Jin Zheng Yan, Southern Capital Center Yunye/Author Tinglu Xizhou/Risk Control
Xiamen Stark Intelligent Technology Co., Ltd. (hereinafter referred to as “Stark”), located in the coastal city of Xiamen, has been under the slogan of “new technology leads new development” since its establishment more than 10 years ago. But Stark has only five invention patents, which may be difficult to match with the company’s slogan. Moreover, the only patents of Stark were applied for before 2017, and the innovation ability was in doubt.
And the problem about Strike goes beyond that. Because there is no “capacity” in the traditional sense, Stark did not disclose capacity data, while comparable companies in the same industry with similar production models have disclosed detailed capacity data of similar products in the past three years. In addition, the plant area disclosed by Stark is strange. It is worth mentioning that Stark sells at a low price to customers with competitive relationships for a long time, but customers do not “buy” the secondary processing and sell under their own brands, and Stark may become a low-cost substitute factory.
1、 Claiming that there is no traditional concept of capacity, the company was “humiliated” by its peers who have published capacity data
As the saying goes, only comparison can distinguish.
For Strike, it claims that there is no traditional concept of “capacity”, so it does not disclose detailed capacity data. However, comparable companies in the same industry similar to the production model of Stark disclosed their capacity data.
1.1 The prospectus does not disclose capacity data, saying that there is no traditional concept of capacity
According to the Prospectus for Initial Public Offering of Shares and Listing on the Growth Enterprise Market (hereinafter referred to as the “Prospectus”) signed on November 8, 2022 by Stark, Stark’s main products are machine vision detection equipment. The R&D department is responsible for the design of products and the development of software algorithms. The production department integrates the process flow according to the technical proposal of the R&D department. The production process mainly includes the core component assembly, equipment assembly Equipment commissioning, etc.
In addition, the prospectus disclosed that due to the characteristics of “standardized production and semi-customized development” and order-driven production of its products, the expansion of Stark’s capacity mainly depends on order demand.
Therefore, Stark said that there was no standardized production line, and the equipment assembly and commissioning process was the main factor determining the company’s capacity. Among them, the equipment assembly process is completed through self-assembly and outsourcing, and Stark can flexibly develop outsourcing processing plans based on the order situation. Therefore, Stark does not have the concept of “capacity” in the traditional sense, and takes the number of equipment or standard working hours as the capacity statistical standard, which cannot truly reflect its production capacity.
In other words, the production links of Stryker mainly include assembly and commissioning, and the assembly link can be completed through outsourcing cooperation. It is a flexible production mode. The capacity is not limited to the number of equipment and working hours, and the expansion of capacity depends on the order demand. Therefore, Stark claims that there is no concept of “capacity” in the traditional sense.
It should be pointed out that among the manufacturing enterprises of machine vision equipment, Stryker is not the only one that adopts flexible production mode.
1.2 The rationality of the production mode was questioned, and it was said that it was similar to the production mode of the same industry
According to the prospectus, the comparable companies selected by Stark in the same industry are Shanghai Juzi Technology Co., Ltd. (hereinafter referred to as “Juzi Technology”), Shenzhen Jintuo Automation Equipment Co., Ltd. (hereinafter referred to as “Jintuo”), Suzhou Tianzhun Technology Co., Ltd. (hereinafter referred to as “Tianzhun Technology”), and Suzhou Huaxing Yuanchuang Technology Co., Ltd. (hereinafter referred to as “Huaxing Yuanchuang”).
According to the “Reply to the second round of examination and inquiry on the application documents for the initial public offering of shares and listing on the GEM of Xiamen Stark Smart Technology Co., Ltd.” (hereinafter referred to as the “Reply to the second round of inquiry”) signed on November 8, 2022, Shenzhen Stock Exchange requires Styker to explain the source of the expression of “standardized production+semi-customized development” and the rationality of the large difference in information disclosure between it and comparable listed companies in the same industry.
Under this inquiry, Stark disclosed the product features and production models of comparable companies. Among them, some non-core production processes in the products of Momentum Technology are entrusted to outsourcing manufacturers for processing, mainly including machining, surface treatment, etc., without involving the core production processes and key technical links of Momentum Technology.
In addition, the raised investment project of Mozi Technology (capacity expansion and construction project of machine vision inspection equipment) will introduce production and commissioning equipment with higher automation and more advanced performance, the automation and standardization of product production will be further improved, and the product quality and stability will be further optimized.
According to the above statement about the production mode of Momentum Technology, Stark explained that Momentum Technology did not clearly state whether its production mode was standardized or customized, but from its statement about the capacity expansion construction project of machine vision inspection equipment, it can be inferred that Momentum Technology is defined as standardized production according to the degree of automation of the production line, and the production mode is between standardization and customization.
In addition, according to the prospectus, some non-core processes in the production process of Stark products, such as electric box assembly or mechanical structural parts, are processed in the way of entrusted processing by providing design drawings.
From this point of view, the non-core processes in the production process of products are both manufactured by outsourcing manufacturers, and the production mode is similar to some extent.
In addition to Moment Technology, the production models of comparable companies such as Jintuo, Tianzhun Technology and Huaxingyuan Chuang are less similar to those of Stark.
Strangely, Moment Technology, also a flexible production mode, disclosed its detailed capacity data.
1.3 The prospectus of Mozi Technology discloses detailed capacity data, and the production mode does not affect the capacity estimation
According to the “Prospectus for Issuance of A-share Shares to Specific Targets in 2022” (hereinafter referred to as the “Prospectus”) of Mozi Technology, from 2019 to 2021 and from January to September 2022, the capacity of machine vision equipment of Mozi Technology was 767 units/year, 1049 units/year, 1549 units/year and 1293 units/year respectively, and the output was 726 units, 945 units, 1492 units and 1236 units, with the capacity utilization rate of 94.6%, 90.04% and 96.31% respectively 95．59％。
It can be seen that the production model of the comparable company Juzi Technology, which is similar to that of Stark, can still calculate its capacity.
From above, Stark claims that the expansion of its capacity mainly depends on the order demand. In the production mode, the outsourcing of non-core processes can be flexibly formulated according to the order situation. Therefore, Stark does not have the concept of “capacity” in the traditional sense. In fact, compared with comparable companies in the same industry, the production mode of the two companies is similar. The prospectus of the company discloses the capacity of machine vision equipment, while the company’s capacity data is “hidden”. The reason is puzzling.
2、 The proportion of cost and manufacturing expenses is “abnormally low”, which is suspected of concealing the actual area of the leased related party’s plant
There are various ways for enterprises to beautify their reports.
It is worth noting that the manufacturing cost of Stark is lower than that of comparable companies in the same industry. In this regard, Stark said that it was caused by the asset-light operation characteristics, and disclosed that the total area of the leased related party’s workshop was 2753.84 square meters. In fact, Stark disclosed on its recruitment platform that it used more than 5000 square meters of plant area.
2.1 The proportion of manufacturing expenses in cost is lower than that of peers, which is explained as the low rent of asset-light operating plant
According to the reply to the first round of inquiry, manufacturing costs are all indirect costs incurred for the production of products. The financial department collects the actual production-related rental costs, auxiliary consumption, depreciation and amortization, water and electricity costs, etc. on a monthly basis.
From 2019 to 2021 and from January to June 2022, the manufacturing expenses of Stark were 843300 yuan, 686600 yuan, 656800 yuan and 334800 yuan, respectively, accounting for 0.86%, 0.63%, 0.43% and 0.4% of the operating costs.
In view of the above costs and expenses, Stark takes the creation of Mozi Technology and Hua Xingyuan as the comparison objects.
According to the reply to the second round of inquiry, from 2019 to 2021, the manufacturing costs of the company were 12.8307 million yuan, 15.2947 million yuan and 26.2074 million yuan respectively, accounting for 15.95%, 15.7% and 17.73% of the operating costs; The manufacturing costs of Huaxing Yuanchuang were 48.8647 million yuan, 54.3384 million yuan and 88.2399 million yuan respectively, accounting for 10.01%, 8.82% and 12.99% of the operating costs. From January to June, 2022, the manufacturing cost data of Mozi Technology and Huaxing Yuanchuang were not disclosed.
It is obvious that the proportion of manufacturing costs to operating costs of Stark is far lower than that of Moment Technology and Huaxingyuan.
For the above situation, Stark said that compared with comparable companies in the same industry, Stark has the characteristics of asset-light operation. During the reporting period, the amount of production plant rent and equipment depreciation and amortization in the cost structure of Stark is lower, and the amount and proportion of manufacturing expenses are lower than those of Mozi Technology and Huaxingyuan Innovation. The cost-side economy further ensures that the gross profit rate of Stark products is higher than the average of comparable companies in the same industry.
The so-called asset-light operation, that is, during the reporting period, Stark did not have its own property, but only leased property from related parties and other third parties for production and office.
2.2 Stryker has no own property and leases the related party Shuntuo Electronics Factory with an area of 2753.84 square meters
According to the prospectus, as of the signing date of November 8, 2022, Stark has no own property.
During the reporting period, that is, from 2019 to 2021 and from January to June 2022, Xiamen Shuntuo Electronics Co., Ltd. (hereinafter referred to as “Shuntuo Electronics”), which is controlled by Chen Zhizhong, the actual controller of Stark Leasing, is located on some floors of the property at No. 583, Tonglong Second Road, the industrial zone of Xiamen Torch High-tech Zone (Xiang’an), for the production or office of Stark. In the early stage of the establishment of Stark, considering that the house of Stark mainly meets the needs of equipment assembly, commissioning, inventory and office, the aforementioned property of Shuntuo Electronics meets the needs of Stark and is idle, and at the same time, as a related party, leasing can guarantee the stability of the production and office space of Stark, so Stark leases Shuntuo Electronics property as the production and office space and continues to this day.
According to the prospectus, from 2019 to 2021 and from January to June 2022, the amount of related lease of office and production buildings from Stark to Shuntuo Electronics was 576700 yuan, 593200 yuan, 601500 yuan and 300700 yuan, respectively. During the same period, the amount of water and electricity charges collected and paid by Shuntuo Electronics for Stark Shuntuo Electronics was 129100 yuan, 140500 yuan, 156000 yuan and 64400 yuan respectively.
As of the signing date of the prospectus, on November 8, 2022, Stark Leasing Shuntuo Electronics Co., Ltd. is located in Unit 101, Unit 201, Unit 301, Zone A and Zone C, No. 583, Tonglong Second Road, Xiamen Torch High-tech Zone (Xiang’an) Industrial Zone. The rental area is 1010.29 square meters, 1281.55 square meters, 333 square meters and 129 square meters respectively. A total of 2753.84 square meters.
Among them, the lease start date of Block A of Unit 101, 201 and 301 is November 1, 2018, and the lease start date of Block C of Unit 301 is May 1, 2020.
In addition, Stark said that during the reporting period from 2019 to 2021 and from January to June 2022, except for the property of Shuntuo Electronics, there was no case that the actual controller of the lease controlled other fixed assets of the enterprise.
In addition to the above-mentioned rental of Shuntuo Electronic Real Estate as a factory building, the rental property of Stark from other third parties is for office purposes.
That is to say, from November 2018 to November 2022, the area of Stark’s workshop was at most 2753.84 square meters, which came from leasing the related party Shuntuo Electronic Real Estate. In addition, Stark did not lease other fixed assets such as production equipment of related parties.
2.3 Multiple information shows that since 2017, the factory area of Stark has been 5200 square meters
According to the information released on July 20, 2017 by the WeChat public platform of the SMT Special Committee of the Guangdong Institute of Electronics, Sitec Co., Ltd. is located in the beautiful coastal city of Xiamen, with a plant area of 5200 square meters.
According to the information of the public recruitment platform, as of the query date of February 20, 2023, the “company profile” of Stark shows that Stark is located in the beautiful coastal city of Xiamen, and was listed on the new third edition on November 1, 2016, with a plant area of 5200 square meters.
That is, from 2017 to now, the actual plant area of Stark is probably 5200 square meters, which is 2446.16 square meters more than the rental area of Shuntuo Electronic Real Estate shown in the prospectus.
According to the research of the South Capital Center of the Financial Securities Research, the 5200 square meters of factory buildings mentioned above may come from the related party Shuntuo Electronics.
2.4 According to the official website of Shuntuo Electronics, a related party, its single factory building covers an area of nearly 5000 square meters
According to the information on the official website of Shuntuo Electronics, Shuntuo Electronics is committed to the R&D, production and sales of soldering tools, automation equipment, and testing and testing equipment. The operating area of the single factory is nearly 5000 square meters. The factory is located at No. 583, Tonglong Second Road, Industrial Zone, Torch High-tech Zone (Xiang’an), Xiamen, Fujian Province.
In summary, in the report period, the rent of production plant and depreciation and amortization of equipment in the cost composition of Stark were relatively low, and the amount and proportion of manufacturing expenses were lower than those of Juzi Technology and Huaxingyuan. Behind this, about the area of Stark’s production plant, the area covered by the prospectus is far less than the area disclosed by its recruitment information, and the aforementioned Stark plant is the leased related party Shuntuo Electronics plant, does it mean that Stark actually uses the property of Shuntuo Electronics located at 583 Tonglong Second Road, or not only the 1st, 2nd and 3rd floors of the signed lease contract, but also the entire property of Shuntuo Electronics located there?
However, behind the reduction of the plant area disclosed in the Stark prospectus, up to now, Shuntuo Electronics has actual business operations. So, is there any mixed use of personnel and assets between Stark and its related party, Shuntuo Electronics? Further, as an enterprise controlled by the actual controller of Stark, does Shuntuo Electronics pay costs for Stark? Doubts remain to be resolved.
3、 Having a competitive relationship with customers but selling at a low price for a long time, the core technology has been replaced or reduced to a “surrogate factory” in disguised form
Brand represents the competitiveness of enterprises. There are three levels for enterprise products to participate in market competition. The first level is price competition, the second level is quality competition, and the third level is brand competition.
For Strike, it may be at the first level. In order to compete for orders, Stark will not hesitate to sell products at a “low price” to the largest customer for a long time. On the basis of Stark products, customers “replace” the core technology of Stark with their own technology, and then affix their own brand for sale. It should be noted that the customer may have a certain competitive relationship with Strike.
3.1 The cooperation between Heli and Strike can be traced back to 2015 and has been the largest customer for many years
According to the prospectus and the reply to the first round of inquiry, Shanghai Heli Intelligent Machine Co., Ltd. (hereinafter referred to as “Heli Intelligent”), Shanghai Heli Electronic Technology Co., Ltd. (hereinafter referred to as “Heli Electronics”), and Shanghai Huanli Industry Co., Ltd. (hereinafter referred to as “Huanli Industry”) are all enterprises controlled by natural person Cheng Kelin.
According to the prospectus and the 2017-2018 annual report, in 2017-2021 and January to June 2022, Heli Smart and its related parties Heli Electronics and Huanli Industry (hereinafter referred to as “Heli”) were the second, first, first, first, first and first largest customers of Stark respectively
Jin Zheng Yan, Southern Capital Center Yunye/Author Tinglu Xizhou/Risk Control