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An excellent enterprise not only needs beautiful operating income and profits, but also needs abundant cash. Nos últimos anos, the bathroom industry’s horse effect is becoming more and more obvious. The pace of expansion of the head of the enterprise further accelerated, and its cash flow has become a topic of concern. As the saying goes, “food in the hand, the heart is not panic. Sanitary industry who has more “surplus food”? Whose budget is tighter?
According to the newly announced 2021 semi-annual financial report, Dongpeng Holdings, Huida bathroom, Gaivota, R & T, Solux technology, Jianlin home, Diou home and other seven bathroom-related companies hold cash (ending cash and cash equivalents balance) of a total of more than 5.5 bilhão de yuans. Entre eles, Dongpeng Holdings reached 2.1 bilhão de yuans, um aumento de 24.79% ano a ano. Compared with the same period last year, Huida bathroom increased the most, de 395 million yuan to 847 milhão de yuans, um aumento de 114.63%. The ending balance of cash and cash equivalents of R&T and Solux Technology decreased.
Cash and cash equivalents balance at the end of the period of each listed bathroom-related enterprise
(unit: bilhão de yuans)
| Semiannual 2021 | Semiannual 2020 | Year-on-year change | |
| Dongpeng Holdings | 21.08 | 16.90 | 24.79% |
| Huida Sanitary Ware | 8.47 | 3.95 | 114.63% |
| Seagull Sumitomo | 6.13 | 5.44 | 12.73% |
| R&T | 4.48 | 5.13 | -12.64% |
| Solux Technology | 6.45 | 8.26 | -21.86% |
| Jianlin Home | 5.41 | 5.12 | 5.67% |
| Diou Home | 3.84 | 3.50 | 9.80% |
Cash flow from operating activities.
Dongpeng had the fastest increase, and some companies turned from positive to negative
Net cash flow from operating activities is an important indicator to judge the quality of survival and sustainability of a company. De um modo geral, an enterprise’s operating cash flow is positive and continues to increase, indicating that the enterprise’s blood-making function is strong, the current operating conditions are good, and have the ability to develop sustainably.
Net cash flow from operating activities of each listed bathroom-related enterprise
(Unit: bilhão de yuans)
| Semiannual 2021 | Semiannual 2020 | Year-on-year change | |
| Dongpeng Holdings | 4.78 | 1.29 | 270.37% |
| Huida Sanitary Ware | -1.37 | 3.14 | -143.54% |
| Seagull Sumitomo | 0.65 | 0.58 | 12.20% |
| R&T | 0.64 | 1.14 | -43.89% |
| Solux Technology | 0.74 | 0.98 | -24.71% |
| Jianlin Home | 0.5 | 2.36 | -78.92% |
| Diou Home | -0.6 | -4.38 | 86.34% |
According to the financial report, in the first half of this year, Dongpeng Holdings had the fastest growth in net cash flow from operating activities, with a year-on-year increase of 270.37%. Dongpeng Holdings said that the growth was mainly due to the increase in operating cash flow as a result of revenue growth. The company’s cash received from the sale of goods and services in the first half of the year reached 4.361 bilhão de yuans, um aumento de 36.31% ano a ano.
Unit: Yuan
| Items | Semiannual 2021 | Semiannual 2020 |
| EU. Cash flows from operating activities. | ||
| Cash received from sales of goods and provision of services | 4.361.149.642.14 | 3,199,427,662.98 |
| Net increase in deposits with customers and interbank deposits | ||
| Net increase in borrowings from central banks | ||
| Net increase in funds borrowed from other financial institutions | ||
| Cash received from original insurance premiums | ||
| Net cash received from reinsurance operations | ||
| Net increase in policyholders’ deposits and investment funds | ||
| Cash received from interest, fees and commissions | ||
| Net increase in funds transferred in | ||
| Net increase in funds from repo business | ||
| Net cash received from agency securities trading | ||
| Tax refunds received | 15576389.95 | 21.955.757.42 |
| Other cash received in connection with management activities | 747,406,838.15 | 693.250.573.90 |
| Subtotal cash inflow from operating activities | 5,124,132370.24 | 3,914,633,994.30 |
The operating cash flow of Huida bathroom in the first half of this year turned from positive to negative, de 314 million yuan to – 137 milhão de yuans. Huida explained this is “due to the payment of bank acceptance bills”. But from the 2021 semi-annual financial report published by Huida Sanitary, Huida Sanitary’s opening balance of banker’s acceptances is 435 milhão de yuans. Its closing balance was 362 milhão de yuans, and the actual payment was about 73.04 milhão de yuans.
- Notes payable
√Applicable□Not applicable
Unit: Yuan Currency: RMB
| Tipo | Closing balance | Opening balance |
| Commercial Promissory Note | ||
| Bank Acceptance | 361,590, 280. 63 | 434,627,999. 20 |
| Total | 361,590, 280. 63 | 434,627,999. 20 |
The total amount of notes payable due and unpaid at the end of the period was $0.00.
Although Diou Home’s operating cash flow in the first half of this year increased by 86.34% ano a ano, the net amount was still negative. From the first half of 2020, Diou Home’s operating cash flow has started to turn negative. The company said the main reason is “delayed collection due to the impact of the new crown epidemic. Normal payments for materials purchased for production and other expenses and works were paid normally. Net cash outflow”. Este ano, the cash flow from operations did increase due to the improvement of payment recovery.
Além disso, R&T, Solux Technology and Jianlin Home purchased goods, received labor service payments and paid various taxes and fees increased more, making their cash flow from operating activities all decreased.
Cash flow from investing activities.
Cash outlay from investing activities increased significantly for many companies
The net cash flow from investing activities is mainly the purchase and construction of fixed assets, intangible assets and other long-term investments, financial investments flow of funds. Bathroom enterprises continue to expand the scale of production capacity. The capital expenditure for the purchase of land use rights, construction of plants, the purchase of machinery and equipment, etc.. has also increased.
In the first half of this year, Dongpeng Holdings, Huida Sanitary Ware, Seagull Sumitomo, R&T, Solux Technology, Jianlin Home, Diou Home 7 companies in the net cash flow from investing activities are negative. This indicates that these companies had more outflows of funds because of the significant increase in cash outflows from investing activities. Entre eles, Dongpeng Holdings had the largest cash outflow in investing activities, more than 1.2 bilhão de yuans.
Net cash flow from investing activities of each listed bathroom-related enterprise
(Unit: bilhão de yuans)
| Semiannual 2021 | Semiannual 2020 | Year-on-year change | |
| Dongpeng Holdings | -12.85 | -3.46 | -271.60% |
| Huida Sanitary Ware | -1.08 | -3.73 | 71.18% |
| Seagull Sumitomo | -1.64 | -1.52 | -7.43% |
| R&T | -0.34 | -0.53 | 35.54% |
| Solux Technology | -0.63 | -2.09 | 69.90% |
| Jianlin Home | -1.92 | -2.95 | 34.84% |
| Diou Home | -2.12 | -2.42 | 12.33% |
The main directions of corporate investment spending can be divided into: capacity expansion and acquisition and capital increase.
Por exemplo, in January this year, Dongpeng Holdings, Fengcheng Dongpeng, Jiangxi Dongpeng signed a framework “Investment Agreement” with the People’s Government of Fengcheng City, Província de Jiangxi, to invest in the construction of an intelligent ceramic home industry park project. The investment in the industrial park includes 9 intelligent rock panel production lines and projects with an annual output of 2.6 million pieces of intelligent complete sanitary ware. The agreement shows that the total investment of the project is about 5.08 bilhão de yuans.
Além disso, Jianlin Home’s 540 million yuan kitchen and bathroom product line expansion project also held a groundbreaking ceremony on January 12 este ano. The construction period of the project is 18 months and is expected to be put into operation in July 2022. Huida Smart Home (Chongqing) Co., Ltd.’s Phase I project was also officially put into operation in March this year. It is currently in the second phase of construction, and the total investment of the project is 1.5 bilhão de yuans. It will be able to produce 2 million pieces of intelligent sanitary products and 150,000 sets of whole bathroom annually after the completion of the third phase, and the annual output value is expected to reach 2.5 bilhão de yuans.
Cash flow from financing activities.
Voo, Seagull increased bank borrowing
In addition to operating cash flow and investment cash flow, there is another important indicator of corporate cash flow – cash flow from financing activities. Issuing bonds and shares, as well as paying dividends and financing, all affect cash flow from financing activities. Por exemplo, borrowing from banks and issuing shares to raise funds can contribute to an increase in cash inflows from financing activities. Em contraste, repaying bank loans and interest, and distributing dividends to shareholders can increase cash outflows from financing activities.
A negative cash flow from financing activities indicates that companies are raising less external funds and are more relaxed on hand. They have funds to repay bank loans and interest, as well as to distribute dividends back to shareholders.
In the first half of the year, Dongpeng Holdings generated the largest net cash outflow from financing activities, totalizando 497 milhão. Dongpeng said it was mainly used to return bank loans, reduce bank borrowings, and pay dividends to shareholders. Whereas Huida Sanitary Ware and Seagull Sumitomo had larger inflows of cash flow from financing activities due to increased bank borrowings.
Net cash flow from financing activities of each listed sanitary ware company
(Unit: bilhão de yuans)
| Semiannual 2021 | Semiannual 2020 | Year-on-year change | |
| Dongpeng Holdings | -4.97 | 3.24 | -253.24% |
| Huida Sanitary Ware | 4.53 | 3.16 | 43.41% |
| Seagull Sumitomo | 1.7 | 0.79 | 114.10% |
| R&T | -0.64 | -0.56 | -14.11% |
| Solux Technology | -0.81 | -0.71 | -15.34% |
| Jianlin Home | -0.48 | 0.79 | -160.57% |
| Diou Home | 1.07 | 7.53 | -85.78% |
Maintaining good cash flow is the guarantee of sustainable development of the enterprise
The cash flow of an enterprise not only shows the dynamics of the change of cash in operating activities, investment activities and financing activities, but also whether the enterprise’s capital is sound and whether the operation and development are smooth.
In layman’s terms, an enterprise can only ensure its survival if it has sufficient cash. If the capital chain is strained or even broken, it is very likely to face the plight of high debt, being included in the list of defaulted executors, or even bankruptcy and liquidation.
Listed companies can still get the inflow of funds by issuing shares, selling assets, bank credit, etc.. to improve the liquidity of funds. Por exemplo, China Evergrande lost 4 billion yuan in its real estate development business in the first half of this year, and Evergrande Auto lost 4.8 bilhão de yuans. It then recouped tens of billions of cash by selling equity and selling assets to ensure the normal operation of project development.
No entanto, for non-listed enterprises, their financing channels are more single. Geralmente, they borrow from banks, private institutions or individuals. No entanto, many small and medium-sized enterprises with weak comprehensive strength are often included in the list of defaulters or even declared bankrupt because they have a broken capital chain and are unable to repay in time. According to incomplete statistics, in the first half of 2021, 91 sanitary ware enterprises were included in the list of defaulted executors, including three sanitary ware enterprises involved in the amount of up to ten million yuan or more, are related to defaulted bank loans. ,