【正文】 。 Partners? analysis 1): Calculate based on the full capacity utilization rate (80%~90%) 2): Calculate based on the actual capacity utilization rate (20%~30%) 133 The disproportional increase of operating expense results in the increase of operating loss in spite of the improvement of product mix Source: Pamp。L Geberit (Shanghai), Roland Berger amp。 Partners? analysis 1 9 , 2 9 91 8 , 3 7 91 5 , 0 1 21998 1999 20xx*+29% % % % Total operating expenses 1998~20xx [RMB ‘000] * Estimation % of sales 134 Among the cost of goods sold, cost of materials and labor are two major cost drivers Source: Pamp。L, Balance sheet, Geberit (Shanghai), Roland Berger amp。 Partners? analysis Cost of goods sold (% of sales) GSHA 1999 GSHA 20xx (19) Turnover ? million RMB ? Million RMB Cost of goods sold ? RMB (% to sales) ? million RMB (92% to sales) Structure of cost of goods sold 113618512154293455685Cost of materials* Labour cost Depreciation Energy consumption Maintenance Others 7521 2493 1203 648 565 439 48% 16% 8% 4% % % 2% 4% % 11% 17% 54% [RMB ‘000] [RMB ‘000] *note: the materials cost are the cost of all materials purchased, instead of materials actually consumed. 135 And among the sales cost, salaries and travelling are two major cost drivers. Meanwhile, promotion fees and staff training cost increase Source: Pamp。L, Balance sheet, Geberit (Shanghai) Sales cost (% of sales) GSHA 1999 GSHA 20xx (19) Turnover ? million RMB ? million RMB Sales cost ? million RMB (% to turnover) ? million RMB (% to turnover) Structure of sales cost Salary Travelling cost Promotion fee Room rental amp。 parking Communication fee Staff training Others 3158 979 588 221 29 1021 20% % % % % % % % 6% 9% 26% % 576 % % 2690 925 582 352 160 64 626 [RMB ‘000] [RMB ‘000] 136 Increase operating expenses results in increase of operating losses in spite of the improvement of sales Backup Profit amp。 loss statement Geberit (Shanghai) 1998~20xx [RMB ‘000] 1998 1999 20xx (1~12) Sales Cost of materials Gross profit personnel expenses Energy/maintenance Depreciation Marketing expenses Administration expenses Other operating expenses Total operating expenses Operating profit (loss) Net ine 10,219 4,938 5,248 6,810 1,236 178 185 5,767 836 15,012 (9,764) (9,669) % % % % % % % % % % (%) (%) 15,568 7,521 7,853 9,345 1,670 1,781 1,238 4,722 307 18,379 (10,526) (10,177) % % % % % % % % % % (%) (%) 14,801 8,003 6,640 9,608 1,522 1,988 1,320 2,317 2,544 19,299 (13,735) (14,656) % % % % % % % % % % (%) ()% Source: Geberit (Shanghai), Roland Berger amp。 Partners? analysis 137 The pany can not generate enough cash from business operations and it solely relies on the continuous cash injection from the parent pany for survival Source: Cash flow, Geberit (Shanghai) Cash inflow and outflow, 20xx (16) [RMB ‘000] 6 5 4 58 6 1 55541 8 7 88 6 1 51 9 2Operating Working capital Investment Cash before financing Inter pany loan 138 . Geberit Daishan 139 GDAI’s sales have continuously improved, and cost are reducing。 the interpany sales increased much faster than to third party 2) Including writeoffs for obsolete materials: 1 million RMB amp。 other unclear accounts Sales development [RMB ‘000] Operating losses development [RMB ‘000] 12%29%31%69%71%88%1998 1999 20xx1) +136% +36% 1) Estimation ( 8 , 5 6 1 )( 1 0 , 7 0 6 )( 6 , 4 9 0 )1998 19992) 20xx1) 24% +74% 3284 4451 7763 Third party Interpany Source: Geberit (Daishan) 140 GDAI’s operating losses are decreasing due to reduction of costs Source: Pamp。L Geberit (Daishani) Cost structure [RMB ‘ 000] 1998 1999 20xx (19) 11% 15% 10% 21% 1% 4% 36% 8% 12% 1% 3% 23% 29% 13% 3% 16% 5% 29% 22% 19% 16% Other operating expenses Administration Marketing Energy maintenance Personnel expenses Cost of material Depreciation 10,058 14,444 11,668 359% 325% 206% % of total