Author: Wang Binggen
Source: Stock Market Dynamic Analysis
In April 2020, Anhui Yingli Electronics Technology Co., Ltd. Yingli Electronics released a prospectus, intending to issue 33 million shares on the GEM, raising about 530 million yuan to be used to build PC precision structural parts, laptop structural parts, and R&D centers. The main major customers include Lianbao Electronic Technology, Renbao Group, Wistron Group , Suzhou Fengchuan Electronic Technology, etc.
"Stock Market Dynamic Analysis" After in-depth investigation, it was found that Yingli Electronics has falsely exaggerated its revenue scale and extremely abundant cash flow. The total external financing in the past two years has easily obtained about 550 million yuan, but it has not hesitated to dilute the equity listing to raise 530 million yuan, beautify its net profit margin and conceal its real interest-bearing liabilities, thereby achieving the listing standards chosen by Yingli Electronics.
Revenue recognition is extremely radical
In the only three reporting periods, the data indicators of Yingli Electronics' accounts receivable accounted for more than 44% of the operating income in the same period, indicating that nearly half of Yingli Electronics' annual operating income did not generate actual cash inflows in balance sheet . The two peers listed in the prospectus are comparable to those of Yingli Electronics, which are all far lower than Yingli Electronics and within a reasonable range. Therefore, the continued high accounts receivable of Yingli Electronics is not caused by industry characteristics.
According to the prospectus of Jihua Group in 2017, the receipts required to obtain in advance include: customer receipt, customs export goods declaration form , and submission of customer's bill of lading. In contrast, there are loopholes in Yingli Electronics' revenue recognition policy. The time point for domestic sales revenue is only after the customer's "acceptance" rather than "sign-up", and no relevant acceptance certificates were obtained; in terms of export, Yingli Electronics only transports the goods to the customer's designated location and confirms the income after receiving the materials, and Jihua Group is to confirm the income after obtaining the customs export goods report form and the bill of lading. Therefore, there is a big difference in the recognition income policy of Yingli Electronics and comparable Yingli Electronics in the same industry, which is why its accounts receivable account for almost half of its operating income during the same period. By adopting an overly radical and unreasonable accounting income recognition policy, the scale of Yinli Electronics' operating income reaches the passing standard, and the operating income may be over-examination.
cash flow is extremely abundant but it is not hesitant to dilute the equity listing fundraising
yingyi In the three reporting periods of 2017, 2018 and 2019, after excluding the fixed asset capital expenditure, dividend distribution and interest repayment required annually, the proportion of the net cash flow generated by operating activities is significantly more than 100% each year. The total value of this indicator in the three years is about 3.6 times the net cash flow generated by operating activities, which proves that Yingli Electronics currently does not lack liquid funds available for fixed asset investment. Inele Electronics' cash flow is actually extremely abundant and its financing channels are unrestricted, which is enough to cover the capital expenditure needs in the next nearly four years while maintaining the same fixed asset capital. Why did Yingli Electronics need to dilute the equity of major shareholders to raise only 530 million yuan in the past three years with sufficient cash flow and easy external financing of 830 million yuan? This is unless Yingli Electronics has a serious debt crisis and liquidity risk.
The authenticity of financial data needs to be tested
According to the above table, only about 50% of the operating income cash flow actually entered the balance sheet. It can be seen in the cash table that Yingli Electronics has supplemented liquidity with an external financing of about three times the net cash flow generated by the same period of operating activities for three consecutive years. This fully proves that Yingli Electronics may have used excessive accounting treatment methods to inflated the operating income scale. The net income ratio was only 8% and 61% in 2017 and 2018, respectively, but this figure reached 112% in 2019, which has a significant connection with Inele Electronics' suppliers and major customers, indicating that Inele Electronics may have artificially adjusted accounts receivable and accounts payable, thereby achieving the purpose of manipulating the cash statement.In addition, in 2019, the cash paid by Yingli Electronics on the debt repayment side was twice the previous short-term loan, and 2.5 times in 2018. The actual interest rate increased from 6% to 8% also reflects the artificial reduction of Yingli Electronics on the debt side. With a high leverage ratio of about 2.3 times, if there is a large amount of payment for receivables in the future, Yingli Electronics' debt repayment risk may have serious liquidity problems.
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