Hainan Raiser Capital Needs To Be Improved

The proportion of accounts receivable is too large.

Hainan raiser capital utilization efficiency To be improved

Hainan Reiser new building materials Limited by Share Ltd (hereinafter referred to as "Hainan raiser") published the prospectus in June 14th, and began to offer shares. Although its good asset structure attracted many investors, some analysts pointed out that the proportion of accounts receivable was too large and the turnover rate of accounts receivable was low, exposing the insufficiency of its capital utilization efficiency. How to improve this predicament after listing has also become a difficult problem facing its management.

Good asset structure

According to the prospectus public financial statements show that in the past three years (2008-2010 years), Hainan raiser asset liability ratio was 56.6%, 35.3% and 25.7% respectively. According to some analysts, "from the report, except for 2008, the liabilities are higher than 50%. In the past two years, Hainan's control over liabilities continued to decline, and the company's asset liability ratio was relatively good."

Not only is asset liability control outstanding, the company's distribution of current assets and non current assets in assets is also more reasonable. In the past three years, the proportion of current assets and non current assets is moderate in the assets composition of the company. The proportion of the current assets of the company in the 2008-2010 years is 52.39%, 62.85% and 55.9% respectively. "No matter from the asset liability ratio or the proportion of total assets, the company can be said to be a reasonable listed company with reasonable assets and good growth space." The analysts said.

receivable Accounts receivable Excessive proportion

Despite its reasonable asset structure, there are many injuries in Hainan's raiser from other major financial indicators.

Financial data show that in the current assets, Hainan's raiser accounts receivable account for 192 million yuan, 161 million yuan and 127 million yuan in the past three years, and the proportion of current assets accounts for 65%, 54% and 79% respectively. That is to say, over the past three years, company accounts receivable have become an important part of current assets, accounting for over 50%.

In response, some analysts pointed out that if excluding accounts receivable factors, the total assets of current assets decreased to 30.5%, 43.7% and 18.2% respectively, and the asset liability ratio rose to 40.5%, 53.5% and 97%. "Excluding the accounts receivable factor, it is easy to see that the company's assets and liabilities are not so perfect, especially in 2008, up to 97%, and the total liabilities of the company are almost equal to the total assets." Those people continued.

The reason for the large amount of accounts receivable is due to the fact that the downstream clients are mainly large scale infrastructure projects such as construction enterprises and real estate development projects. Therefore, due to the large amount of construction and the long construction period, the accounts receivable amount is high. "It is easy for enterprises to counterfeit and increase profits indirectly to make an account of accounts receivable projects. However, from the growth of nearly three years, there is no sharp increase. However, the amount of accounts receivable accounts for a large proportion of current assets, which will double hidden risks for Future Ltd's performance growth and asset structure. A person who has been involved in direct investment projects for many years said in an interview with this newspaper.

In addition, the huge amount of accounts receivable also increased the amount of bad debts, but the occurrence of real bad debts and the accuracy of the bad debts still need time to be further verified. "If a large number of accounts receivable cause future bad debts more than the amount of bad debts mentioned, it will be cruel and risky for the future of enterprises." An accountant who worked for many years told reporters.

Hidden danger of capital turnover

In fact, not only the proportion of accounts receivable is too large, but also the turnover capacity of accounts receivable. According to statistics, the turnover rate of accounts receivable in 2008-2010 years is 4.88 times, 3.47 times and 3.71 times a year, which means that the liquidity of accounts receivable in 2008 can be converted into real funds after 74 days of turnover, and it will take 98 days to liquidation once a year.

What is more alarming is that the receivable turnover capacity of the company is lower than that of the listed companies in the same industry. Statistics show that in the past three years, the average accounts receivable turnover rate of listed companies was 15.05, 13.51 and 14.99 times, with an average turnover time of 25 days, far exceeding the same period data of Hainan's Reiser. Huaxin Cement, which has the best turnover capacity in the same industry, has been up to 38.29, 25.85 and 18.89 times in recent three years. The average turnover time of accounts receivable is 13 days, with the fastest turnover capacity being less than 10 days. "Therefore, in terms of comprehensive data, Hainan's raiser is not as impressive as its main financial statements, and these data have shown hidden dangers, which may foreshadow their future performance changes." Ultimately, the analysts concluded.

According to the plan, Hainan riser plans to issue 34 million shares, the date of purchase is June 22nd, is now in the stage of promotion and preliminary inquiry.