Loss of multiple orders! Sichuan Jinshi Technology Co.Ltd(002951) , suffering from “big customer dependence”, was abandoned by the largest customer again.
On March 29, Sichuan Jinshi Technology Co.Ltd(002951) said that the subsidiary failed to win the bid for Hunan China tobacco related projects, and the products related to the above bid sections were all products supplied by the company in 2021, accounting for about 52% of the company’s total revenue in the first three quarters of 2021, which will have a significant adverse impact on the company’s performance.
multiple projects failed to win the bid
Sichuan Jinshi Technology Co.Ltd(002951) performance should be cool
On March 29, Sichuan Jinshi Technology Co.Ltd(002951) announced that, Jinshi printing, a wholly-owned subsidiary of the company, recently participated in the bidding of project 7, project 9, project 13 and project 14 of Hunan China Tobacco Industry Co., Ltd. (hereinafter referred to as “Hunan China Tobacco”) cigarette box and strip packaging paper procurement and service project (April 2022 June 2024). However, according to the publicity of Hunan China Tobacco’s bid winning candidates, Jinshi printing is not included in the list of bid winning candidates.
Sichuan Jinshi Technology Co.Ltd(002951) said that the failure to win the bid will have a significant adverse impact on the company’s future operating performance. The products related to the above bid sections are the products supplied by the company in 2021, accounting for 8.39%, 1.81%, 26.48% and 14.85% of the total revenue in the consolidated statements of the company in the first three quarters of 2021, with a total of about 51.53%.
In view of the above situation, Sichuan Jinshi Technology Co.Ltd(002951) said that the company would optimize the production structure, achieve energy conservation and efficiency, and enhance the company’s market competitiveness; Optimize product structure and actively expand product categories; Continue to promote the diversified development of the company and enhance the sustainable development ability of the company.
Sichuan Jinshi Technology Co.Ltd(002951) has been “abandoned” by key customers for many times
According to the data, Sichuan Jinshi Technology Co.Ltd(002951) is an enterprise mainly engaged in the research, development and production of cigarette labels and other packaging and printing products. The main packaging and printing products are cigarette labels. It is a supporting packaging product for cigarette consumer goods, with the functions of anti-counterfeiting trademark, appearance image, packaging protection and so on. It specializes in serving large tobacco enterprise groups and providing supporting cigarette label products for their high-grade cigarettes.
However, it is worth noting that Sichuan Jinshi Technology Co.Ltd(002951) has been “abandoned” by major customers in recent years.
On March 15, 2021, Sichuan Jinshi Technology Co.Ltd(002951) said that Jinshi printing, a wholly-owned subsidiary of the company, participated in the bidding of bid sections I and II of Hunan China cigarette box and strip packaging paper procurement and service project I (March 2021 to June 2022) and bid section I of Hunan China cigarette box and strip packaging paper procurement and service project III (March 2021 to June 2022). The announcement of Hunan Zhongyan’s bid winning results shows that Jinshi printing is not in the final bid winning list of two bid sections of project 1 and bid section 1 of project 3.
In the first three quarters of 2020, the products under supply in the above bid sections accounted for about 46% of the total revenue in the company’s consolidated statements and about 46% of the total gross profit. Hunan Zhongyan is currently the company’s largest customer. The final failure to win the bid will have a significant adverse impact on the company’s future business performance.
On April 29, 2021, Sichuan Jinshi Technology Co.Ltd(002951) said that Jinshi printing, a wholly-owned subsidiary of the company, participated in the bidding of Anhui Zhongyan 2021 cigarette strip and box packaging paper procurement project (bidding No.: gn2021030706). Recently, the printing business of Anhui Zhongyan’s bid winning candidates was not included in the list of proposed bid winning (candidate) units. In this bidding announcement, the relevant products under supply accounted for about 3% of the total revenue in the company’s consolidated statements and 3.5% of the total gross profit in 2020. If the bid is not won this time, it will have an adverse impact on the company’s future business performance.
On May 28, 2021, Sichuan Jinshi Technology Co.Ltd(002951) once again stated that Jinshi printing, a wholly-owned subsidiary of the company, participated in the bidding of Anhui Zhongyan 2021 cigarette strip and box packaging paper procurement project (bidding No.: gn2021030706). Finally, Jinshi Jinyin failed to win the bid for the project. Failure to win the bid this time will have an adverse impact on the company’s future operating performance. The company will actively respond and strive to reduce the impact.
Sichuan Jinshi Technology Co.Ltd(002951) suffering from “key customer dependence”
top 5 customers account for more than 95%
Sichuan Jinshi Technology Co.Ltd(002951) has serious “big customer dependence”. According to the 2020 annual report, during the reporting period, the sales of Sichuan Jinshi Technology Co.Ltd(002951) top five customers totaled 608 million yuan, accounting for 95.05% of the total annual sales, of which the sales to the first and second largest customers accounted for 62.98% and 24.13% of the total sales respectively.
Over a longer period of time, the company’s sales revenue to the top five customers accounted for 91.96%, 93.58%, 95.05% and 88.52% of the company’s operating revenue in 2018, 2019, 2020 and the first half of 2021.
This means that it will be disastrous for Sichuan Jinshi Technology Co.Ltd(002951) to be abandoned by major customers Hunan Zhongyan and Anhui Zhongyan.
At the same time, Sichuan Jinshi Technology Co.Ltd(002951) has also received regulatory attention because of its high customer concentration. Shenzhen Stock Exchange issued an inquiry letter to Sichuan Jinshi Technology Co.Ltd(002951) asking the company to explain in detail the reasons and rationality of high customer concentration, and whether the non shortlisted cigarette label project of important customers has an adverse impact on the company’s continuous cigarette label business.
Sichuan Jinshi Technology Co.Ltd(002951) replied that the high concentration of customers of the company was mainly due to the application of cigarette labels to cigarette production, the continuous integration of downstream tobacco production enterprises and the procurement system of tobacco materials, which determined that the customers of cigarette label printing enterprises were relatively concentrated and belonged to the common characteristics of the industry. The continuous integration of tobacco production enterprises and the sales mode dominated by bidding all make the customers of tobacco label production enterprises relatively concentrated.
Hunan production base project suddenly suspended
Sichuan Jinshi Technology Co.Ltd(002951) forced to switch to Shenzhen New Industries Biomedical Engineering Co.Ltd(300832)
Due to the frequent obstruction of the main business and the sudden suspension of the Hunan production base project with a total investment of 453 million yuan, Sichuan Jinshi Technology Co.Ltd(002951) had to turn around and find another way out.
On March 29, 2021, Sichuan Jinshi Technology Co.Ltd(002951) said that due to major changes in market conditions, in order to promote the steady development of the company, the company plans to change the business originally planned by Hunan Jinshi and no longer engage in cigarette label printing business.
Due to the possible change of the original planning business, it is necessary to carry out planning and demonstration according to the new business to be carried out, determine the decoration according to the new business to be carried out, even make partial adjustment to the original construction scheme, and perform the corresponding decision-making procedures. Therefore, at present, the construction of Hunan Jinshi project needs to be temporarily suspended for adjustment and slow down the pace of construction.
In view of the significant changes in the market situation, the company decided after careful evaluation that Hunan Jinshi would no longer engage in cigarette label printing business, and reformulated the adjustment plan for the raised investment project with feasibility and implementation benefits. Therefore, the construction of Hunan Jinshi project was temporarily suspended, and the pace of construction was adjusted and slowed down.
On September 18, 2021, in order to promote long-term development, cultivate and expand new industries, the company invested 25.5 million yuan to jointly invest and establish Shenzhen Jinshi Material Technology Co., Ltd. with Shenzhen Jingwei Chenxu consulting partnership (limited partnership).
It is worth mentioning that Sichuan Jinshi Technology Co.Ltd(002951) has been trading continuously since the concept of “super capacitor” was put into practice. On January 18, Sichuan Jinshi Technology Co.Ltd(002951) said that the super capacitor of the subsidiary Sichuan Jinshi Xinneng Technology Co., Ltd. was in the construction stage of the test base.
Previously, Sichuan Jinshi Technology Co.Ltd(002951) said on the interactive platform that Jinshi Xinneng would produce supercapacitors in the future. Supercapacitor is a new type of energy storage device between traditional capacitor and rechargeable battery. It not only has the characteristics of rapid charge and discharge of capacitor, but also has the energy storage characteristics of battery.
However, this change has not been effective for Sichuan Jinshi Technology Co.Ltd(002951) Sichuan Jinshi Technology Co.Ltd(002951) the performance forecast shows that the expected net profit in 2021 is about 52 million yuan to 57 million yuan, a year-on-year decrease of 69.87% ~ 72.51%.
As for the reasons for this performance change, Sichuan Jinshi Technology Co.Ltd(002951) frankly said that some companies failed to continue winning the bid for the products in supply, resulting in the decline of the company’s overall operating revenue. In addition, the company and its subsidiaries accrued an asset impairment loss of 334722 million yuan for relevant assets that may be impaired this year, which reduced the net profit attributable to shareholders of Listed Companies in 2021.
