The fund-raising and construction of the plant has doubled the capacity. The competition has intensified, which has put pressure on sales.
According to the prospectus, Ocean King's raised funds are mainly used for production line construction projects. After the completion of the project, 1 million sets of lighting equipment capacity will be added, which is equivalent to double the production capacity.
However, the recent operating income data disclosed in the prospectus shows that the sales scale of the company's products has not increased significantly. In 2012 and 2013, due to the national macro-control, the investment growth rate of the power, coal, petrochemical, metallurgical and other industries declined. The sales revenue was once affected. influences.
Ocean King Lighting's main product sales revenue (unit: 10,000 yuan)
| project | the year of 2013 | the year of 2012 | the year 2011 | |||
| Amount | proportion | Amount | proportion | Amount | proportion | |
| Main business income | 113,131.00 | 100.00% | 109,831.31 | 100% | 132,273.12 | 100% |
| total | 113,131.00 | 100.00% | 109,831.31 | 100% | 132,273.12 | 100% |
Some insiders believe that Ocean King's production line construction project is more radical. At present, the market demand for special environmental lighting equipment is increasing year by year, but existing enterprises are expanding their production capacity, and new competitors are constantly entering, and the future will inevitably fall into a situation of gluttony. In the prospectus, Ocean King also admitted that the company is facing increasingly fierce competition. On the one hand, foreign companies such as Philips, Cooper, Osram, and GE Lighting, which are relatively mature in the special lighting industry, are gradually adding to the domestic market. On the other hand, domestic NVC lighting, solar lighting and other relatively large domestic lighting companies have also begun to get involved in this industry.
According to the above analysis, although the demand for special lighting equipment industry is increasing year by year, the future market competition of the special environmental lighting industry will become increasingly fierce. Not to mention the main customer groups of Ocean King Lighting: Metallurgy, petrochemical, coal and other industries have suffered losses in the context of this year's economic downturn, which will inevitably reduce investment and reduce procurement costs. Whether the company's high-priced lighting equipment can maintain its sales growth is hard to predict. Ocean King Lighting's fundraising project will put a lot of pressure on the company's future product sales.
Gross profit margin as high as 70% from abnormal sales model
Comparison of comprehensive gross profit margin between Ocean King and the same industry
| project | the year of 2012 | the year 2011 |
| Foshan Lighting (000541) | 25.95% | 28.31% |
| Snow Wright (002076) | 29.80% | 26.53% |
| Sunlight (600261) | 19.11% | 21.02% |
| Qinshang Optoelectronics (002638) | 31.61% | 34.23% |
| Average of the above four companies | 26.62% | 27.52% |
| Ocean king | 71.77% | 70.48% |
The gross profit margin of Ocean King Lighting is almost three times the average of the four companies. The main reasons given by the company are as follows: (1) Direct sales model suitable for large institutional customers; (2) High technical content of products. The company's main products are special environmental lighting equipment with high gross profit margin, and the added value of the products is high. (3) The industry concentration is low, and there are fewer enterprises with larger scale. At present, the concentration of the special environmental lighting industry is relatively low, and there are fewer companies with larger scales.
But the truth goes far beyond this.
As can be seen from the prospectus, behind the high gross profit is actually the high commission paid by the company to the sales staff. According to its financial data, the wages, bonuses and welfare fees provided by the company to local sales personnel (expressed as “service centersâ€) reached 27% of the income in three years. The prospectus lists comparable average gross profit margins for the highest gross profit of the listed companies, which is 32%, while the ratio of sales personnel to income is only 2%.
Comparative Analysis of the Sales Expense Rate of Ocean King and the Same Industry Company
| Sales expense ratio | the year of 2012 | the year 2011 |
| Foshan Lighting (000541) | 4.99% | 4.61% |
| Snow Wright (002076) | 14.15% | 11.61% |
| Sunlight (600261) | 4.66% | 4.61% |
| Qinshang Optoelectronics (002638) | 6.08% | 5.91% |
| Average of the above four companies | 7.47% | 6.69% |
| Ocean king | 41.55% | 42.35% |
In short, the same is to sell 100 yuan of lamps, Qin Shangguang spent 68 on the cost, 2 dollars on the cost of sales staff; while Ocean King lighting only spent 30 on the cost, but gave The sales staff 27 yuan as a sales incentive! For the luminaire, the cost of 68 dollars and the cost of 30 pieces are obviously very different. The sales incentive of 2 dollars and the sales incentive of 27 dollars are even more different! It seems that Ocean King Lighting's "selling ability to sell orders" is nothing more than a product based on a high-price, high-commission distortion system, and ultimately only those customers who have been blinded by their sales. .
From the prospectus, we learned that the company's subsidiary lighting engineering company is responsible for 90% of the company's external sales business. The company's customers are mainly large and medium-sized state-owned enterprises, government agencies, institutions, etc. Therefore, the company undertakes large-scale projects. In the process, the gross profit margin of up to 70% is maintained. There are no special circumstances, which may cause people to guess.
Major customers of Ocean King Lighting Engineering Co., Ltd.
| Serial number | the year of 2013 | the year of 2012 | the year 2011 |
| 1 | Daqing Oilfield | Ningxia Yusheng | Baoshan Iron and Steel |
| 2 | Baoshan Iron and Steel | Luxin Energy | Daqing Oilfield |
| 3 | Sichuan Electric Power | Daqing Oilfield | Ningxia Yusheng |
| 4 | Hainan Power Grid | Changqing Oilfield | Liaohe Petroleum |
| 5 | Liaohe Petroleum | Baoshan Iron and Steel | Shaanxi colored |
| 6 | Changqing Oilfield | Huainan Mining | Pingdingshan Coal Industry |
| 7 | Xinjiang Petroleum | Baosteel Desheng | Huainan Mining |
| 8 | Harbin Railway Bureau | Jinzhou Petrochemical | Beiyuan Chemical |
| 9 | Jiangsu Electric Power | Zhongyuan Oilfield | Shandong Electric Power |
| 10 | Jinxi Petrochemical | Liaohe Petroleum | Tengchong Hengyi |
Some netizens who claim to be employees of Ocean King Lighting have commented on this model. He believes that the current business model of Ocean King is: “There is a hardship under the reward†model, the sales staff is high, and the proportion of sales expenses The high ratio of sales cost to material cost is staggering. In short, the current reason why it can attract so many excellent sales people's hard work is largely due to their higher rewards. If the high rewards do not exist any day, then the sales force will be completely gone. .
Can the above model last? Some insiders believe that the high rewards of marine king sales personnel and even headquarters management personnel are derived from the high price of their products. According to the objective law of the market, the price of products will surely converge with the value trend. Objectively speaking, the achievements made by Ocean King are the result of the hard sales of many sales personnel. The company's products have requested high prices from customers, but far from providing matching customer value. A technology company without core technology is still targeting a limited professional lighting market. Once competitors imitate and dig their sales patterns, the company will no longer be able to maintain its previous high-speed growth model.
(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)
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