On January 6, the 2023 first review meeting of the GEM Listing Committee of the Shenzhen Stock Exchange was held. Shenzhen Lvlian Technology Co., Ltd. (hereinafter referred to as “Lvlian Technology”), which started from the production and sales of data lines, passed the deliberation of the listing committee. Recently listed on the GEM of the Shenzhen Stock Exchange, Greenlink Technology has also become the fourth company to pass the New Year meeting.
According to the “Prospectus” of Lulian Technology, the public offering will not exceed 41.5 million shares, and the proposed fundraising will be 1.504 billion yuan. The raised funds will be mainly used for investment and construction of the company’s main projects, including product research and development and industrialization construction projects (5.512 100 million yuan), intelligent warehousing and logistics construction projects (110.4 million yuan), headquarters operation center and brand building projects (392 million yuan), and supplementary corporate working capital (450 million yuan).
It is noteworthy that the 1.504 billion yuan raised in the initial public offering of Lulian Technology accounted for 10% of the total shares after the issuance. Based on this calculation, the target valuation of Lulian Technology after listing is about 15.034 billion yuan.
Lvlian Technology, which started in Huaqiangbei, Shenzhen, rose rapidly by relying on the reduction policy of Apple mobile phones in 2020, and successfully broke into the first camp of 3C digital accessories in China. Although it was nearly two and a half years later than competitor Anker Innovation (300866. Lulian Technology, which was successfully listed this time, still cannot hide its problems such as single sales channels, insufficient marketing and insufficient research and development.
After listing, can Lulian Technology untie the entanglement of data cables and find a more sustainable new format?
During the reporting period (2019-the first half of 2022), Lulian Technology achieved revenues of 2.045 billion yuan, 2.738 billion yuan, 3.446 billion yuan, and 1.803 billion yuan respectively, and the net profits attributable to the parent were 225 million yuan, 298 million yuan, and 297 million yuan, respectively. 100 million yuan and 131 million yuan, and the net profit attributable to the parent after deducting non-existing expenses was 220 million yuan, 287 million yuan, 276 million yuan, and 114 million yuan, respectively.
Source: Greenlink Technology Prospectus
In terms of gross profit margin, during the reporting period, the gross profit margins of Greenlink Technology’s main business were 49.74%, 38.1%, 37.21%, and 37.15%, which were slightly higher than the 39.58%, 34.55%, and 32.71% of comparable companies in the same period. and 34.45%.
From 2020 to 2021, the revenue growth rate of Lulian Technology will be 33.89% and 25.86%. While the revenue is slowing down, its non-net profit will decline by 3.83% in 2021, and the revenue will not increase.
In terms of sales channels, during the reporting period, online sales channels provided Lulian Technology with revenues of 1.683 billion yuan, 2.250 billion yuan, 2.687 billion yuan, and 1.386 billion yuan, accounting for 82.41%, 82.41%, and 82.35%, 78.14% and 77.04%, and the gross profit realized through the online e-commerce platform accounted for 91.20%, 88.48%, 84.31% and 82.74% of the gross profit of the main business respectively.
It can be said that online sales are the channel that Greenlink Technology relies on most.
At the same time, in order to ensure the smoothness of online channels, Greenlink Technology has invested a lot of money.
According to public information, the promotion fees and platform service fees paid by Greenlink Technology to e-commerce platforms and other channels are as high as 270 million yuan, 372 million yuan, and 441 million yuan.
From the perspective of revenue area, during the reporting period, the main business income of Greenlink Technology was relatively balanced according to the composition of domestic and overseas sales areas. In the first six months of 2022, domestic and overseas accounted for 53.33% and 46.67% respectively.
In terms of domestic and overseas sales, Greenlink Technology still focuses on online channels. During the reporting period, online sales in overseas markets accounted for 90%.
In this regard, Greenlink Technology listed it as the first item of “special risk” in the risk warning in the “Prospectus”: “The company’s sales on e-commerce platforms account for a relatively high proportion of the company, and there are risks in online platform operations.”
The previously mentioned e-commerce platform promotion and maintenance costs have pushed up the sales costs of Greenlink Technology as a whole.
During the reporting period, the sales expenses of Lulian Technology were 611 million yuan, 452 million yuan, 583 million yuan and 322 million yuan respectively, and the sales expense ratios were 29.88%, 16.53%, 16.91% and 17.88% respectively. ,
Source: Greenlink Technology Prospectus
The sales expense ratio of Greenlink Technology is much higher than the average of 14.84%, 9.52%, 9.15% and 9.29% of comparable listed companies in the same industry.
In this regard, Lulian Technology explained that during the reporting period, the company mainly sold online, and the online platform fee rate was relatively high, resulting in relatively large sales expenses during the reporting period.
Greenlink Technology once stated that in order to reduce the over-reliance on online sales channels, Greenlink Technology is constantly expanding offline sales channels.
The “Prospectus” shows that the proportion of Lvlian Technology’s offline sales in its main business revenue has risen from 17.59% in 2019 to 22.96% in the first half of 2022.
On the way to improve sales channels, Greenlink Technology “still needs to work hard.”
For Lulian Technology, which is about to be listed on the Science and Technology Innovation Board of the Shenzhen Stock Exchange, its scientific research quality is slightly insufficient.
During the reporting period, the research and development expenses of Lulian Technology were 64.8853 million yuan, 95.127 million yuan, 157 million yuan and 83.2243 million yuan respectively, and the proportion of research and development expenses were 3.17%, 3.47%, 4.54% and 4.62%, which were lower than those in the same period 5.59%, 5.27%, 5.06%, and 5.35% of the R&D expense ratios of comparable companies in the same industry.
Source: Greenlink Technology Prospectus
The lack of “science content” is also reflected in the number and update frequency of its research and development patents.
The “Prospectus” shows that Greenlink Technology has 774 domestic patents and 561 overseas patents, including 12 invention patents. However, among the 12 invention patents, Greenlink Technology has 6 patents.
In addition, according to the data, before September 2019, Greenlink Technology had no self-developed invention patents.
The implication is that since the establishment of Greenlink Technology in 2012, there has been no patent for independent invention in the past 7 years, and its scientific research capabilities are doubtful.
The lack of self-developed patents of Lvlian is made up by “buy, buy, buy”.
During the reporting period, the procurement costs of outsourced products of Greenlink Technology accounted for 74.91%, 56.02%, 58.22% and 59.13% of the main business costs respectively.
In other words, the product development, design and sales of Lulian Technology are largely limited by suppliers.
Regarding the high proportion of outsourcing procurement costs, Greenlink Technology stated in the risk warning of the “Prospectus” that “if the supplier shuts down, or there is friction in cooperation with the company, the cooperative relationship between the two parties will be terminated early, and the company will not be replaced in time. Suppliers, there may be delays in the supply of products, which will adversely affect the company’s operating performance and financial condition.”
Similar to Nanjing Rice Information Technology Co., Ltd., which broke through the IPO in the same period, Greenlink Technology and its main suppliers are also suspected of benefit transmission.
The “Prospectus” shows that Shenzhen Xiangfan Technology Co., Ltd. (hereinafter referred to as “Xiangfan Technology”) ranks first among the suppliers of Greenlink Technology. In the first half of 2022, the purchase amount of Greenlink Technology from Xiangfan Technology is 112 million yuan, accounting for 13.2% of the total purchase amount.
According to public information, Xiangfan Technology was established in June 2013 with a registered capital of 18.8 million yuan and a paid-in capital of 2 million yuan. Lulian Technology started cooperation with it in April 2014, that is, Xiangfan Technology was established less than In one year, the two sides have cooperated with each other.
However, what is interesting is that the enterprise check shows that as of the end of 2021, the number of Xiangfan Technology insurance participants is 0.
On July 5, 2022, Xiangfan Technology was listed as an abnormal operation by the Longhua Bureau of the Shenzhen Municipal Market and Quality Supervision and Administration Commission because the registered residence or business premises could not be contacted.
In response to the above situation, the Shenzhen Stock Exchange once raised questions, and the answer given by Greenlink Technology is that there is no benefit transfer.
Interestingly, Greenlink applied for an exemption from disclosure of some of the operating and financial data of the top ten finished product suppliers during the reporting period.
The proportion of external procurement is relatively high, and Greenlink Technology has lost control over product quality.
According to public information, since 2019, many products of Greenlink Technology, including mobile power (20000mAh), laser page presenters, USB chargers (product number CD21880368), creative fans, etc. Inspection failed.
In 2019, the PB132 Greenlink mobile power sold by Greenlink Technology did not meet the national mandatory standards (GB31241-2014), which eventually caused these products to be sealed and isolated.
Search “Green Union UGREEN” on the black cat complaint platform, and you can see that there are a lot of complaints related to its product quality and after-sales service.
How long can Lulian Technology, which has made a fortune by relying on data lines, enjoy the dividends of 3C digital products?
Against the background of the epidemic, the decline in consumption is obvious to all, and this trend is especially evident on smartphones in key areas of consumption.
According to data released by Counterpoint, the global smartphone market shipments in the third quarter of last year were 301 million units, a year-on-year decrease of 12%.
According to previous estimates by the agency, global smartphone shipments will drop by 10% year-on-year in 2022, and the downward trajectory will continue until 2023, but the annual growth rate will improve to -5%, and global smartphone shipments will reach the lowest since 2014. Level.
The 3C digital accessory market, which is strongly bound to the smartphone market, is undoubtedly the most affected.
According to the “2022 New Consumer Insights Report” by Ebang Think Tank, in 2022, among 200 survey samples, more than 42% of 3C digital accessory brands will experience negative revenue growth, 40.5% of brands will achieve growth within 20%, and 14% The growth rate of brands is between 20% and 50%, and only 3.5% of brands have achieved a growth rate of more than 100%.
Take Anker Innovation, a direct competitor of Greenlink Technology, as an example. In the first three quarters of 2022, Anker Innovation achieved revenue of 9.537 billion yuan, a year-on-year increase of 13.19%, and a net profit attributable to the parent company of 830.2 million yuan, a year-on-year increase of 28.6%.
Although Anker Innovations’ net profit attributable to its parent company has grown by more than 14% for six consecutive years, its high book value of inventory is also worthy of attention.
From 2017 to 2021, the book value of Anker Innovations’ inventories was 415 million yuan, 781 million yuan, 1.117 billion yuan, 1.589 billion yuan, and 2.061 billion yuan, accounting for 30%, 43%, and 30% of the current assets at the end of each period, respectively. 42%, 25%, 29.14%.
In addition, Anker Innovation’s 2022 semi-annual report shows that the sales of charging products are 2.945 billion yuan, accounting for 50.02% of revenue, while this proportion is 44.15% in the same period of 2021.
Source: Anker Innovations 2022 Semi-Annual Report
In order to get rid of the dependence on digital charging accessories, Anker Innovations has also participated in the hot outdoor energy storage track in recent years.
In April 2022, Anker Innovations launched a new product “Anker757 Outdoor Power Supply”, which is the first time the company has entered the outdoor energy storage market with a power of more than 500Wh.
However, Caijing Wuji found that the sales volume of this Anker 757 was far from the same type of products of the industry leader Zhenghao EcoFlow when browsing the flagship store of Anker Digital.
Pulling back from the perspective of the protagonist of this article, Greenlink Technology, the R&D expenses are much lower than Anker (83.22 million yuan for Greenlink Technology in the first half of 2022, and 326 million yuan for Anker Innovation), but the sales expense ratio is similar (Greenlink Technology in the first half of 2022 Technology 17.88%, Anker Innovation 20.46%), after the listing of Greenlink Technology, the challenges it faces are quite daunting.
However, the possibility of improving product technical content and design features in a short period of time is very low, and the high sales expense ratio is still eroding its profit margin.
Whether Lulian Technology, which has been listed in a hurry this time, will become a “break” new stock, for its founder Zhang Qingsen, it is worth paying attention to how Lulian will transform after listing in order to be worthy of a valuation of 15 billion.
(Disclaimer: This article only represents the author’s point of view, not the position of Sina.com.)
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