Author:Hairy chestnut

Source: GPLP Rhino Finance (ID:gplpcn)

June twenty _ thirdRuikang Medicine (002589.SZ)I received a letter of inquiry from Shenzhen Stock Exchange about the 2019 annual report. The Shenzhen Stock Exchange inquired about the phenomenon of both high deposits and loans, asset-liability ratio, accounts receivable, goodwill and other data in its annual report.

Photo Source: screenshot of Ruikang Pharmaceutical Bulletin

According to the 2019 report released by Ruikang Pharmaceutical on April 29, the company achieved operating income of 35.259 billion yuan, an increase of 3.95% over the same period last year, a loss of 928 million yuan, a decrease of 220.31% over the same period last year, and net cash flow from operating activities of 2.095 billion yuan, an increase of 1,138.64% over the same period last year.

In this regard, the Shenzhen Stock Exchange requires Ruikang Pharmaceutical to take into account the development of different businesses of the company and the changes of factors such as gross profit margin, period expenses, non-recurrent profit and loss, operating cash flow, etc. explain in detail the specific reasons and rationality for the mismatch between the changes in operating income and net profit, and the specific reasons and rationality for the deviation from the changes in net profit and net cash flow generated by operating activities.

In addition, according to the 2019 annual report, the current liability of Ruikang Pharmaceutical is 20.66 billion yuan, and the asset-liability ratio is 68.42%. The interest expenditure in 2019 was 737 million yuan.

In this regard, the Shenzhen Stock Exchange requires Ruikang Pharmaceutical to combine the asset-liability ratio index of the past three years to explain whether the company's asset-liability ratio is high and whether it is at a higher level in the industry; combined with the business model, explain the reasons for the large scale of the company's current liabilities, and analyze the company's short-term debt paying ability. And combined with the cash flow of production and operation, future capital expenditure arrangements and debt repayment plans, corporate financing channels and capacity, evaluate the solvency of the company, explain whether there is a risk of debt overdue, if so, please fully prompt the risk.

The data show that at the end of 2019, the monetary fund balance of Ruikang Pharmaceutical was 4.83 billion yuan, the balance of short-term loans was 5.192 billion yuan, and the balance of long-term loans and bonds payable was 1.326 billion yuan.

In this regard, the Shenzhen Stock Exchange requires Ruikang Pharmaceutical to explain the specific use and deposit management of the company's book currency funds, and whether there are situations such as limited use or co-management with major shareholders and related party funds. if so, please explain the details and reasons. Explain in detail the reasons and rationality of the high balance of monetary funds, short-term loans and long-term loans at the end of 2019, and the reasons and rationality of the increase in financial expenses, whether there is any difference between the characteristics of "double high deposit and loan" at the end of the year and the company's data over the years and the situation of companies in the same industry.

In fact, Ruikang Pharmaceuticals has achieved relatively rapid performance growth since it went public in 2011, but the company's performance fell sharply in 2018, with a growth rate of-69.07% until a loss in 2019.

Ruikang Pharmaceuticals' loss is a "landmine" planted by the company's previous frenzied mergers and acquisitions.

According to the announcement, from 2015 to 2018, Ruikang Pharmaceutical acquired a total of about 175, with the number of acquisitions peaking in 2017. According to the annual report, in 2017, Ruikang Pharmaceutical added 112 subsidiaries to the scope of merger, of which 87 subsidiaries were merged under the same control and 25 newly established subsidiaries. In 2018, 82 new subsidiaries were added to the scope of merger, of which 47 were merged and 35 were newly established under the same control. In 2019, 31 new subsidiaries were added to the scope of merger, including 6 subsidiaries not under the same control, 2 subsidiaries under the same control, and 23 newly established subsidiaries.

Expansion and mergers and acquisitions have also led to a surge in the company's goodwill. At the end of the reporting period, Ruikang Pharmaceutical had a net goodwill of 3.694 billion yuan, accounting for 51.4% of net assets.