Jiuheng Barcode’s 2019 net profit fell, the Shanghai Stock Exchange Main Board IPO failed

Editor’s note from China Economic Net: Guangzhou Jiuheng Barcode Co., Ltd. (referred to as “Jiuheng Barcode”) will be released at the conference on January 28th. Jiuheng Barcode plans to be listed on the main board of the Shanghai Stock Exchange. The number of shares in this public offering will not exceed 21,255,628 shares, accounting for no less than 25.00% of the total share capital after the issuance. The sponsor is Dongxing Securities. Jiuheng Barcode plans to raise funds of 545 million yuan, of which 320 million yuan will be used for self-adhesive product production base projects, 74.9 million yuan will be used for technology research and development centers and information system upgrade projects, and 150 million yuan will be used to supplement working capital projects.

Jiuheng Barcode is committed to the research and development, production and sales of express logistics application materials products, and is an overall solution provider of domestic express logistics application materials. The controlling shareholder and actual controller of the company is Shen Yunli, who actually controls 51.90% of the company’s equity.

During the reporting period, the company did not distribute dividends.

The growth rate of the company’s operating income in 2019 dropped significantly. In 2018 and 2019, the company’s operating income growth rates were 42.99% and 5.47%, respectively. In 2017, 2018 and 2019, the operating income of Jiuheng Barcode was 990,044,200 yuan, 1,415,638,100 yuan, and 1,493,133,400 yuan, respectively, and the cash received from selling goods and providing labor services was 1,034,917,400 yuan. yuan, 1,430,718,400 yuan, 1,463,334,400 yuan. In each period of the reporting period, the ratio of cash received by the company from selling goods and providing labor services to operating income was 1.05, 1.01 and 0.98, respectively.

The company’s net profit growth rate declined in 2019. In 2018 and 2019, the company’s net profit growth rate was 230.01% and -33.66%, respectively. During the reporting period, the net cash flow generated by the company’s operating activities did not match the net profit. In 2017, 2018 and 2019, the net profit of Jiuheng Barcode was 31,070,200 yuan, 102,536,000 yuan, and 68,023,000 yuan respectively, and the net cash flow from operating activities was 8,106,900 yuan and 4,000,000 yuan, respectively. , 8,955,700 yuan, 119,516,300 yuan.

Company valuations are “up and down.” According to the International Finance News, in just 20 days, the price of Jiuheng Barcode’s investment amount fluctuated, first increased by 22.6% in 5 days, then decreased by 18.44% after 8 days, and then increased by 152.05% after 7 days. On May 2, 2016, Shen Yan transferred 2.08% of the equity of Jiuheng Barcode to Yongzhou Hengjin; 1.74% of the equity was transferred to Yongzhou Hengtong; 1.18% of the equity was transferred to Yongzhou Hengsheng, and the transfer price was 4.38 yuan / Contribution. On May 7, 2016, Ni Le, Guo Wenlan and Yongzhou Hengjia invested in Jiuheng Barcode at a price of 5.37 yuan/investment amount. Among them, Ni Le, Guo Wenlan and Yongzhou Hengjia had not appeared in Jiuheng Barcode’s shareholder list before. . On May 15, 2016, Shen Yan transferred 0.11% of the equity of Jiuheng Barcode to Yongzhou Hengtong; 0.56% of the equity was transferred to Yongzhou Hengsheng at a transfer price of 4.38 yuan/investment amount. On May 22, 2016, Zhuhai Qianheng invested in Jiuheng Barcode at a price of 11.04 yuan per capital contribution.

Jiuheng Barcode submitted the prospectus application draft on June 20, 2019, and updated the prospectus application draft on April 21, 2020. In the initially disclosed prospectus, Jiuheng Barcode did not mention anything related to gambling. The CSRC’s inquiry brought out the gambling past of Jiuheng Barcode.

The prospectus shows that during the previous equity changes of Jiuheng Barcode, Zhuhai Qianheng, Wang Liqun, GF Xinde, Ningbo Jonah, GF Qianhe, Zhang Haibo, Guangdong Yueke, and Guangzhou Yueke Investment Company signed contracts involving performance Agreements with special terms such as gambling and share repurchase.

According to Investor.com, these VAMs have triggered performance compensation clauses, and earlier VAM agreements signed with Zhuhai Qianheng, Wang Liqun, GF Xinde and Ningbo Jonah have also triggered repurchase clauses. However, in order to successfully declare the IPO in June 2019, the above gambling agreements have been terminated.

It is worth noting that the prospectus pointed out that the cancellation agreement signed by Wang Liqun, Ningbo Jonah, Zhang Haibo, Guangzhou Yueke, and Guangdong Yueke stipulated that the company will voluntarily withdraw, not accept, and terminate the application after the initial public offering of shares. In the event of review, rejection, or failure to issue the approval document after expiration, the cancellation agreement will be automatically terminated.

At the end of 2017, 2018 and 2019, the total assets of Jiuheng barcode were 1,269,214,100 yuan, 1,454,682,000 yuan, 1,472,637,700 yuan, and the total liabilities were 713,391,000 yuan, 70,648.64 yuan respectively RMB 10,000, RMB 656,590,200, the company’s combined asset-liability ratios were 56.21%, 48.57%, and 44.59%; the parent company’s asset-liability ratios were 52.38%, 46.47%, and 49.09%, respectively.

At the end of 2017, the end of 2018 and the end of 2019, the ending balance of Jiuheng barcode monetary funds were 116,362,400 yuan, 190,470,400 yuan, and 143,212,200 yuan respectively. Among them, bank deposits were 54,396,500 yuan, 77,960,200 yuan, and 38,312,100 yuan.

At the end of 2017, 2018, and 2019, the current liabilities of Jiuheng Barcode were 581,627,200 yuan, 652,017,400 yuan, and 616,365,600 yuan, respectively. The proportion of current liabilities to total liabilities was 81.53% and 92.29%, respectively. %, 93.87%. At the end of each period of the reporting period, the book values ​​of short-term loans were 110,504,500 yuan, 94,620,000 yuan, and 30,000,000 yuan, accounting for 19.00%, 14.51%, and 4.87% of current liabilities, respectively.

The company’s current ratio and quick ratio are lower than the industry average. At the end of 2017, the end of 2018, and the end of 2019, the current ratios (times) of Jiuheng barcode were 1.23, 1.43, and 1.50, respectively, and the average current ratios (times) of comparable companies in the same industry were 2.16, 2.21, and 2.21; (times) were 0.69, 0.83, and 0.99, respectively, and the average quick ratios (times) of comparable companies in the same industry were 1.58, 1.70, and 1.51, respectively.

The company’s gross profit margin continued to decline. In 2017, 2018 and 2019, the gross profit margins of Jiuheng barcode main business were 24.39%, 21.12% and 19.52%. It is worth noting that Jiuheng Barcode has completed the IPO with a low-margin fundraising project. One of the company’s investment projects is “320 million yuan for self-adhesive products production base project”. In 2017, 2018, and 2019, the gross profit margins of self-adhesive material series products were 10.66%, 9.87, and 7.76%, respectively. The self-adhesive material series products are the products with the lowest gross profit of Jiuheng barcode.

The sales price of the company’s main products decreased. In 2017, 2018 and 2019, Jiuheng Barcode’s electronic receipts accounted for 32.48%, 48.63% and 49.46% of its main business income, respectively. In 2019, the unit price of electronic surface orders fell by 15.01%. In 2017, 2018, and 2019, the unit price of Jiuheng barcode electronic surface sheet (yuan/㎡) was 2.812, 2.838, and 2.412, respectively.

In 2018 and 2019, the sales growth rate of Jiuheng barcode express logistics application material series products was 53.2% and 6.62% respectively. In 2017, 2018 and 2019, the sales amount of Jiuheng barcode express logistics application materials series products were 796.677 million yuan, 1.220509 million yuan and 1.3013599 million yuan respectively, accounting for 81.09% of the company’s main business income. %, 86.71%, 87.59%.

The sales revenue of Jiuheng barcode express waybill has shrunk by nearly 80%, and both production and sales have dropped. During the reporting period, the sales amount of Jiuheng barcode express waybill was 227,045,200 yuan, 109,545,600 yuan, and 50,439,400 yuan, accounting for 28.50%, 8.98%, and 3.88% of the sales revenue of express logistics application materials series products, respectively. In 2018 and 2019, the sales growth rate of Jiuheng barcode express waybill was -51.75% and -53.96% respectively. Compared with the sales amount in 2017, the business revenue of Jiuheng Barcode’s express waybill in 2019 has shrunk by nearly 78%.

Jiuheng Barcode said that the company’s express waybill production and sales have declined. From 2017 to 2019, express waybill production dropped from 2,825,913,100 to 467,138,500, and sales dropped from 2,433,556,700 to 871,501,900 copies, and the proportion of express waybill sales to operating income decreased from 22.93% to 3.38%; the company also gradually expanded the production of electronic face orders and reduced the production of express waybills according to changes in market demand.

The company’s sales to the top five customers are relatively concentrated, mainly due to the high concentration of downstream express logistics industry. In 2017, 2018 and 2019, the total sales revenue of Jiuheng Barcode’s top five customers accounted for 54.21%, 53.60% and 56.02% of the current year’s operating revenue, respectively.

The company’s accounts receivable is increasing year by year, and the accounts receivable turnover rate is lower than the average of comparable companies in the same industry. At the end of 2017, the end of 2018, and the end of 2019, the balances of Jiuheng barcode accounts receivable were 293,981,000 yuan, 368,539,600 yuan, and 501,886,500 yuan respectively, accounting for 29.69% and 26.03% of the operating income for the same period. , 33.61%. Among them, bad debt provisions were 23.6674 million yuan, 26.3058 million yuan, and 36.3319 million yuan. In 2017, 2018 and 2019, Jiuheng barcode accounts receivable turnover rate (times) were 3.52, 4.27, 3.43, and the average accounts receivable turnover rate (times) of comparable companies in the same industry were 4.68, 5.01, 5.04.

Linger Group is a long-term cooperative customer of the company. As an important source of customers for Jiuheng Barcode to expand its overseas business, it mainly purchases the company’s products on behalf of DHL, Malaysia Post and other customers. At the end of 2017, the end of 2018 and the end of 2019, among the main accounts receivable customers of the company, the Linger Group ranked first, first and second respectively.

During the reporting period, the annual collection amount of Linger Group was lower than the sales amount. As of the end of the reporting period, the ending balance of Jiuheng Barcode’s accounts receivable from Linger Group was 76.6595 million yuan. According to the enterprise accounting standards and the company’s accounting policies, the company made a bad debt provision of 13.1174 million yuan according to the expected credit loss rate. As of April 10, 2020, Jiuheng had recovered RMB 14.4769 million of Linger Group’s payment for goods after the barcode period, accounting for 18.88% of the ending balance of accounts receivable from Linger Group.

The company’s inventory turnover ratio has declined and is lower than the average of comparable companies in the same industry. At the end of 2017, the end of 2018, and the end of 2019, the book value of Jiuheng barcode inventory was 234,972,400 yuan, 329,622,600 yuan, and 267,003,800 yuan, accounting for 32.90% and 35.24% of the total current assets at the end of the same period. , 28.90%, accounting for a large proportion. In 2017, 2018, and 2019, the inventory turnover rate (times) of Jiuheng barcode were 4.18, 3.91, and 3.98, respectively, and the average inventory turnover rate (times) of comparable companies in the same industry were 4.73, 5.28, and 8.97, respectively.

The number of employees in the company has decreased for two consecutive years, with a decrease of 264 in 2019 compared to 2017. In 2017, 2018 and 2019, the number of employees of Jiuheng Barcode was 1795, 1584 and 1531 respectively. During the reporting period, the per capita salary of Jiuheng Barcode was lower than the average salary of enterprises in the same industry, and was slightly lower than the average annual salary of Guangzhou in 2017, because the company’s production base was mainly located in Jianghua, which was originally a national-level poverty-stricken county. The level of development and average wages are relatively low.

The company has conflicting production capacity data in two versions of the prospectus. In the prospectus disclosed by Jiuheng Barcode in 2019, in the production capacity, output and sales of the company’s main products, the production capacity of express plastic bags in 2018 was 13.6192 million KG, and the capacity utilization rate was 84.57%; it will be updated in 2020. In the prospectus, the production capacity of express plastic bags in 2018 was 12.3424 million KG, and the capacity utilization rate was 93.31%. It was disclosed twice before and after, with different data.

According to the China Industrial and Economic Information Network, Jiuheng barcodes are intricately connected, and it is suspected that many benefits are being conveyed. According to the disclosure of the prospectus, Guangzhou Jiayin is a company in which Shen Cheng, the nephew of Shen Yunli, the actual controller of Jiuheng Barcode, presides over 10% of the shares and serves as the legal representative, and is a related party of Jiuheng Barcode. The operation of Guangzhou Jiayin relies heavily on Jiuheng Barcode, and there are many doubts about the transaction between Jiuheng Barcode and Guangzhou Jiayin. In addition, the relationship between Jiuheng Barcode and Dongguan Yongcheng Electronics Co., Ltd. and Dongguan Tiancheng Paper Co., Ltd. is also complicated.

It is planned to raise 545 million yuan on the main board of the Shanghai Stock Exchange, of which 150 million yuan is for blood supplementation

The company is committed to the research and development, production and sales of express logistics application materials. It is a well-known overall solution provider of express logistics application materials in China. It can provide customers with the integration of “application design – product production – sub-regional distribution” general Service.

Jiuheng Barcode submitted the prospectus application draft on June 20, 2019 (the official website of the China Securities Regulatory Commission was launched on June 28, 2019), and on April 17, 2020, the official website of the China Securities Regulatory Commission disclosed Guangzhou Jiuheng Barcode Co., Ltd. Feedback on the company’s IPO application documents. On April 21, 2020, Jiuheng barcode updated and submitted the prospectus application draft (the official website of the China Securities Regulatory Commission was launched on May 15, 2020).

Jiuheng Barcode intends to be listed on the main board of the Shanghai Stock Exchange. The public offering of shares this time does not exceed 21,255,628 shares, accounting for no less than 25.00% of the total share capital after the issuance. The sponsor is Dongxing Securities. The company plans to raise funds of 545 million yuan, of which 320 million yuan will be used for the self-adhesive product production base project, 74.9 million yuan will be used for the technology research and development center and information system upgrade projects, 150 million yuan will be used to supplement working capital projects.

Operating revenue growth slowed down in 2019 and net profit declined

In 2018 and 2019, the company’s operating income growth rate was 42.99% and 5.47% respectively. In 2017, 2018 and 2019, the operating income of Jiuheng Barcode was 990,044,200 yuan, 1,415,638,100 yuan, and 1,493,133,400 yuan, respectively, and the cash received from selling goods and providing labor services was 1,034,917,400 yuan. yuan, 1,430,718,400 yuan, 1,463,334,400 yuan. In each period of the reporting period, the ratio of cash received by the company from selling goods and providing labor services to operating income was 1.05, 1.01 and 0.98, respectively.

In 2018 and 2019, the company’s net profit growth rate was 230.01% and -33.66% respectively. During the reporting period, the net cash flow generated by the company’s operating activities did not match the net profit. In 2017, 2018 and 2019, the net profit of Jiuheng Barcode was 31,070,200 yuan, 102,536,000 yuan, and 68,023,000 yuan respectively, and the net cash flow from operating activities was 8,106,900 yuan and 4,000,000 yuan, respectively. , 8,955,700 yuan, 119,516,300 yuan.

Valuations “up and down”

According to International Finance News, it is understood that Jiuheng Barcode was established in 2002, funded by Zhou Xiaowei, Zeng Xianglan, Li Jingwu, Tang Qingdi, Liao Jing, Zuo Huaping, Liu Zhilin and Liu Xiaohui.

On May 2, 2016, Shen Yan transferred 2.08% of the equity of Jiuheng Barcode to Yongzhou Hengjin; 1.74% of the equity was transferred to Yongzhou Hengtong; 1.18% of the equity was transferred to Yongzhou Hengsheng at a price of 4.38 yuan/investment amount.

On May 7, 2016, Ni Le, Guo Wenlan, and Yongzhou Hengjia invested in Jiuheng Barcode at a price of 5.37 yuan/investment amount. Among them, Ni Le, Guo Wenlan and Yongzhou Hengjia had not appeared in Jiuheng Barcode before. in the shareholder list.

On May 15, 2016, Shen Yan transferred 0.11% of the equity of Jiuheng Barcode to Yongzhou Hengtong; 0.56% of the equity was transferred to Yongzhou Hengsheng, and the transfer price was 4.38 yuan/investment amount.

So far, the difference in the valuation of Jiuheng barcode per capital contribution is not too big. On May 22, 2016, Zhuhai Qianheng invested in Jiuheng Barcode at a price of 11.04 yuan per capital contribution.

In just 20 days, the price per investment of Jiuheng barcode fluctuated, first increased by 22.6% in 5 days, then decreased by 18.44% after 8 days, and then increased by 152.05% after 7 days.

Frequently unsuccessful betting, termination of betting before IPO

The prospectus shows that during the previous equity changes of Jiuheng Barcode, Zhuhai Qianheng, Wang Liqun, GF Xinde, Ningbo Jonah, GF Qianhe, Zhang Haibo, Guangdong Yueke, and Guangzhou Yueke Investment Company signed contracts involving performance Agreements with special terms such as gambling and share repurchase. The agreement is terminated in 2019.

In addition, the cancellation agreement signed by Wang Liqun, Ningbo Jonah, Zhang Haibo, Guangzhou Yueke, and Guangdong Yueke stipulated that the company will voluntarily withdraw, not accept, terminate the review, be rejected, and approve documents after the company’s IPO application. In case of unsuccessful issuance after expiration, the cancellation agreement will be automatically terminated.

According to Investor.com, in June and October 2016, Jiuheng Barcode experienced 2 rounds of financing. In June, Zhuhai Qianheng increased the capital of Jiuheng Barcode with a transaction of 11.238 million yuan, and obtained 2.00% of the equity of Jiuheng Barcode at that time. In October, Wang Liqun increased the capital of Jiuheng Barcode with RMB 43.80 million.

In order to successfully complete the financing, Shen Yunli, the actual controller of Jiuheng Barcode, and Jiuheng Barcode Company signed a supplementary gambling agreement with Zhuhai Qianheng and Wang Liqun. The agreement stipulates that in 2016, 2017 and 2018, the deducted non-net profit of Jiuheng Barcode shall not be less than 80 million yuan, 95 million yuan and 105 million yuan, and its deducted non-net profit in any reporting period is lower than the promised 85.00% , Zhuhai Qianheng and Wang Liqun have the right to demand equity or cash compensation from Shen Yunli.

At the same time, if Jiuheng Barcode fails to submit a prospectus before December 31, 2017 or fails to be listed or acquired by December 31, 2019, Shen Yunli will buy back the shares of Zhuhai Qianheng and Wang Liqun. In the gambling agreement, Jiuheng Barcode Company also bears joint and several guarantee responsibility for Shen Yunli’s repurchase obligation. However, “Investor.com” learned that although the company can provide guarantees for the repurchase obligations of major shareholders, the company cannot perform the repurchase obligations. After the failure of the bet, Shen Yunli will face repurchase pressure.

Under the pressure of huge gambling performance, mergers and acquisitions consolidated statements are the fastest way to increase profits.

In the subsequent capital increase, Shen Yunli also signed a gambling agreement with investors such as GF Xinde and Ningbo Jonah, GF Qianhe, Zhang Haibo, Guangzhou Yueke and Guangdong Yueke. All of these VAMs have triggered performance compensation clauses, and the earlier VAM agreements signed with Zhuhai Qianheng, Wang Liqun, GF Xinde and Ningbo Jonah also triggered repurchase clauses. However, in order to successfully declare the IPO in June 2019, the above gambling agreements have been terminated.

At the end of 2019, the total assets were 1.473 billion yuan and the total liabilities were 657 million yuan

At the end of 2017, 2018 and 2019, the total assets of Jiuheng barcode were 1,269,214,100 yuan, 1,454,682,000 yuan, 1,472,637,700 yuan, and the total liabilities were 713,391,000 yuan, 70,648.64 yuan respectively RMB 10,000, RMB 656,590,200, the company’s combined asset-liability ratios were 56.21%, 48.57%, and 44.59%; the parent company’s asset-liability ratios were 52.38%, 46.47%, and 49.09%, respectively.

At the end of each period of the reporting period, the ending balances of Jiuheng barcode monetary funds were 116,362,400 yuan, 190,470,400 yuan, and 143,212,200 yuan respectively. Among them, bank deposits were 54.3965 million yuan, 77.9602 million yuan, and 38.3121 million yuan.

During the reporting period, the company’s current liabilities mainly consisted of short-term borrowings, notes payable, accounts payable, and other payables. At the end of each period of the reporting period, the current liabilities of Jiuheng Barcode were 581,627,200 yuan, 652,017,400 yuan, 616,365,600 yuan, and the current liabilities accounted for 81.53%, 92.29%, and 93.87% of the total liabilities, respectively. At the end of each period of the reporting period, the book values ​​of short-term loans were 110,504,500 yuan, 94,620,000 yuan, and 30,000,000 yuan, accounting for 19.00%, 14.51%, and 4.87% of current liabilities, respectively.

Current ratio and quick ratio are lower than the industry average

At the end of 2017, the end of 2018, and the end of 2019, the current ratios (times) of Jiuheng Barcode were 1.23, 1.43, and 1.50, respectively, and the average current ratios (times) of comparable companies in the same industry were 2.16, 2.21, and 2.21; The quick ratios (times) were 0.69, 0.83, and 0.99, respectively, and the average quick ratios (times) of comparable companies in the same industry were 1.58, 1.70, and 1.51, respectively.

Jiuheng barcode indicates that the company’s current ratio and quick ratio are lower than the average level of comparable companies in the same industry, while the asset-liability ratio is higher than the average level of comparable listed companies in the same industry, with certain long-term and short-term debt repayment pressure, certain To a certain extent, it has affected the company’s expansion of business scale and improved profitability. The company hopes to supplement its working capital by issuing shares to enhance its solvency and reduce financial risks.

Gross profit rate fell, with low gross profit fundraising projects to cross the IPO

During the reporting period, the gross profit margins of Jiuheng Barcode’s main business were 24.39%, 21.12% and 19.52%.

Jiuheng said that the main reasons for the decline in gross profit margin are as follows:

During the reporting period, the company adjusted the product structure according to the changes in the downstream market demand. The market demand for the express waybill product with the highest sales of the company decreased year by year, and its sales revenue and gross profit rate both declined. Due to the company’s advance layout in the electronic bill market, the electronic bill has replaced the express waybill as the company’s highest-selling product.

In 2018, affected by environmental protection and market factors, the purchase price of the company’s paper raw materials has risen to varying degrees. Affected by this, the company’s raw material costs have increased. In order to avoid the impact of raw material cost fluctuations on the company’s costs, the company has extended upward through the industrial chain to realize the self-production of thermal paper and hot melt adhesive, which reduces the risk of raw material price fluctuations to a certain extent.

In 2019, affected by the changes in the specifications of electronic face sheets, the market price of the company’s old-spec products decreased, resulting in a slight decrease in the gross profit margin of electronic face sheets in 2019. At the same time, the proportion of sales revenue of products with relatively low gross profit margins such as express packaging materials among the company’s main products has increased, resulting in a decline in the company’s comprehensive gross profit margins.

It is worth noting that Jiuheng Barcode has completed the IPO with a low-margin fundraising project. One of the company’s investment projects is “320 million yuan for self-adhesive products production base project”.

In 2017, 2018 and 2019, the gross profit margins of self-adhesive material series products were 10.66%, 9.87 and 7.76% respectively. The self-adhesive material series products are the products with the lowest gross profit of Jiuheng barcode.

Prices of key products have dropped

The company’s main products are express logistics application material series, commercial application material series and self-adhesive material series. Express logistics application material series mainly include electronic face sheet, express envelope, express plastic bag, woven bag, express waybill and self-adhesive label products; commercial application material products include commercial paper; self-adhesive material series mainly include thermal paper, Carbonless paper and release paper, etc.

In 2017, 2018 and 2019, the proportion of electronic bills revenue to main business revenue was 32.48%, 48.63% and 49.46% respectively.

In 2017, 2018, and 2019, the unit price of Jiuheng barcode electronic surface bill (yuan/㎡) was 2.812, 2.838, and 2.412 respectively, and the unit price of express waybill (yuan/copy) was 0.093, 0.092, 0.058, respectively, and the express envelope The unit price (yuan/piece) is 0.292, 0.314, 0.276 respectively, the unit price of express plastic bag (yuan/KG) is 10.803, 11.400, 11.554 respectively, the unit price of self-adhesive label (yuan/㎡) is 3.071, 3.055, 2.560 respectively, express delivery The unit prices of woven bags (yuan/KG) are 10.451, 8.430 and 9.925 respectively.

In 2019, the unit price of electronic surface orders for main products fell by 15.01%.

The sales revenue of express waybill has shrunk by nearly 80%, and both production and sales have dropped

From the perspective of the composition of main business income, in 2017, 2018 and 2019, the sales amount of Jiuheng barcode express logistics application materials series products were 796.677 million yuan, 1.220509 million yuan, 130,135.99 yuan respectively 10,000 yuan, accounting for 81.09%, 86.71%, and 87.59% of the company’s main business income, respectively. It is the company’s current and future key development areas.

In 2018 and 2019, the sales growth rate of Jiuheng barcode express logistics application material series products was 53.2% and 6.62% respectively.

During the reporting period, the sales amount of Jiuheng barcode express waybill was 227,045,200 yuan, 109,545,600 yuan, and 50,439,400 yuan, accounting for 28.50%, 8.98%, and 3.88% of the sales revenue of express logistics application materials, respectively. %.

In 2018 and 2019, the sales growth rate of Jiuheng barcode express waybill was -51.75% and -53.96% respectively. Compared with the sales amount in 2017, the business revenue of Jiuheng Barcode’s express waybill in 2019 has shrunk by nearly 78%.

In the prospectus, Jiuheng Barcode disclosed the risk of iterative changes in major products.

Electronic bills can replace manual entry of express logistics information. Express companies can use automatic sorting lines to identify electronic bills, which can reduce labor costs, improve sorting efficiency, and promote China’s express delivery industry into the digital age, leading to the demand for electronic bills A substantial increase, the utilization rate of traditional express waybill has declined. From 2014 to June 2019, the proportion of electronic bills used in express bills (including electronic bills and express waybills) increased from about 5% to about 96%.

Jiuheng Barcode said that the company’s express waybill production and sales have declined. From 2017 to 2019, express waybill production dropped from 2,825,913,100 to 467,138,500, and sales dropped from 2,433,556,700 to 871,501,900 copies, and the proportion of express waybill sales to operating income decreased from 22.93% to 3.38%; the company also gradually expanded the production of electronic face orders and reduced the production of express waybills according to changes in market demand.

Jiuheng Barcode pointed out that with the development of the industry and technological progress, new products may appear in the industry in the future, or the specifications of existing products may change. If the company cannot respond in time in the future, it may have an adverse impact on the company’s operating performance.

Sales to the top five customers are relatively concentrated

In 2017, 2018 and 2019, the total sales revenue of Jiuheng Barcode to the top five customers was 536.6939 million yuan, 758.7296 million yuan and 836.4092 million yuan respectively. The total sales revenue of the top five customers The proportion of operating income in the current year was 54.21%, 53.60% and 56.02% respectively.

In 2019, the sales revenue of Jiuheng Barcode to China Post reached 112 million yuan, accounting for 7.53%, making it its third largest customer in 2019, while China Post was not among the top five customers of Jiuheng Barcode before.

Jiuheng barcode indicates that the company’s sales to the top five customers are relatively concentrated, mainly due to the high concentration of the downstream express logistics industry.

Accounts receivable is increasing year by year, and the turnover rate of accounts receivable is lower than the average of comparable companies in the same industry

At the end of 2017, the end of 2018 and the end of 2019, the balance of accounts receivable of Jiuheng Barcode was 293,981,000 yuan and 36,853.9 yuan respectively.60,000 yuan, 501,886,500 yuan, accounting for 29.69%, 26.03%, and 33.61% of the operating income in the same period. Among them, bad debt provisions were 23.6674 million yuan, 26.3058 million yuan, and 36.3319 million yuan.

Jiuheng Barcode said that during the reporting period, the company’s accounts receivable balance showed an upward trend year by year, mainly due to the expansion of the company’s sales scale and the adjustment of customer structure. At the end of 2018, the ending balance of accounts receivable increased by RMB 74,558,600 compared with the end of 2017, an increase of 25.36%. On the one hand, the scale of income further increased, and the ending balance of accounts receivable increased accordingly; on the other hand, accounts receivable Linger The Group’s payment for goods continued to increase and some of the payment exceeded the credit period, which increased the total ending balance of accounts receivable.

At the end of 2019, the closing balance of accounts receivable increased by RMB 133,346,900 compared with the end of 2018, an increase of 36.18%, mainly due to the substantial increase in the sales amount of the company to China Post since the second half of 2019, and it has a certain credit period, As a result, the ending balance of receivables from China Post was relatively large, with an amount of RMB 57.2171 million; secondly, due to the increase in customer demand, the company’s sales to SF Express and Shentong in the fourth quarter increased more than the same period last year, and it was still within the credit period. , resulting in a larger increase in the corresponding ending balance of accounts receivable.

In 2017, 2018 and 2019, Jiuheng barcode accounts receivable turnover rate (times) were 3.52, 4.27, 3.43, respectively, and the average accounts receivable turnover rate (times) of comparable companies in the same industry were 4.68 , 5.01, 5.04.

Linger Group’s repayment amount is lower than the sales amount

Linger Group is a long-term cooperative customer of the company. As an important source of customers for the company to expand its overseas business, it mainly purchases the company’s products on behalf of DHL, Malaysia Post and other customers. At the end of 2017, the end of 2018 and the end of 2019, among the major accounts receivable customers, the Linger Group ranked first, first and second respectively.

During the reporting period, the annual collection amount of Linger Group was lower than the sales amount.

Jiuheng Barcode said the main reason is: In addition to express packaging business, Lingo Group also operates real estate development business in Malaysia. Affected by changes in the operating environment of the local real estate industry in Malaysia, the real estate business engaged in by Lingo Group has nearly In the past few years, the speed of sales has been slow, the capital chain is relatively tight, and there is a situation in which payment for goods is delayed. In order to maintain the normal operation of the business with the Linger Group and take into account the overall stable development of the export business, especially the business development with the international express delivery giant DHL, the company continues to maintain cooperation with the Linger Group.

Jiuheng Barcode said that as of April 10, 2020, the company had recovered RMB 14.4769 million of the Linger Group’s payment for goods, accounting for 18.88% of the ending balance of the Linger Group’s accounts receivable.

As of the end of the reporting period, the ending balance of the company’s accounts receivable from Linger Group was 76.6595 million yuan. According to the provisions of the Accounting Standards for Business Enterprises and the company’s accounting policies, the company made provision for bad debts based on the expected credit loss rate of 13.1174 million yuan. mentioned more adequately.

Inventory turnover has decreased and is lower than the average of comparable companies in the same industry

The company’s inventory mainly includes raw materials, finished products, issued goods, turnover materials, work in progress, etc. During the reporting period, with the continuous expansion of the company’s operating scale, the book value of inventories continued to grow.

At the end of each period of the reporting period, the book value of Jiuheng barcode inventory was 234,972,400 yuan, 329,622,600 yuan, 267,003,800 yuan, accounting for 32.90%, 35.24%, 28.90%, accounting for a large proportion.

In 2017, 2018, and 2019, the inventory turnover rate (times) of Jiuheng barcode were 4.18, 3.91, and 3.98, respectively, and the average inventory turnover rates (times) of comparable companies in the same industry were 4.73, 5.28, and 8.97, respectively.

Jiuheng Barcode said that during the reporting period, the company’s inventory turnover rate decreased, mainly because with the continuous expansion of the company’s business scale, in order to ensure the timeliness of supply to customers, the company increased the reserve of raw materials and The production volume of finished goods, resulting in a decrease in inventory turnover.

The number of employees has decreased for two consecutive years

The number of employees in the company decreased for the second year in a row. In 2017, 2018 and 2019, the number of employees of Jiuheng Barcode was 1795, 1584 and 1531 respectively.

During the reporting period, the per capita salary of Jiuheng Barcode’s senior employees showed a fluctuating trend, and the per capita salary of middle-level employees, ordinary employees and all employees showed an increasing trend. Among them, the decrease in the per capita salary of senior employees in 2019 was mainly due to the change of senior employees during the overall change of the company in December 2018. Some directors and supervisors with higher salaries resigned from high-level positions and were classified as middle-level managers. At the same time, some employees with lower salaries were elected as supervisors. Later classified to high-level; the larger increase in the per capita salary of middle-level employees in 2019 was mainly due to the changes in middle-level employees during the company’s overall change in December 2018 and the expansion of the company’s business scale.

During the reporting period, the per capita salary of Jiuheng Barcode was lower than the average salary of enterprises in the same industry, and was slightly lower than the average annual salary of Guangzhou in 2017, because the company’s production base was mainly located in Jianghua, which was originally a national poverty County, the level of economic development and the average wage level are relatively low.

5 contract disputes and 10 labor disputes were involved in the reporting period

The prospectus disclosed that during the reporting period, Jiuheng Barcode had 5 contract disputes and 10 labor disputes.

(1) The dispute over the loan contract between Changsha Economic and Technological Development Group Co., Ltd. and Alfenghua and Jiuheng Co., Ltd. and the dispute over the right of recourse between Jiuheng Co., Ltd. and Alfenghua and Zhong Huicai.

Because Alfenghua failed to repay the loan in time, Jiuheng Co., Ltd. also failed to fulfill its guarantee responsibility. Therefore, Changsha Economic and Technological Development Group Co., Ltd. submitted to Changsha County, Hunan Province for the loan and guarantee of Alfenghua and Jiuheng Co., Ltd. The people’s court filed a lawsuit. On January 3, 2017, the People’s Court of Changsha County, Hunan Province issued (2016) Xiang 0121 Min Chu No. 2503 “Civil Judgment”, and the judgment is as follows: (1) Aierfenghua shall pay the plaintiff’s loan within seven days from the date when the judgment takes effect5 , 000,000.00 yuan; (2) Erfenghua shall pay the plaintiff liquidated damages within seven days from the date when the judgment takes effect (among which the liquidated damages from June 13, 2014 to June 13, 2016 are 1,096,500.00 RMB, the liquidated damages from June 13, 2016 to the date of actual repayment are based on the outstanding loan and calculated according to the standard of 3/10,000 per day); (3) Jiuheng Co., Ltd. Under the joint and several liability for repayment, Jiuheng Co., Ltd. has the right to claim compensation from Alfenghua after assuming the guarantee responsibility; (4) Jiuheng Co., Ltd. shall pay the plaintiff’s cost of 93,450.00 yuan for the realization of the creditor’s rights within seven days of the effective date of the judgment; ( 5) Dismiss other claims of the plaintiff.

On the 10th of 2018, Jiuheng Co., Ltd. fulfilled its guarantee responsibility according to (2016) Xiang 0121 Min Chu No. 2503 “Civil Judgment”, and repaid 2,998,915.35 yuan to Changsha Economic and Technological Development Group Co., Ltd. on behalf of Aierfenghua Yuan. In order to recover the compensation from Alfenghua, Jiuheng Co., Ltd. filed a lawsuit with the People’s Court of Changsha County, Hunan Province. On September 27, 2018, the People’s Court of Changsha County, Hunan Province issued (2018) Xiang 0121 Min Chu No. 6812 “Civil Judgment”, and the judgment is as follows: (1) Aierfenghua will file a complaint with Jiuheng Co., Ltd. within ten days from the date when the judgment takes effect. The repayment amount is 2,998,915.35 yuan and interest; (2) Zhong Huicai is jointly and severally liable for repayment.

Because El Fenghua and Zhong Huicai failed to perform their payment obligations after the above judgment took effect, Jiuheng Co., Ltd. applied to the People’s Court of Changsha County, Hunan Province for compulsory execution. During the execution process, Jiuheng Barcode, Al Fenghua and Zhong Huicai reached an execution settlement on March 29, 2019, and agreed that in addition to the 100,000.00 yuan already paid, Zhong Huicai would pay the balance on May 31, 2019. Pay before the day. On the same day, the People’s Court of Changsha County, Hunan Province issued (2019) Xiang 0121 Zhi No. 580 “Execution Ruling”, ruling as follows: (1) to terminate the execution of this case; (2) if the person subject to execution fails to perform his obligations according to the execution and settlement agreement, Jiuheng Barcode can apply to restore the execution of the original effective legal documents.

Because Al Fenghua and Zhong Huicai failed to perform their payment obligations as agreed in the execution and settlement agreement, Jiuheng Barcode applied to the Changsha County People’s Court for resumption of execution. On September 9, 2019, Jiuheng Barcode received an execution payment of 1,000,000.00 yuan from the Changsha County People’s Court. On December 31, 2019, Jiuheng Barcode received an execution payment of 500,000.00 yuan from the Changsha County People’s Court. As of the signing date of this prospectus, Jiuheng Barcode has recovered a total of 1,600,000.00 yuan, and the case is still in the process of execution.

(2) A contract dispute between Jianghua Jiuheng and Sihui (Beijing) Automobile Service Co., Ltd.

Since Sihui (Beijing) Auto Service Co., Ltd. failed to pay the payment for the goods as agreed, Jianghua Jiuheng filed a lawsuit with the Tongzhou District People’s Court of Beijing against Sihui (Beijing) Auto Service Co., Ltd. over the payment of the goods. On July 28, 2017, Beijing Tongzhou District People’s Court issued (2017) Jing 0112 Min Chu No. 12143 “Civil Mediation Letter”, the mediation is as follows: (1) Sihui (Beijing) Auto Service Co., Ltd. on September 30, 2017 The payment of Jianghua Jiuheng 220,000.00 yuan was paid a few days ago; (2) If Sihui (Beijing) Auto Service Co., Ltd. pays the payment in full and on time according to the first agreement above, the two parties will settle the debt, otherwise, Jianghua Jiuheng will It has the right to apply for a one-time enforcement of the payment of 267,020.00 yuan.

Since Sihui (Beijing) Auto Service Co., Ltd. failed to perform its payment obligations as agreed in the mediation agreement, Jianghua Jiuheng applied to the Tongzhou District People’s Court of Beijing for compulsory execution. During the execution process, Sihui (Beijing) Auto Service Co., Ltd. had no property available for execution, and the Tongzhou District People’s Court of Beijing issued (2017) Jing 0112 Zhi No. 7372 “Execution Ruling” on April 13, 2018, and the ruling is as follows: The execution procedure of the civil mediation letter (2017) Jing 0112 Min Chu No. 12143 by the Tongzhou District People’s Court of Beijing was terminated.

As of the signing date of this prospectus, Sihui (Beijing) Auto Service Co., Ltd. has not made the above payment to Jianghua Jiuheng.

(3) The sale and purchase dispute between Jianghua Jiuheng and Guangzhou Zhonglian Paper Co., Ltd.

Because Guangzhou Zhonglian Paper Co., Ltd. failed to pay the purchase price as agreed, Jianghua Jiuheng filed a lawsuit with Guangzhou Huangpu District People’s Court against Guangzhou Zhonglian Paper Co., Ltd. On January 10, 2019, Guangzhou Huangpu District People’s Court issued (2018) Yue 0112 Min Chu No. 7592 “Civil Mediation Letter”, the mediation is as follows: (1) Guangzhou Zhonglian Paper Co., Ltd. shall pay before January 20, 2019 The payment for the goods is 213,510.80 yuan; (2) If Guangzhou Zhonglian Paper Co., Ltd. fails to pay in full and on time according to the first item above, Jianghua Jiuheng has the right to require Guangzhou Zhonglian Paper Co., Ltd. to pay the unpaid amount and liquidated damages immediately. (Based on the actual amount owed, from January 21, 2019 to the date of payment, the liquidated damages will be paid at an annual interest rate of 24%) and attorney fees of 15,000.00 yuan, and an application to the court for enforcement.

Because Guangzhou Zhonglian Paper Co., Ltd. failed to pay the payment in full and on time as agreed in the mediation agreement, Jianghua Jiuheng applied to the People’s Court of Huangpu District, Guangzhou City for compulsory execution. As of August 19, 2019, Jianghua Jiuheng has received the payment of 116,351.59 yuan from Guangzhou Zhonglian Paper Co., Ltd. and the execution payment of 112,159.21 yuan allocated by the Huangpu District People’s Court of Guangzhou City. The execution of this case has been completed.

(4) Disputes over the sales contract between Jiuheng Barcode and Beijing Rufeng Express Co., Ltd.

Because Beijing Rufeng Express Co., Ltd. failed to pay the purchase price as agreed, Jiuheng Barcode filed a lawsuit with Beijing Fengtai District People’s Court against Beijing Rufeng Express Co., Ltd. On October 29, 2019, the People’s Court of Fengtai District, Beijing made (2019) Jing 0106 Min Chu No. 24133 “Civil Judgment”, the judgment is as follows: (1) Beijing Rufeng Express Co., Ltd. shall pay the payment within ten days from the date when the judgment takes effect 71,727.50 yuan; (2) Beijing Rufeng Express Co., Ltd. shall pay liquidated damages within ten days from the date when the judgment takes effect (based on 71,727.50 yuan, calculated from April 23, 2019 to the date of actual payment) , calculated according to the loan interest rate announced by the People’s Bank of China for the same period).

On November 3, 2019, the People’s Court of Fengtai District, Beijing announced the delivery of (2019) Jing 0106 Min Chu No. 24133 Civil Judgment to Beijing Rufeng Express Co., Ltd. in accordance with the law.

As of the signing date of this prospectus, Beijing Rufeng Express Co., Ltd. has not paid the above amount to Jiuheng Barcode.

(5) Disputes over the sales contract between Jiuheng Barcode and Hunan Hengruixiang Packaging Co., Ltd.

Because Hunan Hengruixiang Packaging Co., Ltd. failed to pay the payment for the goods as agreed, Jiuheng Barcode filed a lawsuit with Yuanjiang City People’s Court against Hunan Hengruixiang Packaging Co., Ltd. for the arrears of payment for goods, requesting that Hunan Hengruixiang Packaging Co., Ltd. be ordered to be ordered The responsible company paid RMB 377,600.00 for goods and RMB 37,760.00 for late payment. On March 16, 2020, Yuanjiang City People’s Court decided to accept the case after review, and issued (2020) Xiang 0981 Min Chu No. 427 “Notice of Acceptance of the Case”.

As of the signing date of this prospectus, Yuanjiang City People’s Court has not yet heard the case.

The production capacity data of the two versions of the prospectus are inconsistent

The company has conflicting production capacity data in two versions of the prospectus.

In the prospectus disclosed by Jiuheng Barcode in 2019, in the production capacity, output and sales of the company’s main products, the production capacity of express plastic bags in 2018 was 13.6192 million KG, and the capacity utilization rate was 84.57%; In the prospectus updated in 2018, the production capacity of express plastic bags in 2018 was 12.3424 million KG, and the capacity utilization rate was 93.31%. It was disclosed twice before and after, with different data.

The relationship is intricate and it is suspected that many benefits are conveyed

According to China’s Industrial Economic InformationAccording to the disclosure of the prospectus, Guangzhou Jiayin Label Paper Co., Ltd. (hereinafter referred to as Guangzhou Jiayin) is a company in which Shen Cheng, the nephew of Shen Yunli, the actual controller of Jiuheng Barcode, presides over 10% of the shares and serves as the legal representative. It is Jiuheng. Barcode Affiliate.

Financial information shows that Guangzhou Jiayin has a close relationship with Jiuheng barcode business. For example, Guangzhou Jiayin was the fifth largest supplier of Jiuheng Barcode in 2016. Jiuheng Barcode purchased 17.8098 million yuan of hot melt adhesive from Guangzhou Jiayin that year, accounting for 3.45%.

Inquiring about the industrial and commercial information, the total sales of Guangzhou Jiayin in 2016 was 22,359,200 yuan. Based on the annual sales performance of 22,359,200 yuan, Jiuheng Barcode contributed 17,809,800 yuan, accounting for nearly 80%. It can be said that , It is the business of Jiuheng barcode that supports Guangzhou Jiayin.

There is also a noteworthy piece of information. Guangzhou Jiayin paid social security to only 5 people in 2016. By 2017 and 2018, after Jiuheng Barcode reduced related transactions and greatly reduced the purchase of Guangzhou Jiayin, Guangzhou Jiayin paid social security personnel was also reduced to one or even one person.

It can be seen that the operation of Guangzhou Jiayin relies heavily on Jiuheng barcode. However, there are many doubts about the transaction between Jiuheng Barcode and Guangzhou Jiayin. Jiuheng Barcode disclosed in the prospectus that during the reporting period, it only sold 273,600 yuan of release paper and printed matter to Guangzhou Jiayin in 2016, which was a small amount and had limited impact on the company’s operating results. However, in the accounts receivable and payable of related parties, Jiuheng Barcode also disclosed that Jiuheng Barcode had accounts receivable of 1.1538 million yuan from Guangzhou Jiayin in 2017. However, there were no accounts receivable in 2016, that is to say, this was a new account receivable in 2017.

What is strange is that according to the disclosure of the previous related transactions, Jiuheng Barcode did not have any related sales to the related party Guangzhou Jiayin in 2017, but this year it generated 1,153,800 yuan of accounts receivable . So, how did this account receivable come about?

In addition to the suspicious transactions with Guangzhou Jiayin, the relationship between Jiuheng Barcode and Dongguan Yongcheng Electronics Co., Ltd. and Dongguan Tiancheng Paper Co., Ltd. is also complicated.

From the perspective of equity relationship, natural person Li Yong holds 100% equity of Dongguan Yongcheng Electronics Co., Ltd. and 80% equity of Dongguan Tiancheng Paper Co., Ltd. The information disclosed in public information shows that Li Yong has a close relationship with Shen Yunli, the actual controller of Jiuheng barcode. According to the information from Tianyancha, there are a total of 12 companies that have relations with Li, of which at least 5 are related to Shen Yunli, the actual controller of Jiuheng Barcode.

For example, Li Yong holds a 5% stake in Guangzhou Lanxing New Energy Investment Co., Ltd. (hereinafter referred to as Guangzhou Lanxing) and serves as a supervisor of this company. The remaining 95% of Guangzhou Lanxing is owned by Zeng Xianglan, who is Shen Yunli ‘s spouse. Guangzhou Yixin Investment Co., Ltd. and Shantou Yixin Gas Thermal Power Co., Ltd. are both companies invested by Guangzhou Lanxing.

Jianghua Yao Autonomous County Jiuheng Wind Power Co., Ltd. is an enterprise directly controlled by Shen Yunli, with a shareholding ratio of 70%. Li Yong also participated in the company, holding a shareholding ratio of 15%. In addition, Jianghua Jiuheng New Energy Co., Ltd., with a registered capital of 100 million yuan, is also one of the companies that Li Yong and Shen Yunli cooperate with, holding 7% and 75.68% of the shares respectively.

It can be seen that although Li Yong and the actual controller of Jiuheng Barcode are not related, they are very close, and Jiuheng Barcode does not need to disclose this in the prospectus. However, Jiuheng Barcode frequently purchases from the company controlled by Li Yong. The information disclosed in the prospectus shows that Dongguan Tiancheng Paper Co., Ltd. is the fourth largest supplier of Jiuheng Barcode in 2017. Jiuheng Barcode purchased 34.3921 million yuan from Tiancheng Paper in that year, accounting for 4.73%.

Tiancheng Paper was established on October 20, 2016. It became one of the top five suppliers of Jiuheng barcode in 2017, and did not enter the top five in 2018 and 2019. In 2016, Tiancheng Paper’s operating income was nearly 2.5 million yuan, and no employees paid social security; in 2017, Tiancheng Paper’s annual sales increased to 37.39 million yuan, and the number of social security contributions increased to 1 person.

In addition, according to the prospectus, the purchase amount of Jiuheng Barcode from Tiancheng Paper in 2017 was 34.39 million yuan. It can be seen that in addition to Jiuheng Barcode, Tiancheng Paper only sold about 3 million yuan in that year. 2016 was comparable in size. It can be seen that Tiancheng Paper’s business is also supported by Jiuheng barcode.