Beijing Yuxin Technology Group Co., Ltd. (referred to as Yuxin Technology), which has not officially received IPO approval after one and a half months, has doubts about its continued profitability.
A reporter from the Changjiang Business Daily found that from 2014 to June 2017 (reporting period), the company achieved a total net profit of 282 million yuan, and government subsidies and tax incentives totaled 204 million yuan, accounting for more than 70%. At the same time, in 2016, the company's net profit soared unexpectedly, and in the first half of 2017, it suddenly lost more than 10 million. During this period, many of the company's subsidiaries were in the red.
Compared with comparable listed companies in the same industry, the company's most prominent feature is its high debt ratio and obviously weak solvency, which shows the company's urgency to expand financing channels through listing.
It is worth noting that profitability is unstable, and the company's business entertainment is very "eye-catching". During the reporting period, the company's business entertainment expenses averaged 20 million yuan per year. In addition, as an IT company, the company faces frequent lawsuits due to infringement.
Yuxin Technology is one of the largest banking IT solution providers in China. It has been listed on the US stock market as early as 2004. Since 2012, the company has been privatized and delisted. It completed the share reform in 2015 and applied to the Securities Regulatory Commission in 2016. Issuance of A shares.
At present, Yuxin Technology’s road to listing is more tortuous. The company had arranged two meetings, but the vote was postponed and the review was canceled on the eve of the meeting. It was not until the third meeting on July 17 this year that it barely passed.
Last week, in response to the above issues, a reporter from the Changjiang Business Daily sent an interview letter to Yuxin Technology, but as of the time of publication, no specific reply had been received.
The profitability of the main business is weak, and the net profit relies on tax incentives and subsidies.
The profitability of the main business is weak, which is the main reason why the market has widely questioned the sustainability of Yuxin Technology.
is a well-known bank IT solution provider. Up to now, the company has provided services to the People's Bank of China, three major policy banks, five major state-owned commercial banks, 13 joint-stock banks, more than ten foreign banks, and more than 100 regional commercial banks. and rural credit cooperatives provide related products and services.
However, the company's performance is not outstanding. During the reporting period, the company achieved operating income of 1.434 billion yuan, 1.502 billion yuan, 1.623 billion yuan, and 518 million yuan, and net profits during the same period were 43.9494 million yuan, 74.0493 million yuan, 177 million yuan, and -13.2925 million yuan respectively. Operating income has grown steadily, and net profit has increased dramatically in 2016, with a year-on-year increase of 1.39 times. However, in the first half of 2017, it suffered a loss of more than 10 million yuan.
Significant changes in net profit are closely related to the companynon-recurring gains and losses. During the reporting period, its non-recurring profits and losses were -63.9112 million yuan, -34.7316 million yuan, 36.7602 million yuan, and 10.8714 million yuan respectively.
company explained that non-recurring profits and losses were negative in 2014 and 2015, mainly due to share-based payment.
Excluding non-recurring gains and losses, the net profit data are 108 million yuan, 109 million yuan, 140 million yuan, and -24 million yuan.
What deserves special attention is that the role of government subsidies and tax incentives in the above-mentioned net profits is immeasurable. During the reporting period, the company received government subsidies of 6.8057 million yuan, 7.1052 million yuan, 21.1926 million yuan, and 6.2069 million yuan, accounting for 15.49%, 9.60%, 11.97%, and -46.69% of the net profit respectively. The tax incentives during the same period were 49.4506 million yuan, 65.5502 million yuan, 52.5232 million yuan, and 1.7122 million yuan respectively, accounting for 112.52%, 88.52%, 29.66%, and -12.92% of the current net profit, accounting for 45.85% of the net profit after deducting non-recurring gains and losses. %, 60.26%, 37.43%, -7.11%.
Overall, during the reporting period, the company achieved a total net profit of 282 million yuan, deducting non-net profits of 333 million yuan, while tax incentives and government subsidies totaled 204 million yuan. From this calculation, tax incentives and government subsidies accounted for 72.34% of net profit and 61.26% of non-net profit.
is not very profitable, but the company spends a lot of money on expenses, the most prominent of which is business entertainment expenses. During the reporting period, its entertainment expenses were 16.9735 million yuan, 20.0585 million yuan, 19.9035 million yuan, and 9.0652 million yuan respectively. The average annual entertainment expenses were close to 20 million yuan.
Changjiang Business News inquired about dozens of IPO companies and listed companies. Most companies’ entertainment expenses are around several million yuan, and those exceeding 10 million yuan are extremely rare. However, Yuxin Technology’s business entertainment expenses are extremely high, and the company did not explain this.
The assets are complex and difficult to coordinate, and related transactions with China CITIC Bank are alleged to be abnormal.
Yuxin Technology’s poor profitability is closely related to factors such as poor management of most of its subsidiaries and difficulty in coordinating assets. The
prospectus shows that Yuxin Technology has 15 wholly-owned subsidiaries. Except for one that was only established in 2017 and has no operating data, 11 of the remaining 14 have unsatisfactory operating performance. Among them, Tianjin Yuxin’s net profit gradually declined. Guangzhou Yuxin's net profits in 2015 and 2016 were -646,500 yuan and -5.0293 million yuan respectively, and it continued to suffer losses.
The operating performance of the Yuxin Technology Holdings subsidiary is also not good. Yuxin Yicheng's net profits from 2015 to the first half of 2017 were 4.7142 million yuan, -7.7483 million yuan, and -3.9408 million yuan respectively, turning from profit to loss. Yuxin Data suffered losses of 9.2589 million yuan, 9.4188 million yuan, and 4.0972 million yuan respectively from 2015 to the first half of 2017. Overall, among the 11 holding subsidiaries, in the first half of 2017, except for not operating normally, 8 of the 10 suffered losses. Among the 09 joint-stock companies of
html, 6 suffered losses in the first half of 2017. What is noteworthy aboutis its wholly-owned company Yuxin Hongtai, which is shown as having "no actual business operations", but its net profits from 2015 to the first half of 2017 were 6.5846 million yuan, 6.5957 million yuan, and 7.8656 million yuan. The company did not disclose where it came from.
A reporter from the Changjiang Business Daily noticed that Yuxin Technology Holdings holds shares in 35 companies, involving computer software, hardware and technology development and promotion, technical training and consulting services, corporate credit reporting, asset management and investment, consumer credit and many other fields. These business areas are relatively scattered and difficult to achieve business coordination.
In the prospectus, Yuxin Technology did not explain the reasons for its involvement in these fields through controlling shares in the above-mentioned companies, including the company's own industrial planning and the reasons for most of the losses of the controlling subsidiaries.
In addition, the company's related-party transactions are relatively frequent, among which the related-party transactions with China CITIC Bank are alleged to be abnormal.
Chang Zhengong, the former director of Yuxin Technology, and Chang Zhenming, the former chairman of China CITIC Bank, are brothers. Chang Zhengong served as the director of the company from April 1, 2014 to July 15, 2015, and Chang Zhenming served as the director of CITIC during that period. Bank Director.
During the reporting period, China CITIC Bank has been the company's largest customer for a long time. The income from China CITIC Bank was 418 million yuan, 327 million yuan, 308 million yuan, and 51 million yuan respectively, accounting for 29.16% and 21.77% of the current operating income. , 18.96%, 9.90%.
In 2013, before Chang Zhengong became a director, the company’s sales revenue to China CITIC Bank was 264 million yuan. In July 2016, Chang Zhenming's position changed. In the first half of 2017, the transaction amount between Yuxin Technology and China CITIC Bank shrank to 51 million yuan.
is plagued by infringement lawsuits, and its debt repayment ability is significantly lower than that of its peers.
The high debt repayment pressure is also a real problem that Yuxin Technology needs to face.
As of June 30, 2017, Yuxin Technology's asset-liability ratio was 51.51%, current ratio , and quick ratio were 1.34 times and 0.79 times respectively. During the same period, the average asset-liability ratio, current ratio, and quick ratio of comparable companies in the same industry were 3.23 times, 2.84 times, and 35.51%. Data shows that the company's solvency is significantly lower than that of comparable companies in the same industry, and the company is under great debt repayment pressure.
In addition, in the first half of 2017, despite a sharp decline in profits, accounts receivable and inventories rose sharply, while monetary funds plummeted. As of June 30, 2017, the company's monetary funds dropped sharply from 620 million yuan at the beginning of the year to 231 million yuan, a decrease of 390 million yuan. Accounts receivable increased from 409 million yuan to 526 million yuan, and inventory increased from 355 million yuan to 514 million yuan. Of the current assets of 1.341 billion yuan, accounts receivable and inventory accounted for 77.55%. The company's current liabilities are 998 million yuan, of which short-term borrowings are 554 million yuan. These data are also enough to show that Yuxin Technology’s funds are extremely tight. While
's financial situation is in poor condition, the company has faced many lawsuits due to infringement. The prospectus of
disclosed that in October 2012, Zhuhai Approval Technology sued Bank of Qingdao, Zhejiang Yuxin Bank and Yuxin Technology for infringement of computer software copyright, requesting an immediate stop to the infringement and destruction of all infringing software and documents, and an apology and joint compensation. The economic loss was 5 million yuan. In the end, after destroying relevant documents, Zhejiang Yuxin Bank and Yuxin Technology jointly compensated 500,000 yuan.
In 2016, Yuxin Technology was sued by Peking University Founder for infringement, demanding compensation of 120,000 yuan. After mediation by the Beijing Copyright Mediation Center, the company had to sign an agreement with Peking University Founder to pay for the use of the other party's two Founder fonts.
In June 2017, Guangxi Yufeng Xinhe Rural Bank sued Yuxin Technology over a technology entrustment development contract, requesting the court to award damages of 475,700 yuan and attorney fees of 30,000 yuan. After several twists and turns, the case has not yet been concluded.
In addition, in November 2014, the company sued 3iInfotech Limited as a plaintiff, requiring the other party to pay a software usage fee of 1.4048 million yuan. Although the company won the lawsuit, 3i Company had no property available for execution.
(Editor: Li Yue)
