Shenzhen Business Daily Reading Client Reporter Zhu Feng

On December 1, Yirui Technology (688301), a leading domestic X-ray detector company, announced that it plans to issue shares to specific objects to raise no more than 1.45 billion yuan, and the funds will be used for X-ray vacuum devices and comprehensive solution construction projects. The total investment of the project is 1.563 billion yuan, and the construction period is 36 months.

The

proportion of funds used in the previous fundraising project is low

Regulators are concerned about their reasons and reasonableness

In April this year, Yirui Technology disclosed its plan to issue shares to specific targets. On November 1, the Shanghai Stock Exchange issued a review inquiry letter to inquire about the necessity of this fundraising project and the status of the previous fundraising project. On the evening of December 1, the company replied to the above inquiry.

According to the data, Yirui Technology's main business is the research and development, production, sales and service of X-ray core components and comprehensive solutions. The company successfully landed on the Science and Technology Innovation Board in September 2020, with a net amount of 1.986 billion yuan. As of the end of July 2024, the amount unused by the company was 148 million yuan, and the unused funds were over-raised, accounting for 7.45% of the net funds raised.

After the successful IPO, Yirui Technology also issued a convertible bond in October 2022, raising a net amount of 1.421 billion yuan. As of the end of July 2024, the amount unused by the company was 420 million yuan.

According to the application materials, the company's 2022 convertible bond issuance will use 70.45% of the funds raised, of which the "digital X-ray detector key technology research and development and comprehensive innovation base construction project" will use 25.90%; The "New Detector and Scintillator Material Industrialization Project" has been postponed from September 2024 to December 2025.

In this regard, the SSE requires an explanation of the reasons and reasonableness of the postponement of the previous fundraising and investment in the "New Detector and Scintillator Material Industrialization Project", the subsequent payment arrangements and specific time points, whether the production can be reached on schedule, whether there is a delay in the conversion to consolidation, and improve the relevant risk warnings; The reasons and rationality of the low proportion of funds used in the "Digital X-ray Detector Key Technology R&D and Comprehensive Innovation Base Construction Project"; Whether the above-mentioned influencing factors of the previous fundraising and investment construction have an adverse impact on the implementation of this fundraising project.

Yirui Technology said that there are certain differences between this fundraising project and the previous fundraising project in terms of products and implementation locations, and they remain independent of each other. Therefore, the above-mentioned influencing factors of the previous fundraising and investment construction will not adversely affect the implementation of this fundraising project. In addition, there is no major uncertainty in the implementation and commercialization of this fundraising project.

The new capacity may not be absorbed in time

Regulation is concerned about the need for financing

Yirui Technology said in the prospectus that this project is an important part of the company's strategic expansion to achieve "the world's leading comprehensive product and solution provider in the field of X-ray". After the completion of the project, the company will add 77,000 tubes and 19,300 sets of X-ray integrated solution product production capacity.

However, Yirui Technology also pointed out that some of the above-mentioned products are new products, and there are certain risks in market development. In the process of project implementation and follow-up operation, if there is a slowdown in the growth of customer demand, the introduction of customers is less than expected, the market development lags behind or the market environment is unfavorable, the company's new production capacity will not be able to digest the risk in time.

Therefore, the SSE requested to explain the main considerations for the implementation of the fundraising project and the necessity of financing.

Yirui Technology replied that after the successful implementation of the project, it will help the company move towards the strategy of "a variety of X-ray core components and comprehensive solution providers", continue to meet the needs of the downstream market, grasp the development opportunities of the global X-ray industry, continuously improve the resilience of the domestic industrial chain and the independent and controllable ability of the company's supply chain, optimize the layout of the X-ray industry, deeply participate in the global market competition, enrich the product matrix, and build a new growth curve.

The average price of the main products showed a downward trend

Monetary funds and interest-bearing liabilities are relatively high

During the reporting period (2021 to 2023 and the first half of 2024), the operating scale of Yirui Technology expanded year by year, with operating income of 1.187 billion yuan, 1.549 billion yuan, 1.864 billion yuan and 1.026 billion yuan respectively, and net profit deducted from non-attributable to the parent company of 341 million yuan, 517 million yuan, 591 million yuan and 335 million yuan respectively.

However, in 2024, the company's operating income in the first three quarters will be 1.356 billion yuan, a year-on-year decrease of 2.91%, and the net profit deducted from the non-attributable parent will be 386 million yuan, a year-on-year decrease of 21.57%.

Yirui Technology said that in the future, if the market demand for X-ray core components declines sharply due to the decline in the industry's prosperity, it will limit the company's rapid development to a certain extent and affect the company's profitability.

During the reporting period, the gross profit margin of Yirui Technology's main business was 55.83%, 58.00%, 59.01% and 57.27% respectively, which was significantly higher than the 42.43%, 39.92%, 38.97% and 38.49% of comparable companies in the same industry in the same period. When inquiring, the SSE requested to explain the reasons and reasonableness of the gross profit margin of the company's main business being higher than that of comparable companies in the same industry.

It is worth mentioning that Yirui Technology has the risk of declining product prices: after more than ten years of development, the market competition in the industry has been intensifying, and product prices have continued to decline worldwide. During the reporting period, the average price of the company's main products showed a downward trend.

However, Yirui Technology also said that the price reduction factor has little impact on gross profit margin. In the future, if the company cannot reduce costs through a series of measures such as large-scale production, improving production yield and localization of the upstream and downstream of the industrial chain, or unable to achieve differentiated and high value-added product layout in a timely manner, or unable to timely deploy business segments that are in line with the development trend of the industry and have growth potential, or product prices will decline more than the company's expectations, the company may face the risk of declining gross profit margin due to the decline in product prices, which will affect profitability.

As of June 30, 2024, the balance of monetary funds of Yirui Technology was 1688.2402 million yuan, and the balance of interest-bearing liabilities was 3152.442 million yuan. Therefore, the SSE requires an explanation of the reasons and reasonableness of the company's higher monetary funds and interest-bearing liabilities.

Yirui Technology replied that the company's monetary funds and interest-bearing liabilities are relatively high, mainly due to the previous raised funds and the borrowing of some special loans for projects, and the relevant funds have not been used up; As the construction progress of the project progresses, the company expects the balance of monetary funds to gradually decline. The company's monetary funds and interest-bearing liabilities are relatively high, which is reasonable.

At the end of the reporting period, the book value of the company's accounts receivable was 281 million yuan, 357 million yuan, 605 million yuan and 864 million yuan respectively, and the accounts receivable turnover ratio was 5.41, 4.65, 3.81 and 2.75 respectively. The SSE requires that the reasons and reasonableness of the decline in the turnover rate of accounts receivable during the reporting period be explained in combination with the sales model, credit policy, major customers, and comparable companies in the same industry.

Reviewer: Wang Bei