On November 12, Noble Bird issued an announcement saying that its total debt amount of 500 million yuan and a three-year debt financing instrument 16 Noble Bird PPN001 could not pay the principal and interest in full and on time, which has constituted a substantial breach of contract.
In addition, from June 2019, the rating results of 14 Noble Bird corporate bonds issued by Noble Bird have been downgraded. The 14 Noble Bird bond rating and main rating have dropped from AA- to CC level in June.
Debt defaults and the decline in bond ratings highlight the intensified cash flow risk and the deterioration of solvency. In addition, Noblebird also faces problems such as a sharp decline in performance, continued decline in operating capacity, and judicial freezing of a high proportion of pledged shares of controlling shareholders.
Tight liquidity under pressure
In the first three quarters of 2019, Noblebird achieved operating income of 1.169 billion yuan, a decrease of 49.20% year-on-year. After considering the impact of Jiezhi's trip and BOY in the consolidated report in this report, Noblebird's revenue fell 14.28% year-on-year. This period recorded a net profit of -167 million yuan, which was converted from profit to loss from 28.743 million yuan in the same period in 2018.
Although in this issue, Jiezhi's trip and BOY are excluded from the consolidated statement, the expense ratio of Noble Bird is rising. The total expense ratio increased from 27.87% in the third quarterly report of 2018 to 36.06% in the third quarterly report of 2019, of which the increase in sales expenses was the largest, an increase of 4.9 percentage points from the same period last year. Noble Bird said that the increase in sales expenses was mainly due to the increase in sales rebates and the increase in sales models and sales benefits caused by adjustments in sales models.
From the perspective of operating capacity, both the inventory turnover days and accounts receivable turnover days of Noble Bird have reached their highest values ​​in the past five years. The inventory turnover days increased from 69.54 days in the 2015 third quarter report to 189.69 days in the third quarter report of 2019; the accounts receivable turnover days increased from 282.66 days in the third quarter report of 2015 to 335.34 days in the third quarter report of 2019.
Choice Financial Terminal
In fact, the increase in the expense ratio and the decline in operating capacity are closely related to the tightening of noble birds' liquidity. The third quarterly report revealed that Noble Bird ’s monetary fund balance was only 15.8891 million yuan, while short-term loans were 1.177 billion yuan, and non-current liabilities due within one year (including long-term loans and bonds payable due within one year) were 1.302 billion yuan. The gap was as high as 2.464 billion yuan.
The Interim Report revealed that Noble Bird was unable to find new financing channels. Some financial companies continued to draw loans, pressure loans or increase credit conditions for Noble Bird, and the land and housing assets they held were all mortgaged. In terms of receivables, the amount of accounts receivable in the third quarter was 1.421 billion yuan, accounting for 29.10% of the total assets. Due to payment difficulties for some dealers and customers, and the unfavorable repayment, the credit impairment loss (including other bad debt provisions for other receivables) was accrued for the current period of 102 million yuan.
At present, the production and operation of Noble Bird has been affected. Due to the extension of the settlement period for upstream suppliers, some suppliers have terminated their cooperation with Noble Bird. Noble Bird has no choice but to purchase raw materials through intermediaries, resulting in rising costs. At the same time, Noble Bird adjusted its sales model, implemented a new franchise policy, promoted the sale of Noble Bird brand direct-operated stores, absorbed and increased sales staff, and caused costs to rise.
From January to September 2019, Noble Bird closed 587 stores, newly opened 225 stores, and the total number of stores was 2516, a year-on-year decrease of 362. Among them, Noble Bird brand direct-operated stores were closed 402, and only 91 were newly opened.
Was warned of using "financial skills"
In December 2018, Noble Bird issued a notice that the company and related personnel received the warning letter from the Fujian Securities Regulatory Bureau, and the Fujian Securities Regulatory Bureau issued a warning to listed companies and relevant responsible persons.
From 2015 to 2017, Noble Bird provided dealers with a total of 1.942 billion yuan, 1.745 billion yuan, and 1.419 billion yuan in financial assistance. The listed companies did not disclose the funding matters in a timely manner and did not submit them to the shareholders' meeting for consideration. Until April 28, 2018, the company did not disclose the financial assistance for 2017; On May 18, 2018, the company held the 2017 annual shareholders' meeting to review the financial assistance for 2017; on May 18, 2018, the company disclosed 2015 And 2016 financial assistance matters.
The listed company did not account for the above amounts through other receivables, but instead calculated through accounts receivable. As a result, the 2015 and 2016 financial reports respectively increased provision for bad debts by RMB 5.681 million and RMB 26.385 million, and understated net profits of RMB 3.4224 million and RMB 15.328 million.
In addition, in 2017, the listed company recognized a disposal gain of RMB 4,561,100 in advance in the event that the land transaction was not completed.
Some shares of controlling shareholders were judicially frozen
According to the relevant announcement, the Noble Bird Group holds 47.9115 million Noble Birds, accounting for 76.22%. As of August 3, 2019, the number of judicially frozen shares was 42654.73 million, accounting for 67.86% of the total share capital of listed companies. As the stock price has fallen below the closing line set by the Noble Bird Group and relevant financial institutions, the shares held by the Noble Bird Group still have the risk of being frozen by waiting. And if the frozen shares are subject to judicial disposal, it may lead to changes in the actual controller of Noble Bird.
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