Recently, according to the official website of Shenzhen Stock Exchange, the gem IPO of Tianjian Guangdong Brandmax Marketing Co.Ltd(300805) Co., Ltd. (hereinafter referred to as “Tianjian shares”) has been accepted, and the company plans to raise 600 million yuan. In terms of performance, from 2018 to 2020 and the first half of 2021, Tianjian shares achieved operating revenue of RMB 423 million, RMB 554 million, RMB 1256 million and RMB 657 million respectively, and the corresponding net profit attributable to the parent company was RMB 15.7963 million, RMB 8.2795 million, RMB 80.6023 million and RMB 63.602 million respectively.
From the data, the net profit of Tianjian shares in 2018 and 2019 is not high, and half of the company’s employees have not paid “five insurances and one fund” in both years. In this regard, the company explained: “during the reporting period, the company did not pay social insurance and housing provident fund for some employees because some employees were re employed after retirement, new employees in the current month, foreigners or voluntarily gave up payment.”
According to the prospectus (application draft) of Tianjian shares, the estimated amount of social insurance and housing provident fund to be paid by Tianjian shares in 2019 is 12.3515 million yuan, accounting for 283.99% of the total profits of the year. In other words, if half of the employees did not pay the “five insurances and one fund” in that year, the company might not be profitable.
Image Source: screenshot of prospectus (declaration draft)
Nearly half of the employees of have “voluntarily given up” five insurances and one fund in 2018 and 2019
Five insurances and one fund is the basic guarantee of the employing enterprise to the employees, and it is also the legal obligation that should be fulfilled. However, the reporter of daily economic news found that nearly half of Tianjian’s employees failed to pay “five insurances and one fund” in 2018 and 2019.
According to the prospectus (application draft), in 2018, the number of unpaid Tianjian shares’ pension, medical, unemployment, industrial injury, maternity and housing provident funds was 1111, 1019, 1019, 1019 and 1735 respectively, accounting for 52.04%, 47.73%, 47.73%, 47.73%, 47.73% and 81.26% respectively. Among them, 989, 958, 958, 958, 958 and 1674 people voluntarily gave up, accounting for 89%, 94%, 94%, 94% and 96% respectively.
In 2019, 1445, 1194, 1196, 1194, 1195 and 2290 people, accounting for 52.09%, 43.04%, 43.11%, 43.04%, 43.08% and 82.55% respectively, failed to pay the above “five insurances and one fund” of Tianjian shares. Among them, 1219, 1076, 1078, 1076, 1076 and 2167 gave up voluntarily, accounting for 84%, 90%, 90%, 90% and 95% respectively.
It is worth noting that in 2018 and 2019, the number of unpaid employees for the housing provident fund project was the largest, accounting for more than 80% of the overall employees
Image Source: screenshot of prospectus (application draft)
In fact, the estimated amount of social insurance and housing provident fund that Tianjian shares need to make up in 2018 and 2019 are RMB 10.7383 million and RMB 12.3515 million respectively, accounting for 76.64% and 283.99% of the total profits of the year, that is, if the supplementary social security is included, Tianjian shares may be in a state of loss in 2019.
In response, Tianjian shares replied to the reporter’s interview letter that during the reporting period, the company focused on the development of its main business, continued to expand its business scale and achieved steady growth in its business performance; The company deducted non net profit of 58 million yuan in 2020, while the net profit of 46.96 million yuan has been realized in the half year of 2021.
With regard to the history of social security and provident fund deposit, Tianjian replied that the actual controller of the company has made a commitment that if the company is retroactive, he will unconditionally and fully bear the relevant supplementary payment and punishment, the compensation or compensation of interested parties, and the relevant expenses paid by the company and its holding subsidiaries, Guarantee that the company and its holding subsidiaries will not suffer losses.
Coincidentally, the performance of Tianjian shares has developed well in the past two years, and the payment and deposit of the company’s social security and provident fund have been greatly improved. The reporter noted that by the end of June 2021, the proportion of unpaid social security (endowment insurance) among the company’s employees was only 1.81%, while the proportion of unpaid housing provident fund was 1.62%.
lawyer: Tianjian shares need to be paid back for employees
In order to further understand the situation, the reporter of daily economic news recently visited the subsidiary of Tianjian Co., Ltd. as a candidate, that is, Zhongshan Tianjian electroacoustic Co., Ltd. (hereinafter referred to as Zhongshan Tianjian) located at No. 13 Maonan Road, Torch Development Zone, Zhongshan City, Guangdong Province. The net profits of the company in 2020 and the first half of 2021 were 25.9741 million yuan and 11.5141 million yuan respectively.
According to an employee of Zhongshan Tianjian, “the company now has five insurances and one fund, but it seems that general workers (production line employees) can choose by themselves”.
In order to verify the above situation, the reporter then contacted the employee in charge of human resources related work of Zhongshan Tianjian on the grounds of application. According to him, generally, the company will pay “five insurances and one fund” to the employee, but if the employee doesn\’t want to pay, he can put forward it and sign an agreement to prove that he gives up, not the company is unwilling to pay, but after giving up, Each month will be 500 yuan more than the salary of employees who pay five insurances and one fund.
In this regard, Tianjian replied that the company has been actively promoting the coverage of social security and provident fund. At present, the company pays social insurance and housing provident fund in strict accordance with the standards of relevant national laws and regulations. The above situation does not exist for new employees. Subsequently, the company will actively publicize the policies related to social security and provident fund, actively assist in solving various abnormal problems existing in the deposit process of employee accounts, and work with employees to improve the standard governance level of the company.
Headset, headset and other audio products were produced by reporters in Zhongshan Tiankai’s official account of Tiankai’s official public number. The Zhongshan area has four production workshops, including Bluetooth workshop, speaker workshop, headphone workshop and injection workshop. The company implements a 5-day and 8-hour system, with a base salary of 2000 yuan / month, overtime of 17.24 yuan / hour at ordinary times, overtime of 22.99 yuan / hour on Saturday and Sunday and 34.25 yuan / hour on legal holidays.
Zhang Yue (a pseudonym), another HR employee of Zhongshan Tianjian, told reporters, “recently, the company has not recruited general workers. Taking into account overtime pay, the salary level of a general worker of Zhongshan Tianjian is generally about 4000 yuan (before tax). However, the specific situation is related to how much overtime, whether he can work at night, etc.”.
“Recently, the company has not recruited general workers. Overtime is mainly concentrated on working days. Now it has a salary of more than 3000 yuan.” One employee said. In terms of amount, 500 yuan may be more attractive to general workers.
But Zhang Yue said that the company’s employees must buy five insurances and one fund, and they can’t choose by themselves.
However, the reporter looked through many recruitment notices issued by Tianjian home from 2018 to 2020 and found that the company clearly paid “five insurances and one fund” in the recruitment of fresh graduates / previous graduates, engineers and technicians, and other recruitment showed that “the company purchased endowment insurance, medical insurance, unemployment insurance, maternity insurance and industrial injury insurance for employees”, That is, only “five insurances” are promised
Image Source: screenshot of recruitment notice released by Tianjian home
According to Zhao Zhanzhan, deputy director of Beijing Yunjia law firm, Tianjian shares did not pay the “five insurances and one fund” to the employees and needed to make up the payment. “this is a legal obligation, and employees\’ voluntary waiver cannot exempt the enterprise from this obligation.”
Lawyer Xu Feng of Shanghai Jiucheng law firm also held the same opinion. He said that although Tianjian shares said in the prospectus (declaration draft) that during the reporting period, the company was not subject to administrative punishment for violating laws, regulations and rules on social insurance and housing provident fund, the company may still face the possibility of punishment in the social security management part. If the voluntary waiver of the employee is true, it is the disposal of the employee’s rights, and arbitration or litigation may still be brought within the limitation of action, which may not completely exclude the possibility of liability for the company.
When talking about whether the supplementary payment will lead to the company’s performance loss in 2019, Xu Feng responded that he did not rule out the possibility of retroactive adjustment of profits.
performance depends on key customers
Public information shows that the main business of Tianjian shares is the R & D, manufacturing and sales of micro electroacoustic components, consumer, industrial and vehicle electroacoustic products and health acoustic products. The company’s main products are all kinds of earphone products, including headset (wireless headset, wired headset), TWS headset and in ear headset (wireless in ear, wired in ear).
In addition to the finished headphones for end consumers, the company also operates walkie talkie accessories and vehicle accessories, acoustic parts (speakers, microphones), etc. the newly expanded business products include health acoustic products such as hearing aids, hearing aids, customized headphones, speaker modules and microphones.
From the perspective of revenue structure, earphone products are the main source of revenue for Tianjian. From 2018 to 2020 and the first half of 2021, earphone products provided 86.13%, 86.3%, 94.14% and 90.88% of revenue for Tianjian respectively. However, in recent years, the company’s earphone products have been transformed rapidly. Among them, the revenue of in ear headphones accounted for 74.65% of the total headphone products in 2018; In 2019, the proportion of in ear headphones decreased to 47.35%, while the proportion of headphones increased to 28.27%; In 2020, TWS headphones accounted for 47.77% of the revenue, and headphones accounted for 31.36%; In the first half of 2021, the proportion of headphones reached 50.98% of the total headphones, while that of TWS headphones was 30.36%.
In addition, from 2018 to 2020 and the first half of 2021, Tianjian’s business model is mainly ODM (original design manufacturer), with a small number of OEM (i.e. OEM production) mode and private brand operation mode. During the reporting period, the company’s ODM mode revenue accounted for 86.95%, 88.11%, 94.77% and 91.21% of the company’s total revenue respectively.
At present, Tianjian’s customers include Harman group, Sennheiser, Philips, Motorola, corsair, Bose, Decathlon, zoundindustry, Logitech, oppo, vivo, Anker Innovations Technology Co.Ltd(300866) , Lanhe technology, Baidu, Shenzhen Transsion Holdings Co.Ltd(688036) .
Affected by many large foreign customers, Tianjian’s products are mainly exported. From 2018 to 2020 and the first half of 2021, the proportion of export revenue in the company’s main business revenue is 40.21%, 69.74%, 87.32% and 88.46% respectively, showing a gradual upward trend. The exporting countries and regions include North America, Europe and other places. At the same time, some raw materials (such as PCBA) of the company are purchased directly or indirectly from overseas manufacturers.
It is worth noting that Tianjian shares has a high concentration of major customers. From 2018 to 2020 and the first half of 2021, the total sales revenue of the company’s top five customers was 305 million yuan, 396 million yuan, 1069 million yuan and 561 million yuan respectively, accounting for 72.09%, 71.49%, 85.08% and 85.39% of the operating revenue respectively. The concentration of the top five customers was high.
Among them, from 2018 to 2020 and the first half of 2021, the company’s sales revenue to Harman group was 26.1274 million yuan, 148 million yuan, 785 million yuan and 343 million yuan respectively, accounting for 6.17%, 26.75%, 62.47% and 52.28% of the operating revenue of each period respectively, accounting for a relatively high proportion and showing an upward trend as a whole. Harman group is the world’s leading manufacturer of audio products. Tianjian Co., Ltd. has cooperated with Harman group since 2017. The products sold to Harman group are mainly TWS headphones and headphones.
As for the dependence on large customers, Tianjian replied that the relatively high concentration of customers in the industry is a common phenomenon in the industry and has a certain rationality. Compared with enterprises in the same industry with similar business models such as Goertek Inc(002241) , Risuntek Inc(002981) , Cosonic Intelligent Technologies Co.Ltd(300793) , the sales revenue of the top five customers of each company is close. At present, the company has cooperated with its core customers for many years and signed stable framework agreements. The company’s customers are mainly international well-known electroacoustic brand manufacturers. The customers have large production and operation scale, good business reputation and maintain good cooperative relations with customers, which provides a guarantee for the sustainability of transactions between the company and its main customers. In the future, the company will further enhance its penetration among International Electroacoustic enterprise customers, continue to expand Chinese brands and independent brands of medical health products and customized products, and actively develop new customers and potential high-quality markets.
(source: Daily Economic News)
