It will be another year when it will be counted in mid-year. In particular, in July and August, many light company owners “traveled†on their “inertial†business. They called it “inspection of the market†and essentially meant “receiving in the middle of the yearâ€.
Overheated investment, poor access, unstable engineering, increased inventory, accounts receivable, and accounts payable are just enough to describe the status of domestic LED companies in the first half of this year. "Even if a listed company relies on LED concepts to raise funds is not easy, SMEs are more likely to be trapped by the 'triangular debt'." Hu Lan, director of marketing planning at Sunshine Lighting, told the "High-tech LED" reporter.
On August 6th, it was reported that Zhejiang Ningbo Andi Optoelectronics Technology Co., Ltd. with over 100 million assets applied for bankruptcy. Prior to this, several LED companies with old qualifications such as Duo Duoli, Bolent, Vision Electronics, etc. had closed down. The reason is that the industry's "triangular debt" has triggered a break in the capital chain and it has not been worth mentioning.
Big company ripple effects
According to GLII statistics, in the first half of this year, among all listed LED companies with semi-annual report, there were 15 companies with pre-increase in performance, accounting for 25.42%, and the results were flat, pre-reduced and loss-making. There were 1, 13, and 3, respectively, and the respective proportions were 1.69%, 22.03%, and 5.08%.
The reporter noted that even if it is a listed company with a year-on-year growth in revenue in the first half of the year, its receivables have also increased more or less, and even higher percentages have exceeded 90% of operating income. Among them, National Star Optoelectronics (002449.SZ) revenue for the first half of 445 million yuan, while accounts receivable reached 225 million yuan, accounting for 52.3%; Alto Electronics (002587.SZ) for the first half of the year revenue of 147 million yuan Receivables amounted to RMB 67 million, accounting for 45.5%.
At the same time, quarterly increases in accounts receivable have undoubtedly increased the risk of bad debts. According to the semi-annual report of Liaider Optoelectronics (300296.SZ), the company’s bad debt loss increased from 1.23 million yuan in the same period of last year to 3,933,100 yuan in the first half of this year, an increase of nearly 2 times; and bad debt reserve also increased from 7,937,100 yuan in the same period of last year. To 11.5241 million yuan in the first half of this year, an increase of 45.19%. At the same time, due to the squeeze of accounts receivable, the net cash flow from operating activities for the first half of the year decreased from RMB 5,485,200 to RMB -124 million in the same period last year.
In this regard, Liader Optical Accounting explained that the sharp increase in accounts receivable is mainly affected by the national financial austerity policy, customer payment delays, coupled with the company's first half of the completion acceptance project is relatively centralized, the acceptance of the payment can not be charged in time.
"At present, LED terminal sales mainly depend on engineering orders, but its recovery period is relatively long. If you take the EMC model of the project, it takes at least 2 to 3 years to return the funds." Zhu Yan, deputy general manager of Tsinghua Tongfang Lighting Group, frankly stated that LED Rigid price cuts occur every month, constantly testing the company's capital chain, and can easily breed the industry's three-debt phenomenon.
Zhen Mingli is a typical case. According to internal personnel of the company, sales in the Mainland market fell due to the problem of book entry. The company had orders for government engineering projects with a scale of over 100 million, but it was forced to postpone due to changes in the government and cash flow.
“Large companies often play a leading role in the market. If large companies are under tight funding, SMEs that are paralyzed around it will have no source of liquidity and will begin to owe each other. Under the curb effect, the situation of the triangular debt will worsen. “An insider made clear the mystery.
The triangular debt is also common in the upstream and downstream of the industrial chain. Upstream is often a large company. They are relatively strong, occupying downstream funds and can drag on. As a result, accounts payable and accounts receivable have increased substantially.
The production area "triangular debt" vicious cycle
In the ancient town of Zhongshan, where small and medium-sized LED companies are clustering, the issue of “triangular debt†is different from the above-mentioned transaction-dependent relationship of large-scale funds, which is more manifested in the accumulating sales inertia that has formed within the industry cluster for many years.
“Last year so far, it is estimated that there are no fewer than 1000 L ED companies in transition from Guzhen, plus 95% of them are small or even micro-sized companies. The price war and the phenomenon that you owe me are very serious.†General Manager of Leia Lighting Zhou Jiaxiang Concerned about the status of the current LED industry capital chain.
According to an interview with the "High-tech LED" reporter, the so-called "triangular debts" in the production areas refer to the common name of the companies in the industrial bases where the companies have exceeded the collection commitment period or agreed payment period and have not paid the outstanding payment. The chain of debt relationship formed by the default payment.
Take Guzhen as an example, its unique check monthly settlement and logistics transportation enterprise's function of "consignment advancement" also provide a suitable breeding ground for the development of "triangular debt". Usually expressed as: the business of the company is less than the finished product of the company's debt, the finished product company owes the debt of the accessory company, and the accessory company owes the debt of the upstream raw material company. Or is there a similar debt relationship: input-output-backlog-arrears-reinvest-re-output-backlog-arrear.
"In the long run, companies and companies will fall into a vicious cycle of 'big production loss, small production loss, no production and compensation'," said the person in charge of the Guzhen Town Finance Office.
It is understood that due to the habit of check monthly payment and advance payment, the model currently formed in ancient towns is basically: the manufacturers ship the goods to the freight company (specified by the customer or identified by themselves), and the logistics company notes according to the requirements of the manufacturers. Clear payment methods (substitute or not, payment methods account for the majority), then send the goods to their destination. After the goods are delivered, the goods will be withdrawn within a certain period of time according to the requirements of the manufacturer. During the period, the logistics company took over the risk of payment, but also controlled the right to control the cash for a certain period of time, and will issue 30 to 60 days to the manufacturers expected checks.
“Manufacturers will use these expected cheques and then purchase production materials from their suppliers. Many companies will also use cheques for settlement. Businesses, manufacturers, logistics, parts and other 'triangular debt' relationships will be tangled.†Shuguang Logistics General manager Liu Aixiu said.
The reporter found that the "triangle debt" phenomenon is very common in ancient towns. In order to win over customers, accessories companies and finished products adopt monthly settlement methods with customers, and it is normal for them to make monthly payments once in a few months. However, factories need production, and they need raw materials. When the funds are not in place, they will enter a “negative operation†state. Once a certain link is insufficient, capital chain fracture becomes inevitable.
"Loan difficult" overwhelmed the last straw
At the beginning of the venture, SMEs did not have much demand for working capital. However, once companies want to take a higher level, they will encounter financial bottlenecks.
"Generally speaking, with an annual turnover rate of 8 funds, if you want to achieve annual sales of 50 million yuan, the company will need about 6.25 million yuan of liquidity. Together with fixed assets, the registered capital will need about 10 million yuan." Ms. Chen, who has worked in corporate finance for many years, told reporters that “SME financing is not easy and it is very rare to raise so much money.â€
According to industry sources, the days of home lighting and LED companies this year are very difficult. Since June 2012, 15% of the two major categories of companies have been suspended and semi- suspended. Enterprises accustomed to the operation of unspoken rules such as "triangular debt" have begun to hope for a life-saving straw from bank loans.
However, despite the fact that the central bank began to cut interest rates several times in succession from the beginning of this year, denials of loans, delayed lending, cuts in quotas, and long-term loan changes to short-term loans have become a means of many financial institutions to respond to SMEs.
“When we took money from a bank in 2008, we could almost lend at the benchmark interest rate. Now we take a one-year loan as an example, and the interest rate is still higher than the 5.67% at the time of the 2009 financial crisis. In the past two years, the foreign sales have shrunk, and domestic demand has been shrinking. Sluggishness is more difficult than it was three years ago.†An LED manufacturer with an annual output value of about 50 million yuan located in the Cao San Industrial Zone in Guzhen complained to reporters.
Mr. Zhou, who has been engaged in LED indoor commercial lighting industry for over 4 years, is busy running major financial institutions in Zhongshan. "Our SME loans are very difficult!" This was his feelings after many loans hit the wall. Mr. Zhou’s LED business had sales of more than 20 million yuan last year, but his profitability was not optimistic. He said: "In order to revitalize the capital chain, I would like to borrow 2 million yuan to pay for some suppliers and purchase equipment first, which is 10% of annual sales, but banks just don't lend."
This reporter learned that due to widespread concern about the hidden risks of the LED industry, this year's upstream suppliers have also adopted the same month of cash settlement, while dealers still prefer logistics because of frequent LED product price fluctuations and difficult payment for construction goods. The way to advance is sometimes tight.
"There is not enough liquidity, and small and medium-sized enterprises that are caught in the middle of the triangle debt will need to spend their days scrutinizing their lives." According to Mr. Zhou, his factory warehouses are all leased, and now each bank requires loans to be secured by fixed assets.
It is understood that, in addition to bank loans, private lending, although relatively easy, but the interest is too high, generally four to five points monthly rate, to calculate the loan of 1 million yuan, one year down to at least 600,000 yuan interest. Many business executives have said that unless it is a short-term loan, private lending will not work this way.
Emerging LED companies are such that other traditional lighting lighting SMEs are even more difficult to say. For the reasons for this situation, the person in charge of the loan business of a state-owned bank in Zhongshan revealed the reasons: “The main reason is that banks are afraid of companies running away, resulting in the formation of bad debts, because now everyone knows that the current issue of LED industry debt is more serious.
Overheated investment, poor access, unstable engineering, increased inventory, accounts receivable, and accounts payable are just enough to describe the status of domestic LED companies in the first half of this year. "Even if a listed company relies on LED concepts to raise funds is not easy, SMEs are more likely to be trapped by the 'triangular debt'." Hu Lan, director of marketing planning at Sunshine Lighting, told the "High-tech LED" reporter.
On August 6th, it was reported that Zhejiang Ningbo Andi Optoelectronics Technology Co., Ltd. with over 100 million assets applied for bankruptcy. Prior to this, several LED companies with old qualifications such as Duo Duoli, Bolent, Vision Electronics, etc. had closed down. The reason is that the industry's "triangular debt" has triggered a break in the capital chain and it has not been worth mentioning.
Big company ripple effects
According to GLII statistics, in the first half of this year, among all listed LED companies with semi-annual report, there were 15 companies with pre-increase in performance, accounting for 25.42%, and the results were flat, pre-reduced and loss-making. There were 1, 13, and 3, respectively, and the respective proportions were 1.69%, 22.03%, and 5.08%.
The reporter noted that even if it is a listed company with a year-on-year growth in revenue in the first half of the year, its receivables have also increased more or less, and even higher percentages have exceeded 90% of operating income. Among them, National Star Optoelectronics (002449.SZ) revenue for the first half of 445 million yuan, while accounts receivable reached 225 million yuan, accounting for 52.3%; Alto Electronics (002587.SZ) for the first half of the year revenue of 147 million yuan Receivables amounted to RMB 67 million, accounting for 45.5%.
At the same time, quarterly increases in accounts receivable have undoubtedly increased the risk of bad debts. According to the semi-annual report of Liaider Optoelectronics (300296.SZ), the company’s bad debt loss increased from 1.23 million yuan in the same period of last year to 3,933,100 yuan in the first half of this year, an increase of nearly 2 times; and bad debt reserve also increased from 7,937,100 yuan in the same period of last year. To 11.5241 million yuan in the first half of this year, an increase of 45.19%. At the same time, due to the squeeze of accounts receivable, the net cash flow from operating activities for the first half of the year decreased from RMB 5,485,200 to RMB -124 million in the same period last year.
In this regard, Liader Optical Accounting explained that the sharp increase in accounts receivable is mainly affected by the national financial austerity policy, customer payment delays, coupled with the company's first half of the completion acceptance project is relatively centralized, the acceptance of the payment can not be charged in time.
"At present, LED terminal sales mainly depend on engineering orders, but its recovery period is relatively long. If you take the EMC model of the project, it takes at least 2 to 3 years to return the funds." Zhu Yan, deputy general manager of Tsinghua Tongfang Lighting Group, frankly stated that LED Rigid price cuts occur every month, constantly testing the company's capital chain, and can easily breed the industry's three-debt phenomenon.
Zhen Mingli is a typical case. According to internal personnel of the company, sales in the Mainland market fell due to the problem of book entry. The company had orders for government engineering projects with a scale of over 100 million, but it was forced to postpone due to changes in the government and cash flow.
“Large companies often play a leading role in the market. If large companies are under tight funding, SMEs that are paralyzed around it will have no source of liquidity and will begin to owe each other. Under the curb effect, the situation of the triangular debt will worsen. “An insider made clear the mystery.
The triangular debt is also common in the upstream and downstream of the industrial chain. Upstream is often a large company. They are relatively strong, occupying downstream funds and can drag on. As a result, accounts payable and accounts receivable have increased substantially.
The production area "triangular debt" vicious cycle
In the ancient town of Zhongshan, where small and medium-sized LED companies are clustering, the issue of “triangular debt†is different from the above-mentioned transaction-dependent relationship of large-scale funds, which is more manifested in the accumulating sales inertia that has formed within the industry cluster for many years.
“Last year so far, it is estimated that there are no fewer than 1000 L ED companies in transition from Guzhen, plus 95% of them are small or even micro-sized companies. The price war and the phenomenon that you owe me are very serious.†General Manager of Leia Lighting Zhou Jiaxiang Concerned about the status of the current LED industry capital chain.
According to an interview with the "High-tech LED" reporter, the so-called "triangular debts" in the production areas refer to the common name of the companies in the industrial bases where the companies have exceeded the collection commitment period or agreed payment period and have not paid the outstanding payment. The chain of debt relationship formed by the default payment.
Take Guzhen as an example, its unique check monthly settlement and logistics transportation enterprise's function of "consignment advancement" also provide a suitable breeding ground for the development of "triangular debt". Usually expressed as: the business of the company is less than the finished product of the company's debt, the finished product company owes the debt of the accessory company, and the accessory company owes the debt of the upstream raw material company. Or is there a similar debt relationship: input-output-backlog-arrears-reinvest-re-output-backlog-arrear.
"In the long run, companies and companies will fall into a vicious cycle of 'big production loss, small production loss, no production and compensation'," said the person in charge of the Guzhen Town Finance Office.
It is understood that due to the habit of check monthly payment and advance payment, the model currently formed in ancient towns is basically: the manufacturers ship the goods to the freight company (specified by the customer or identified by themselves), and the logistics company notes according to the requirements of the manufacturers. Clear payment methods (substitute or not, payment methods account for the majority), then send the goods to their destination. After the goods are delivered, the goods will be withdrawn within a certain period of time according to the requirements of the manufacturer. During the period, the logistics company took over the risk of payment, but also controlled the right to control the cash for a certain period of time, and will issue 30 to 60 days to the manufacturers expected checks.
“Manufacturers will use these expected cheques and then purchase production materials from their suppliers. Many companies will also use cheques for settlement. Businesses, manufacturers, logistics, parts and other 'triangular debt' relationships will be tangled.†Shuguang Logistics General manager Liu Aixiu said.
The reporter found that the "triangle debt" phenomenon is very common in ancient towns. In order to win over customers, accessories companies and finished products adopt monthly settlement methods with customers, and it is normal for them to make monthly payments once in a few months. However, factories need production, and they need raw materials. When the funds are not in place, they will enter a “negative operation†state. Once a certain link is insufficient, capital chain fracture becomes inevitable.
"Loan difficult" overwhelmed the last straw
At the beginning of the venture, SMEs did not have much demand for working capital. However, once companies want to take a higher level, they will encounter financial bottlenecks.
"Generally speaking, with an annual turnover rate of 8 funds, if you want to achieve annual sales of 50 million yuan, the company will need about 6.25 million yuan of liquidity. Together with fixed assets, the registered capital will need about 10 million yuan." Ms. Chen, who has worked in corporate finance for many years, told reporters that “SME financing is not easy and it is very rare to raise so much money.â€
According to industry sources, the days of home lighting and LED companies this year are very difficult. Since June 2012, 15% of the two major categories of companies have been suspended and semi- suspended. Enterprises accustomed to the operation of unspoken rules such as "triangular debt" have begun to hope for a life-saving straw from bank loans.
However, despite the fact that the central bank began to cut interest rates several times in succession from the beginning of this year, denials of loans, delayed lending, cuts in quotas, and long-term loan changes to short-term loans have become a means of many financial institutions to respond to SMEs.
“When we took money from a bank in 2008, we could almost lend at the benchmark interest rate. Now we take a one-year loan as an example, and the interest rate is still higher than the 5.67% at the time of the 2009 financial crisis. In the past two years, the foreign sales have shrunk, and domestic demand has been shrinking. Sluggishness is more difficult than it was three years ago.†An LED manufacturer with an annual output value of about 50 million yuan located in the Cao San Industrial Zone in Guzhen complained to reporters.
Mr. Zhou, who has been engaged in LED indoor commercial lighting industry for over 4 years, is busy running major financial institutions in Zhongshan. "Our SME loans are very difficult!" This was his feelings after many loans hit the wall. Mr. Zhou’s LED business had sales of more than 20 million yuan last year, but his profitability was not optimistic. He said: "In order to revitalize the capital chain, I would like to borrow 2 million yuan to pay for some suppliers and purchase equipment first, which is 10% of annual sales, but banks just don't lend."
This reporter learned that due to widespread concern about the hidden risks of the LED industry, this year's upstream suppliers have also adopted the same month of cash settlement, while dealers still prefer logistics because of frequent LED product price fluctuations and difficult payment for construction goods. The way to advance is sometimes tight.
"There is not enough liquidity, and small and medium-sized enterprises that are caught in the middle of the triangle debt will need to spend their days scrutinizing their lives." According to Mr. Zhou, his factory warehouses are all leased, and now each bank requires loans to be secured by fixed assets.
It is understood that, in addition to bank loans, private lending, although relatively easy, but the interest is too high, generally four to five points monthly rate, to calculate the loan of 1 million yuan, one year down to at least 600,000 yuan interest. Many business executives have said that unless it is a short-term loan, private lending will not work this way.
Emerging LED companies are such that other traditional lighting lighting SMEs are even more difficult to say. For the reasons for this situation, the person in charge of the loan business of a state-owned bank in Zhongshan revealed the reasons: “The main reason is that banks are afraid of companies running away, resulting in the formation of bad debts, because now everyone knows that the current issue of LED industry debt is more serious.
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