The more Jinjin culture gold leases are played, the more they are accused of "selling gold"

In the first quarter of 2014, under the combined effect of factors such as the tension in Ukraine, the price of gold finally rebounded after falling for more than a year. This is undoubtedly good news for those gold stocks that have a large amount of gold stocks, but Jinyi Culture (002721, closing price 20.48 yuan), which was listed at the beginning of the year and mainly engaged in gold jewelry processing and sales, is an exception, and the price of gold has risen sharply. In the first quarter of this year, the company suffered a substantial loss of 12.14 million yuan.

Gold leasing is the "culprit" of the loss of Jinyi culture. Gold leasing was originally a hedging tool for gold processing and sales companies to balance the fluctuation of gold prices, but the purpose of Jinyi culture to do gold leasing seems to have changed – in the case of the same industry, gold leasing accounts for only 6% of the average income. Jinyi culture's gold leases accounted for as much as 26%, which is beyond the company's ability to digest, and it is inevitable that the hedging “set-out” losses.

As the gold leasing volume of the Jinyi culture is not proportional to the sales volume and inventory, in the opinion of the financial controller of the peer company, this has become a speculative “selling gold” behavior.

Jinyi Culture unexpectedly lost gold leases in the first quarter as "culprits"

In January 2014, the IPO restarted for a year and a half. On January 27th, Jinyi Culture, which specializes in R&D, design, outsourcing production and sales of precious metal crafts, landed on small and medium-sized boards.

The "Daily Economic News" reporter noted that over the past year or so, as the price of gold has continued to fall, the market has been worried about whether the performance of the Jinyi culture, which is the main sales of gold products, can survive. Beginning in September 2012, the price of gold began to dive from the high of 360 yuan / gram (the price of the previous period). As of December 31, 2013, the price of gold fell to a minimum of 232.7 yuan / gram, a drop of 35%.

However, the prospectus shows that the net profit of Jinyi Culture in the first half of 2013 was as high as 111.44 million yuan, far exceeding the level of 76.67 million yuan in 2012. Although the announcement shows that the company's forecasted net profit for the first quarter of 2014 will fall by 15.02% to 28.80%, that is, the net profit is between 15.5 million yuan and 18.5 million yuan, but the market is still optimistic. In the 12 trading days after the listing, Jinyi Culture rose from the issue price of 10.55 yuan/share to the highest 31.3 yuan/share, an increase of nearly 200%. But what disappoints investors is that the final performance of Jinyi Culture in the first quarter of this year was a loss of 12.14 million yuan.

Gold leasing leads to huge losses

On March 31, a performance revision announcement of Jinyi Culture made the market stunned. The company originally expected a slight decline in the first quarter of 2014 to become a "loss of 12 million yuan to 19 million yuan", to know that the figure for the same period last year was 24.35 million yuan.

On April 29, a quarterly report released by Jinyi Culture showed that the company's first quarter loss was 12.14 million yuan, and the net profit attributable to shareholders of listed companies in the first half of 2014 was 4 million to 8 million yuan, down 92.59 from the same period of the previous year. %~96.30%.

For the reason of the loss in the first quarter, Jinyi Culture attributed this to the huge fair value loss caused by the gold leasing business.

According to the "Daily Economic News" reporter, the so-called gold leasing refers to the gold processing and sales enterprises borrowing gold raw materials from the banks for production. When the lease expires, they can purchase them from the Shanghai Gold Exchange or their own stocks. The amount of gold is returned to the bank, and the lease fee is paid at a certain rental rate.

Taking Jinyi Culture as an example, at the beginning of the period, in order to obtain raw materials, Jinyi Culture leased gold to banks according to the gold price of the Shanghai Gold Exchange on the lease date and the amount of gold leased. In accounting treatment, the leased gold is included in the “transactional financial liabilities” subject. At the end of the period, the company will calculate the difference between the gold value and the corresponding book cost of the transaction financial liabilities during the period of the gold lease repayment; the amount of the gold leased amount of the outstanding part will be adjusted according to the gold price of the Shanghai Gold Exchange at the end of the period. Financial liabilities, while recognizing gains and losses from changes in fair value.

According to the announcement of Jinyi Culture, as of March 28, 2014, the Shanghai Gold Exchange's gold closing price was 258.5 yuan / gram, the company's gold lease margin was 3239 kg, based on this calculation of the first quarter of 2014 gold leases The investment income was 18.96.62 million yuan, resulting in a loss of fair value changes of 78.807 million yuan. In the same period of last year, the investment income generated by Jinyi Culture Gold Leasing was 7.761 million yuan, resulting in a loss of fair value changes of 4.383 million yuan.

That is to say, in the first quarter of this year alone, the loss caused by Jinyi Culture due to gold leasing was as high as 59.125 million yuan, and if the financial expenses incurred by gold leasing were added, the actual loss exceeded 60 million yuan.

Is the price of gold rising and falling a bad thing?

The rise in gold has become the main reason for the loss of performance of Jinyi Culture. For this situation, has the company had any risk warnings before?

"Daily Economic News" reporter noted that the risk of future performance fluctuations, Jinyi culture is very comprehensive but very vague, it tells investors that the fall in gold prices or the rise in gold prices seems to be detrimental to the company's performance. .

In the “Risk Factors” chapter of the prospectus, Jinyi Culture mentioned “the risk that the decline in gold prices may lead to a decline in market demand” and “the risk of large inventory balances”, and stated that “if the price of raw materials such as gold is in a short period of time A sharp drop will bring risks to the company's operations. If the prices of raw materials such as gold continue to fall, the potential market demand for precious metal crafts will have a risk of decline. “If the prices of raw materials such as gold continue to fall, they will bring the issuer The risk of inventory price decline and the inventory backlog caused by the decline in potential market demand for precious metal crafts. In this view, the decline in gold prices is not good for the company's performance.

Also in the “Risk Factors” chapter, Jinyi Culture also mentioned “the risk of gold leasing business”. The company stated that “the company will have a fair value change loss if the gold price rises by 10% based on the closing price of the gold leased amount at the end of September 2013 and the date of signing this prospectus. 43.5 million yuan, accounting for 46.21% of the company's 2012 operating profit."

The falling price of gold is not good for the company. The price increase of gold is also unfavorable to the company. What is the closest relationship between the performance of Jinyi Culture and what factors?

Jinyi culture gold leases accounted for a terrible increase in the first quarter, continued to significantly cover the position

For gold processing and selling companies, gold leasing is actually a tool for hedging similar to futures. A good gold processing and sales company can use a reasonable amount of gold leases to balance performance fluctuations.

Gold leases account for far more than peers

"Daily Economic News" reporters found that including the Oriental Jinlu [0.24% fund research report] (600086, closing price of 17.03 yuan), Yuyuan Mall [-0.40% fund research report] (600655, closing price of 7.52 yuan), Lao Fengxiang [-0.91% fund research report] (600612, closing price 22.99 yuan), Ming brand jewelry [-0.32% fund research report] (002574, closing price 25.15 yuan) and other gold sales listed companies are doing gold leasing business . At present, the physical gold borrowed by most gold companies for gold leasing to banks is included in “transactional financial liabilities” at fair value at the end of the period.

In the case of Oriental Jinluo, according to the 2013 interim report, the company’s transactional financial liabilities were 238.63 million yuan, and the current income of gold jewelry was 387.658 million yuan. Calculated by this, gold leases accounted for the proportion of gold products revenue (transactional financial liabilities/gold) Product revenue × 100%, the same below) is 6.19%. At the end of 2013, Dongfang Jinluo’s transactional financial liabilities were 232.29 million yuan, and the income of gold jewelry was 505.557 million yuan, which calculated that the proportion of gold leases in gold products revenue was 4.6%. According to the 2011 and 2012 annual reports, the proportion of gold leases of Oriental Jinyu in the current year accounted for 11% and 8.84% of the income of gold products;

In the Yuyuan Mall, the company announced the total income of gold jewelry. In 2013, the transactional financial liabilities of Yuyuan Mall was 2,133,856,700 yuan, and the income of gold jewellery was 20,915,160,200 yuan. From this calculation, the proportion of gold leases in the income of gold products was 10.39%. In 2011 and 2012, Yuyuan Mall’s gold leases accounted for 10.9% and 6.5% of the revenue of gold products, respectively;

In terms of Ming jewellery, the company's transactional financial liabilities in 2013 were 41,169,500 yuan, and the income of gold jewelry was 773,394,000 yuan. Based on this calculation, the ratio of gold leases to gold jewelry revenue was 5.32%. According to the 2013 Interim Report, the 2012 Annual Report, and the 2011 Annual Report, the proportion of gold plaques in Mingpai jewellery accounted for 4%, 5.4%, and 5.9%, respectively;

"Daily Economic News" reporter noted that in addition to the above three companies, Lao Fengxiang and Jinye Jewelry [0.18% fund research report] (000587, closing price of 11.05 yuan) will be included in the inventory of gold leases. Laofengxiang has more businesses, and Jinye Jewelry's gold business accounted for more than 95.38%, so the comparability of Jinye Jewelry is strong. According to the 2013 annual report, the income of Jinye Jewelry Gold Products is 84,232.63 million yuan, and the book value of raw materials in its inventory is 40,056,680 yuan. Considering that it is impossible to fully use gold leases in inventory, the proportion of gold leases in gold products should be 4.76%. under. According to the above data in the 2012 annual report, Jinye Jewelry Gold Leasing accounted for 7.64% of the gold product revenue.

Based on the data of the above companies, gold leasing accounts for less than 11% of the revenue of gold products.

Gold leasing continues to soar

Compared with the proportion of gold leases of peer-listed companies, the gold lease amount (value) of Jinyi Culture is too high.

"Daily Economic News" reporter noted that in 2011, Jinyi Culture's transactional financial liabilities were 2,795,052 yuan, and the income of pure gold products and investment gold bars was 2,075,026,300 yuan. Based on this calculation, gold leases accounted for the proportion of gold products. 13.47%.

In 2012, Jinyi Culture's transactional financial liabilities were 433,846,500 yuan, and the income of pure gold products and investment gold bars was 240,143.9 million yuan. Based on this calculation, gold leases accounted for 18.1% of the total revenue of gold products.

In the 2013 annual report, Jinyi Culture’s transactional financial liabilities were 5.8358 million yuan, a sharp increase of 65% from the middle of the year. This shows that in the second half of 2013, Jinyi Culture significantly increased the gold lease. As the gold index (Shanghai Commodity Exchange) plunged by about 16% in the fourth quarter of 2013, Jinyi Culture's substantial increase in the fair value of gold leases played a significant role in the improvement of performance. In 2013, the income of Jinyi Culture Pure Gold Products and Investment Gold Bars was 2,246,688,000 yuan. According to this calculation, gold leasing accounted for 26% of the revenue of gold products.

As of the end of the first quarter of 2014, Jinyi Culture's transactional financial liabilities have reached 83,051,200 yuan, an increase of 43.08% from the end of 2013.

In the first quarter of 2014, the price of gold began to rebound due to the impact of the Ukrainian crisis. However, in this context, Jinyi Culture, which has an abnormally high proportion of gold leases, has not reduced the amount of leases (profit-making), but has further increased the amount of gold leases (replenishment of positions), which is exactly the year of Jinyi Culture 2014. The main reason for the quarterly loss.

Jinyi Culture over-expends gold leasing industry: not hedging is speculation

For enterprises that are mainly engaged in gold processing and sales, hedging has become the main means of ironing performance because the fluctuation of gold price directly affects product cost and selling price. The main hedging method chosen by gold companies is gold leasing.

When gold prices are expected to go down, gold processing and sales companies can hedge by reducing inventory and large amounts of leased gold. Once the gold price falls during the lease period, the company can buy gold at a low price for repayment; on the contrary, when the gold price is expected to rise, the gold processing and sales enterprise can obtain high profits by increasing the inventory and reducing the gold lease.

Before 2013, Jinyi Culture recognized the downward trend of gold prices, and gained high profits due to the increase in the amount of gold leased.

In the first half of 2013, the price of gold fell all the way. The spot price of gold on the Shanghai Gold Exchange (Au99.99) fell from the closing price of 336.8 yuan/g in January to the closing price of 243.5 yuan/g in June. Jinyi Culture benefited significantly. From January to June of that year, the company repaid 1022 kilograms of gold leases due and leased 1175 kilograms of gold. The outstanding balance at the end of the period was 1,450 kilograms. The investment income of the gold leasing business was RMB 5,187,600, and the gains and losses from changes in fair value were RMB 947.28 million. In the first half of the year, Jinyi Culture's net profit attributable to shareholders was 108 million yuan, and the gold leasing business contributed more than 90% of its profits.

However, the essence of "hedging" is a supplement and adjustment of the main business, rather than a means of pursuing high profits. For gold processing and sales companies, gold leasing will inevitably have a degree limit, but not the original.

In response to the question of whether Jinyi Culture’s gold leasing accounted for a reasonable proportion of gold income, the “Daily Economic News” reporter repeatedly called the Jinyi Culture Securities Department to solve the problem and informed the other party’s A-share peers’ gold leasing as a percentage of the gold revenue. Analysis, I hope the relevant person in charge of the company can give an explanation. However, as of press time, the reporter did not receive an official reply from Jinyi Culture.

“The higher the proportion of gold leases, the greater the fluctuations in the performance of gold companies.” Some private investors told the “Daily Economic News” reporter that if the gold leases of the same industry companies accounted for about 6% of gold revenue, Jinyi Culture But as high as 26%, then the gold leasing of Jinyi Culture is not a hedging, but speculation. Due to the lack of corresponding management rules, the gold leasing scale of Jinyi Culture is easy to encounter the risk of human error judgment. Similar to the performance loss in the first quarter of 2014, it is likely to reappear.

“Some gold processing and selling companies are financing through this kind of gold leasing and doing speculative trading.” Yesterday, the financial director of a gold processing and sales listed company told the “Daily Economic News” reporter that for those gold processing without shortage of funds For sales companies, their gold leases are hedging. And some companies that lack funds to do gold leasing are financing activities. "Now many banks make gold leases for customers on the off-balance sheet, that is, the customers hand over the leased gold to the bank for processing and pay a certain amount of interest to take cash."

“To judge whether the amount of gold lease is reasonable, it is enough to look at sales and inventory.” The chief financial officer pointed out that if gold leases are needed for operational purposes, the leased gold will be reflected in sales volume and inventory.

The "Daily Economic News" reporter noted that according to the statement on the 9th page of the Jinyi Cultural Prospectus, the amount of gold inventories in the company's inventory in 2011 and 2012 was 36.515 million yuan and 55.016 million yuan. The total inventory of the company's 2013 annual report was 679.47 million yuan, and the proportion of gold stocks was estimated at 68%. In 2013, the amount of gold stocks was about 460 million yuan.

The data shows that in 2013, Jinyi Culture's transactional financial liabilities increased by 34.5%, but the sales revenue of gold products decreased by 6.44%, and the value of gold inventory decreased by about 16.4% (the current inventory impairment provision was 3.774 million yuan, accounting for a very large proportion. small).

Gold leasing has increased substantially, but gold sales and gold inventories are declining. The gold leasing of Jinyi Culture is more like the “financing behavior” mentioned by the above-mentioned chief financial officer.

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