BGI: 280 billion yuan worth of nearly a hundred times earnings lifted Could Go On?

The past is always to come。  In mid-July, BGI more than 200 million shares will be lifted starting, at the current share price lifted the market value of about 28 billion。So in general the amount of scale lifting of the ban, not only to China but also large gene test for the market。  BGI (300676.SZ), one in the market before Taylor's company, Tencent and Huawei worked with side by side, known as the three cards in Shenzhen。  July 14, 2017, at the Mandarin A-share market, the total market capitalization starting only less than 60 million from the amount of body tied with a little disproportionate Huawei Tencent。But after starting 12 daily limit persistent efforts, once among the one hundred billion market cap club。Unicorn business cards in the capital market is still workable。  Although the market after stir passions subside, the total market value than gold Genomics peak moment almost cut, but there is still a total market value of 54.6 billion, equivalent to 9 times the market value of the starting price-earnings ratio as high as 135 times。(Recommended reading) more than 500 billion market value of the company how the market outlook stars?Huge lifting of the ban will have any effect on the market?  Before the advent of such a component of the full lifting of the ban, then we need to seriously look at the fundamentals of the company。  28 billion lifted the market value: Feast agency's upcoming first look at part of the case。The following table is held by BGI lifting of the ban lifted its shares Name of shareholder Number: lifting of the ban are from the Genomics Institute of the shares of the original shareholders due to market before, most of these shareholders are large in 2014 Yuet Wah after the gene started to introduce external institutional investors into the company。  BGI, formerly Founded in 2010, UW Medicine, first established its shareholders Mandarin Holdings (95%) and Chinese junior garden (5%)。March 2014, the Chinese juniors Park will be 5% of the share transfer to the UW Holdings, in May 2014, Mandarin holding company in turn 32% of the share transfer price of 44.8 million yuan to China's large investment。After that, the company went through a "buy-style capital" period。Rough list: rough statistics, as of June 2015, a total of more than 50 agencies (including dropouts) to BGI invested a total of more than 7 billion yuan。  June 24, 2015, the last time before the transfer of shares of large Chinese market, the valuation of up to 19.1 billion yuan。The IPO in 2017, in order to calculate the offer price, the total market capitalization of only about 5.5 billion yuan。IPO issue price is actually much lower than the price of the final round of pre-IPO financing。  But this does not affect the original shareholders, even if it is the final round of admission institutions to obtain huge amounts of book value。The reason we all know, after starting the company stock price soaring, after the callback is still more than 500 billion market capitalization。  It's just paper profits, we need to be secured cash holdings。We opened the window lifting of the ban time to lock in profits, then it is for these institutions, when its shares in the hands of the ban is to continue to hold or sell it?  This can not guess, but the company's business and results can be studied。  Its reputation: BGI had to do that in this business then, various agencies of the first to grab the lead in the BGI specifically what business it?  Located in genomics applications industry, BGI said in the prospectus "genome contains related industries has formed a scientific discovery, a complete industrial chain, industrial development of technological invention。……Next-generation gene sequencing technology has been used in clinical service, representative of the presence or absence of invasive prenatal genetic testing application。Representatives of Chinese enterprises is the Genomics and Health and Berry。"BGI reproductive health services are divided into basic research and clinical application services, basic scientific research services, basic research and clinical application of complex diseases services and basic research and clinical application of drug services in four sectors。In the prospectus, the four sections of profit model as shown below: where reproductive health and complex diseases like operations is currently the most important business, earnings in mid-2017, the highest proportion of revenue in the company's total revenue, to 54.twenty one%。  Speaking unfamiliar reproductive health。For a few people can understand the words: premarital pregnancy test, check-ups。Specifically it includes: Of course, BGI can enjoy a good reputation, business or technical content。Jun bread is not a technical expert, do not talk about the technical details of the trespass。  Or return to read the main industry earnings。  Earnings Snapshot: keep up the cash flow profit growth, lower than the industry average gross to look at the profitability of the company nearly five years。  The past five years, revenue from BGI 10.4.7 billion rose to 20.9.6 billion, the cumulative increase of 100.19% compound annual growth rate of about 18.95%; the normalized net profit from the female 1.3.6 billion up to 3.9.8 billion, the cumulative increase of 192.65% compound annual growth rate of about 30.79%。Revenue and profits have maintained a rapid growth。  However, after mid-2015, the company's net operating cash flow declined, and net profit trend away from。2017 Annual net profit 3.9.8 billion yuan, compared with 2015 2.2.6 billion yuan, an increase of 1.7.2 billion yuan。But in mid-2017, net operating cash flow of only 2.$ 2.7 billion over the same period net profit of 57.04%, compared with mid-2015 reduced by 1.0.2 billion yuan。  BGI's gross and net absolute value is not low, but especially gross margins are generally higher in the healthcare industry is not high profit margins, even below the industry median level。  Look at comparative data industry。According to industry classification, BGI are "biotechnology" industry。The industry segments, A-share listed companies a total of 48。BGI current total market capitalization ranks third in the industry, but the company's 2017 gross sales and net profit margin were 56.95% and 20.22% of its gross margin and net profit margin in the industry ranking as follows: 2017, BGI gross margins in the 48 companies ranked No. 35, net profit margin ranked 28。In the middle position of the lower。  In 2018, a quarterly, the company achieved net profit of his maternal.0.1 billion a year earlier, an increase of only 6.71%, gross margin by 56.95% down to 53.68%, while net operating cash outflow 1.5.3 billion yuan。  Among the many A-share companies, the Genomics Institute of the texture can not be considered poor, but the current corresponding to 135 times earnings, growth and profit fineness really support such a valuation?  The next focus of talk about cash flow problems。  The main business of payment periods longer accounts receivable rising faster main factors affecting the cash flow of the company's accounts receivable may be faster growth, lower turnover。  2013-2017 every year, at the same time the company doubled revenues, accounts receivable also by the 2.2.5 billion a substantial increase to 8.1.2 billion, the cumulative increase of about 260.89%, higher than the increase in revenue over the same period and normalized net profit of the parent。  Accounts receivable turnover days extended from 56 to 122 days, which shows that the slower turnover rate。In addition, the company also by the amount of bad debt losses in 2014 of 675.180,000 yuan to rise in mid-year 2017 4484.110,000 yuan, an increase of 5.64 times, far more than the same period the growth rate of revenue growth。  A simple comparison of the data show: the risk of bad debt losses in mid-2017 BGI may have increased compared with that before the listing。To further investigate this issue, we checked the problem of bad debt provision。  2017 annual report, the company's 17 individual customers full bad debt, the first large customers single provision for bad debt by 30%。Although the company did not clearly disclose the name of the main customers, but read the previous annual financial data provided by its prospectus and Annual Audit Report 2017, accounts receivable is primarily aimed at hospitals, and other organizations and institutions, and the long aging。Key issues its audit report show: In recent years, BGI's fastest growing business reproductive health services。From 2013 to 2017 every year, the company's revenue from reproductive health sector 3.2.7 billion to 11.3.6 billion, the cumulative increase of 247.40%, proportion of revenue which is also determined by 11.48% up to 54.21%, reproductive health services have become a major source of the active force pulling the company's revenue growth, but also become the company's accounts receivable。The company said in the prospectus: Due to the long payback period as the main business, with the further development of the company, its course of business whether it will deposit more accounts receivable and bad debts?In fact, on this risk, the company's prospectus also related statements: the company's bad debt losses increased year by year, the company seems secondary evidence suggesting a certain degree of risk。In 2018, a quarterly, the company's accounts receivable has been further increased to 8.8.3 billion yuan。  Although the monarch is not bread gene technology expert, China's big business and then delve into the technical details of a few years we may not be able to thoroughly understand。But we believe BGI prospectus is still very frank: in particular, suggests there may be a risk of the company increased accounts receivable and an increase in bad debts。Sure enough, the risk in mid-2017 annual report and a quarterly in 2018, is confirmed by the data。  This also allows us to believe that the prospectus said is a risk indeed exists "if accounts receivable led to the rapid growth of tight liquidity, may adversely affect the company's business development."。  R & D investment decline in the proportion of the middle reaches of the level of industry support BGI Another factor may be derived from the valuation of its high-tech company's image。  Measure whether a company belongs to high-tech companies have a lot of dimensions, and even subjective dimension。From the earnings perspective, the amount of R & D spending, accounting, changes in trends, industry and contrast may be able to show a part of the company's scientific and technological properties。  First on a sector comparison table, look at the company's industry situation overall R & D in 2017: Overall, R & D expenditure in 2017 1.7.4 billion yuan, the amount came in fourth place in its industry segment, the absolute value is not low, but compared to 2016 decreased by about 2.4 million yuan。  Changes in the proportion of R & D spending from revenue point of view, the decline in。The proportion of R & D expenditure in revenue by 2014 11.54% decline in 2017 to 8.32%, far lower than the same period in the company's cost of sales revenue 19.Accounting for 18%。2017, R & D expenditure accounted ranked No. 19 in the industry, the industry is in the middle position, but did not enter the first tier。  The proportion of total R & D personnel observed from the staff: mid-2017 the proportion of R & D staff of 17 in 2016.22 to 4%.66%, has improved, but still slightly lower than the same period 25.97% of the sales ratio。Company R & D spending per capita is about 27.030 000, in the middle reaches of the industry, ranked No. 24。  The company had said that "the company to consolidate and enhance the core competitiveness, has been the emphasis on research and development of new types of services," but the current financial data, the BGI's investment in research and development and not with the camp in the prospectus and net income growth and the simultaneous growth。  To understand the positive direction, which may be due to the expansion of scale of scale brought about revenue, revenue per unit diluted R & D spending。In addition, the ratio of R & D expenditure capitalized BGI is 0, indicating that the company's R & D expenses in the process is still more cautious。This objective approach to enhance the gold content of current profits, reducing future amortization pressure。  However, industry comparison, R & D spending accounted for BGI and R & D spending per capita ranking in revenue was not living in the forefront of the industry, but at the level of the middle reaches of the industry。  Each company's specific business the pharmaceutical industry is to a large difference, a simple comparison of the data does not accurately show the company's scientific and technological content。However, if the financial data consolidated profit growth, cash flow point of view, BGI is able to support the existence of a hundred times earnings pressure。  Living in high-tech industries gene, a revenue of about 2.1 billion, net profit of about 400 million of the company, its texture perhaps not bad。However, even in the A-share market, the current growth, can make it, more than 500 billion market cap it?  According to the current public information disclosure, the market expected the first single CDR landing A shares is not far off, about the height of summer, probably in July。  The financial side is not alarmist enough to go around。Faced with the huge upcoming episode ban restricted shares, BGI is the time to show their true strength of the。