Investment, Hangzhou Qiaochi and Hangzhou Yougang respectively, and Yuan Weijun transferred 0.25% of the shares held by the company to Hangzhou Yougang. After another capital increase, the registered capital of the company was changed to 10 million yuan, and the paid-in capital was still 1.755 million yuan.

Soon, in January 2016, Hangzhou Yougang transferred its 5% stake in the company and Yuan Weijun transferred the 2% stake in the company it held to Hangzhou Meizhen.

The Mi playing network was established on July 18, 2013 by Sha Shihe and Zhang Jun. Before being acquired by Youtou Technology, one of the shareholders of Mi playing network was Hangzhou Baimen.

Disclaimer: This article only represents the author's personal opinion; the author declares: I do not hold the stock mentioned in the article

(Editor: Liu Wei HF113)

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