Photovoltaic in IPO: return on equity decreased wages and other compensation expenses increased

Polaris solar PV net news: shares in the total number of shares publicly to 29.88 million shares, including IPO of 23.49 million shares, old stock transfer of 6.39 million shares, issuing price 16.42 Yuan per share. The company’s main business for film development, production and sales of solar cells, main products are medium PTFE surface energy solar module backsheet.

Jolywood photovoltaic new material company limited is a specialized solar cell film development, production and sale of the State-level high-tech enterprises. Founded in March 2008, is located in the scenic South of Yangtze shajiabang town, Changshu city, only 1 hour drive from the Shanghai HongQiao international airport, the transportation is convenient.

When investors evaluate shares in this offering, should seriously consider the following risk factors. Risk factors described below is based on the principle of importance or size of that sort may affect investment decisions, the risk that the company is as follows:

, Preferential tax policy changes of risk

According to on December 2, 2009 Jiangsu Province science and Technology Office, and Jiangsu Province Department of finance, and Jiangsu Province national IRD, and Jiangsu Province place IRD issued of on finds Jiangsu Province 2009 degrees second batch high-tech enterprise of notification (sukau enterprises Association (2009) 11th,), this company was finds for high-tech enterprise, sent card date for on May 27, 2009, validity three years, 2009, and 2010, and 2011 company enjoy national on high-tech enterprise of related offers policy, Pay corporate income tax at 15%. Above offers policy in 2011 due Hou, company proposed high-tech enterprise qualification review applications, Jiangsu Province high-tech enterprise finds management work coordination group to sukau enterprises Association (2012) 15th, paper confirmed company through high-tech enterprise review, and renewal new of high-tech enterprise certificate, sent card date for August 6, 2012, validity three years, 2012 up company continuous three years enjoy by 15% of tax paid enterprise income tax of offers policy. The reporting period, companies enjoy high-tech enterprises preferential income tax amount 4.9739 million Yuan, 9.2896 million Yuan, respectively, and 1, 1.5797 million Yuan tax credits accounted for the percentage of the total profit for the current period, and 9.49% and 10.08%, respectively.

Although the company has always paid attention to research and innovation, research spending continues to increase in recent years, research and development and innovation capacity grows, products with high technology content, but if the company cannot continue to meet in the future high-tech enterprise qualification or relevant changes in tax policy, are likely to increase the company’s tax burden, thereby affecting the company’s business performance.

Second, financial risk

(A) the receivables growth risks

Report period within with company operating scale expanded, company should accounts receivable paragraph gradually increased, 2011 late, and 2012 late and 2013 late, company should accounts receivable paragraph respectively for 2,958.480,000 yuan, and 9,168.560,000 yuan and 11,014.440,000 yuan, as December 31, 2013, company should accounts receivable paragraph in the account age a years within of part accounted for than for 96.39%, although company has always been attention should accounts receivable paragraph of recycling and developed has strictly of should accounts receivable paragraph management policy, But the European debt crisis, the United States countervailing factors such as, double anti-EU survey to downstream photovoltaic module production and operations of the company have a greater adverse impact, if cash-strapped companies main customers or operating results fell, will affect the recovery of accounts receivable of the company.

(B) the product sales price decrease of risk

The reporting period, solar film products company’s average selling price was 42.37 Yuan/square meter, 31.80/m² 23.33 Yuan/sq m, decline, due to increasing product yield and the purchase of raw materials impact of falling prices and other factors, the company’s main business gross margin remained at a good level, and the 52.65% and 47.88%, respectively. But affected by the debt crisis in Europe and the United States both and the influence of European double investigation, photovoltaic components and raw materials decline in profitability of the company, more attention to the control of procurement costs for raw materials, may result in product sales prices fall further, if the company cannot keep pace drop in product costs, may lead to lower sales and operating income growth in company net profit growth.

(C) net asset yield decline risk

In 2011, 2012 and 2013, after deducting the non-recurring profit and loss of the company weighted average return on equity, and 48.26% and 40.01%, respectively, at a high level. After the public stock offering to raise funds, the company’s net assets will have significantly improved in a short time scale, but raising capital investment project has a certain period, projects of production also requires a certain amount of time, the net profits of the company in the short term is difficult to achieve growth, return on equity of the company decreased the risk.

Third, managing risk

(A) the human resources risks

Company coated film produced independently developed fluorocarbon coating, using a variety of material surface modification technology, and the production equipment on its own integration and debugging, product development, production of polymeric materials, physical chemistry and Automation control, comprehensive application of multiple disciplines, for product development, design and management of high professional quality requirements. How to maintain the stability of the existing team, and continue to attract foreign outstanding technical and management personnel is a key factor related to the company’s future rapid and stable development. If companies in personnel training and introduction cannot meet the demands of rapid expansion of the company, will undermine the competitiveness of companies in the market.

(B) the risk management company high growth

Company since established yilai, assets scale and operating performance are fast growth, report period within company of assets total respectively for: 22,356.90,000 yuan, and 36,648.420,000 yuan and 49,690.50,000 yuan, net worth respectively for 10,867.930,000 yuan, and 18,529.820,000 yuan and 27,400.250,000 yuan, company of business income respectively for 13,885.200,000 yuan, and 24,560.890,000 yuan and 34,537.310,000 yuan, Net profits were 4,469.320,000 yuan and 7,661.890,000 yuan and 9,770.430,000 yuan, showing rapid growth. If this times issued success, with company raised funds of in place and investment project of implementation, company operating scale will in short-term within quickly expanded, on company operating management, and resources integration, and market pioneering, aspects are proposed has more high of requirements, if company management team quality and the management level cannot adapted company scale and capacity quickly expansion of needs, organization mode, and business process and management system failed to with company scale of expanded and timely adjustment, and perfect, will will directly effects to company of operating efficiency and profit capacity.

(C) the actual controller to control risk

The actual controller of the company Lin Jianwei, Zhang Yuzheng couple, prior to this release, the two men together directly held 71.625% shares of the company and huhtamaki investment controls 4.5% shares of the company. After this release, Lin Jianwei, Zhang Yuzheng and his wife are still in a holding position, Lin Jianwei, Zhang Yuzheng couples might use its stake, the company’s related trade and business decision-making and control personnel arrangements, which may damage the company and the interests of minority shareholders.

Four investment projects, mobilization of financial resources risk

(A) raise funds for investment projects of construction risks

This offering to raise funds from investing in “12 million square meters-coating solar film extension project”, “annual output of 16 million square meter coating solar film project”, “solar photovoltaic new material research and development projects.” The implementation of such projects in line with the company’s development strategy, can effectively enhance the productivity and profitability of the company, and conducive to the sustained and rapid development of the company. Although the feasibility study of the project after a careful and fully, in the implementation process of the project, however, there are still some uncertain factors or force majeure, could lead to projects cannot be completed on time, quality, affecting the expected benefits.

(B) raise funds for investment projects, market risks

The company’s production of coated film market demand, broad prospects for development. This times raised funds investment project “annual 12 million square meters coated reply type solar back film expansion project” and the “annual 16 million square meters coated reply type solar back film expansion project” all up postpartum, company coated reply type back film of capacity will increased 28 million square meters/years, capacity growth range larger, although company solar back film products quality stable reliable, has larger of cost, and technology, competition advantage, deeply customer recognized, products supply, but the project up postpartum, If the company’s marketing and sales network cannot keep up with the pace of development, raise money will affect this realization of the investment project is expected to generate revenue.

Five, after the listing of corporate salary costs such as wages increase risk of impact on business performance

If this times issued success, with raised funds investment project of implementation, company sales scale will has larger growth, company of employees needs also will has larger increased, employees number of increased and employees treatment of improve will makes company wage, pay costs keep growth, thus increased company of production cost and operating costs, if company cannot timely digest raised voted project added capacity, increasingly growth of human cost will may on company operating performance produced adverse effects.

Original title: shares in IPO: return on equity decreased wages and other compensation expenses increased

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