In August 2022, the company raised 2.338 billion yuan in an IPO, exceeding the target by 685 million yuan; however, just one year later, this money was almost entirely spent. What to do then? Refinance, of course!

So, having just raised over 2 billion yuan, they then sought an additional 3 billion yuan. Everyone is thinking about drawing water from the pool; how can the A-share market be in good health?

Today, let's talk about the company Jiangbo Long.

As we all know, storage chips are hailed as the "food" of electronic products, the carriers of data. However, for a long time, the domestic storage market has been dominated by foreign giants, and few domestic companies dare to easily touch this "tough bone." As a result, Jiangbo Long has been pursued by capital, with its stock price soaring by 77.83% on the first day of listing, and its market value exceeding 40 billion yuan.

Moreover, Jiangbo Long has been very promising, with many of its products ranking among the top in the global market. As of the end of June 2023, Jiangbo Long had obtained 485 patents, including 195 invention patents, 106 foreign patents, and 90 software copyrights. In the first three quarters of this year, Jiangbo Long's R&D expenses were 400 million yuan, a year-on-year increase of 52.57%, accounting for 6.1% of the operating income, which is a significant increase compared to previous years.

However, despite the many glories and the popularity of its AI chips in the first half of the year, it cannot conceal the difficulties the company is facing.

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According to the third-quarter report, Jiangbo Long's net profit was -883 million yuan, a year-on-year decrease of -521.76%, while the same period last year was 209 million yuan. That is to say, just one year after going public, Jiangbo Long's performance has changed dramatically, resulting in a huge loss.

Note that although the performance loss is unpleasant, this is not the main point.

Under the huge loss, the inventory is high, the inventory turnover rate continues to decline, especially the significant increase in accounts receivable, which greatly increases the company's operating risk. Taking accounts receivable as an example, by the end of the third quarter of 2023, this figure was 1.335 billion yuan, a year-on-year increase of 65.45%, which is significantly higher than the growth rate of operating income.

What are the consequences of this?The company has long been in a state of "hemorrhaging," and the situation is getting worse and worse!

From 2020 to 2022, Jiangbo Long's net operating cash flow was -811 million yuan and -326 million yuan, respectively. However, by the first three quarters of this year, this figure turned into -1,704 million yuan. Clearly, with accounts receivable, accounts payable, and inventory capital occupation, the fundamental situation of Jiangbo Long is more serious than the loss itself.

In fact, the problem of "hemorrhaging" has already been exposed.

As of the end of the third quarter of 2023, Jiangbo Long's book monetary funds were 1,827 million yuan, but the company's short-term borrowings surged by 54.92% to 1,715 million yuan. Theoretically speaking, following this trend, Jiangbo Long will soon face the risk of debt repayment.

So, what should be done?

Fundraising, continue to ask the capital market for money!

In August 2022, Jiangbo Long went public with an IPO, raising a total of 2,338 million yuan, with an oversubscription of 685 million yuan; in August 2023, Jiangbo Long announced the issuance of convertible bonds to unspecified objects, intending to raise 3,000 million yuan.

That is to say, one year after the IPO financing, Jiangbo Long is again reaching out to the capital market for money!

Here is an additional note: just like the IPO financing, in the 3,000 million yuan convertible bond financing, the amount used to supplement working capital is 800 million yuan.

As of the end of the third quarter of 2023, Jiangbo Long's interest-bearing debt amount was 3,380 million yuan. It has to be said that it is easier to directly ask the capital market for money than to work hard to earn it.In addition to that, let's also talk about the acquisition by Jiangbo Long.

In the convertible bond financing plan, two such figures were disclosed:

First, the acquisition of 81% of the equity in SMART Brazil, with a planned use of funds of 1.28 billion yuan; second, the acquisition of 70% of the equity in Suzhou, with a planned use of funds of 920 million yuan.

That is to say, although the company is very short of money, although the competition in the storage chip industry is becoming more and more fierce, and although the company's profitability has deteriorated, it still spends over 2 billion yuan on mergers and acquisitions.

Note that it is not their own money!

It should be added that the two companies to be acquired have also been in a loss state since this year. If the acquisition is completed, it will form a huge goodwill.

So, everyone guess what the plot will be later?