On January 21, Niutech Environment Technology Corporation(688309) submitted the announcement of annual performance loss in 2021. It is estimated that the operating revenue will reach 83 million yuan to 85 million yuan in 2021. It is estimated that the net profit attributable to the owner of the parent company will reach – 8.6 million yuan to – 10.3 million yuan in 2021, a decrease of about 54.572 million yuan to 56.272 million yuan compared with the same period of the previous year.
According to the Listing Rules of shares on the science and Innovation Board of Shanghai Stock Exchange, the financial data of 2021 touched the financial delisting Portfolio Index of “operating revenue + net profit”. The company simultaneously issued the first suggestive announcement that the company’s shares may be subject to delisting risk warning, and the company may be subject to “* ST”.
Niutech Environment Technology Corporation(688309) once “with star” will become the first on the science and innovation board. On the whole, at present, the performance forecast shares of the science and innovation board have increased by more than 90%, and the “star belt” of Niutech Environment Technology Corporation(688309) is only a case. Market participants said that the science and innovation board company as a whole is in the critical stage of climbing the slope, with small performance scale and fluctuating performance, which is the normal operation. For the science and Innovation Board enterprises in the growth stage, more patience needs to be given to accompany and help them develop better.
Performance loss in advance caused by periodic order fluctuation
Niutech Environment Technology Corporation(688309) it mainly produces continuous cracking equipment, which is mainly used for the treatment of solid wastes such as waste tires, waste plastics and dirty oil sludge. According to the analysis of the company in the announcement, there is no significant adverse change in the company’s core competitiveness and sustainable operation ability. The decline in performance in 2021 is the periodic performance fluctuation experienced by the company in the development stage, mainly due to the following three factors.
First, the industry characteristics at this stage are easy to cause short-term performance fluctuations. the various industrial continuous cracking production lines provided by the company for customers are a large-scale system project. This business is a heavy asset investment. With the gradual implementation of customer orders, old customers usually do not add project orders in a short time. Therefore, the company needs to continuously expand new customers and maintain business continuity. The company has a long order cycle and many business links. It takes a long time period from contacting customers through online publicity, exhibitions and other channels to finally signing sales contracts with customers. The promotion of the project is vulnerable to epidemic or policies and other factors.
second, the implementation of orders in 2021 did not meet expectations, which was greatly affected by major customers. affected by changes in the external environment, customers’ own conditions and the epidemic situation in 2020, the orders of Chinese and overseas customers failed to be signed as scheduled. In 2020, the actual amount of orders signed by the company was only 29.66 million yuan, and the amount of new orders signed in 2020 was less, which directly affected the recognized amount of revenue in 2021. Meanwhile, in 2021, the implementation of individual projects was suspended or suspended due to government approval and other reasons, and affected by covid-19 epidemic and other factors, the implementation progress of some orders in hand of the company was less than expected. Among them, the expected revenue of Nanjiang project is reduced by about 20 million yuan, and that of a project in the UK is reduced by about 27 million yuan.
In addition, according to the company’s disclosure in the reply to the regulatory inquiry letter of the third quarterly report of 2021, the company has a certain dependence on major customers, and about 60% of its revenue in recent years comes from Karamay Shuntong Environmental Protection Technology Co., Ltd., the largest customer. With the reduction of solid waste, customers’ demand for the treatment of cracking equipment decreased accordingly. The company’s sales revenue from Shuntong environmental protection decreased significantly to 8.2468 million yuan, accounting for only 18% of the total revenue.
third, affected by the epidemic, new orders are delayed or failed to sign. affected by the epidemic in 2021, the company’s market development was delayed, customers’ on-site visit and due diligence were limited, and the order signing time was later than expected. At the same time, the customer’s project approval procedures are time-consuming, and the implementation progress of newly signed orders is delayed. The company signed 10 new orders in 2021, with an order amount of 190.1 million yuan, of which the contract amount in December was 89.8 million yuan, accounting for 47.24%. According to the company’s revenue recognition policy, only RMB 6400 will be recognized in 2021.
Niutech Environment Technology Corporation(688309) also stated in the announcement that by the end of 2021, the amount of orders on hand that the company has not yet recognized revenue is about 208698700 yuan (including tax), and it is expected that about 60% of the revenue will be recognized in 2022. At the same time, the reserves of customers outside China are good, and it is expected that new orders will be signed in 2022.
According to the analysis of insiders, waste pyrolysis treatment changes the original incineration, landfill and other treatment methods, which is conducive to the harmless treatment or resource utilization of solid waste, reduce resource loss and promote recycling, which is in line with the national strategic orientation of developing green industry and circular economy. However, since the application of cracking treatment in many fields is in its infancy, the unbalanced characteristics of the early stage of the industry restrict the company’s business to maintain sustainable growth. In particular, the sewage sludge solid waste treatment business is greatly affected by the implementation of relevant environmental protection policies around the country. At present, the whole industry is still in the stage of market development.
Niutech Environment Technology Corporation(688309) has certain technical characteristics in subdivided fields and has won technical awards and industry certification for many times. Public information shows that the company’s core product “complete set of technology and equipment for low-temperature cracking and resource utilization of industrial continuous waste rubber and waste plastics” won the national science and Technology Progress Award (second prize) in 2011 and is the only award-winning company in the same industry; The complete set of technology and equipment for waste oil sludge thermal decomposition and resource utilization was rated as a major environmental protection technology and equipment encouraged by the state by the Ministry of industry and information technology and the Ministry of science and technology in 2017. It is also the only selected equipment in the field of waste oil sludge treatment.
The overall performance of the science and innovation board is bright, and the performance fluctuation needs to be treated rationally
at present, the performance forecast shares of the science and innovation board have increased by more than 90%. The “Star” of Niutech Environment Technology Corporation(688309) is only a case. As of January 21, the official website of the Shanghai Stock Exchange shows that 64 science and Innovation Board companies have issued performance forecasts or performance letters. The sector as a whole continued the high growth trend in the first three quarters, with 58 companies increasing in advance, accounting for more than 90%. Among them, 30 companies are expected to increase their net profit by more than 100% year-on-year in 2021, Beijing Hotgen Biotech Co.Ltd(688068) and Dongxin technology are expected to increase by 1684.65% and 1051.89% respectively. In addition, there are Guizhou Zhenhua E-Chem Inc(688707) and Sunshine Guojian Pharmaceutical(Shanghai) Co.Ltd(688336) two companies to turn losses.
From the course of the global capital market, it is a common phenomenon that enterprises appear development differentiation after listing, and the science and innovation board, as an emerging market, is no exception. In particular, the science and innovation board is mainly connected to serve growth technology enterprises, and the sector differentiation also reflects the natural changes in the process of enterprise development.
In fact, since its establishment, supporting the development of “hard technology” enterprises and serving key core technological innovation is the consistent original intention of the science and innovation board. The science and innovation board has always adhered to depicting the “diversity” of science and innovation enterprises with the standard of diversity and inclusiveness, painted the color of science and innovation, and ignored the “profit only theory”. A number of enterprises with different technical routes, various business types and aiming to promote China’s scientific and technological self-reliance have joined the wings of the capital market. Including 26 unprofitable enterprises, 4 enterprises with special equity structure, 5 red chip enterprises and 11 listed enterprises with the fifth set of standards.
If there are differences, there will inevitably be development differentiation. As a whole, Kechuang board company is in the critical stage of climbing the slope, with small performance scale and fluctuating performance, which is the normal operation; Part of the company’s business and customer structure are relatively single, and the industrial chain is highly dependent, which is also an inherent feature. Therefore, we need to give more patience to the science and Innovation Board enterprises in the growth stage, accompany and help them grow better. “The science and innovation board supports innovation and development, the underlying logic remains unchanged, and the market needs to be treated more rationally,” said a senior market person.
from the perspective of supervision, the supervision of science and innovation board always adheres to the bottom line of “authenticity”. According to insiders, the guidance of early and strict supervision in the continuous supervision of science and innovation board is quite clear, and the authenticity of financial performance has been repeatedly emphasized by regulators.
In November 2021, the Shanghai Stock Exchange issued the self regulatory guidelines for listed companies on the science and Innovation Board No. 9 – Financial delisting indicators: operating income deduction, further unblocked the “export pass” of the science and innovation board, accelerated the clearance of enterprises whose main business has lost operating capacity, and focused on cracking down on the illegal manipulation of performance “shell”.
According to the requirements of the rules, for the company whose audited net profit attributable to the owner of the parent company in the latest fiscal year (whichever is lower before and after deducting non recurring profits and losses, hereinafter referred to as net profit) is negative, it is required to deduct relevant operating income in accordance with the listing rules, and it is not allowed to evade the delisting provisions by adjusting income or non recurring profits and losses,
The sharp decline of Niutech Environment Technology Corporation(688309) performance has also been closely concerned and focused on inquiry by Shanghai Stock Exchange. According to the official website of the Shanghai Stock Exchange, after the disclosure of the company’s semi annual report and third quarterly report in 2021, the Shanghai Stock Exchange issued regulatory inquiry letters at the first time, requiring the company to fully disclose the changes and reasons of the company’s operating performance, and requiring intermediaries to express verification opinions.
For investors, science and innovation enterprises are the micro foundation of China’s high-quality economic development and the vanguard force and important pillar of the transformation of China’s old and new kinetic energy. Their high-quality development lies not only in short-term accounting profits, but also in the continuous operation ability with R & D and innovation as the core, and the compliance of corporate governance and internal control, The authenticity of financial performance and the quality of information disclosure. Innovation is not achieved overnight, and value is not achieved in a day. As an investor of sci-tech innovation board, we should stick to the concept of long-term investment, be a friend of innovation and time, and stay with sci-tech innovation board company with the mentality of partner.
