Two years ago, the IPO raised 1 billion yuan to spend, and the fundraising project has not yet achieved the expected benefits. Dongshan Precision (002384.SZ) has made a comeback and once again raised 1.81 billion yuan for capacity expansion.
Recently, Dongshan Precision disclosed the 2012 non-public offering plan, plans to raise 1.081 billion yuan and invest in 4 projects, all of which are capacity expansion projects.
It is worth noting that Dongshan Precision's performance last year and the first quarter of this year have all declined, and the IPO fundraising project has not achieved the expected benefits. Now, once again, the financing expansion is undoubted.
Serious decline in performance
While refinancing, performance continued to decline.
On April 26, Dongshan Precision disclosed the first quarterly report of 2012, achieving a total operating income of 265.543 million yuan, down 3.36% year-on-year; achieving a net profit of 100.903 million yuan, down 68.18% year-on-year.
It is worth noting that its “net cash flow from operating activities†decreased by 40.28% over the same period of the previous year. Dongshan Precision explained that the company’s newly invested subsidiaries have not yet generated net cash inflows. And its 2011 annual report released recently showed that its “net cash flow from operating activities†increased by 537.59% year-on-year.
According to Dongshan Precision's 2011 annual report, its performance has declined. Last year, it realized a total operating income of 1,117,966,800 yuan, a year-on-year increase of 33.42%; a net profit of 67,725,800 yuan, a year-on-year decline of 26.4%. However, after deducting non-recurring gains and losses, Dongshan Precision's net profit last year was only 54.701 million yuan, and its performance fell 38.77% year-on-year.
In this regard, Dongshan Precision explained: Because during the reporting period, the company increased the development investment of new products LED and its modules, and the corresponding R&D expenses and trial production costs increased; affected by the global PV industry downturn, the company participated in the United States SolFocus., Inc. suffered a large loss in the current period, and the company confirmed the increase in investment losses; the company's operating profit and net profit decreased accordingly.
The reporter noted that Dongshan Precision's net profit for the first three quarters of 2011 was 31.7 million yuan, 30 million yuan, 6.01 million yuan, and the fourth quarter was -0.21 million yuan.
A fund manager in Shanghai is worried that Dongshan Precision’s consolidated gross profit margin fell by 4.35% last year, especially the gross profit margin of its traditional business precision sheet metal and precision casting fell by 3.59% and 3.55% respectively. “A decline in the gross profit margin of a company actually It is more serious, which means that the competition is very fierce, and it is impossible to adopt a strategy of selling at a high price, which means that the core competitiveness is not good."
Dongshan Precision explained the reason for the decline in gross profit margin: mainly due to the increase in the scale of the assembly business of the company and the addition of the company's new precision electronic business and the products of some subsidiaries to the mass production, resulting in lower initial gross profit margin.
The fact is that the gross profit margin of all of its products has declined, not just the new products that have not been mass-produced.
IPO project did not meet expectations
Despite the growth in sales of Dongshan Precision last year, the rate of increase in accounts receivable and inventory is also obvious.
Dongshan Precision's 2011 annual report showed that accounts receivable was 28,624,300 yuan, a year-on-year increase of 19.24%; inventory year-end balance was 31,393,300 yuan, an increase of 76.32%; inventory turnover was 3.78, down 1.26 percentage points from the same period last year. In this regard, Dongshan Precision believes that the main reason is that with the continuous investment of raised funds, the scale of production continues to expand, the comprehensive manufacturing capacity is enhanced, customer orders are increased, and the balance of raw materials, products and stocks is correspondingly increased.
In the first quarter of 2012, Dongshan Precision's inventory reached 365.99 million yuan, an increase of 14.71% compared with the beginning of this year.
According to Dongshan Precision’s 2012 non-public offering plan, the 1.081 billion yuan it plans to raise will invest 175.6 million yuan for “expanding precision sheet metal parts project†and 118.61 million yuan for “expanding precision metal structural parts projectâ€. 249.85 million yuan was used to "expand the precision electronic device project" and 536.94 million yuan to "expand the LED device and precision module project."
According to the reporter, Dongshan Precision has raised 1 billion yuan in the 2010 IPO, of which nearly 640 million yuan is over-raised. In just two years, Dongshan Precision spent a total of 1 billion yuan to raise funds. More importantly, the fundraising project did not achieve the expected benefits.
Dongshan Precision IPO prospectus shows that the two projects of “expanding precision sheet metal manufacturing capacity engineering construction project†and “technical center capacity improvement project†are planned to use 289.70 million yuan of raised funds, and the actual capital demand of the project is 322.7 million yuan. .
However, the actual fundraising of Dongshan Precision reached 1.04 billion yuan, the net fundraising amount was 95,882,800 yuan, and the over-raised fund was 63,612,800 yuan.
As of December 31, 2011, the “expansion of precision sheet metal manufacturing capacity engineering construction project†promised an investment amount of 292,895,500 yuan, the accumulated investment amount was 279,678,600 yuan, and the difference between the committed investment amount was -13,214,400 yuan, and the cumulative investment progress was 95.49%.
The estimated expected annual benefit of 5,629.90 yuan, in fact only achieved 5,629,940 yuan, a difference of 6.33% compared with the expected benefits. Obviously, Dongshan Precision's IPO fundraising project did not complete its original commitment.
Crazy expansion
The over-raised 636.638 million yuan of 326.69 million yuan was used for foreign investment, 3,244,860 yuan to repay the expiration of bank acceptance bills, 16264.18 million yuan was used to return bank loans, 110.88 million yuan to supplement working capital, 1088.55 Ten thousand yuan was used to purchase assets.
In this case of over-raising, Dongshan Precision’s “spending money†was quickly and surprisingly. After two years, the fundraising of 1.04 billion yuan was only 13.9254 million yuan.
However, before the listing and capacity expansion, Dongshan Precision's net profit in 2009 was 72.312 million yuan, but in 2011 after a series of expansion, it was only 67.725 million yuan.
The reporter called Dongshan Precision on May 7th. As of press time, no reply was received.
Such performance directly reflects the stock price. Since its listing on April 9, 2010, Dongshan Precision has rushed to 82.41 yuan at the end of the year, and has since fallen. As of May 7, 2012, the stock closed at 20.74 yuan, the reinstatement price was 25.09 yuan, and its issue price for the year was 26 yuan.
In this context, Dongshan Precision in order to "settlement" the people's hearts, the company's actual controllers Yuan Fugen, Yuan Yongfeng proposed to all shareholders to "8 shares for every 10 shares, 2 bonus shares and 1 yuan (including tax)."
However, this does not allow people to revive their motives for refinancing.
Among the four projects of Dongshan Precision's refinancing, it is strange to continue the project of “expanding precision sheet metal partsâ€. Since the IPO “expanding precision sheet metal manufacturing capacity engineering construction project†cannot meet expectations as expected, how can it be guaranteed to continue to expand? Can a project with capacity achieve the expected benefits?
In Dongshan Precision's “Feasibility Report on the Use of Non-public Issuance of Equity Raised Fundsâ€, the company repeatedly emphasized “the rapid development of downstream industriesâ€, “the company's strong technical reserves†and “company one-stop†precision manufacturing services. "System" and "Flexible Manufacturing System for Rapid Response of Projects" are many "big articles", but how to solve the original inventory, how to digest the new capacity, whether there are new orders is enough to undertake these new capacity in the future, etc. The actual situation is not mentioned.
For investors, it is impossible to judge whether there is an inevitable connection between many of the above-mentioned "big articles" and digesting new capacity.
“Actually, the LED industry is currently in a state of overcapacity. There are too many projects launched by local governments. In the future, there will be a chaotic situation that relies on low-price competition.†The fund manager said frankly that the results of the survey showed that customers were in 2010. Lined up with other products, and in 2011, it was an order from enterprises. "The development speed of China's LED industry is currently the world's number one. The number of enterprises has reached more than 4,000 in just a few years. Overcapacity has become a reality. Dongshan Precision now plans to spend 5 billion to expand production, I don't know how the company digests these capacity?"
Recently, Dongshan Precision disclosed the 2012 non-public offering plan, plans to raise 1.081 billion yuan and invest in 4 projects, all of which are capacity expansion projects.
It is worth noting that Dongshan Precision's performance last year and the first quarter of this year have all declined, and the IPO fundraising project has not achieved the expected benefits. Now, once again, the financing expansion is undoubted.
Serious decline in performance
While refinancing, performance continued to decline.
On April 26, Dongshan Precision disclosed the first quarterly report of 2012, achieving a total operating income of 265.543 million yuan, down 3.36% year-on-year; achieving a net profit of 100.903 million yuan, down 68.18% year-on-year.
It is worth noting that its “net cash flow from operating activities†decreased by 40.28% over the same period of the previous year. Dongshan Precision explained that the company’s newly invested subsidiaries have not yet generated net cash inflows. And its 2011 annual report released recently showed that its “net cash flow from operating activities†increased by 537.59% year-on-year.
According to Dongshan Precision's 2011 annual report, its performance has declined. Last year, it realized a total operating income of 1,117,966,800 yuan, a year-on-year increase of 33.42%; a net profit of 67,725,800 yuan, a year-on-year decline of 26.4%. However, after deducting non-recurring gains and losses, Dongshan Precision's net profit last year was only 54.701 million yuan, and its performance fell 38.77% year-on-year.
In this regard, Dongshan Precision explained: Because during the reporting period, the company increased the development investment of new products LED and its modules, and the corresponding R&D expenses and trial production costs increased; affected by the global PV industry downturn, the company participated in the United States SolFocus., Inc. suffered a large loss in the current period, and the company confirmed the increase in investment losses; the company's operating profit and net profit decreased accordingly.
The reporter noted that Dongshan Precision's net profit for the first three quarters of 2011 was 31.7 million yuan, 30 million yuan, 6.01 million yuan, and the fourth quarter was -0.21 million yuan.
A fund manager in Shanghai is worried that Dongshan Precision’s consolidated gross profit margin fell by 4.35% last year, especially the gross profit margin of its traditional business precision sheet metal and precision casting fell by 3.59% and 3.55% respectively. “A decline in the gross profit margin of a company actually It is more serious, which means that the competition is very fierce, and it is impossible to adopt a strategy of selling at a high price, which means that the core competitiveness is not good."
Dongshan Precision explained the reason for the decline in gross profit margin: mainly due to the increase in the scale of the assembly business of the company and the addition of the company's new precision electronic business and the products of some subsidiaries to the mass production, resulting in lower initial gross profit margin.
The fact is that the gross profit margin of all of its products has declined, not just the new products that have not been mass-produced.
IPO project did not meet expectations
Despite the growth in sales of Dongshan Precision last year, the rate of increase in accounts receivable and inventory is also obvious.
Dongshan Precision's 2011 annual report showed that accounts receivable was 28,624,300 yuan, a year-on-year increase of 19.24%; inventory year-end balance was 31,393,300 yuan, an increase of 76.32%; inventory turnover was 3.78, down 1.26 percentage points from the same period last year. In this regard, Dongshan Precision believes that the main reason is that with the continuous investment of raised funds, the scale of production continues to expand, the comprehensive manufacturing capacity is enhanced, customer orders are increased, and the balance of raw materials, products and stocks is correspondingly increased.
In the first quarter of 2012, Dongshan Precision's inventory reached 365.99 million yuan, an increase of 14.71% compared with the beginning of this year.
According to Dongshan Precision’s 2012 non-public offering plan, the 1.081 billion yuan it plans to raise will invest 175.6 million yuan for “expanding precision sheet metal parts project†and 118.61 million yuan for “expanding precision metal structural parts projectâ€. 249.85 million yuan was used to "expand the precision electronic device project" and 536.94 million yuan to "expand the LED device and precision module project."
According to the reporter, Dongshan Precision has raised 1 billion yuan in the 2010 IPO, of which nearly 640 million yuan is over-raised. In just two years, Dongshan Precision spent a total of 1 billion yuan to raise funds. More importantly, the fundraising project did not achieve the expected benefits.
Dongshan Precision IPO prospectus shows that the two projects of “expanding precision sheet metal manufacturing capacity engineering construction project†and “technical center capacity improvement project†are planned to use 289.70 million yuan of raised funds, and the actual capital demand of the project is 322.7 million yuan. .
However, the actual fundraising of Dongshan Precision reached 1.04 billion yuan, the net fundraising amount was 95,882,800 yuan, and the over-raised fund was 63,612,800 yuan.
As of December 31, 2011, the “expansion of precision sheet metal manufacturing capacity engineering construction project†promised an investment amount of 292,895,500 yuan, the accumulated investment amount was 279,678,600 yuan, and the difference between the committed investment amount was -13,214,400 yuan, and the cumulative investment progress was 95.49%.
The estimated expected annual benefit of 5,629.90 yuan, in fact only achieved 5,629,940 yuan, a difference of 6.33% compared with the expected benefits. Obviously, Dongshan Precision's IPO fundraising project did not complete its original commitment.
Crazy expansion
The over-raised 636.638 million yuan of 326.69 million yuan was used for foreign investment, 3,244,860 yuan to repay the expiration of bank acceptance bills, 16264.18 million yuan was used to return bank loans, 110.88 million yuan to supplement working capital, 1088.55 Ten thousand yuan was used to purchase assets.
In this case of over-raising, Dongshan Precision’s “spending money†was quickly and surprisingly. After two years, the fundraising of 1.04 billion yuan was only 13.9254 million yuan.
However, before the listing and capacity expansion, Dongshan Precision's net profit in 2009 was 72.312 million yuan, but in 2011 after a series of expansion, it was only 67.725 million yuan.
The reporter called Dongshan Precision on May 7th. As of press time, no reply was received.
Such performance directly reflects the stock price. Since its listing on April 9, 2010, Dongshan Precision has rushed to 82.41 yuan at the end of the year, and has since fallen. As of May 7, 2012, the stock closed at 20.74 yuan, the reinstatement price was 25.09 yuan, and its issue price for the year was 26 yuan.
In this context, Dongshan Precision in order to "settlement" the people's hearts, the company's actual controllers Yuan Fugen, Yuan Yongfeng proposed to all shareholders to "8 shares for every 10 shares, 2 bonus shares and 1 yuan (including tax)."
However, this does not allow people to revive their motives for refinancing.
Among the four projects of Dongshan Precision's refinancing, it is strange to continue the project of “expanding precision sheet metal partsâ€. Since the IPO “expanding precision sheet metal manufacturing capacity engineering construction project†cannot meet expectations as expected, how can it be guaranteed to continue to expand? Can a project with capacity achieve the expected benefits?
In Dongshan Precision's “Feasibility Report on the Use of Non-public Issuance of Equity Raised Fundsâ€, the company repeatedly emphasized “the rapid development of downstream industriesâ€, “the company's strong technical reserves†and “company one-stop†precision manufacturing services. "System" and "Flexible Manufacturing System for Rapid Response of Projects" are many "big articles", but how to solve the original inventory, how to digest the new capacity, whether there are new orders is enough to undertake these new capacity in the future, etc. The actual situation is not mentioned.
For investors, it is impossible to judge whether there is an inevitable connection between many of the above-mentioned "big articles" and digesting new capacity.
“Actually, the LED industry is currently in a state of overcapacity. There are too many projects launched by local governments. In the future, there will be a chaotic situation that relies on low-price competition.†The fund manager said frankly that the results of the survey showed that customers were in 2010. Lined up with other products, and in 2011, it was an order from enterprises. "The development speed of China's LED industry is currently the world's number one. The number of enterprises has reached more than 4,000 in just a few years. Overcapacity has become a reality. Dongshan Precision now plans to spend 5 billion to expand production, I don't know how the company digests these capacity?"
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