Rongqi Technology's performance growth rate has fluctuated greatly in recent years, with a high proportion of single products and a high concentration of downstream industries. In addition, the company also has a great dependence on the Apple industry chain, and its operating performance also fluctuates seasonally.
On June 17, 2022, Rongqi Industrial Technology (Suzhou) Co., Ltd. (hereinafter referred to as Rongqi Technology) will pass the Shenzhen Stock Exchange GEM . On September 2, the company has submitted its registration.
prospectus shows that Rongqi Technology issued 13.34 million shares in this public offering, accounting for 25.01% of the total share capital after issuance. It is estimated that 292 million yuan will be raised, of which 232 million yuan will be used for the smart measurement and control equipment R&D and manufacturing center project and the supplementary working capital of 60 million yuan.
flipped through the prospectus and found that Rongqi Technology's performance growth rate has fluctuated greatly in recent years, with a high proportion of single products and a high concentration of downstream industries. In addition, the company also has a great dependence on the Apple industry chain, and its operating performance has also fluctuated seasonally. Regarding the above situation, the Discovery Network sent an interview letter to Rongqi Technology for public email requesting to resolve the doubts. As of press time, Rongqi Technology did not give a reasonable explanation.
Single product accounts for a high proportion. The downstream industry is highly concentrated.
Public information shows that Rongqi Technology is mainly engaged in the research and development, design, production, sales and technical services of intelligent equipment, focusing on providing independent research and development of intelligent inspection and assembly equipment for inspection and assembly processes in intelligent manufacturing.
In recent years, Rongqi Technology's revenue and net profit growth rate has fluctuated significantly. From 2019 to 2021, Rongqi Technology achieved revenue of RMB 102 million, RMB 243 million and RMB 291 million, respectively, with year-on-year growth rates of 14.40%, 137.80% and 19.77% respectively; net profit attributable to shareholders during the same period was RMB 23 million, RMB 45 million and RMB 57 million, respectively, with year-on-year growth rates of -5.72%, 98.33% and 27.35%, respectively.
Source: Wind (Rongqi Technology)
At present, Rongqi Technology has formed a main business pattern with intelligent equipment as the main and fixtures and accessories as the auxiliary. Among them, intelligent equipment can be further divided into intelligent detection equipment and intelligent assembly equipment according to its functional attributes.
From 2019 to 2021, Rongqi Technology's intelligent equipment achieved revenue of RMB 79 million, RMB 191 million and RMB 244 million, respectively, accounting for 77.43%, 86.40% and 84.06% of the main business revenue, respectively; among which, intelligent detection equipment achieved revenue of RMB 55 million, RMB 187 million and RMB 233 million, respectively, accounting for 54.06%, 84.49% and 80.19% of the main business revenue, respectively. Obviously, Rongqi Technology has a high dependence on intelligent testing equipment.
Source: Prospectus (Rongqi Technology)
At present, the above-mentioned downstream application products of Rongqi Technology are mainly concentrated in the consumer electronics industry. During the same period, the company's sales revenue used in the consumer electronics industry was RMB 97 million, RMB 220 million and RMB 263 million, respectively, accounting for 95.31%, 99.26% and 90.68% of the main business revenue, respectively, which is the main source of the company's main business revenue.
Source: Prospectus (Rongqi Technology)
Industry insiders pointed out that Rongqi Technology's single product intelligent equipment accounts for a high proportion, and the product field is also highly concentrated in the consumer electronics industry. In the future, if the consumer electronics industry declines in prosperity, the industry's fixed asset investment decreases, downstream investment slows down or other demand decreases, it will have an adverse impact on Rongqi Technology's operating performance.
is relatively dependent on the Apple industry chain
From 2019 to 2021, Rongqi Technology's sales revenue to the top five customers was RMB 74 million, RMB 183 million and RMB 174 million, respectively, accounting for 72.93%, 82.73% and 59.85% of the main business revenue, respectively. Among them, Luxshare Precision has always been the largest customer, and the proportion of the company's sales to it accounts for 30.78%, 39.16% and 23.06% of its main business revenue, respectively.
Source: Prospectus (Rongqi Technology)
In the prospectus, Rongqi Technology stated that the company's customers are relatively concentrated, mainly because the company's main products or services are not directly targeted to consumers as final consumer goods, but are used as intermediate products or services to downstream consumer electronic manufacturers and consumer electronic brands. Therefore, the company's main customers are Apple, Amazon and its related major EMS manufacturers.
Further, Apple's terminal products are gradually introducing wireless charging modules on a large scale, which has prompted the rapid increase in demand for wireless charging detection equipment in Rongqi Technology, and the company's corresponding orders from Apple have increased significantly.
From 2019 to 2021, Rongqi Technology's direct or indirect sales to Apple were RMB 53 million, RMB 204 million and RMB 230 million, respectively, accounting for 52.11%, 91.85% and 79.44% of its main business revenue, respectively.
Source: Prospectus (Rongqi Technology)
As the depth and breadth of Rongqi Technology's cooperation with Apple continue to expand, the company has the risk of relying on the Apple industry chain. For example, in the future, Rongqi Technology will not be able to maintain its advantages among the smart equipment manufacturers in the Apple industry chain, and will not be able to continue to maintain its cooperative relationship with Apple, or the decline in Apple's product market demand will have a significant impact on the company's operating performance.
In addition, Rongqi Technology is located in the field of customized intelligent equipment, and the production and delivery cycle is relatively long. Company customers often focus on the second half of the year for final acceptance. In addition, smart equipment suppliers generally adopt the revenue confirmation method of confirming product sales revenue only after the customer's final acceptance is qualified, resulting in the main business income of Rongqi Technology showing obvious seasonal fluctuations.
From 2019 to 2021, Rongqi Technology achieved revenues of RMB 70 million, RMB 210 million and RMB 199 million respectively in the second half of the year, accounting for 68.99%, 94.88% and 68.73% of the main business revenue, respectively.
Source: Prospectus (Rongqi Technology)
In this regard, Rongqi Technology also issued a risk warning in the prospectus, "The company's main business income shows obvious seasonal fluctuations, and the relevant period expenses occur relatively balancedly within the year. Therefore, it may cause the company to suffer seasonal losses or low profits in the first quarter, semi-annual or third quarter, and the company's operating performance has a risk of seasonal fluctuations."
, correspondingly, is the size of accounts receivable that Rongqi Technology cannot be underestimated. From 2019 to 2021, the book value of of Rongqi Technology's accounts receivable was 32.7972 million yuan, 75.1273 million yuan and 96.9503 million yuan, respectively; the turnover rate of accounts receivable was 3.88, 4.27 and 3.21, respectively.
Source: Prospectus (Rongqi Technology)
(Reporter Luo Xuefeng Financial Researcher Chen Kangli)
