Author: Suhang

Produced: Insight into the IPO

Looking at the profit myth of A shares in recent years, most of them have occurred in photovoltaic companies.

Especially since 2021, participants in almost every link such as silicon materials, silicon wafers, and battery chips have made a lot of money, and many cross-border companies have been able to share a piece of the pie in time.

Junda shares (002865.SZ) is typical.

Recently, Junda shares submitted an application for listing on the main board to the Hong Kong Stock Exchange. If it goes well, it may become the first "AH" listed company in the photovoltaic industry.

01

From automotive interiors to photovoltaic cells

Similar to Tongwei shares, Junda shares started in the automotive interior parts business, which is not related to the photovoltaic industry.

since 1985, yang renyuan, the soul of junda shares, has been the secretary of wuxian city plastic products factory no 7. In 1998, all the net assets of the No.7 and No.3 Factory of Wuxian Plastic Products Factory were auctioned to Wuxian Huachang Engineering Plastic Factory ("Huachang Plastic Factory"), and Yang Renyuan was immediately transferred to the factory director in 1999.

In 2001, Huachang Plastic Factory changed its name to Suzhou Wanda Automotive Interior Parts Factory. In 2008, the factory was transformed from collective ownership to a limited liability company. Yang Renyuan held 30% of the shares and sold all his shares in 2010.

and Junda shares was established in 2003, the initial shareholders for Xu Xingrang, Xu Xiaoping, Li Xinhua, Yang Renyuan did not actually participate in the shareholding, only as a consultant.

from 2003 to 2004, Suzhou Wanda automobile interior parts factory transferred a piece of land use right in Hainan, its instrument panel, bumper and other businesses developed for Hainan Mazda automobile co., ltd. and put into mass production, as well as all supporting relationships (including related intangible assets) in Hainan Mazda to junda shares.

after a series of equity transfers, as of the time of listing, junda shares are wholly owned by yang renyuan's family, yang renyuan's family, yang renyuan's family, yang renyuan's family, yang renyuan's daughter Lu xiaohong and Hunan radio and television's shareholding platform, respectively, holding 32.62, 53.38, 4%, 5% and 5%.

In 2017, the company was listed on the main board of Shenzhen Stock Exchange.

In the first annual report after listing, Junda shares performed well. In 2017, operating income was 1.1523 billion yuan, an increase of 24.96 percent over the same period last year, and net profit attributable to shareholders of listed companies was 67.4426 million yuan, an increase of 20.97 percent over the same period last year.

but since 2018, the auto market has been in the doldrums, and the shareholders of junda shares and its major customer, Haima Auto, have been operating in a dismal way, and once made the news because of "selling houses and saving themselves. Affected by this, Junda's share income fell for two consecutive years, in 2018 and 2019, operating income decreased by 21.71 percent and 8.39 percent year-on-year, respectively, while net profit attributable to the parent company decreased by 37.97 percent and 58.82 percent year-on-year, respectively.

Although operating income rebounded in 2020, rising 3.84 percent year-on-year to 0.858 billion yuan, net profit continued to decline 21.37 percent year-on-year to only 13.5464 million yuan.

At the end of 2020, under the leadership of the new helmsman Lu Xiaohong, Junda transferred its two subsidiaries, Chongqing Senmai Auto Parts Co.

02

High premium acquisition, debt ratio surge

in February 2021, junda shares announced a capital increase of 0.15 billion yuan to shangrao hongye new energy co., ltd. (hongye new energy), accounting for 12% of the total share capital after the capital increase, and began to gradually enter the photovoltaic business.

in September 2021, junda shares spent about 1.434 billion yuan to acquire 51% of shangrao jietai new energy technology co., ltd (jietai technology) and became the controlling shareholder.

different from Tongwei shares, Junda shares have not yet established a firm foothold in the photovoltaic industry to decisively abandon the original business.

in April and June 2022, junda shares successively transferred its subsidiaries Suzhou junda car industry technology co., ltd. and Hainan xinsu molding industry and trade co., ltd. to young's investment, completely divesting the automotive plastic interior and exterior trim business.

in August 2022, junda shares completed the acquisition of the remaining 49% stake in jietai technology, with a total consideration of 1.519 billion yuan and a premium of 184.80.

The acquisition of Jettech has brought a growth miracle to Junda's shares. In 2021, 2022 and January-September 2023 (the "Reporting Period"), Junda's income from continuing operations (I. e., income from the automotive interior parts business) reached $1.639 billion, $11.086 billion and $14.342 billion, respectively.

At the same time, related acquisitions have also increased Junda's debt.

During the reporting period, the gearing ratio of Junda shares was 73.2 per cent, 88.1 per cent and 72.0 per cent, respectively, compared with 43.6 per cent in 2020.

the decline in debt ratio in the first three quarters of 2023 is largely due to the fact that in June of that year, Junda's shares were set to increase by 2.738 billion yuan, of which 1.519 billion yuan was used for the acquisition of Jietai Technology, 0.5 billion yuan was used for the pilot project of high-efficiency N-type solar cell research and development, and the rest was used to supplement working capital and repay bank loans.

In addition to completely divesting the original main business and fully transforming photovoltaics, Junda shares are also betting on the N-type TOPCon technology route.

in the first three quarters of 2023, junda shares shipped 5GW of p-type PERC batteries and 12.1GW of n-type TOPCon batteries.

Photo Source: Junda Stock Prospectus

Jingke Energy, which also bet on the TOPCon route, has also become Junda's largest customer and largest supplier.

During the reporting period, Junda's purchases from the top five suppliers were $0.806 billion, $5.574 billion and $6.908 billion, accounting for 59.7, 47.2 and 38.8 of the total purchases for the period, respectively.

Among them, the purchase amount from Jingke Energy was 0.43 billion yuan, 2.006 billion yuan and 1.982 billion yuan respectively, accounting for 31.8, 17.0 and 11.1 respectively.

At the same time, Junda's sales to Jingke Energy were 0.884 billion yuan, 3.337 billion yuan and 3.722 billion yuan respectively, accounting for 53.9 per cent, 30.1 per cent and 25.9 per cent respectively.

In the case of relying on large customers, as the major photovoltaic giants including JinkoSolar gradually advance the integration process, Junda's performance may be under pressure.

In addition, overcapacity has led to price cuts across the industry chain, which has also had a deep impact on the fourth quarter and full-year results of industry companies.

judging from the information released by the performance forecast of listed companies, TCL central (002129.SZ) expects the net profit attributable to shareholders of listed companies to decrease by 44.47-52.18 year on year after deducting non-profit in 2023. Jingke Energy (688223.SH) Net profit attributable to shareholders of listed companies after deducting non-profit in 2023 is expected to increase by 147.59-174.05, but in the fourth quarter or year-on-year decrease by up to 55.5, the month-on-month decline was the highest or 80.0 per cent.

Junda shares also failed to escape this disaster. According to the performance express, the operating income of Junda shares in 2023 was 18.397 billion yuan, an increase of 58.65 percent over the same period last year, and the net profit attributable to shareholders of listed companies after deducting non-profits was 0.575 billion yuan, an increase of only 16.64 percent over the same period last year.

According to the results of the first three quarters disclosed in the performance bulletin and the third quarterly report, in the fourth quarter, Junda's operating income was about 4.016 billion yuan, and the non-net profit was changed from positive to negative, about -0.997 billion yuan.

and the first performance step change face, is the market performance of Junda shares.

since the transformation of photovoltaic, the share price of junda shares has been rising all the way, reaching a peak of 190.28 yuan/share (former restoration) on November 9, 2022, up more than tenfold. Since then, it has gradually declined, and has rebounded after May 2023, but the good times are not long. Since July 2023, it has been going down all the way. As of February 21, it has closed at 59.73 yuan/share, with a total market value of 13.6 billion yuan, almost "knee cut" from the highest point ".