According to public information, the Beijing Stock Exchange Listing Committee is scheduled to hold the 58th Listing Committee Review Meeting in 2022 on October 28, 2022, to review Qingdao Raytheon Technology Co., Ltd. (hereinafter referred to as “Raytheon Technology”), and the sponsor is Guotai Junan Securities.
Raytheon Technology is a professional computer hardware equipment manufacturer. Its main products include notebook computers, desktop computers, peripherals and peripherals (including monitors, keyboards, mice, headphones, etc.).
As of the date of signing the prospectus, Suzhou Haixin directly holds 17.9022 million shares of the company, with a shareholding ratio of 35.8043%, and is the controlling shareholder of the company; Suzhou Haixin is a wholly-owned subsidiary of Haier Group, and Haier Group also indirectly controls Haier Group through Cube Ark holds 2.2238% of the company’s voting rights, and Haier Group controls 38.0281% of the company’s voting rights in total, making it the company’s actual controller.
Shareholding structure chart, picture source: prospectus
The funds to be raised in this IPO are mainly used for brand upgrade and headquarters operation center construction projects, product development and design center construction and hardware product development and design projects, repayment of bank loans, and replenishment of working capital.
Use of fundraising, picture source: prospectus
1. The gross profit margin of main business is lower than that of peers
During the reporting period, Raytheon Technology achieved operating income of 2.091 billion yuan, 2.254 billion yuan, 2.642 billion yuan, and 1.175 billion yuan respectively, and the net profit attributable to owners of the parent company was 56.7808 million yuan, 60.7595 million yuan, 77.7343 million yuan, 27.6738 million yuan.
Fundamentals, picture source: prospectus
It is worth noting that from January to June 2022, due to factors such as changes in consumer electronics industry demand, the new crown pneumonia epidemic, exchange rate changes and other factors, Raytheon Technology’s operating income decreased by 2.66% compared with the same period last year, and the net profit after deduction from the parent company was compared with last year. It fell 24.67% over the same period.
Specifically, during the reporting period, the company’s main business income is the sales income of notebook computers, desktop computers, peripherals and peripheral products. Among them, notebook computer sales accounted for 78.85%, 74.68%, 73.57%, and 66.91% of the current main business income, which were the company’s main products. From 2019 to 2021, the compound growth rate of notebook computer sales revenue will be 12.67%, and the business scale will continue to increase. However, from January to June 2022, due to the decline in the downstream prosperity of the consumer electronics industry and the national epidemic, the company’s notebook computer sales revenue decreased year-on-year.
Main business income is classified by product or service, picture source: prospectus
In each period of the reporting period, the gross profit margins of Raytheon Technology’s main business were 10.93%, 10.29%, 12.62%, and 11.83%, respectively.
Below the average of comparable companies in the same industry.
Comparative analysis of gross profit margins of comparable companies, picture source: prospectus
At present, industry giants such as Lenovo and Dell have a higher market share than issuers by virtue of their advantages in capital, channels, and product line combinations. According to public data, in 2020, the top four domestic e-sports laptop and desktop markets are Lenovo, Dell, issuer, and HP, respectively, with a sales share of 31.15%, 14.24%, 8.87%, and 8.06%; The top four in terms of revenue share are Lenovo, Dell, HP, and the issuer, with revenue shares of 32.68%, 14.94%, 8.13%, and 7.83%, respectively.
If market competition further intensifies in the future, or the company cannot launch computer hardware products that conform to consumer trends and user preferences through continuous product development, upgrades and iterations, and optimize product structure, enhance its own brand influence and product competitiveness, and further expand market share, The company may face the risk of slowing business growth and declining market share.
During the reporting period, the research and development expenses of Raytheon Technology were 67.7816 million yuan, 75.4642 million yuan, 111 million yuan and 31.5639 million yuan respectively, of which the design and development expenses accounted for 72.50%, 73.72%, 75.75% and 54.55% respectively. The company’s independent research and development capabilities are more focused on product planning, product creativity and appearance design, product overall scheme design, etc. Since the company operates in an asset-light mode, the specific implementation of product development plans is entrusted to outsourced manufacturers, and outsourced R&D is the issuer. part of the R&D process. If the outsourced manufacturer fails to complete the product landing and mass production according to the company’s product definition, product creativity and appearance design plan, there may be the risk of the company’s product development failure, the company’s inability to maintain market competitiveness and the risk of market share decline.
2. Rely on the top five customers
Except that some computer hardware products of the company have been produced by themselves since 2021, during the reporting period, the production of the company’s products
It mainly adopts the outsourcing model, and the cooperating outsourcing manufacturers include Quanta Computer, Blue Sky Computer, Tongfang Information, Pegatron Technology and many other computer hardware OEMs.
Raytheon Technology purchases core components from overseas suppliers and settles with some overseas suppliers mainly in US dollars. Fluctuations in the exchange rate between the US dollar and the RMB will directly affect the company’s procurement costs. In each period of the reporting period, the company’s exchange losses were 8.8416 million yuan, -6.1084 million yuan, 3.0190 million yuan, and 8.1733 million yuan. If the US dollar exchange rate fluctuates greatly in the future, foreign exchange gains and losses may occur and thus affect the overall profitability of the company. The company faces certain exchange rate fluctuation risks.
During the reporting period, the total sales revenue of the top five customers of Raytheon Technology accounted for 70.48%, 76.22%, 84.70%, and 79.39% of the operating revenue for the same period, respectively.
Customer concentration is high. If the production and operation conditions of the company’s main customers deteriorate or the cooperative relationship between the main customers and the company changes, resulting in a decrease in the number of orders placed by them to the company, it may have an impact on the company’s performance stability.
In addition, with the expansion of the company’s production and operation scale, Raytheon Technology’s liquidity needs have gradually increased. In each period of the reporting period, the net cash flow generated by the operating activities of Raytheon Technology was 8.9276 million yuan, -195 million yuan, -706 million yuan, and -359 million yuan respectively. After considering the discounted bills to recover the payment for goods, the net cash flow from operating activities The amounts were 84.8621 million yuan, -52.7229 million yuan, -90.3801 million yuan, and -186 million yuan, with certain fluctuations. If the company cannot effectively strengthen fund management, make overall arrangements for the collection and payment of project funds, strengthen the recovery of accounts receivable, and make reasonable use of commercial credit for payment arrangements, it may cause substantial fluctuations in cash flow from operating activities, which will bring operating risks to the company. and debt service risk.
The difference between the company’s net profit and the net cash flow from operating activities, picture source: prospectus
At present, the competition in the specialized computer hardware market where Raytheon Technology is located is becoming increasingly fierce. The company needs to further seek breakthroughs in core technologies, and on this basis, carry out business growth model innovation and improve its overall R&D design strength and testing level; at the same time, the company It is necessary to do a good job in market research, collect user demand information, and increase investment in product promotion and market channels through the implementation of various marketing plans to further enhance the company’s brand and market awareness.