Securities abbreviation: Shenzhen Farben Information Technology Co.Ltd(300925) securities code: Shenzhen Farben Information Technology Co.Ltd(300925) reply to the inquiry letter on Shenzhen Farben Information Technology Co.Ltd(300925) application for issuing convertible corporate bonds to unspecified objects
Sponsor (lead underwriter)
Ping An Securities Co., Ltd
(address: floor 22-25, block B, Ping An financial center, No. 5023, Yitian Road, Futian street, Futian District, Shenzhen)
May, 2002
About Shenzhen Farben Information Technology Co.Ltd(300925)
Applying for issuing convertible corporate bonds to unspecified objects
Reply to audit inquiry letter
Shenzhen Stock Exchange:
We have received your inquiry letter on Shenzhen Farben Information Technology Co.Ltd(300925) application for issuing convertible corporate bonds to unspecified objects (audit letter [2022] No. 020077) (hereinafter referred to as "audit inquiry letter") issued on April 18, 2022, Shenzhen Farben Information Technology Co.Ltd(300925) (hereinafter referred to as "the company", " Shenzhen Farben Information Technology Co.Ltd(300925) " or "the issuer") organized Ping An Securities Co., Ltd. (hereinafter referred to as "Ping An Securities" or "the sponsor") and other intermediaries to seriously discuss relevant issues, and implemented the issues you mentioned one by one, At the same time, in accordance with the requirements of the audit inquiry letter, the prospectus for the issuance of convertible corporate bonds by Shenzhen Farben Information Technology Co.Ltd(300925) gem to unspecified objects (hereinafter referred to as the "prospectus") has been revised and supplemented. The relevant questions are replied as follows, please review.
Special note:
1. Unless otherwise specified, the abbreviation or interpretation involved in this reply is the same as that in the prospectus.
2. Any discrepancy between the total and the mantissa of the sum of the itemized values in the reply to the audit inquiry letter is caused by rounding.
3. The font in the reply to this audit inquiry letter represents the following meanings:
Review the questions listed in the inquiry letter in bold
Replies to the questions listed in the audit inquiry letter and the verification opinions of the intermediary institutions in Song typeface
Amendments and supplements to the prospectus (BOLD)
catalogue
Question 1 3 question 2 30 question 3 42 question 4 122 other questions one hundred and thirty-one
Question one
During the reporting period, the gross profit margin of the company's software technology outsourcing business was 28.95%, 29.42%, 28.44% and 26.13% respectively, showing a downward trend; The net cash flows from operating activities were 127635 million yuan, 406249 million yuan, 666912 million yuan and -2305854 million yuan respectively. At the end of each reporting period, the book balance of the company's accounts receivable was 246049100 yuan, 393655500 yuan, 557399800 yuan and 984511300 yuan respectively, accounting for 31.45%, 30.13%, 28.62% and 44.68% of the operating revenue respectively. As of September 2021, the total balance of accounts and notes receivable of the company to Evergrande group and its affiliated enterprises was 383442 million yuan, of which the overdue amount was 296594 million yuan.
The issuer is requested to supplement: (1) in combination with the development of the industry, the pricing model of relevant businesses, the average salary level of personnel, the situation of comparable companies in the same industry, explain the reasons for the decline of the gross profit margin of the company's software technology outsourcing business, whether the decline of gross profit margin is sustainable and its impact on sustainable profitability; (2) In combination with the development of the industry, the company's revenue recognition policy, credit policy and the situation of comparable companies in the same industry, explain the reasons for the negative net cash flow of the company's operating activities in the latest period, whether there are adverse changes in the company's operating environment, whether it affects the company's sustainable operation ability, and whether the company has a reasonable asset liability structure and normal cash flow level, Whether there is enough cash flow to pay the principal and interest of corporate bonds; (3) The overdue and collection of accounts receivable at the end of each reporting period, combined with the type of main customers, operation, credit policy, collection and aging, and the situation of comparable companies in the same industry, explain whether the provision for bad debts of accounts receivable of the company is sufficient; (4) In combination with the latest progress in the operation of Evergrande group and its affiliated enterprises, the aging of accounts receivable and the collection of relevant accounts receivable of the issuer, explain whether it is necessary to withdraw bad debt reserves for accounts receivable of Evergrande group and its affiliated enterprises individually, the sufficiency of relevant bad debt reserves and the countermeasures to be taken by the issuer.
The issuer is requested to make supplementary disclosure of the risks related to the above matters and give a major risk warning to (4).
The sponsor and accountant are requested to check and express clear opinions.
[reply]
1、 Combined with the development of the industry, the pricing model of relevant businesses, the average salary level of personnel and the situation of comparable companies in the same industry, explain the reasons for the decline of the gross profit margin of the company's software technology outsourcing business, whether the decline of gross profit margin is sustainable and its impact on sustainable profitability
(I) industry development
According to the "industrial classification of information and technology companies" (revised by China Securities Regulatory Commission in 2012), and the "industrial classification of software and service companies" (revised by China Securities Regulatory Commission in 2012).
According to the statistical bulletin of software and information technology service industry in 2021 issued by the Ministry of industry and information technology, the national software and information technology service industry was in good operation in 2021, with more than 40000 Enterprises above Designated Size, and the cumulative software business revenue was 9499.4 billion yuan, a year-on-year increase of 17.7% and a two-year compound growth rate of 15.5%. Software business revenue maintained rapid growth. In 2021, the total profit of the software industry was 1187.5 billion yuan, a year-on-year increase of 7.6%, and the two-year compound growth rate was 7.7%; The profit margin of main business increased to 9.2%, and the profitability increased steadily.
(II) pricing model of the company's business
The company mainly obtains customers through bidding and business negotiation. For the formation and adjustment of service price, the company has formulated strict internal control processes, such as "project initiation and bidding process", "sales framework contract review process", etc.
1. Formation and adjustment mechanism of software technology service unit price delivered by workload
(1) First offer
The bidding and business negotiation quotation methods introduced by the company in new customers are mainly based on cost plus, and the pricing is comprehensively considered in combination with the customer's industry characteristics, market competition factors and the company's competitive strategy.
Basic quotation = direct cost / (1 - target gross profit margin)
Among them, the direct cost mainly includes the salary, bonus, social security accumulation fund, welfare and other expenses of the technology implementation and development personnel. The cost plus proportion mainly considers the company's sales expenses, management expenses, capital cost and other factors to add a certain profit space. Profit margin is considered in combination with customer industry characteristics, market competition factors and the company's competitive strategy.
(2) Price adjustment
Affected by the market situation, changes in customer demand, changes in customer service evaluation of suppliers and the company's market competition strategy, the company and customers will negotiate and adjust the price.
2. Formation and adjustment mechanism of software technology service unit price delivered by results
The quotation mechanism of the company's software technical services delivered by results: the quotation is based on direct cost plus, combined with comprehensive factors such as customer budget, market competition factors and the company's competitive strategy. Among them, the direct cost mainly includes the salary, bonus, social security accumulation fund, welfare and other expenses of the technology implementation and development personnel. The cost plus proportion mainly considers the company's sales expenses, management expenses, capital cost and other factors to add a certain profit space. The main factors of profit space include: customer budget, market competition factors and company competition strategy. Basic quotation = direct cost / (1 - target gross profit margin)
When the demand of the project changes, the company will negotiate with the customer to adjust the price and reassess the workload according to the changed demand.
(III) average salary level of technical implementation and development personnel of the company
In 2019, 2020, 2021 and January March 2022, the per capita salary of technology implementation and development personnel is 150600 yuan / year, 155800 yuan / year, 164200 yuan / year and 165500 yuan / year respectively (the financial statements from January to March 2022 are unaudited, the same below). The salary of technology implementation and development personnel includes salary and bonus, including basic salary, performance salary, post allowance, etc.
During the reporting period, there was no change in the salary policy of technology implementation developers. Among them, the basic salary of the technology implementation and development personnel shall be adjusted according to the employee's rank, entry time and other factors, and the bonus shall be approved and paid according to the daily responsibilities, completion of work objectives and comprehensive results of performance appraisal of the technology implementation and development personnel.
During the reporting period, the average salary of technology implementation and development personnel showed an upward trend year by year, mainly due to the rising cost of newly recruited personnel and the company's consideration of the degree of competition in customers, adjusting the salary of some personnel to maintain a certain stability of personnel.
(IV) comparison between the company's gross profit margin and that of comparable companies in the same industry
During the reporting period, the comparison between the company's gross profit margin and that of comparable companies in the same industry is as follows:
Company name: Service Division: January to March 20222021 20202019
Class month
China soft international total 26.66%, 29.21%, 29.76%
Neusoft Corporation(600718) all 35.10% 26.16% 26.21% 26.19%
Beyondsoft Corporation(002649) all 21.07% 26.16% 24.48% 21.97%
All soft power 19.50%, 24.67%, 27.22%, 26.88%
Jiangsu Hoperun Software Co.Ltd(300339) financial technology industry 26.81% 27.37% 26.01% business or service
Archermind Technology (Nanjing) Co.Ltd(300598) all 18.89%, 22.33%, 23.48%, 26.28%
Guangzhou Sie Consulting Co.Ltd(300687) pan ERP + software 35.64% 34.84% 29.24% maintenance service
26.62% of the average comparable value of the company
Shenzhen Farben Information Technology Co.Ltd(300925) 24.56% 26.26% 28.42% 29.33%
As shown in the above table, there is no significant difference between the gross profit margin of the company and the average gross profit margin of comparable companies in the same industry
The gross profit margin of the company in 2019 is 2.71% higher than the average gross profit margin of comparable companies in the same industry,
This is mainly because Alibaba raised the service price for its main customers in 2019, and the company paid more attention to Ping An insurance
Adjust the post level structure of the group and strengthen cost control. Gross profit of the company in 2021 and January March 2022
The fluctuation trend of interest rate is consistent with that of the gross profit margin of comparable companies in the same industry, both showing a slight downward trend.
(V) reasons for the decline of gross profit margin of software technology outsourcing business
In each period of the reporting period, the proportion of main business income and gross profit margin of different business types of the company are as follows:
From January to March 2022, the project revenue accounts for the revenue in 2020 and the revenue accounts for the revenue in 2019
Specific gross margin ratio gross margin ratio gross margin ratio gross margin ratio
Development and programming services 51.78% 24.46% 53.09% 25.90% 56.84% 28.63% 58.87% 29.12%
Delivered at 21.55% 24.38% 19.68% 25.25% 18.04% 28.05% 22.41% 29.70% of work test and integration services
Software implementation and operation and maintenance services 18.96%, 24.45%, 18.04%, 27.89%, 14.97%, 28.85%, 11.28%, 30.08% technical services
Business analysis and design services 6.94% 24.85% 7.49% 25.13% 8.14% 27.28% 6.76% 30.00%
Average gross profit margin 2
