On September 27, Zhejiang Child Care Ergonomics Technology Co., Ltd. disclosed its prospectus and planned to be listed on the GEM, becoming the “first stock of children’s learning desks and chairs”. However, Child Care Technology is also currently facing sluggish performance grow

html On September 27, Zhejiang Child Care Ergonomics Technology Co., Ltd. (hereinafter referred to as " Child Care Technology ") disclosed its prospectus and planned to be listed on the GEM and hit the "first stock of children's learning desks and chairs".

Child Care Technology was established in 2015. Its main business is easy-lift, multi-functional children's learning tables and chairs. Red Star Capital Bureau noticed that Child Care Technology focuses on the mid-to-high-end market. The price of a set of study desks and chairs exceeds 2,000 yuan, and about 200,000 sets can be sold every year, accounting for more than 50% of the mid-to-high-end market.

However, Child Care Technology is also currently facing sluggish performance growth, declining production capacity utilization but the need to raise funds to expand production, and large dividends before the IPO. It is still unclear whether this IPO can be successful.

Child Protection Technology Photo IC photo

A set of tables and chairs sells for more than 2,000 yuan, and 200,000 sets are sold every year.

However, the products have been repeatedly complained about.

Child Protection Technology owns two major brands: " Child Protection " and "Xiangxue". The main products include study tables, study chairs, eye protection desk lamps and spine protection school bags, etc. Among them, the company's main business revenue is mainly from the "child care" brand, accounting for more than 98%.

With the development of the times, children's health has received more and more attention, and parents' demand for high-quality, safe and functional children's learning tables and chairs has become stronger and stronger. According to iResearch data, the domestic market size of children's learning tables and chairs in 2019 was 6.71 billion yuan, and will continue to maintain a rapid growth rate in the next few years. The market size is expected to exceed 20 billion yuan in 2024.

From the perspective of industry competition, the high-end market concentration in the industry is high and the head effect is obvious. According to iResearch's calculations, the market share of the top five companies in children's learning desks and chairs with a retail price of more than 3,000 yuan/set in 2019 reached 97.60%, of which the market share of child protection technology was 53.30%. The prospectus of

shows that a set of study desks and chairs owned by Hutong Technology has a unit price of more than 2,000 yuan and can sell about 200,000 sets every year.

Red Star Capital Bureau inquired about the Tmall flagship store for child care and found that there are many high-end products priced at more than 6,000 yuan per set, or even close to 100 million per set. For example, this table and chair set, which is billed as "solid wood, electric lift, and antibacterial," has a price tag of about 12,000 yuan per set, starting from 9,060 yuan after coupons.

However, under the aura of high-end, Child Protection Technology's products have been repeatedly complained about due to quality and service issues. Under the above-mentioned solid wood table and chair product, there are consumer reviews saying that after buying a table and chair worth RMB 8,000 to 9,000 yuan, the table and chair cannot automatically move up and down after being installed, the size is wrong, they have to be changed back and forth, and less stuff is sent, and the customer service is also perfunctory, calling After-sales customer service complaints are useless.

Some consumers complained on social media that a children’s study desk and chair worth more than 7,000 yuan, which had just been used for 5 years, broke after elementary school and almost injured the child; another netizen said in June 2020, The child care table and chair I bought during Double Eleven in 2019 had broken joints and slag, and the sales efficiency was extremely poor.

Performance growth is sluggish

Capacity utilization has dropped, but it still needs to raise funds to expand production

Generally speaking, Child Care Technology has good earning power. The

prospectus shows that from 2018 to 2020 (reporting period), the revenue of Child Care Technology was 433 million yuan, 551 million yuan, and 547 million yuan respectively, and the net profits during the same period were 60.0538 million yuan, 87.2751 million yuan, and 66.0116 million yuan respectively. . Among them, the main business income of Child Protection Technology is mainly study desks and study chairs, and the total revenue of these two types of products accounts for nearly 90%.

During the reporting period, Child Protection Technology mainly achieved sales through a distribution model. During the reporting period, the sales revenue of Child Care Technology was 303 million yuan, 392 million yuan, and 398 million yuan respectively, accounting for 72.27%, 73.53%, and 75.98% of the current main business revenue respectively.

However, the performance growth of child protection technology has gradually shown signs of weakness. Childcare Technology's operating income and net profit both experienced negative growth in 2020, with the year-on-year decline in net profit reaching 24%.

Regarding the reasons for the double decline in revenue and net profit in 2020, Childcare Technology did not explain in the prospectus. However, according to the prospectus, in 2020, the growth rate of domestic sales revenue of Childcare Technology slowed down significantly: sales revenue under the distribution model was almost the same as the previous year, and online and offline direct sales revenue even experienced negative growth. This may be the main reason for the company's decline in performance.

In addition, the gross profit margin of Childcare Technology’s main business continued to decline during the reporting period, from 49.24% in 2018 to 43.09% from January to June 2021. Among them, learning chairs have the highest gross profit margin, which was 54.62%, 57.51%, 53.63% and 50.85% respectively from January to June 2018. The overall profit margin is also showing a downward trend. The prospectus of

Child Care Technology believes that the gross profit margin of the main business continued to decline during the reporting period, mainly affected by changes in sales product structure, changes in the focus of sales channels and other factors. In the future, if there is an increase in the proportion of revenue from low-gross profit products, distribution If the proportion of model sales revenue further increases, there is a risk of further decline in gross profit margin.

It is worth mentioning that from 2018 to the first half of 2021, the capacity utilization rates of child protection technology study tables were 103.36%, 98.53%, 83.34% and 72.46% respectively, showing a continuous downward trend. As of the end of 2020, the annual production capacity of study tables and study chairs, the main products of Child Care Technology, is as high as 265,900 pieces and 240,700 pieces respectively.

In this IPO, Child Protection Technology plans to raise 570 million yuan, of which 447 million yuan will be invested in the "annual output of 350,000 sets of green smart furniture production line projects", accounting for 78% of the total investment amount. Even though the production capacity of Baby Care Technology is not saturated and continues to decline, it still needs to raise funds to expand production. To a certain extent, there is a risk that it cannot effectively absorb the new production capacity.

A sudden large sum of dividends was distributed before the IPO.

9% fell into the pockets of the actual controllers and the couple.

Child Protection Technology is a typical mom-and-pop store. As of the signing date of the prospectus, Yang Runqiang and Bai Yanzhen directly and indirectly controlled 93.69% of the shares and corresponding voting rights of Child Protection Technology. On the eve of

's IPO, in the first half of 2021, Childcare Technology conducted a cash dividend of 41.4 million yuan, accounting for 63% of its 2020 net profit. Calculated based on the shareholding ratio of shareholders, Yang Runqiang and Bai Yanzhen received a total of 38.78 million yuan.

What’s interesting is that while Front Foot is paying dividends, Back Foot Protective Technology plans to use 50 million of the raised funds to supplement working capital. This also makes child protection technology questionable.

According to the prospectus, CITIC Securities , the sponsor of Child Protection Technology, , engaged in the behavior of “investing first and then insuring” it.

In May 2020, when Child Care Co., Ltd. made its fifth capital increase, CITIC Securities Investment Co., Ltd. (hereinafter referred to as " CSI Investment") increased capital by 43.197 million yuan to Child Care Co., Ltd. with monetary funds, of which 5.485 million yuan was included in the registration capital. Tianyan check shows that CSI Investment is 100% owned by CITIC Securities. As of the signing date of the prospectus, CSI Investment held a total of 10.4318 million shares of Child Protection Technology, accounting for 2.90% of its total share capital, making it the sixth largest shareholder of Child Protection Technology.

Child Protection Technology is currently facing sluggish performance growth, declining production capacity utilization but the need to raise funds to expand production, and large dividends before the IPO. It is still unclear whether this IPO can be successful. Red Star Capital Bureau will also continue to pay attention to its IPO process.

Red Star News reporter Yu Yao Yu Dongmei

editor Yang Cheng

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