Involved Accounts Receivable 100 Million Billions of Accounts Still Need to Issue Bonds**

With more than 600 million currency funds on the books, why is there still a limit of 500 million corporate bonds to be issued?

On January 12, Ai Kang Technology (002610) issued an announcement that it has obtained the approval of the CSRC to issue corporate bonds of no more than 500 million yuan. The proceeds from the issuance of corporate bonds are intended to use supplementary liquidity funds to repay corporate debts and adjust the liability structure.

However, as of the third quarter of 2012, Ai Kang Technology not only retained more than 600 million currency funds on the books, but had accumulated nearly half of its IPO funds to “maintain” its own cash flow before this, but it was clear that there was little success.

The industry questioned this behavior, and the spokesperson later pointed to the fact that Ai Kang Technology aims to expand through solar power station construction.

One financial expert, who declined to be named, pointed out that this situation is not unrelated to the significant increase in the company’s performance last year and the significant increase in accounts receivable.

In the secondary market, the share price of Econ Technology has been bleak since its listing, and has soared to 29.98 yuan/share on the second day of the listing. As of January 17th, it closed at 5.94 yuan, which was nearly two-thirds lower than the issue price of 16 yuan per share when listed a year and a half ago.

Book lying 600 million in funds On January 12, 2013, iKang Technology was approved by the China Securities Regulatory Commission for corporate bonds with a issuance period of not less than 5 years (including 5 years) and a total amount of not more than 500 million yuan. The funds raised will be used to supplement liquidity, repay corporate debt, and adjust the liability structure.

However, in fact, prior to this, Ai Kang Technology had used nearly 50% of IPO to raise funds to perform a series of "maintenance" on the company's cash flow.

Ai Kang Technology landed on the SME board in August 2011. It changed the sponsor representative and the accounting firm a month later. In October, it revised the plan for the use of over-raised funds, of which RMB 90 million was used to repay the bank, 1.96. 100 million yuan is used for permanent replenishment of working capital.

In addition, in order to effectively reduce the related financial expenses, Ai Kang Technology rolled back the use of 58 million yuan of idle funds from raised projects in May 2012 and November 2012 to temporarily supplement the working capital. As such, Ai Kang Technology has cumulatively used 45.32% of the raised funds to supplement liquidity or return the bank**.

Obviously, the investment in such a large proportion of IPO cash encounters a cruel reality: Although the third quarterly report in 2012 shows that ACON's monetary capital is about 610 million, the financial costs of ACON Technology are still increasing, and the year-on-year increase. 70.74%. And the asset-liability ratio has reached 61.01%, far exceeding the average of 38.7% in the industry.

While lying on the books with more than 600 million currency funds, and using supplementary funds, large-scale borrowing, issuing corporate bonds, etc. to supplement liquidity, why is there such a strange situation?

On January 15, the reporter called Ai Kang Technology on this issue. A staff member of the Securities Department did not explicitly respond to the reporter, but said: “The company’s bond is definitely a certain demand for funds. The main reason is that the entire photovoltaic company’s liquidity is now The holding capacity and external capabilities of the banks were relatively low. At the same time, the bank’s collection and payment of loans to photovoltaic companies was relatively tight. In addition, the company’s investment in solar power station construction involved a relatively wide range of funds, so it was relatively Big capital requirements."

On January 17th, the reporter dialed the office of the secretary of the Dong Ji secret office according to the instructions of the above-mentioned staff, but he was unable to connect.

The adverse market expansion in 2012 was a year when China's PV companies encountered a "cold stream": overcapacity, the United States and Europe "double reversed." The dreams of IPOs of many photovoltaic companies, such as China Haiyang New Energy Power Co., Ltd., also shattered. The Economist technology, which is engaged in the production and sale of solar accessories, actually voted for the issuance of corporate bonds on the board of directors three months after the IPO.

In the case of such a downturn in the industry, Ai Kang Technology has to issue bonds. What is it like?

The industry questioned this behavior, spearheading the development of the Ai Kang Technology Power Plant construction project, and suspected of an expansion of the market. This argument is not groundless. Last year, the investment in non-raised investment projects of Ai Kang Technology was mainly concentrated in the field of solar power plants: not only 160 million yuan had been invested in the construction of 25MW power plants for Phase I and Phase II and 42 million for Aikemang 20MW Phase I power stations in Qinghai Province, but also It has invested more than 400 million yuan in the construction of the 20 MW power station in Qinghai Yixiang Phase III and the construction of the second phase of the 20MW power plant in Xinjiang Yikang.

The above-mentioned staff members also admitted that: “Now the company is doing some PV power plants and the like. After the bonds are issued, some of the liquidity will be added to the power station projects, but not all of them.”

A senior person who has worked in the photovoltaic industry said: “In terms of experience, we are not optimistic about the solar accessories industry. On the other hand, building solar power plants cannot be said to be bad, but because the power station construction itself will consume a lot of solar wafers, At the same time, a large amount of electricity is needed to extract silicon wafers, so the cost is high, and the photoelectric conversion efficiency is not high. Generally speaking, the revenue of solar power stations is not high, and it is not very optimistic, but the specific needs to look at national industrial policies. ”

For example, in the case of the Xinjiang Kangkang 20MW Power Station II, the company said it will invest approximately 200 million in the project and expects net profit of approximately 263 million yuan over the 25-year operating period. The securities department explained that “according to the estimated return on investment, it is expected that all input costs can be recovered in 10 years or so, and the electricity price sold after 10 years is a net profit. Although the initial investment funds are tight, they are divided equally. More than 10 million net profit is a good help to the company's cash flow."

For the above example project, a securities company photovoltaic industry researcher said: "Although it is an early layout, but in the case of adequate subsidies, this can only be considered a meager item, not necessarily a good profit project. And even if After 10 years of net profit, it is very likely that there will be other problems affecting its profitability after 10 years, such as the reduction in the quality of components, the decline in the efficiency of power generation, the changes in subsidies, etc."

Performance change A financial expert pointed out to the reporter that this strange situation was not unrelated to the significant increase in the company’s performance last year and the large increase in accounts receivable.

Under the “cold flow” of photovoltaics in 2012, the decline in the performance data of Economics seems to be understandable. However, the net profit growth rate for the second consecutive year was about 100%. After only one year of listing, it suddenly fell to -115.99%, and the decline rate was far beyond the average of -21.79% in the same industry, making it difficult for investors to accept.

According to the third quarterly report in 2012, Ai Kang Technology had a loss of 31,617,700 yuan in the first three quarters of the year, and it was estimated that the annual net profit loss ranged from 35 million to 50 million yuan. The gross profit margins of the company's main operations were all in the down channel.

At the same time, the company’s accounts receivable increased significantly, from 141 million in early 2011 to 425 million in the third quarter of 2012, which has more than tripled in less than two years. Correspondingly, in the first three quarters of 2012, the company completed a total of 1.078 billion sales revenue, and the net cash flow from operating activities was -101 million.

The aforementioned financial experts further explained that: “A substantial increase in accounts receivable will lead to a tighter cash flow of the company, which will force the company to rely on a large amount of short-term borrowings to maintain normal business operations. This will inevitably bring about huge financial cost pressures. , and then devour the company's profits."

According to the company's financial data, last year's three quarterly report of Ai Kang Technology reported a short-term loan balance of 720 million yuan and a year-on-year increase of 70.74% in financial expenses, which represented the largest increase among the three expenses.

It is worth noting that in the accounts receivable within one year disclosed by Ai Kang Technology's interim report for 2012, Wuxi Suntech ranked second with 41.788 million yuan. In the "cold stream" of China's photovoltaic industry in 2012, Suntech was the first to bear the brunt of debt.

With regard to the outstanding amount, the securities department staff explained: “Wuxi Suntech has used its components and other goods to pay its debts. Based on the company’s risk control perspective, this customer has not done it recently. As far as I know, At present, it has not had any contact with Suntech. "In other words, today, iCharm Technology has lost this important customer which has been referred to many times.