The hottest revenue quality drops, and the tax reb

The quality of revenue has declined, the tax rebate is abnormal, and there are many doubts about Tangyuan Electric's IPO.

Chengdu Tangyuan Electric Co., Ltd. (hereinafter referred to as Tangyuan electric) is a proposed listed company whose main business is to re drive the mobile beam in the rail transit industry to realize the loading of traction power supply and public works engineering detection and monitoring and information management system. The company's main products are traction power supply detection and monitoring system The inspection and monitoring system and information management system of public works are mainly applied to the traction power supply of electrified railways, high-speed railways and urban rail transit lines and the operation and maintenance of public works projects. The company's major customers are China Railway Corporation and CRRC, which contributed nearly 90% of the company's operating revenue during the reporting period

through in-depth study of the prospectus of Tangyuan electric, we found that the company may have many problems, such as "declining revenue quality", "suspected of raiding revenue", "reliance on tax incentives", "abnormal tax rebate amount", "or false raised investment projects"

accounts receivable rose, and the quality of revenue fell seriously

we found that Tangyuan electric had a huge increase in both accounts receivable and notes receivable in 2017, accounting for a substantial increase in the proportion of operating revenue, which shows that the quality of revenue fell significantly. In addition, we found that the growth rate of the company's accounts receivable far exceeded the growth rate of the operating revenue of the year, which means that the part of the sharp growth in the operating revenue in 2017 did not obtain the corresponding cash flow, but almost all of it was linked to the accounts receivable, which was suspected of "hitting the door" to attack the operating revenue in the early stage of listing

according to the prospectus, the operating revenues of Tangyuan electric from 2015 to 2017 were 90 million yuan, 141 million yuan and 208 million yuan respectively. The growth rates of the operating revenues in 2016 and 2017 compared with the previous year were 56.67% and 47.52% respectively, with significant growth. However, in sharp contrast to the sharp increase in operating income, the company received cash flow from selling goods and providing labor services during the reporting period. According to the disclosure, during the reporting period, the cash flows received by the company from selling goods and providing labor services were 88 million yuan, 154 million yuan and 127 million yuan respectively. The cash flows received from selling goods and providing labor services in 2015 and 2016 were basically the same as the operating income of the year. However, the cash flows received by the company from selling goods and providing labor services in 2017 were far lower than the operating income of the year, with a year-on-year decrease of 17.53% compared with the cash flow of 2016, It can be seen that the quality of the company's revenue is not as good as that of the previous year

we found through the prospectus that the main reason for the increase in revenue and the decline in operating cash inflow of Tangyuan electric in 2017 was the high accounts receivable in that year, including accounts receivable and notes receivable. According to the disclosure, the accounts receivable of the company during the reporting period were 27.503 million yuan, 48.9582 million yuan and 82.3092 million yuan respectively, accounting for 30.54%, 34.71% and 39.55% of the operating revenue of the year, which increased significantly year by year. In terms of notes receivable, the notes receivable of the company during the reporting period were 12.4264 million yuan, 800000 yuan and 22.7965 million yuan respectively, which was less in 2016, but it increased nearly 30 times in 2017 compared with 2016. If the accounts receivable and notes receivable are aggregated, the accounts receivable of the company during the reporting period are 39.9267 million yuan, 49.7582 million yuan and 105 million yuan respectively, accounting for 44.34%, 35.28% and 50.50% of the operating revenue of the year respectively. The proportion of accounts receivable in the operating revenue increased by nearly 15 percentage points in 2017, which shows the degree of decline in the quality of revenue

based on the above operating income calculation, the operating income of Tangyuan electric increased by 67.0854 million yuan in 2017. Generally speaking, under the condition that the business model of the enterprise and downstream customers have little change, the proportion of the increase amount of accounts receivable of the company to the increase amount of operating revenue in the same period should be equal to the proportion of the balance of accounts receivable of the previous year to the operating revenue. However, in 2017, the company's accounts receivable and notes receivable increased by 55.3475 million yuan, accounting for 82.50% of the increase in operating revenue, far exceeding the proportion of accounts receivable in operating revenue in 2016. At the same time, it also means that most of the company's increased revenue in 2017 did not obtain real transaction cash, but was linked to accounts receivable. Then whether these transactions really exist, and whether there is a situation of recognizing revenue in advance and falsely increasing revenue? Or did the company deliberately relax its sales credit in 2017 to "hit the door" and surprise its revenue? I'm afraid it needs further verification by the relevant departments

due to the surge in accounts and notes receivable, tangyuan Electric's net operating cash flow in 2017 decreased significantly. The net operating cash flow of the company in 2016 was 48.1491 million yuan, while in 2017 it was only 5.8428 million yuan, which means that less than one tenth of the net profit of 62.0191 million yuan in that year was converted into real cash inflow, which can be seen from the decline in the quality of revenue

in addition, due to the significant increase in accounts receivable of Tangyuan electric during the reporting period, the company's bad debt accrual of accounts receivable also increased significantly. According to the disclosure, the bad debt accrual amount of accounts receivable reported by the company was 1.9673 million yuan, 3.31 million yuan and 5.8084 million yuan respectively, with a year-on-year increase of 68.25% and 75.48% in 2016 and 2007, and the growth rate is still relatively large. It is worth mentioning that the company's bad debt accrual ratio of accounts receivable is probably lower than that of the same industry, and the real amount of bad debt accrual is probably more than that. According to the disclosure, the bad debt accrual proportion of Tangyuan electric within one year, one to two years and two to three years is 5%, 10% and 20% respectively, which is basically equivalent to that of the same industry. However, the bad debt accrual ratio of 3-4 years and 4-5 years is 30% and 50% respectively, which are the lowest among the ten enterprises in the same industry disclosed in the prospectus. Among them, the accrual ratio of accounts receivable in the same industry aged 3-4 years is basically between 50% and 60%, while the accrual ratio of accounts receivable in the same industry aged 4-5 years is mostly 80%. In this way, the company's bad debt provision amount may not be sufficient, so the profit may also contain moisture

the amount of tax rebate is abnormal, which may falsely increase the software revenue to defraud concessions

we found that Tangyuan electric enjoyed a variety of tax incentives during the reporting period, including income tax incentives and VAT refund incentives. However, we found that the amount of tax incentives from the company during the reporting period was huge, which exceeded 60% of the net profit in 2017, or there was a serious reliance on tax incentives. In addition, we calculated the software revenue from the company's sources and the amount of VAT levied and refunded immediately during the reporting period, and found that the company may be suspected of defrauding the VAT refund by falsely increasing the software revenue

according to the prospectus, tangyuan electric enjoyed three income tax preferences during the reporting period, namely, the western development tax preference, the R & D expense plus deduction preference and the disabled salary plus deduction preference. The total amount of the three income tax preferences during the reporting period was 4.7834 million yuan, 5.092 million yuan and 8.3039 million yuan respectively. In addition, During the reporting period, the company also enjoyed the preferential policy of VAT refund for the sale of software products. According to the disclosure, the preferential amount of VAT refund during the reporting period was 6.6258 million yuan, 7.3216 million yuan and 10.3103 million yuan respectively. To sum up, the total amount of all tax incentives of the two types is 11.4092 million yuan, 12.3308 million yuan and 18.6142 million yuan respectively. According to the disclosure, the net profit of the company during the reporting period was 18.0884 million yuan, 36.2142 million yuan and 62.0191 million yuan respectively, and the proportion of tax incentives in the current net profit was 63.07%, 34.05% and 30.01% respectively. In 2015, it was as high as more than 60%, which decreased in 2017, but the proportion was still as high as 30%. The company may rely on tax incentives to a certain extent. If the company cannot enjoy these tax incentives due to policy changes in the future, the company's performance may be "changed"

in addition to relying on tax incentives to a certain extent, we found that the VAT refund amount during the reporting period of Tangyuan electric also seemed to be unreasonable. According to the prospectus, the company is a developer mainly engaged in the traction power supply and public works engineering detection and monitoring and information management system in the rail transit industry, and the whole system includes embedded software and hardware parts of each module, of which the software part enjoys the tax preference of immediate collection and refund of national value-added tax. However, the amount of VAT levied and refunded by the company's software products every year surprised us that Sanju environmental protection company mainly relies on technological innovation, model innovation and financial innovation to support and serve the transformation and upgrading of the petroleum and chemical industry, As we mentioned above, if the accuracy of the strain gauge is not high, or the anti-aging ability of the glue used to fix the strain gauge is not good, or the material of the sensor is not good, the accuracy and service life of the sensor will be affected by 6.6258 million yuan, 7.3216 million yuan and 10.3103 million yuan respectively, accounting for 36.63%, 20.22% and 16.62% of the current net profit, respectively

first of all, let's look at the relevant provisions of the state: according to the notice on the value-added tax policy for software products (hereinafter referred to as the "notice") No. 100 document of the Ministry of Finance and the State Administration of Taxation, the "general value-added tax payers sell their self-developed and produced software products, collect value-added tax at the rate of 17%, and implement the policy of immediate collection and refund for the part of their actual value-added tax burden exceeding 3%." At the same time, for embedded software products, the notice stipulates that "the immediate tax refund is equal to the current value-added tax payable of software products minus the current sales of software products multiplied by 3%, and the current sales of embedded software products is equal to the total sales of embedded software products, computer hardware and machine equipment minus the current sales of computer hardware and machine equipment." In short, for the production equipment with embedded software, the sales volume of VAT that is levied and refunded immediately must first remove the hardware part and then calculate only the software part. The tax rebate rate is 14% of the sales volume of the software part, which is levied and refunded immediately

looking back at the data disclosed in the prospectus, we can calculate that the software sales revenue of the company during the reporting period is 473.271 billion yuan, 52.2971 million yuan and 73.645 million yuan respectively through the tax rebate rate of 14% and the tax refund amount during the reporting period of Tangyuan electric. During the reporting period, the company's operating revenue was 90 million yuan, 141 million yuan and 208 million yuan respectively. In other words, the proportion of the company's embedded software revenue in the sales revenue during the reporting period was 52.55%, 37.08% and 35.38% respectively. Normally, when the company's production process remains consistent during the reporting period and the cost of raw materials changes little, the proportion of software revenue in the total revenue of the whole system should be similar. However, the company's software revenue accounted for 52.55% of the total system sales revenue in 2015, but fell to 37.08% and 35.38% in 2016 and 2017, which seems to be obviously unreasonable

another way of thinking analysis, according to the prospectus, the main cost of Tangyuan Electric's main engineering detection and monitoring and information management system comes from raw materials, including cameras, sensors, lenses, car bodies, etc. during the reporting period, direct raw materials accounted for 78.09%, 79.63%, 77.85% of the operating costs. Therefore, most of the unit cost of products comes from raw material components, namely hardware. Due to the limited data disclosed in the prospectus, we don't know whether the hardware revenue in the company's sales revenue can cover the purchase cost of these hardware? In other words, does Tangyuan electric deliberately sell the hardware in the system to customers as software, thereby falsely increasing the software sales revenue to obtain the tax rebate of software sales? We believe that the financial audit drafts are available,