Hai Lan Home: Left Handed Bonus Right Hand Raise Cash Flow "Quality" OK?

Hai Lan's home price is lower than that of its peers, and its income data deviate from its seasonal characteristics of clothing industry.

The real controller Zhou Jianping of Hai Lan home and its concerted action belong to absolute holding. Naturally, it belongs to the largest beneficiary of cash dividends. It is reported that between 2015 and 2017, it received a total cash dividend of 3 billion 800 million yuan through cash dividends.

Here, we can feel that the behavior of Hai Lan's left home bonus and right hand fundraising will give investors a question mark in their minds.

The marketing ads of Hai Lan's home "only two times a year in the sea Lan" have been popular all the time. But is it true that the clothing enterprises that focus on inventory only satisfy the "two times a year" consumption? So, is the marketing strategy of "two times a year", the product storage of the Hai Lan's family, and the mention of the price drop is also as "calm" as the slogan?

Reporters found that Hai Lan home's self depreciation inventory ratio was lower than peers, while the income data deviated from its seasonal characteristics of the clothing industry.

In 2017, the inventory balance of Hai Lan's self operated product was 2 billion 450 million yuan, which accounted for 30% of the total inventory, and the reserve requirement for the provision of inventory depreciation was only 190 million yuan, accounting for about 8% of the inventory.

As we all know, the provision amount of inventory depreciation reserve directly affects the current profits and losses. The larger the proportion, the more obvious the profit reduction will be.

So in the A share clothing enterprises, why is the home of the sea LAN inventory less than its peers?

First of all, we can compare directly with the comparable peers to see whether the inventory depreciation reserve ratio of Hai Lan's home is similar to that of its peers.

YOUNGOR (7.190, -0.02, -0.28%), because of its real estate business, therefore accounts for the ratio of its inventory depreciation to the original stock value. It roughly calculates its inventory value in terms of its inventory value and corresponding depreciation price, and accounts for 8% of its inventory depreciation, and accounts for 17% of the reported drop in prices (3.530, 0.01, 0.28%). The seven pound wolf (7.620, -0.02, -0.26%) stock price fall accounts for 37%, and the United States apparel (3.100, 0, 0.00%) accounts for 18%.

The above data show that except for YOUNGOR, Hai Lan's home is far lower than its counterparts, while YOUNGOR has a smaller scale of clothing inventory than Hai Lan's.

This shows that the inventory price of Hai Lan's household is lower than that of some peers.

Inventory depreciation ratio:

Sina Finance found that Hai Lan's home income data deviated from its seasonal characteristics.

According to the seasonal characteristics disclosed in the prospectus, the sales volume of the company in the second half of the year is generally higher than that in the first half.

But according to the quarterly review of sina's revenue from 2015 to 2017, the annual income of the first half of the three years is greater than that of the second half of the year. The first half of 2015 is 35 million yuan higher than that of the second half of the year. The first half of 2016 is 525 million yuan higher than that of the second half of the year, and the income of the first half of 2017 is larger than that of the second half of the year. It is more than 300 million yuan.

The characteristics of these three years' financial statements are obviously contrary to the seasonal characteristics of their industries.

Then, is the deviation of Hai Lan's home related to the change of its product structure? Sina's financial analysis of its product structure reveals that the income structure category from 2015 to 2017 has only one more down jacket category than the prospectus disclosed at that time.

From 2015 to 2017, the ratio of down jacket income to the total income of the current period has been maintained at around 12%.

Down clothing belongs to the winter fund should expand the category will further increase its sales volume, so that the second half of the year sales volume expansion, but the characteristics of its earnings report is in the first half of the year is larger than the second half, obviously deviated from the logic.

Sina finance further found that from 2009 to 2017, the sum of the three products of trousers, shirts and Western-style clothes accounted for 50% of the total revenue of the current period, which means that the structure of half income products had not changed significantly.

At the same time, Sina Financial found that its own brand declined from 97% in 2009 to 87% in total revenue. The fluctuation of revenue accounted for only about 10%, that is, the main contribution source of revenue was relatively stable.

This shows that the product structure of the enterprise is relatively stable, and the reason why the income data deviate from the seasonal characteristics caused by the product structure does not seem to be valid.

If it is not caused by the change of product structure, is there any other reason? Is this kind of financial data deviating from seasonal characteristics will make people doubt about its authenticity? This may require further explanation by enterprises.

Quarterly Revenue:

Taken from 2018-07-11 public offering, Switching Company bond prospectus:

The grotesque of Hai Lan's home: left handed bonus, right hand raise cash flow "quality"?

By the end of 2017, the company's actual controller Zhou Jianping and his co operative Zhou Yanqi and Zhou Lichen had directly and indirectly controlled 2 billion 888 million shares of the listed company through Hai Lan group and Rongji international company, accounting for 64.28% of the total share capital of the company, and Zhou Jianping and its concerted action took an absolute controlling position in the listed company.

In 2015 and 2016, the company's actual controller Zhou Jianping and his co operative Zhou Yanqi and Zhou Lichen holding shares accounted for 69.27% of the total share capital of the company.

Reporters found that the past three years, Hai Lan's home has maintained a high cash dividend.

From 2015 to 2017, cash dividends accounted for 50.2%, 70.50% and 64.78% of the net profit attributable to the common shareholders of the listed companies in the consolidated statements (see chart below).

If a rough estimate is made according to the holding shares, the company's actual controller Zhou Jianping and his co operative persons have received cash (including tax) 1 billion yuan, 1 billion 500 million yuan and 1 billion 300 million yuan respectively from 2015 to 2017.

In the past three years, the company's actual controller Zhou Jianping and his unanimous people earned a total bonus of 3 billion 800 million yuan in cash (including tax) dividends.

Profit distribution plan:

However, the reporter found that in November 2017, the company issued a convertible bond plan, and the total amount of the public offering of Switching Company bonds could not exceed 3 billion yuan. After deducting the issuance cost, the raised capital will invest in the upgrading project of the industrial chain informatization, the construction project of Logistics Park and the construction of the material flow park.

The total investment of these three projects is as high as 3 billion 200 million yuan.

In June 14, 2018, the public offering of Switching Company bonds was approved by the China Securities Regulatory Commission.

That is to say, when Hai Lan's home has already divided 2 billion 100 million yuan into cash, it will get the capital support of 3 billion yuan of convertible bonds from the capital market.

Here, it is puzzling is that its project capital demand is strong (estimated investment of 3 billion 290 million yuan), why still maintain a huge amount of cash 2 billion 100 million yuan dividends?

What is more worth mentioning is that as the company's actual controller Zhou Jianping and his concerted people hold absolute control of the company, he will receive more than 60% of the cash dividends through the profit distribution plan of 2017.

Recruitment and investment projects:

Hai Lan's home has been paying dividends for a long time. Can it prove the cash abundance of the company from the side?

According to the results of the financial report, the final balance of the money fund of Hai Lan's home for three years (from 2015 to 2017 and the first quarter of 2018) was 7 billion 900 million yuan, 8 billion 800 million yuan, 7 billion 800 million yuan and 8 billion 800 million yuan respectively.

Initially, it seems that the company has plenty of cash reserves, but considering the factors such as squeezing suppliers' funds in the upper reaches of Hai Lan's home, and settling the terminal's franchisee margin, will there be a gap in the money if these factors are deducted?

According to the simple calculation of financial accounts, Sina's financial calculation formula is as follows:

(money fund + accounts receivable + prepaid account) - (accounts payable + advance receivables + long term payable + non current liabilities due within one year) =Q (Note: if Q>0 indicates that there is no gap in the money fund, if there is a gap in the Q<0 statement)

According to the above formula, the monetary accounts of Hai Lan's home account have already been in breach, according to the above formula. The first quarter gap in 2018 was 360 million yuan, and the shortfall funds in 2015 to 2017 were 2 billion 130 million yuan, 530 million yuan and 770 million yuan respectively (see chart below).

Therefore, we can see that the cash flow in the financial statements of Hai Lan's home mainly comes from the contribution from the upstream and downstream (the upstream squeezing the supplier's funds, the downstream precipitating terminal franchisee margin), and the cash flow "quality" is not good.

It is worth mentioning that the company achieved sales revenue of 5 billion 722 million yuan in the fourth quarter of 2017, and the cash inflow of operating activities was 7 billion 781 million yuan in the current quarter. The cash inflow from operating activities was higher than the 2 billion yuan in the current quarter sales. The main reason is that in December 2017, the amount of business payment paid by the store to the company in accordance with the estimated sales situation exceeded the company's final confirmed revenue, resulting in a larger cash inflow in the fourth quarter.

That is to say, we should look for the actual sales revenue of the store in advance.

However, it is puzzling why the current income is more than 2 billion yuan in the current income. Why would the channel businessmen be willing to occupy such a large capital in advance? This may require further explanation by the enterprises.