What Is The Worry About The Accounts Receivable Of American State Clothing?

002269.SZ recently disclosed its 2018 performance.

During the reporting period, the company's operating income was 7 billion 677 million yuan, an increase of 18.62% over the same period last year, and a net profit of 40 million 361 thousand and 600 yuan.

From 17 years net loss 3 hundred million to 18 years net profit forty million, what is the company's earnings gold content?

Smith Barney apparel was listed in 2008, and its market value reached 26 billion 100 million yuan at its peak. It was the largest market maker of the brand clothing section.

However, since 2012, the company's net profit has continued to slide, even to a deficit of 432 million yuan in 2015.

In the 2015-2017 year, the net profit of the company has been recorded for three consecutive years.

However, the most important reason for this profit is that more than 80 million of the investment income and government subsidies are in fact. The fact is that the clothing business of the company is still in a state of loss.

The main source of profit is government subsidies and investment income.

According to the earnings report, the total revenue of men's wear and women's wear products in the company's revenue is 7 billion 14 million, an increase of 18.37% over the same period, accounting for about 91.36% of revenue.

In 2018, the net profit of the company was 40 million 361 thousand and 600 yuan, a 305 million improvement over the previous year.

The main reason is that the company achieved an investment income of about 48 million 328 thousand yuan for the joint venture Shanghai Huarui bank during the reporting period.

In addition, the government made a subsidy of about 33 million 106 thousand and 400 yuan during the reporting period. The total contribution of the two companies was about 81 million 434 thousand and 400 yuan, accounting for about 201.76% of the company's net profit in the current period.

In other words, the company's main clothing business for men and women is actually still losing money.

In addition, by the end of December 31, 2018, the amount of the company's book investment real estate amounted to about 276 million yuan, an increase of 147.25% over the same period. In the reporting period, the company was partly owned by its own property, and the fixed assets were pferred to the investment real estate.

According to the financial report, the annual depreciation rate of the company's fixed assets is 2.38%-2.97%, while the annual depreciation rate of the investment real estate is 1.9%-2.38%.

That is to say, converting part of the property into investment property not only increases other income of the company, but also reduces the depreciation cost of the company to some extent.

Inventory assets accounted for more than 30%, still larger downward pressure.

Turning to the annual report, as of December 31, 2018, the net inventory of Smith Barney apparel was 2 billion 349 million yuan, down 8.42% from the same period last year, while the company's inventory turnover time was about 208.18 days, a decrease of 24.78 days from the same period last year, and the turnover rate has increased.

In 2018, the company suffered a total loss of assets of about 313 million yuan, accounting for about 641.62% of total profit.

Among them, the loss of inventory price is about 230 million, which is the most important item of company assets impairment.

In fact, after the disclosure of the 2017 annual report and the 2018 semi annual report, the company had been questioned by the Shenzhen stock exchange because of the higher book value of the inventory and the amount of the stock price fall.

As of December 31, 2018, the company's book inventory amounted to 2 billion 349 million yuan, accounting for about 32.58% of total assets, and the Future Ltd still faced greater inventory pressure.

Accounts receivable increased far beyond revenue, and the company's short-term debt paying ability was under pressure.

Another noteworthy point is the company's receivables.

In 2018, the company's book receivable accounts for about 1 billion 217 million yuan, up 177.33% from the same period last year, about 9.52 times of the revenue growth, and accounts for 16.89% of the total assets of the company, representing an increase of 10.26 percentage points over the same period last year.

In addition, the company accounts receivable increased sharply, and the turnover time also reached 38.83 days, an increase of about 16.9 days compared with the same period last year, and the turnover rate dropped sharply.

According to the earnings report, the growth of accounts receivable is mainly due to the increase in credit sales of customers.

High accounts receivable increased the risk of bad debts. During the reporting period, the company made provision for bad debts 48 million 67 thousand and 900 yuan, which was about 119.09% of the net profit of the company, and became another important factor to drag the company's profits.

On the whole, the net cash flow of operating cash in 2018 was 622 million, an increase of 941 million over the same period last year, and the cash flow situation has improved.

However, as of December 31, 2018, the company's assets and liabilities ratio increased to 60.08%, much higher than that of 46.86% of Taiping Pacific and 25.84% of Semir clothing.

In addition, the company's low speed ratio is only 0.48.

Low speed capability usually indicates that the company's short-term debt paying ability is under some pressure.

In February 1, 2019, the US bond clothing announcement issued a public offering of no more than 503 million shares, raising no more than 1 billion 500 million yuan, all used for brand upgrading and product supply chain pformation projects (1 billion 195 million) and repayment of bank loans (305 million).

In April 9, 2019, the company issued a related paction announcement on accepting financial assistance from controlling shareholders. According to the announcement, the controlling shareholder Shanghai investment in Chinese clothing will provide financial support to the company for no more than 500 million yuan and a term of one year, and the lending interest rate will carry out the benchmark interest rate of the PBC in the same period, so as to supplement the company's liquidity and improve the company's financing efficiency.

In the fierce competition of garment industry, how do we go to the future of American Apparel?