Sfir: Instrument faucet that is gradually being surpassed

Reading: Just three months ago on January 13, the rival of the same industry in Shanghai Ankerui Electric just landed on the capital market. And Ankerui has always been regarded as a small team of entrepreneurs who have been separated from the Sfir family. However, over time, Ankerui, who was once established as the manager and sales manager of Sfir in the Zhouzhong team (who was the chairman of Ankeru in midweek), has gradually surpassed Sfir in technology and sales.

The Werner Military Academy in Suffolk cultivates Ankerui, and is caught up to 19% in gross profit in 9 years

In the last three years, Ankerui's net profit has been above the Sfir, and the gross profit rate is 10 points higher. Jiangsu Sfir Electric Co., Ltd. (hereinafter referred to as Sfir) is no stranger to listing.

Just three months ago on January 13, the rival Shanghai Ankerui Electric just landed on the capital market. And Ankerui has always been regarded as a small team of entrepreneurs who have been separated from the Sfir family.

However, over time, Ankerui, who was once established as the manager and sales manager of Sfir in the Zhouzhong team (who was the chairman of Ankeru in midweek), has gradually surpassed Sfir in technology and sales. Ancorui prospectus disclosed that in 2010, Sfir sold 206662 units of installed digital instruments, while Ankerui sold 212,735 units, and Sfir was surpassed by latecomers.

What's more, once the instrument leader, Sfir, net profit has fallen after Arcore for three consecutive years.

Gradually Beyond Instrument Faucet

Sfeier Electric was established in 1998. The company's address is in Jiangyin, Jiangsu. Its main products are smart distribution meters, power quality improvement and energy-saving control products, and distribution control components.

Among them, Smart Distribution Meters, as the main profit-making products of Sfir, accounted for 63.11%, 60.88% and 59.43% of the total operating revenue in 2009-2011, respectively, and the gross profit contributed by the company in the past three years were also respectively. Accounted for 67.88%, 67.42% and 64.63%.

According to the disclosure of the Faire Prospectus, Sfiele's competitors in smart distribution meters include Dandong Huatong Measurement and Control, Zhuhai Pino Electronics, Shenzhen Zhongdian Power Technology and Shanghai Ankerui Electric.

From the ranking order of its competitors in the Fairfield prospectus, although Federer is reluctant to regard Ankerui as his strongest competitor, in fact, this is the most direct and geographically recent Phil's power meter companies, which are inextricably linked, have overtaken in many ways.

Founded in 2003, Ankerui has a deep relationship with Sfir. Most of the executives at Ankerui came from Jiangyin, and its fund-raising project, the “customer-side smart power meter industrialization” manufacturing base, is located on the other side of Xicheng Expressway, which is only 18 kilometers away from Sfir.

In 2003, several senior employees who had been doing management and sales work at Sfir were given the opportunity of the power meter industry. They resigned from Sfir and founded the Ancorui Electric Co., Ltd., including a former management position at Sfir. In the middle of the week, Zhu Fang, who has sales positions, Tang Jianjun, who is engaged in production management, and Wu Jianming and Jiang Long, who work on technology research and development. This group of people who are good at management, production and sales functions started from the beginning on the shoulders of Sfir, and finally sent Ancorui to the capital market on January 13, 2012.

In the last three years, Ankerui’s net profit has been above the top, and in 2009-2011, the net profit of Fei Fei was 24.88 million yuan and 3195 respectively. Ten million yuan and 40.1 million yuan; the same period, Ankerui's net profit was 25 million yuan, 38.64 million yuan and 40.39 million yuan.

The net profit only slightly exceeds, but the difference in gross profit margin can pull the gap between the two companies. From 2009 to January-February 2011, Sfir's consolidated gross profit margin was 50.25%, 53.06%, and 54.46%. During the same period, Ankerui's gross profit margin was 62.05%, 63.97%, and 64.79%. The average gross profit margin of the two companies with the same business is actually a difference of 10 points.

Sfir explained that Ankerui's comprehensive gross margin is higher than that of the company, on the one hand because of the relatively low gross profit margin of the distribution control components of one of the main products of Sfir. Another and more important reason is that the partial software of Ankerui's power management and security products, ie the provision of a set of monitoring system platforms including power smart meters, has created a gross profit rate that has greatly improved Ankeru’s Comprehensive gross profit. This reason is recognized by Sfir, and it is also the direction for future development of higher gross profit for power meters.

A researcher in the power industry analyzed that the group of entrepreneurs who came from Sfiele Electric should be able to better understand the constraints of the big company mechanism and not take detours in the growth period, so they quickly caught up with Sfir.

“Even if it is overtaken, under the backdrop of a huge market for power meters and a high gross profit in the current industry, Sfir should be able to maintain profitability in the next few years,” the researcher said in an interview with the Money Weekly reporter.

Capacity Expansion Increases Sfir Risk

The increase in smart grid construction and energy conservation and emission reduction in China, and the policy dividends brought about by electrical instruments, have attracted more and more companies with capital and technological advantages to increase investment and expand production capacity.

However, this policy dividend cannot always be maintained.

Although the instrumentation industry has entered the threshold, but the good prospects and high gross profit margin will attract more companies to enter and cause existing companies to rapidly expand production capacity.

The just-listed Ankerui has invested RMB 81.86 million in the “customer-side smart power meter industrialization project” and added 600,000 units/year of capacity.

Larger competitors in the industry such as intelligent control technology, Delixi Group instrumentation, Zhejiang Zhengtai instrumentation and other large-scale expansion will also directly lead to intensified market competition in the future, the industry's profit rate tends to decline, and the related product gross profit rate declines accordingly , thereby affecting the company's product prices and profit levels.

For Sfir, this risk is particularly significant. After Sfir raises funds to reach production, its production capacity will be further improved. Its power quality detector will increase from the current 100,000 units to 240,000 units, and motor protection controllers will increase from the current 10,000 units to 3 units. Million, Smart Saver has increased from the current 800,000 units to 2.1 million units, and the Harmonic Reactive Power Compensation Device has been changed from the current production of outsiders to independent production with a production capacity of 1,620 units. The capacity expansion has exceeded 100% and even reached 200%. The sales risks and the decline in gross profit margin caused by fierce competition will all seriously threaten the smooth return of investment of the fundraising project.

Sfir admits in the prospectus that this risk may cause some deviations between facts and expectations, and lead to the company's continued rapid growth.

Related transaction shears continue to chaos

Compared with the competitive pressures brought by peers, the greater obstacle faced by the process of the Sfimer listing is that it cuts down on related transactions and Sfir Electric from many electronic and electrical companies and senior management teams under the same controller. Independence issues.

The Sfir prospectus shows that almost all executives of the issuer have served as senior executives of the related company Changpower Technology. Changyi’s current secretary, Zhu Zhiyi, is also a non-independent director of Sfir.

As for the view that the chairman of Xinchao Group Wang Xinchao is the legal risk of acting as chairman and legal representative of Changjiang Electronics Technology and Sfir, investment bankers do not agree. In fact, in the A-share market, there are many examples of this. There are numerous examples of state-owned companies and state-owned listed companies that are the same actual controllers. The private companies, Health Yuan and Livzon Group, are under the actual control of Zhu Baoguo, the same chairman.

On the contrary, it is difficult to clarify the related transactions between Sfir and a number of companies under the New Wave Group. Even if they are successfully listed in the future, it will be difficult to use only a few annual reports, quarterly reports, and semi-annual reports for a year to avoid the transfer of benefits.

However, a reporter of the Money Weekly telephoned the Office of the Sfier Board of Directors, and the company’s staff members seem to “don’t worry that the matter will affect the listing”.