On April 19, Hanxin technology released its annual report for 2021. The company achieved an operating revenue of 272 million yuan, a year-on-year increase of 7.01%; The net profit attributable to the shareholders of the listed company was 48.41 million yuan, a year-on-year increase of 24.13%, deducting non net profit of 43.7 million yuan, a year-on-year increase of 22.13%.
Purely from the data, Hanxin technology’s profit is acceptable. However, after further reading the company’s annual report, the reporter of China Securities Journal found that the company’s gross profit margin in 2021 was 32.61%, down 2.65 percentage points from the previous year. In the case of slight increase in operating revenue, decline in gross profit margin and little impact on non recurring profits and losses, where does the high growth of the company’s net profit come from? The answer may lie in the adjustment of the company’s bad debt provision. What is more difficult is that in the face of the dilemma of increasing accounts receivable year by year, the commitment made by Hanxin technology in the process of reporting to the Beijing stock exchange seems to have broken its promise.
“clever” bad debt provision
The devil hides in the details. According to the annual report of 2021, as of December 31, 2021, the book balance of accounts receivable of Hanxin technology was 338 million yuan, accounting for 124.26% of the company’s operating revenue in that year, of which 148 million yuan with an aging of more than one year, accounting for 43.7% of the total accounts receivable.
The accrual ratios of Hanxin technology for different aging combinations are: 6.58% within 1 year, 12.46% from 1-2 years, 22.91% from 2-3 years, 30.85% from 3-4 years, 54.85% from 4-5 years and 100% over 5 years. According to the withdrawal ratio, the amount of bad debt provision of the company is 46.543 million yuanP align = “center” source: annual report of Hanxin technology in 2021
However, as of March 31, 2021, the company disclosed in the prospectus that the bad debt provision ratio was 6.79% within one year, 12.66% from one to two years, 27.97% from two to three years, 43.55% from three to four years, 72.03% from four to five years and 100% over five yearsP align = “center” source: Hanxin technology public offering manual
Comparing the two groups of data, it is not difficult to find that the company has quietly changed the proportion of bad debt provision. Inadvertent proportion adjustment is reflected in the great difference in performance. What’s more, there was a difference of 17.18 percentage points before and after the change of the accrual proportion of only 4-5 years old. According to rough estimation, according to the withdrawal ratio published in the first quarter of 2021, the amount of bad debt provision for accounts receivable in 2021 should be 541263 million yuan, which is 7.5833 million yuan different from the data disclosed in the 2021 annual report.
According to this calculation, the net profit attributable to the shareholders of the listed company in 2021 is 40.82 million yuan, and the performance growth rate is less than 5%, which is not as good as the revenue growth. It is obvious that the performance quality of Hanxin technology is outstanding.
growth worries
Behind the “flickering” at the accounting end, the growth of Hanxin technology faces great uncertainty.
The annual report of 2021 shows that the company’s operating revenue is 272 million yuan, while the accounts receivable is as high as 338 million yuan. The accounts receivable accounts for 124.26% of the operating revenue, 54.34% of the total assets of 622 million yuan and 86% of the net assets of 392 million yuan.
Hanxin technology has been criticized by the outside world for its high proportion of accounts receivable. Looking through the historical statements of the company since its listing on the new third board in 2016, it can be found that the proportion of accounts receivable in the operating revenue of the company from 2016 to 2021 was 50%, 90%, 103%, 106%, 129% and 124% respectively, and the proportion of accounts receivable in the revenue exceeded 100% for many years, which showed an increasing trend year by year.
The high proportion of the company’s accounts receivable has also attracted the attention of the national share transfer system of small and medium-sized enterprises. In the first and second rounds of inquiry letters of Hanxin technology, the company was asked to explain that the proportion of accounts receivable in revenue exceeded 100% and increased gradually, and the proportion of accounts receivable was low.
Under the repeated questioning of the share transfer system, Hanxin technology said in its reply in the second round of inquiry that the situation of large balance of accounts receivable had been improved to a certain extent by the end of March 2021. From the annual report of 2021, this improvement is only a periodic superficial improvement.
For the dilemma of the high proportion of accounts receivable, Hanxin technology admitted that with the expansion of the company’s business scale, the company’s accounts receivable scale may further increase. The growth of accounts receivable will put pressure on the company’s working capital, which is not conducive to the continuous expansion of the company’s business scale.
In addition, the customer dependence of Hanxin technology also brings a certain degree of uncertainty to its future development. The financial report shows that in 2021, the total sales volume of the company’s top five customers was 151 million yuan, accounting for 55.66% of the total operating revenue of the current period, an increase of 0.84 percentage points over 54.82% in the same period last year; Customers are relatively concentrated, and the top five customers fluctuate greatly.
\u3000\u3000 “If the company fails to expand its business, expand its market share and enhance its profitability in the future, the loss or change of existing customers will have an adverse impact on the company’s operating performance. The company’s operating revenue during the reporting period mainly comes from Shandong Province, and the main customers are government departments, enterprises and institutions, so there is a risk of regional concentration of sales. If the company fails to realize its market in other regions in the future Development will have an adverse impact on the profitability of the company. ” Hanxin Technology issued the above warning in its annual report.
host broker “walking horse lamp” replacement
Interestingly, since the listing of the new third board in 2016, Hanxin technology has frequently changed the host broker. From the earliest Guosen Securities Co.Ltd(002736) , to the current Sino German securities, Hanxin technology has changed the host broker five times in six years. Is it a coincidence or a secret that the host securities companies are frequently changed?
previously, a broker who had participated in Hanxin technology project said that Hanxin technology had problems such as high dependence of regional customers, high proportion of accounts receivable and non-standard revenue recognition, which were too risky, so they gave up the company’s recommendation business
letter Phi quality is worrying
As a listed company that has been listed on the new third board for many years and now officially landed on the Beijing stock exchange, Hanxin technology frequently makes various low-level errors in the letter Phi documentsP align = “center” source: annual report of Hanxin technology in 2021
In the chapter “financial accounting report” of the company’s 2021 annual report, the company’s name should appear twice in a row as “error! No reference source found”.
Coincidentally, as early as the second round of inquiry on the enterprise by the national share transfer system of small and medium-sized enterprises, He criticized the expression quality of his reply to relevant questions: “according to the first round of inquiry reply and relevant working papers, the issuer’s reply documents did not answer in detail in many places, some answers avoided the important and ignored the important, and there were situations such as nonstandard written expression, insufficient demonstration and omission; there were problems such as incomplete working papers, and some verification procedures were not in place.”
