"A Pair Of Chopsticks" IPO Road: 700 Million Of The Double Gun Technology To Seize The Capital Market

In July 3rd, the Polytron Technologies Inc (hereinafter referred to as "two gun technology") disclosed the prospectus on the official website of the SFC.

The prospectus shows that double gun technology was founded in July 1995, and its main business is the development, design, production and sale of kitchen utensils. At present, there are 5 major categories of chopsticks, chopping boards, spoon shovels, sign categories and other food kitchenware, with over 1000 kinds of single products, and about 300 million pairs of chopsticks and 10 million pieces of chopping boards are sold annually.

In 2019, double gun technology sold 305 million pairs of chopsticks, 10 million 870 thousand and 900 pieces of chopping boards, and collected 718 million yuan of revenue.

Two gun technology intends to apply for the Shenzhen Stock Exchange listing, raising 395 million yuan, then its success?

The capital tour of chopsticks company

It has been established for 25 years, and is located in the town of Bai Zhang, Yuhang District, Hangzhou.

From the performance point of view, in the 2017-2019 years, the technology of double guns achieves 500 million yuan, 608 million yuan and 718 million yuan respectively, and the annual compound growth rate is 19.77%. The net profit attributable to the shareholders of the parent company is 41 million and 400 yuan, 45 million 968 thousand and 200 yuan, 71 million 839 thousand and 900 yuan respectively, and both revenue and net profit have maintained steady growth.

From the perspective of product structure, in the past 2017-2019 years, the annual sales of chopsticks of double guns technology were 303 million pairs, 310 million pairs and 305 million pairs respectively, and the sales volume of chopping boards was 8 million 147 thousand and 100, 9 million 118 thousand and 10 million 870 thousand and 900 respectively, and two categories contributed more than 70% sales.

Double gun technology says that chopsticks are replaced by chopsticks per person every year, and every household is estimated to replace chopping boards every four years. The demand for chopsticks in China is about 1 billion 400 million pairs per year, and the demand for chopping boards is about 115 million.

The application for IPO, double gun technology is about to invest 395 million yuan for 3 items, such as the construction of automatic kitchen production base, and so on. If the project is completed, the output of new chopsticks will be 100 million pairs, bamboo and wood chopping boards with 10 million production capacity, and plant fiber composite food kitchenware production capacity of 4000 tons.

"The number of enterprises in the kitchenware industry is relatively large, the concentration of industries is low, the homogenization competition is fierce, and the core competitiveness of product quality, bargaining power and brand is particularly important." In July 6th, a tableware industry downstream enterprises said.

The prospectus shows that the double gun technology industry includes three new board Enterprises: Sanhe bamboo wood (832835.OC), 833187.OC, Zhejiang Tianzhu industry and Trade Co., Ltd., Fujian Ming Zhu Bamboo Technology Co., Ltd., and Italy Ace (Hongkong) Holdings Limited.

However, Sanhe bamboo and wood sales in 2018 were 106 million yuan and net profit was 10 million 815 thousand and 900 yuan. In 2018, the sales volume of 129 million yuan was 19 million 963 thousand and 400 yuan, and net profit was 19 million 963 thousand and 400 yuan.

From the point of view of sales channels, the sales network of dual gun technology covers business super, distributors, electricity suppliers, foreign trade, and other direct businesses. Among them, direct selling businesses, distributors, electricity providers and so on are their main sales channels.

Among them, the distribution channel is the most important sales channel of double gun technology. In 2017-2019 years, its sales volume reached 259 million yuan, 284 million yuan and 312 million yuan through distribution channels, accounting for more than 40% of the main business revenue.

Multichannel operation or challenge

Having multiple channels of dual gun technology, it is mentioned in the prospectus that "multi-channel operation requires relatively high level of management of the company, while adverse changes in the channel may also have some adverse effects on the company's performance".

Double gun technology, for example, "if large business superclass customers adjust business strategy, change regional market layout, change sales products and brands and other commercial practices", or "company management of distributors is not in place, sales terminals feedback information lag", or "future, Tmall, Jingdong, vip.com and other e-commerce platform sales policy, charging standards and so on." Significant adverse changes will have adverse effects on the company's performance.

In addition, double gun technology has prompted a larger balance of accounts receivable risk.

At the end of -2019 in the end of 2017, the net book receivable of dual arms technology accounts for 159 million yuan, 212 million yuan and 214 million yuan respectively, representing 51.51%, 57.6% and 47.92% of current assets respectively.

In the structure of accounts receivable balance, the distributor accounts receivable balance is also the bulk.

At the end of 2017, the end of 2018 and the end of 2019, the balance of accounts receivable of dual gun technology to distributors was 89 million 464 thousand yuan, 124 million yuan and 102 million yuan respectively, accounting for 52.73%, 54.39% and 44.24% of the total receivable balance.

For the rapid growth of the accounts receivable balance of dealers at the end of 2018, double gun technology explained that "mainly from the company business adjustment at the end of 2017 and early 2018, the sales of Auchan, Zhongbai supermarket and other businesses were distributed to Shanghai Zun Ding Industrial Co., Ltd., Wuhan Zhongyuan Jiuding commerce and Trade Co., Ltd. and other distributors. Meanwhile, after the cancellation of the Guangzhou dealer, the part of its business was from Guangzhou. Min LAN Commodity Co., Ltd.

At the end of 2019, the technology of double guns decreased the balance of receivables of dealers. "It is due to its strengthening of dealer credit management. At the same time, the dealer's low balance of receivables, such as Shanghai Zun Ding Industrial Co., Ltd., Wuhan zhongjiuding commerce and Trade Co., Ltd. and Guangzhou Min LAN daily necessities Co., Ltd." has been reduced.

For the first quarter of 2020, double gun technology said that the impact of the new crown epidemic, the extension of the Spring Festival holiday in China, the resumption of time has been postponed, which has affected the company's purchase, production and sales in the first quarter of 2020. With the gradual control of the epidemic situation, the overall operation of the company tends to be normal, and has no significant adverse impact on production and operation.