Ocean King Lighting Technology Co., Ltd. (hereinafter referred to as "Ocean King Lighting") has recently disclosed the prospectus on the website of the China Securities Regulatory Commission. The company plans to list on the Shenzhen Stock Exchange and plans to issue 50 million shares. The reporter consulted the company's prospectus and found that the problem was quite large. This article reveals six of the major problems, especially for investors to analyze one by one. According to the prospectus, the main business of Ocean King Lighting is the development, production, sales and service of special environmental lighting equipment. However, what is the actual business model? In the detailed description, it can be seen that the so-called "R&D and production" is essentially the purchase of parts from outside manufacturers, and then assembled and processed for sale. In short, there is no difference between the “cottage factory†assembled with many purchased parts in Shenzhen. Ocean King lighting products are mainly industrial lighting equipment, including fixed lighting equipment (industrial hanging lights, projection lights), mobile lighting equipment (mobile lights) and portable lighting equipment (explosion-proof searchlights, flashlights) three categories. For the above lamps, the most important core components are light sources, ballasts, electronic components and so on. However, in the production process of Ocean King, the above parts need to be purchased from the outside world. The company's so-called "production" is simply to buy the above-mentioned core parts, and then put on a shell to change the face into a "high-tech lighting." From the top five suppliers and procurement ratios disclosed by the company, the outsourcing amount of the company in the past three years is estimated. The proportion of the purchased components of the core components such as light source, ballast and electronic components in the past year is in the proportion of the current year's cost. 60% or more. From the company's "lighting equipment production process" flow chart, the "main production process" is simply a simple manual operation such as "wire welding", "component assembly / assembly" and "product packaging". What is the difference between this simple assembly process and the “cottage factory†that many parts in Shenzhen buy themselves? The so-called “quality guarantee†that the company claims is based on its own process quality control or based on procurement. Above the "quality assurance" of the business? First sin: distorted high price, high commission sales system For Ocean King Lighting, some people in the lighting industry commented that the impression was "high product prices and strong sales orders." The reporter found on Taobao.com that the price of the same strong photocell is generally less than 100 yuan, and foreign brands are around 150-200 yuan. The strong light bulb produced by Ocean King Lighting sold for 288 yuan, which is more than 30% more expensive! The company's financial statements show that the gross profit margin of the company's products has reached 70%, and the average gross profit margin of the industry is 25%. The difference is very far. As already analyzed above, in fact, the core components of the company's products are basically outsourced, and the so-called technical content is not high. How can the company sell such a high price? Where is the rich gross profit used? As can be seen from the prospectus, behind the high gross profit is actually the high commission paid by the company to the sales staff. According to its financial data, the wages, bonuses and welfare fees provided by the company to local sales personnel (expressed as “service centersâ€) reached 27% of the income in three years. The prospectus lists comparable average gross profit margins for the highest gross profit of the listed companies, which is 32%, while the ratio of sales personnel to income is only 2%. In short, the same is to sell 100 yuan of lamps, Qin Shangguang spent 68 on the cost, 2 dollars on the cost of sales staff; while Ocean King lighting only spent 30 on the cost, but gave The sales staff is 27 yuan as a sales reward! For the lamps, the cost of 68 yuan and the cost of 30 pieces are obviously very different. The sales incentive of 2 dollars and the sales incentive of 27 dollars are even more different! It seems that the ocean Wang Lighting's "selling ability to sell orders" is nothing more than a product based on a high-price, high-commission distortion system, and ultimately only those end customers who are blinded by sales. On the Internet, some netizens who claim to be employees of Ocean King Lighting have commented on this model. He believes that Ocean Wang’s business model is: “There is a bitterness under the rewardâ€, the sales staff’s high, sales expenses The proportion of sales, the ratio of cost of sales and material costs, is staggering. In short, the current reason why it can attract so many excellent sales people's hard work is largely due to their higher rewards. If the high rewards do not exist any day, then the sales force will be completely gone. . The above model can last for a long time? Some insiders believe that the high rewards of marine king sales personnel and even headquarters management personnel are derived from the high price of their products. According to the objective law of the market, the price of products will surely converge with the value trend. Objectively speaking, the achievements made by Ocean King are the result of the hard sales of many sales personnel. The company's products have requested high prices from customers, but far from providing matching customer value. A technology company without core technology is still targeting a limited professional lighting market. Once competitors imitate and dig their sales patterns, the company will no longer be able to maintain its previous high-speed growth model. Second sin: the contradiction of inventory/purchasing is difficult to explain In addition to the company's business model, there are many flaws in the prospectus. Is this a financial negligence, or is it another deep meaning? On the one hand, the reporter found that the company's inventory production and sales over the years have serious inconsistencies. According to the company's production and sales volume disclosed in the prospectus, it can be seen that the company has more production than sales in the past three years, so the end of the period will inevitably have product retention. Even if the inventory surplus before 2009 is not calculated, the results of three consecutive years of calculations show that the company's product retention sets have been increasing over the years. By the end of 2011, there were at least 97,560 sets of lighting equipment on the company's books, a slight increase compared to 2010, with the largest increase being fixed lighting. On the other hand, however, the company's finished goods inventory at the end of 2011 found a completely different trend. In the “Business Cost Analysis†section of the prospectus, the company listed the ending book balances of various finished products at the end of the three years. At the end of 2011, not only the overall inventory amount has decreased, but also the largest reduction in the amount of fixed lighting equipment! Why is the production and sales retained in the past years, and the average cost has increased year by year, the inventory value at the end of the year has declined. Disclosure and the final amount of finished products have contradictions. What is the company's explanation? In addition to the above problems in inventory production and sales, the company's light source procurement over the years is also a certain gap with the output of finished products. According to the number of purchases and proportions of the top five suppliers disclosed by the company, the number of light source parts purchased by the company in each of the three years is between 650,000 and 700,000 sets. However, the annual output of the company's lighting equipment has reached between 1 million and 1.2 million sets! According to common sense, a set of light sources can only produce a set of lighting equipment. Is it possible for the company to "sow beans into soldiers"? Disassemble the light source accessories for multiple use? From the perspective of the financial statements of the prospectus, the company's annual income has maintained steady growth. However, the reporter conducted in-depth research and found that in 2011, in order to achieve the performance "growth", the company's income is quite large. The company's revenue growth in 2011 has declined compared to 2010. The main source of income growth is the increase and decrease of receivables and advance receipts, and there is not much cash. In the end, the net profit for 2011 was 189 million, but the net cash flow from operations was only 158 million, and there was a huge difference of 31 million between performance and cash. Even so, the company's revenue growth is still not as good as other comparable listed companies. The fourth sin: the huge amount of money but the stock market The most unacceptable thing about Ocean King Lighting is that it is holding huge amounts of cash on one hand and paying dividends to major shareholders every year. On the other hand, it is asking for financing when it is crying. Especially at the current low stock market valuation, if the company really does not lack money, why should it rush to list the “selling equityâ€? If the company really lacks money, what is the purpose of the big dividends and the funds on the books in the past? According to the section on “Use of Raised Funds†in the prospectus, Ocean Wang Lighting intends to publicly issue 50 million shares of common stock, accounting for 12.5% ​​of the total share capital after the issuance, and plans to invest 550,410,100 yuan. However, according to the company's financial statements, as of the end of 2011, the company's book cash amounted to 346,283,300 yuan. In the past three years, the company has a total cash dividend of 240 million yuan. Book cash plus 3 years of historical dividends reached 586,283,300 yuan, more than 30 million yuan more than the proposed fundraising. However, it should be noted that since the actual controller of the company, Zhou Mingjie, holds 83.62% of the company's share capital, most of the historical dividends have fallen into the pockets of major shareholders. When you have money, you will give priority to major shareholders. When you have no money, you will come to the stock market to make money. Is this the company's so-called "protection of investor interests"? On the other hand, according to the company's prospectus of 50 million shares and the fundraising project budget of 550,410,100 yuan, the stock issuance price should be at least 11 levels. Based on the company's earnings per share of 0.543 yuan in 2011, the issue price-earnings ratio is 20.26 times. Still based on the comparable listed companies in the above four industries, according to the statistics of the straight flush iFind, among the Foshan Lighting, Snowlight, Sunshine Lighting and Qinshang Optoelectronics listed between 2000 and 2011, the highest P/E ratio is 2011. In November of this year, Qinshang Optoelectronics issued 55.81 times, the lowest is 28.44 times of Snowlight released in October 2006. Ocean King Lighting's price-earnings ratio is 20.26 times, which is obviously a lot cheaper. If the company's development prospects really show that it is so good, why does the company choose to "sell" the equity in such a downturn? The fifth sin: too many part-time jobs, even part-time competitors A normal listed company will inevitably need to establish a sound supervision system. The independent director system is an important supplement to protect the rights and interests of small and medium-sized shareholders and achieve corporate governance. However, what the reporter saw from the prospectus of Ocean King Lighting is that certain directors have certain flaws. They are not only part-time in a number of companies or even competitors, but also have a long-term worry. It is hard to be reassured. According to the prospectus of Ocean King Lighting, the company's board of directors consists of thirteen directors, including five independent directors. Since the beginning of this year, the independent directors who have been "unknown" in listed companies have become the focus of market doubts because of "only taking money and not serving" and "multiple part-time earning salaries". However, Ocean King Lighting has recruited two independent directors who are concurrently part-time in the competition: Chen Yansheng is currently an independent director in five companies, and Wang Jinxi is also working part-time in Ocean King Lighting and NVC Lighting. According to the data, Ocean King Lighting's independent director Chen Yansheng is currently the vice chairman and secretary general of China Lighting Association. In addition to his appointment at Ocean Wang Lighting, Chen Yansheng is also an independent director of four listed companies including Sunlight Lighting, Feile Audio, Qinshang Optoelectronics and Yuanfang Optoelectronics, and the main businesses of these four companies are also For lighting fixtures or for lighting. Another part-time independent director, Wang Jinxi, is currently an independent director at NVC Lighting. According to the data, Wang Jinxi was born in 1938 and is now 74 years old. According to the current regulations of the China Securities Regulatory Commission, no one can serve as an independent director of a listed company at the same time, which means that Chen Yansheng is a part-time job on the “red lineâ€. In addition, if there are independent directors who are part-time competitors at the same time, how can we guarantee the independence and confidentiality of independent directors? What is the significance of this arrangement of Ocean King Lighting? Sixth sin: fundraising projects are not reliable The company's fundraising project is mainly divided into three parts: an annual production capacity of 1 million sets of special environmental lighting equipment production lines (intended to invest 334,528,800 yuan), R&D center construction (intended investment of 14,481,800 yuan) and renovation and expansion of marketing centers around the country Investment of 69,774,500 yuan). First of all, for this Ocean King lighting expansion production line project, adding 1 million sets of capacity per year is an extremely aggressive plan. In terms of the highest revenue in 2011, the company reluctantly achieved sales of 1.23 million sets of lighting equipment by boosting the increase in accounts receivable in the same year, compared with an increase of about 55,000 sets in 2010. The company's corresponding capacity utilization rate in 1994 was 94.24%, which did not reach full production. According to the newly added capacity of 1 million, this part of the capacity digestion is expected to be at least 10 years. Even in accordance with the optimistic forecast of the “2011-2013 market size compound annual growth rate of 20.84%†given in the prospectus, the company’s 2011 revenue growth rate is only 11%, obviously less than the above forecast; The prospectus also acknowledges that major domestic lighting companies such as NVC have stepped into the industry and expanded their scale and market share through various competitive strategies. At the same time, internationally renowned companies such as Philips, Cooper, Osram, and GE Lighting have gradually increased their investment in the Chinese market, and have taken the development of the domestic high-end special environmental lighting market as their development goal. Therefore, the future market competition of the special environmental lighting industry will become increasingly fierce. Not to mention the main customer groups of Ocean King Lighting: Metallurgy, petrochemical, coal and other industries have suffered losses in the context of this year's economic downturn, which will inevitably reduce investment and reduce procurement costs. Whether the company's high-priced lighting equipment can maintain its sales growth is hard to predict. As for the construction of the second R&D center, it can be seen from its budget arrangement that the construction focus is obviously not related to “R&Dâ€. According to the company's disclosed investment details, the total investment budget of 144,183,800 yuan, the budget for purchasing research and development equipment is only 8.75 million, accounting for only 6%. Of the remaining budget, construction projects, price increases and bottom-up funds accounted for 59%. Is the company to expand its research and development capabilities or to build a building? Ocean King Lighting’s “Building Building Enthusiasm†is even more impressive in the third “Marketing Center Expansion and Renovation†project. Because the project's investment of RMB 69,774,500 is “to set up a marketing headquarters and three functional centers in the company. The lighting engineering company is responsible for setting up six secondary marketing service organizations in Beijing, Chengdu, Shenyang, Shanghai, Jinan and Zhengzhou. A secondary marketing service agency needs about 2,500 square meters of space ("Prospectus"), and also rents "intermediate office buildings in urban areas." Excuse me, has the company not carried out marketing activities in the above areas before? Is the income growth in the history of the company achieved through the construction of magnificent marketing centers and offices? If the income cannot grow, how will you be? Is it hard to earn the hard-earned investment of investors? Lithium Battery Charger can charge 3.7V LiPo battery at a rate of 500mA,1000mA, 1500mA or 2000mA per hour. It is designed to charge single-cell Li-Ion battery or battery packs Li-Polymer batteries. The charger board incorporates a charging circuit, status LED with changetable color to let you know when battery is full. Please double check the data sheet when you need to buy a battery charger . 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The third sin: the year-end performance is large
Judging from the advance receipts and important contract disclosures of Ocean King Lighting, the business outlook for 2012 is not optimistic. First, at the end of 2011, the company's advance receipts were the lowest in the past three years, indicating that its future identifiable income is not large; secondly, even in the case of the “significant sales contract†disclosed by the company, it has not been implemented at the end of the year. The signing time of major contracts was mainly concentrated in the first and second quarters of last year. In other words, the contracts signed in the second half of the year did not seem to be too many, and there is still doubt about how much the amount is due to be implemented in 2012. Even so, the total amount of the above-mentioned "significant sales contract" is more than 18 million yuan, which is less than 1.5% of the 2011 revenue. Even if it is all implemented in 2012, it can only be said to be a drop in the bucket.
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January 24, 2020