KONE's largest supplier is frequently fined, claiming to be leading the industry but its market share is less than1%-

Author | Huang

Edit | Chen Xinxin

The market share of a proposed IPO company is only about 0.62%, but it claims to be a leading domestic enterprise. In fact, there are many competitors whose market share obviously exceeds that of the company. Is this statement suspected of misleading investors?

Zhejiang Tongli Transmission Technology Co., Ltd. (hereinafter referred to as "Tongli Technology") stated in the prospectus that it has formed a strong market competitiveness and is a leading general reducer enterprise in China. In the inquiry letter, Shenzhen Stock Exchange questioned its advanced core technology, market share and ranking.

On February 23rd, Kone Technology replied to the second inquiry letter of Shenzhen Stock Exchange and updated the prospectus. In this round of inquiry, Shenzhen Stock Exchange mainly inquired about the company's core technology, capital flow verification, customers, distribution, suppliers, gross profit margin, etc.

Established in June 2008 +065438+ 10, KONE Technology is mainly engaged in research and development, production, sales and service of reducers, and its products include general reducers, industrial gearboxes and accessories. The company plans to raise 345 million yuan in this IPO, sponsored by Essence Securities and represented by Zhai and Gan Qiangke.

abstract

According to public information, during the reporting period, Xinling Electric, the largest supplier of Kone Technology, was punished by the State Administration of Market Supervision, Natural Resources and Planning Bureau, Health and Wellness Bureau, Environmental Protection Bureau and other departments. Penalties include producing unqualified products, illegally occupying land to build factories, and putting factories into production without permission. The situation is very serious. In addition, Changzhou Southern Electric Co., Ltd. (hereinafter referred to as "Southern Electric"), Fujian Shenghua Foundry Co., Ltd. and other major suppliers were also punished by the Environmental Protection Bureau for violating regulations. For suppliers who are often punished, Kone Technology has been working with them steadily for many years. Is there a problem with its supplier system? Is the quality of its own products affected?

In the prospectus, Kone Technology claims to be the leading general reducer enterprise in China and has strong market competitiveness. But in contrast, the company's market share in 2020 is only about 0.62%, which has a certain gap with its peers. At the same time, Kone Technology is at a low level in invention patents and R&D investment, so it is difficult to reflect its "strong market competitiveness".

First, the biggest suppliers are often fined.

Reducer belongs to general equipment and is one of the important basic components of various industrial transmission systems, which can be widely used in various fields of national economy, such as metallurgy, chemical industry, environmental protection, energy, construction machinery and other industries. The main raw materials needed to produce reducers include motors, castings, steel, bearings, etc. Therefore, the upstream industries of the reducer industry include electrical machinery and equipment manufacturing, metal smelting and calendering, and general equipment manufacturing.

According to the prospectus, during the first half of 2018-202/kloc-0 (hereinafter referred to as the "reporting period"), the main business costs of kone technology were divided into four categories: direct materials, direct labor, manufacturing expenses and transportation expenses. Among them, the cost of direct materials such as motors, castings and steel accounts for more than 70%, accounting for 75.66%, 76.08%, 74.94% and 79. 15% respectively.

It can be seen from the composition of the main raw material suppliers of KONE Technology that Xinling Electric has been the largest supplier of the company during the reporting period. Tongli Technology mainly purchased motors from Xinling Electric Appliances, and the purchase amounts were 65,438+0,285 in 830 yuan, 65,438+0,365,438+0,000 yuan, 65,438+0,696 in 960 yuan, 65,438+0,933 in 300 yuan.

However, Time Business School found that Xinling Electric was a "bad record" through drilling. Is there any "mystery" behind whether such a supplier can continue to sit firmly on the throne of KONE Technology's chief supplier?

According to Zi Chu [20 19]No. 102, Xinling Motor was ordered by Taizhou huangyan district Market Supervision Administration to stop producing unqualified three-phase asynchronous motors, and two unqualified three-phase asynchronous motors were confiscated and fined 2240 yuan.

In 202 1 year, Xinling Electric was ordered by Huangyan Branch of Taizhou Natural Resources and Planning Bureau to return the illegally occupied 1027 square meters of land to the collective of Jing 'an Village, demolish all new buildings (structures) on the illegally occupied land and impose a fine of 82,200 yuan.

On August 1 1, 2020, the Health and Health Bureau of Huangyan Bureau of Taizhou City gave Xinling Electric an administrative penalty for warning, because the intensity or concentration of occupational hazard factors in the company's workplace exceeded the national occupational health standards and violated relevant regulations.

According to public information, Xinling Electric has been punished by Taizhou huangyan district Environmental Protection Bureau for different reasons. For example, on 20 17, 10 and 19, the construction projects that were put into operation without the approval of the environmental protection department were ordered to stop production by Huangyan Branch of Taizhou Environmental Protection Bureau and fined 58,000 yuan.

On July 6, 2020, Xinling Electric was fined 28,000 yuan by Huangyan Branch of Taizhou Environmental Protection Bureau. The reason was that it was engaged in the manufacture of motors and iron castings, and the entrance and exit of the motor shell paint dipping room were not sealed, and no volatile organic waste gas was generated in the closed space.

On June/KOOC-0/65438+/KOOC-0/October/KOOC-0/KOOC-0/day, 2020, Xinling Electric was fined 65438+10,000 yuan by Huangyan Branch of Taizhou Environmental Protection Bureau for allegedly failing to store hazardous wastes according to national environmental protection standards.

In addition to being punished by many departments, Xinling Electric has also had many contract dispute lawsuits, which have been enforced and included in the list of people who have lost their trust.

In addition to the record of multiple fines imposed on the largest supplier, Southern Electric was the fifth largest supplier of KONE Technology in 20 19 and 2020, and the third largest supplier in 20021first half of the year. In 2020, the company was fined 60,000 yuan for violating the volatile organic waste gas management system.

Fujian Shenghua Foundry Co., Ltd., as a related party of KONE Technology, was the third largest supplier of KONE Technology in 20/KOOC-0/8, and was punished by the Environmental Protection Bureau/KOOC-0/times in 20/KOOC-0/7 and 20/KOOC-0/8 respectively. The reason for punishment is that the facilities and places that have not been built for storage are safely classified to store industrial solid waste; Environmental protection facilities that need to be built are put into production and industrial solid waste open-air stacking without acceptance.

Major suppliers have been fined repeatedly, but the cooperative relationship with Kone Technology has not been affected at all. Has KONE established a perfect supplier screening and management mechanism? How do the above suppliers establish cooperation with Kone Technology through selection? Are there any other interest arrangements between the two sides? Among them, did the unqualified products produced by Xinling Electric flow into the related products of Kone Technology?

It is worth mentioning that in the second round of inquiry, Shenzhen Stock Exchange indicated that Kone Technology's outsourcing suppliers are scattered and there are many individual industrial and commercial households, and asked Kone Technology to explain the reasons and rationality of non-centralized procurement of heat treatment and rough machining, and to explain the fairness of outsourcing procurement of different suppliers in the same process; Whether raw materials and external processing suppliers are related to the issuer except the related parties disclosed in the prospectus.

Two, the industry leader, but the market share is less than 65438 0%.

In addition to questioning the cooperation with suppliers, the core technology of Kone Technology and the positioning of GEM have also been inquired by Shenzhen Stock Exchange many times.

According to the prospectus, at present, KONE Technology has four core technologies: the design and development technology of reducer transmission structure, the modular design and development technology of reducer parts, the lean production technology of reducer and the customized design and development technology of reducer, covering the key areas of reducer product development and production. Through the application of core technology, the company has formed a strong market competitiveness in research and development, production, sales and service, and is a leading general reducer enterprise in China.

Then, as a leading technology in China, what is Kone Technology's market share?

According to the data, in 2020, KONE's sales of reducers (transmission equipment) will be 340 million yuan, with a market share of about 0.62%. Sales of similar products in Guo Mao (6039 15. SH) and Ningbo Dongli (002 164. SZ) is 21580,000 yuan and10.69 million yuan respectively, and the market share is 3.92% and 1.94% respectively. It can be seen that the market share of Guo Mao and Ningbo Dongli is not high, but in contrast, the sales and market share of Kone Technology are far lower than those of comparable listed companies, and the market competitiveness is difficult to reflect.

Is the market of this industry scattered, which leads to the low market share of the above companies? Or does Kone Technology deliberately avoid comparable companies with high market share and create an "illusion" with little gap with its peers?

In the first round of inquiries, Shenzhen Stock Exchange raised questions and asked Kone Technology to explain the selection basis, selection scope and rationality of comparable companies in the same industry. The background of low market share of Guo Mao and Ningbo Dongli; In addition to the above competitors, the related products of other comparable companies in the same industry of the issuer are not included in the analysis of comparable companies in the same industry.

Tongli explained that at present, the high-end market of domestic reducers is mainly occupied by foreign brands such as SEW, FLENDER and BOSCH, and many scattered domestic brands are mainly distributed in the low-end market. Foreign brands are not listed on domestic A shares. Except for Guo Mao and Ningbo Dongli, there are no listed companies whose main business is similar to that of the issuer. The main business or products of other A-share listed companies are mainly concentrated in a specific field, or mainly serve some downstream industries.

In 20 19, Tongli technology's market share was 0.26%, and the market shares of Ningbo Dongli and Guo Mao were 0.75% and 1.62% respectively. Through calculation, from 20 19 to 2020, the market share of KONE Technology increased by about 0.36 percentage points, and the market shares of Ningbo Dongli and Guo Mao increased by 1. 19 percentage points and 2.3 percentage points respectively, both higher than KONE Technology.

In fact, market share can reflect the competitiveness of enterprises to a certain extent. Especially in the reducer industry, the technical requirements are higher, and the market share can better reveal the technical strength of enterprises. Judging from the current market share of Kone Technology, there is still a certain gap between the company and its peers.

In terms of R&D expenses, during the reporting period, the R&D expenses of KONE Technology were 10 159800 yuan, 10649800 yuan,1709400 yuan and 7459200 yuan, respectively, with an industry average.

In terms of R&D expense ratio, during the reporting period, the R&D expense ratio of KONE Technology was 3.59%, 3.47%, 3.4 1% and 3.42% respectively, and the industry average was 3.45%, 3.92%, 3.92% and 3.76% respectively. It can be seen that the R&D expenditure of KONE Technology in 20 18 was higher than the industry average, but then the R&D expenditure rate of KONE Technology continued to decline slightly, which was lower than the industry average.

Judging from the invention patents, as of June 30th, 2002 1, there were 8 invention patents of KONE Technology, of which1was obtained by the transferee. The invention patents granted by Guo Mao and Ningbo Dongli are 14 and 1 1 respectively, both of which were originally obtained. China Mao co., ltd was established on 20 13, five years later than kone technology. But as of June 30th, 20021year, the number of patents of this company was twice that of KONE Technology.

Perhaps Kone Technology is too vague in describing the specific performance of leading the industry. In the first round of inquiry and the second round of inquiry letter, Shenzhen Stock Exchange has repeatedly questioned the company's business, market share and technology, and asked Kone Technology to explain whether the basis for leading the core technology in the same industry is sufficient. Is there a risk that core technologies or products will be eliminated? Explain whether the market share and market ranking of the issuer's products are accurate? Combined with the above problems, the issuer's scientific and technological innovation, core technology and its advanced nature. , indicating whether the issuer meets the requirements of GEM positioning?

reference data

Prospectus for the initial public offering and listing on the Growth Enterprise Market of KONE Technology (declaration draft). Shenzhen Stock Exchange

Reply to the inquiry letter (the first inquiry and the second inquiry) on the review of the application documents for the initial public offering and listing of KONE Technology. Shenzhen Stock Exchange