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    Dayun Auto: Commercial trucks manufacturing private leading financial performance is not stable enough | Industrial new shares

    2019-03-13 15:17:41

    Research Institute of Listed Companies in the Financial Industry

    The proposed IPO enterprise in this issue of “Industry New Shares” is: Universiade Automobile Co., Ltd. The place where the enterprise applies for listing is the GEM of the Shenzhen Stock Exchange. The listing sponsor isCITIC SecuritiesCo., Ltd. The signing law firm is Beijing King & Wood Law Firm. The signing accounting firm is PricewaterhouseCoopers Zhongtian Certified Public Accountants (special general partnership). The number of shares to be issued is 268,004,400 shares, accounting for 20.00% of the total issued share capital.

    I. Company Profile: Stable growth in income, net profit and fluctuations in cash flow from operating activities

    Universiade Motors is known as Universiade Automobile Co., Ltd. It was established in 2007 in Yuncheng City, Shanxi Province. The industry in which the company is located is in accordance with the "Guidelines for the Classification of Listed Companies' Industries" (revised in 2012) as "manufacturing-automobile manufacturing (C36)" and in accordance with the "National Economic Industry Classification" (GB/4754-2017) as "automobiles". Vehicle manufacturing (C361).

    Dayun Auto is a commercial vehicle manufacturer integrating R&D, production, sales and service. It is mainly engaged in research and development, production and sales of heavy trucks, medium trucks, light trucks, other special vehicles and new energy vehicles. It has three major vehicle manufacturing bases in Shanxi Yuncheng, Hubei Shiyan and Sichuan Chengdu. Shanxi Yuncheng Base mainly develops, produces and sells heavy trucks and new energy vehicles; Hubei Shiyan Base mainly develops, produces and sells medium-sized cards; Chengdu Base mainly develops, produces and sells light trucks.

    At present, the controlling shareholder of Dayun Auto is the Grand Canal Kyushu, and the actual controller is Yuanqin Mountain. Yuan Qinshan is the current chairman and general manager of the company. As of the signing date of this prospectus, Yuanqinshan directly held 11,342,000 shares of the issuer, accounting for 1.06% of the total issuer's share capital, and controlled the issuer's total of 800,000,000 shares through the Universiade Kyushu and Universiade Group, accounting for the pre-issuance. 74.62% of the issuer's total share capital.

    In terms of business conditions, benefiting from the rapid growth of demand for heavy trucks in China and the rapid growth of demand for new energy vehicles, the main business of the Grand Canal in the reporting period (2015, 2016, 2017, first half of 2018) Business income increased year by year, with 3.283 billion yuan, 5.743 billion yuan, 8.553 billion yuan and 4.261 billion yuan. In 2016 and 2017, the company's main business income growth rate was 74.91% and 48.93%, respectively.

    The main business income of Dayun Auto is divided into non-new energy vehicle revenue, new energy vehicle revenue, and accessory revenue. Among them, non-new energy vehicle revenue is the main source of the company's main business income, accounting for 92.78%, 96.78%, 96.66%, and 93.00%, respectively. Non-new energy vehicles include heavy trucks, medium trucks and light trucks. Among them, the sales revenue of heavy trucks accounted for more than 50% during the reporting period, which is the main source of revenue for the main business of Universiade.

    During the reporting period, the gross profit margin of Dayun Auto's main business was 6.78%, 9.40%, 11.38% and 9.38% respectively. From 2015 to 2017, the gross profit margin showed an upward trend. According to the statement of the prospectus, it mainly relies on its continuous improvement of product quality, continuous upgrading of products, especially heavy truck products, and new energy vehicles due to subsidy factors, resulting in higher gross profit margin. In the first half of 2018, the gross profit margin of the main business decreased slightly compared with 2017, mainly due to the decline in gross profit margin of the heavy truck business segment.

     1

    Listed companies mainly engaged in the production and sales of trucks and new energy vehicles in China.China National Heavy Duty Truck(000951.SZ),Foton Motor(600166.SH),Hualing Xingma(600375.SH). During the reporting period, the gross profit margin of Universiade Motor was relatively lower than the average of the company, mainly due to the difference in the composition of comparable companies. The business composition of Universiade was the closest to that of China National Heavy Duty Truck. Therefore, in the report period, the two companies were close to each other except for the large gap in gross profit margin in 2015. The other two companies have a wide range of business, and the gross profit margin of other businesses is quite different from the gross profit margin of trucks. Because the gross profit margin of heavy truck business is in the middle-low level of many businesses as a whole, therefore, the Grand Car The interest rate is lower than the average gross profit margin of the comparable company.

     2

    During the reporting period, the company's asset-liability ratio continued to remain at a low level, mainly due to the company's lack of external debt financing and large amounts of outstanding payment to suppliers, the lower amount of liabilities and the lower risk of long-term debt repayment. The company's 2015 and 2016 asset-liability ratios are higher than comparable companies in the same industry, mainly because the company has a single financing channel before the listing of the New Third Board. Since its establishment, it has relied on rolling profits and bank loans to maintain the company's production and operation needs. The company's asset-liability ratio at the end of 2017 was lower than that of comparable companies in the same industry, mainly due to the company's financing of RMB 1.70 billion through the issuance of shares in the New Third Board in August 2017, and the asset-liability ratio was significantly reduced.

     3

    During the reporting period, the net profit of Dayun Motor was RMB 42 million, RMB 40 million, RMB 548 million and RMB 125 million respectively. The net cash flow from operating activities during the reporting period was 341 million yuan, 981 million yuan, -85.6 million yuan, and -8.69 billion yuan. It can be seen that the net profit of Dayun Motor in the report period is not only very unstable, but also does not match the net cash flow generated by operating activities. In the prospectus, it explains the mismatch between the net profit and the net cash flow from operating activities: the net cash flow from operating activities in 2015 was 299 million yuan more than the net profit, mainly due to the operating receivables of the year. The decrease of 575 million yuan was caused by the net cash flow generated by operating activities in 2016 compared with the net profit of 941 million yuan, mainly due to the increase of 3.049 billion yuan in operating payables; in 2017, the net cash flow from operating activities was less than net profit. 1.45 billion yuan, mainly due to the increase in inventories and the increase in operating receivables; in the first half of 2018, the net cash flow from operating activities was -86.69 million, which was 994 million yuan less than net profit, mainly due to The payment period was concentrated in the second half of the year, with operating receivables increasing by 492 million yuan and operating payables decreasing by 504 million yuan. As can be seen from the above explanation, the net profit and the net cash flow generated by operating activities do not match mainly due to changes in items such as receivables, payables, and inventory.

    However, there was no specific explanation in the prospectus for the excessive fluctuation of net profit during the reporting period, especially the reason for the substantial increase in net profit in 2017. However, it can be seen from the top 5 customers of accounts receivable that during the reporting period, the largest accounts receivable customers of Dayun Automobile were Shanxi Jianyun Automobile Sales Co., Ltd. The book balance of the company's accounts receivable in the accounts receivable of the Universiade was 126 million yuan, 480 million yuan, 648 million yuan, and 987 million yuan. In the first half of 2018, the book balance of the company's accounts receivable was as high as 987 million yuan, exceeding the full year of 2017. The possible reason is that part of the accounts receivable that have confirmed revenue in 2017 has not been recovered, and a relatively large amount of accounts receivable has been generated in the first half of 2018. In the first half of 2018, the balance of accounts receivable in the first half of 2018 accounted for as much as 50.05%.

    Shanxi Jianyun Automobile Sales Co., Ltd. is not only the largest customer of Dayun Automobile, but also the general agent of Dayun Automobile in Shanxi Province. At present, the company is a wholly-owned subsidiary of Yuncheng Urban Construction Investment Development Co., Ltd. It seems to have nothing to do with Universiade. However, as far as the prospectus is concerned, the company has just acquired the five terminal sales companies Taiyuan Sales, Linyi Sales, Xixian Sales, Changzhi Sales and Yuncheng Dayun Automobile Sales, which were separated from the Universiade system. The company and a transportation company, Datong Transportation, signed a "Strategic Cooperation Framework Agreement" with Dayun Auto, and became the general agent of Dayun Motors in Shanxi Province. It can be basically judged that the company was actually established to integrate the sales network of Universiade in Shanxi. The increase in the company's accounts receivable by Universiade is on the one hand the result of integration. On the other hand, it seems that the suspicion of profit adjustment cannot be ruled out.

     4

    For listed companies, large fluctuations in net profit and cash flow will affect investors' expectations of the company and affect the evaluation of the company by the market parties, which may cause large fluctuations in stock prices. Therefore, in any case, the above situation needs to be improved after the listing.

    Second, the industry's place: commercial trucks manufacturing vehicle manufacturing leading enterprises, and the gap between leading companies

    The automobile industry is one of the largest and most important industries. It has a large proportion in the manufacturing industry and has a strong driving role in the development of related industries. In the past ten years, the global auto industry has shown a trend of “rapid growth – overall decline – rapid growth – steady growth”. However, China's auto industry has exceeded 0.2 million vehicles in 2013. As the macroeconomic growth rate slowed down, it also entered an adjustment period. Industry adjustments have accompanied the increase in the market share concentration of manufacturing companies in the industry. As the capacity growth is too fast in the future, the integration risks faced by the industry will also increase. Specific to the commercial truck segment where the Universiade is located, the trend of higher concentration will become more apparent.

    In recent years, the overall competitive landscape of the truck market has changed little, and has maintained a high degree of market concentration. The top companies in the industry mainly includeDongfeng MotorGroup Co., Ltd. (Dongfeng Motor Co., Ltd., 00489.HK), China National Heavy Duty Truck Group Jinan Truck Co., Ltd. (China Heavy Duty Truck, 000951.SZ), FAW Jiefang Automobile Co., Ltd., Beiqi Foton Motor Co., Ltd. (Futian Automobile, 600166 .SH), Shaanxi Automobile Group Co., Ltd., etc. Among them, Dongfeng Motor Co., Ltd. is a core subsidiary of Dongfeng Motor Group, one of the three major automobile groups in China. Its main products are light-duty trucks, sports multi-purpose passenger vehicles, passenger car chassis, etc.; China National Heavy Duty Truck is the main heavy-duty load in China. The automobile and military vehicle production base is the heavy-duty automobile manufacturer with the most complete driving form and the largest tonnage in China; FAW Jiefang Automobile Co., Ltd. is the light, medium and heavy truck enterprise under the China FAW Group, the cradle of China's automobile industry. Futian Automobile is a professional commercial vehicle manufacturing company controlled by BAIC Group. It is also a listed company. Its main profit sources are light trucks and heavy trucks. Among them, light trucks have been the first in the industry for many years. Shaanxi Automobile Group Co., Ltd. products Covering heavy military off-road vehicles, heavy trucks, medium and large passenger cars (chassis), medium and light trucks, heavy-duty axles, Cummins engines and auto parts, it is a designated military equipment reserved for the military. Off-road vehicle production base and first batch of automobile export base Business.

    Situation of three listed companies in the industry

     5

    The sales volume of Dayun Auto's 2017 young, medium and heavy truck business remained stable and rising, and its market share ranked eighth in the industry and remained stable. Although Yunyun Auto began to develop new energy vehicles in 2016, in the case of the new energy vehicle industry at the same starting line, in 2016, the sales of pure electric vehicle logistics vehicles ranked second in the industry.

    Among the truck markets where Universiade is located, most of the top rankings are state-owned enterprises. As the leader of private enterprises in the commercial vehicle manufacturing segment, the biggest advantage of Dayun Automobile is its advanced and flexible mechanism. In the face of changes in market demand, it can quickly make strategic adjustments to adapt to an increasingly personalized and diversified market. demand. However, the automotive industry is also an industry that is heavily influenced by policies. As a private enterprise, it has a natural disadvantage compared with state-owned enterprises in terms of policy inclination and resource acquisition. Dayun Automobile relies on its own accumulation and development. Although it has developed into a competitive private enterprise leader in commercial vehicle manufacturing in recent years, it has achieved a leading level in the production of heavy trucks, medium trucks and other models, but in the customer base. The size of the product, the size of the company, etc., are still small compared with domestic state-owned commercial vehicle manufacturers and well-known foreign automakers, and the capital strength still needs to be improved.

    Third, research and development and fundraising

    The automobile manufacturing industry is a capital-intensive, technology-intensive industry. As a high-tech enterprise, Dayun Automobile has 1,072 authorized patents including key assemblies and important parts. Relying on lightweight design, portable car negative pressure sensor, switch test device and flange rolling forming equipment, new energy vehicle high-voltage relay status monitoring, four-circuit valve protection and other core technologies, has developed tractors, dump trucks, A series of fuel, gas and new energy commercial vehicle products, including trucks, special vehicles and trailers.

    During the reporting period, the research and development expenses of Dayun Automobile increased year by year, with 0.69 billion yuan, 107 million yuan, 147 million yuan and 0.72 billion yuan respectively. The proportion of operating income was 2.06%, 1.84%, 1.66% and 1.67% respectively. Dayun Auto has established a complete vehicle R&D system and formed a complete echelon of chief engineer, chief designer, professional chief engineer, chief engineer, engineer and technician. As of the end of the reporting period, there were 968 R&D personnel of Dayun Automotive Technology, accounting for 15.03% of the employees; 62 masters and 576 undergraduates of technical R&D personnel, and the number of R&D personnel with undergraduate and above accounting for 65.91 of all R&D personnel. %.

    Automotive production (especially for heavy trucks and new energy vehicles) places high demands on the technology itself. As a leading enterprise in the field of private heavy trucks, Universiade Motor has a certain gap between its overall technical level and the target enterprises and state-owned enterprises. The proceeds from the issuance of funds for the purpose of this project are mainly to enhance the company's technical level, improve its core competitiveness, and meet the company's long-term strategic development needs.

    The total amount of funds to be raised by Universiade Motor is RMB 5.167 billion. After deducting the relevant issuance expenses, it is intended to be used for the following projects: 1. Chengdu Dayun Automobile Group Co., Ltd. production workshop (line) intelligent, digital technology transformation project ; 2. Chengdu Dayun Automobile Group Co., Ltd. Yuncheng Branch four major process intelligence, digital technology upgrading project; 3. Chengdu Dayun Automobile Group Co., Ltd. Shiyan branch production workshop (line) intelligent, digital technology transformation project; 4. Chengdu Dayun Automobile Group Co., Ltd. pure electric light passenger car and multi-purpose passenger car expansion project; 5. Dayun Automobile Co., Ltd. vehicle and auto parts test and trial center technology upgrading project.

    Great Fortune Car Raises Funds

     6

    Among them, projects 1, 2, and 3 are all intelligent and digital technology transformation projects. Such projects will help enterprises to improve the technical level and market competitiveness of Dayun Automobile through technological transformation of existing equipment, purchase of advanced technology and equipment at home and abroad, and the construction of modern facilities with complete facilities. The main business of production of large and strong automobile manufacturing products. Through the development of layout project 4, it will help Universiade to enrich its product line and expand new profit growth points. The trial production center in Project 5 is an important part of the Universiade technology research and development system. It is mainly responsible for the development and testing of the new product of the Universiade, as well as the upgrade optimization and verification support of the product in the production process. Special studies provide experimental research and precision measurement. After the expansion of the trial production center, the product development of the Universiade will be deepened from the verification test to the development test. Therefore, the project has far-reaching significance for the iteration of existing products and industrial upgrading.

    In the future, Universiade will continue to carry out large-scale and continuous business and technological innovation, and actively explore new business areas (such as new energy, overseas markets, etc.). The research and development of new business and the development of new markets require a large amount of continuous investment, which requires continuous improvement of capital strength, production capacity, expansion of sales scale, improvement of service network system, continuous improvement of technology research and development, and improvement of market position.

    Description of the column:Strengthening industry, technological innovation, globalization... In 2018, many elements have profoundly shaped the new look of the capital market. In 2019, these changes will continue to deepen. The industry preference and competitiveness value of newly listed companies are important annotations for mapping economic structure changes. In order to better reflect the industrial characteristics behind the new shares, we launched the "Industry New Shares" series. In the process of the constant convergence of the “change and invariance” of industry and capital, the importance of information transmission and information interpretation is prominent. Using qualitative and quantitative analysis, from the perspective of systematic research, we are in the capital market “into the sea”, bringing investors new stock research and tracking, looking at the new economy from the new company, and discovering new value with new discoveries.

    contact us:Yuan.wu@jrj.com.cn

    Hot searchGrand Canal IPO

    Editor in charge: Robot RF13015

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