Qiaqia Food Preservation Quality Assets Listed Assault Whitewash Report

First, relying on a single main product, slow growth, product chain is difficult to extend outwards The company's "Qiaqia Guazi" brand, although well-known, but it also highlights the problem of a single profit. According to company sales data, sunflower seed products account for more than 80% of total sales and gross profit, plus approximately 9% of watermelon seeds, which are almost all sources of company revenue and profit. The growth rate of the industry is slow, and it is expected that the average annual growth rate in the future will be only 10%. Although the company is leading the industry in scale, some characteristics of the industry itself, including low barriers to entry, small product differentiation, and consumers’ perceptions of the taste are higher than brands, determine that the structure of decentralized competition will exist for a long time. It is difficult for dominant companies to quickly expand their market share.

Although the company is also trying to extend the product line to change the current pattern of single profit, but from the data of the past three years, there is little effect. The product introduction column of the company's website shows that the company has launched more than 30 products in other related fields, including egg yolks, cashews, peanuts, beans and walnuts. However, the share of these new products in the company’s overall sales has been between 11% and 18% for the past three and a half years, with no substantial growth. From the point of view of sales amount, new products surged by 51% in 2008, and fell sharply by 41% in 2009. In the 10 years, 1H is also a negative growth, and the performance is quite unstable.

This actually reflects the company's dilemma in the future growth point: the advantages of a snack product can not simply migrate to another product. Although the company currently ranks among the leading players in the sub-industry, it does not mean that it can become a leading company in the fast food industry. From the development history of these leading international companies such as Kraft and Danone, high R&D investment and continued M&A are important ways to gain a dominant position. And these two foods are not currently available: The company's R&D investment in the last three years and the first phase accounts for an average of less than three-thousandths of the sales revenue. It has neither built nor expressed any willingness in M&A. In the status quo, we have done the "King Guazi King," and the company's long-term growth space is worrying.

Second, the financial policy is rampant. Before listing, the assault whitewash report 1H in 1H07, the company's asset-liability ratio was 69%, 68%, 57% and 38%, respectively. On the surface, the company's debt ratio has rapidly declined and its financial soundness continues to increase. However, careful exploration can reveal the true face of the company’s financial status.

The company's high debt ratio in the previous period mainly comes from short-term borrowings and huge operating payables. Observing the cash flow, we can see that the company is financing its long-term investment projects with short-term liabilities. The cash flow from borrowing is mainly used to construct fixed assets. Due to the long payback period for long-term assets, its cash flow will be difficult to meet short-term debt repayment needs, which will result in tight liquidity of the company. In 2007-09, the company's average current ratio was 1.16, and the quick ratio was only 0.54, which was only about half of the normal level. In anticipation of future listing and financing, the company did not hesitate to assume liquidity risk in order to rapidly expand, and its financial policy was quite rampant. Unfortunately, this did not bring about growth in sales and earnings. In 2009, sales revenue fell by nearly 20%. In 10 years, 1H was basically zero growth.

The huge amount of operating payables is also one of the short-term financing sources of the company. Its essence is to use its own scale advantage in the industry chain and occupy the upstream suppliers for a long time. According to the company’s disclosure of the top five suppliers in recent years, the single-family amount is only 2-3 million yuan, which is less than 3% of the company's main business cost, which is a relatively weak position relative to the company. Correspondingly, the company's payable turnover days (calculated for consolidated accounts payable and bills payable) were as high as 128 days in 2007 and 80 days in 2008, which were far beyond the normal commercial credit period and fell back to the normal 59 days in 2009. . Financing in this way is tantamount to killing chickens and taking eggs.

The debt ratio of 1H in 2009-10 significantly declined because the company repaid all short-term borrowings and shortened the payment period for operating payables, which corresponds to a sharp decrease in cash at hand and a substantial drop in inventory levels. The cash balance in hand fell drastically from a level of RMB 2-3 billion in 2007-09 to RMB 60 million in June 2010. The inventory balance decreased from 550 million in 2007 to 260 million in June. It is worth noting that the decline in inventory levels is associated with the decline in capacity utilization. Taking the example of the leading product sunflower seeds, the capacity utilization rate of the company in the 1H three-year period from 2007 to 2007 was 94%, 98%, and 71 respectively. % and 60%. Considering comprehensively, this is not simply the impact of the economic cycle. There are also companies that intend to control the operating rate when they are close to the market to digest historical inventory and reduce the high debt ratio so as to achieve the purpose of making the financial statements look healthier.

Third, high-quality assets are reserved for the middle of the country and hidden in the body to seek future capital operations. The controlling shareholder of the company Huatai Group Anhui Huaxia Agricultural Science and Technology Co., Ltd. does not enter the scope of the listed assets. The data shows that Hua Xia Agriculture was established in 2004 and is currently engaged in the sale of sunflower seeds. In the year of 08-10, the company achieved profitability. In 10 years, the 1H profit has reached more than 13 million yuan, which is 21% of the listed company's profit for the same period. According to the website of the company, it is a national leading agricultural industrialization leading enterprise and has been awarded the title of "China's Agricultural Industry Top 100 Most Powerful Companies for Growth". The company's business scope includes: Northwestern China, with Jiuquan as the center, radiation in Qinghai and Xinjiang, etc.; Central China, with Inner Mongolia as the main raw material production center; Northeast China, with Jilin and the three eastern provinces of radiation.

Although the company stated in the prospectus that the suppliers of the raw materials for the production of Qiaqia Food are mainly large growers and traders of crop production areas, they are totally different from the customers of the three companies such as Huaxia Agriculture, and there is no such thing as Huaxia Agriculture. The company's customers sign a targeted purchase and sales agreement. However, the company also disclosed that its sunflower seed procurement area includes 91 regions in Xinjiang, Heilongjiang, Jilin, and Liaoning, where domestic companies only purchase raw materials for sunflower seeds. In fact, the actual controller separately supplies seeds to purchase sunflower seeds through Huaxia Agriculture and precisely food. Although the current scale of Huaxia Agriculture is relatively small, the intersection of future business will be inevitable. For the food processing industry, controlling upstream means controlling resources. In fact, the controlling shareholder’s main profit asset is Huaxia Agriculture, in addition to the exact food that will be listed. Other subsidiaries controlled by the company, such as minerals and logistics, are still at a loss. It is not simple to remove this asset.