The hidden business worries behind the "NVC internal strife": Dehao Runda is deeply suffering from "subsidy dependence"

At a time when the civil and military fight between the "radar duo" is turning upside down, the performance and operating capabilities of Dehao Runda, the major shareholder in the turmoil, in the first half of the year have undoubtedly become the focus of much attention. The financial report shows that in the first half of 2014, Dehao Runda achieved total revenue of 1.935 billion yuan, a year-on-year increase of 42.98%. However, the net profit attributable to shareholders of the listed company was 32.81 million yuan, a year-on-year decrease of 35.03%. The net profit after excluding non-recurring gains and losses was -17.9644 million yuan, a year-on-year decrease of 546.91%. It is worth noting that in the semi-annual report, the government subsidy income included in the current profit and loss was as high as 64.4308 million yuan. This means that without this part of the government subsidy, Dehao Runda's losses in the first half of the year would be even more embarrassing. Since 2009, governments across China have increased support for the LED industry, and a series of financial subsidy policies have emerged, triggering a rush of capital from all parties. Against this background, Dehao Runda ended its business model of solely operating small household appliances and began to transform into the LED industry. The reporter collected financial data in the past six years and found that since 2009 to the present, Dehao Runda has received a total of 1.108 billion yuan in government subsidies included in the profit and loss of the period-end statement. However, the cumulative net profit achieved during the same period was only 856 million yuan. The government subsidies were a full 250 million yuan higher than the net profit. It can be seen that the 1.1 billion government subsidy whitewashed Dehao Runda's operating performance and became the only magic weapon for turning losses into profits. Dehao Runda's serious "subsidy dependence" can be seen. In fact, "Radar Love" rapidly evolved from the initial congeniality to a life-and-death fight in just 19 months. When Wu Changjiang surrendered his equity, Wang Donglei unexpectedly broke into NVC. Wu Changjiang, known as a gambler, became an ally with Wang Donglei, who also had a gambling bent. This was destined to be a bigger gamble from the beginning. The key to winning or losing lies in whether Wang Donglei can enable Dehao Runda and NVC Lighting to achieve effective integration in the LED industry chain as originally envisioned. However, in the current era of constant "thunder dramas", it seems that Dehao Runda still has a long way to go to find a way out of the sea to solve its business difficulties. Received a subsidy of 1.1 billion in six years Recently, Dehao Runda released its annual report for the first half of 2014. In the first half of this year, Dehao Runda achieved operating income of 1.935 billion yuan, a year-on-year increase of 42.98%. However, despite achieving high growth in revenue, Dehao Runda's profitability is intriguing. During the reporting period, the net profit attributable to shareholders of the listed company was 38.7025 million yuan, a year-on-year decrease of 23.36%. According to the accounting algorithm, "net profit attributable to shareholders of listed companies = net profit after non-reduction + non-recurring gains and losses", non-recurring gains and losses include gains and losses from the disposal of non-current assets, government subsidies included in current profits and losses, etc. Therefore, if the net profit is positive, but the net profit after non-deduction is negative, and the "net profit after non-deduction + the amount of government subsidy included in the current profit and loss" is positive, then the government subsidy is its "reliance" on turning losses into profits. Interestingly, in the first half of the year, Dehao Runda’s government subsidy income included in the current profit and loss was as high as 64.4308 million yuan. In other words, if it were not for government subsidies, its loss in the first half of the year would have reached 25.7283 million yuan. The reporter combed through the financial data of the past six years and found that from 2009 to the first half of this year, the government subsidies included in the current profit and loss by Dehao Runda were 8.1003 million, 269.5604 million, 310.2644 million, and 22.42 million respectively. 23,900, 232,003,900 and 64,430,800. The cumulative government subsidies included in the profit and loss at the end of the period were as high as 1.108 billion yuan. However, the cumulative net profit realized during the same period was only 856 million yuan. The government subsidies were a full 250 million yuan higher than the net profit. In other words, the 1.1 billion government subsidy played a role in "enhancing performance" and whitewashed Dehao Runda's operating performance. Previously, a major theme of Wu Changjiang's attack on Wang Donglei and Dehao Runda was that Dehao Runda was in poor operating condition and had long relied on extracting huge government subsidies to survive. Just in the past August, Wu Changjiang revealed to the public that Dehao's financial situation was very poor and "collapse is possible", which revealed Dehao Runda's operating worries. Regarding the question of relying on government subsidies to turn around losses, Deng Fei, the secretary of the Board of Directors of Dehao Runda, admitted to reporters that as an emerging industry, LED has been vigorously supported by the government and implemented corresponding subsidy policies. The amount of subsidies is relatively high. This is normal in the industry and is also a necessary stage for the development of the LED industry. Especially since Dehao Runda is in its infancy, this problem is more prominent. After NVC’s future is stable, Wang Donglei may still return to Dehao Runda as general manager if approved by the board of directors.