Analysis of Outsourcing Procurement Data Discrepancies and Inventory Turnover Days Issues at Bangze Chuangke

Based on the public information I have collected, this is a professional analysis of the outsourcing procurement data discrepancies and inventory turnover days issues of Bangze Chuangke.

Guangdong Bangze Chuangke Electric Co., Ltd. (Stock Code: NQ874249) is a cross-border e-commerce enterprise focusing on the R&D, production and sales of office appliances and household appliances, whose main products include paper shredders, laminators, vacuum sealers, etc. The company adopts a hybrid production model of

[1][2].

According to public reports, Bangze Chuangke encountered the issue of

during its Beijing Stock Exchange (BSE) listing review, mainly involving the following aspects:

In the prospectus and responses to review inquiry letters, the outsourcing procurement supplier information disclosed by the company has

. From the responses to review inquiry letters, it can be seen that the company has disclosed in detail the procurement quantities and unit prices of key raw material suppliers, including:

Supplier Type	Procurement Content	Disclosure Features
Packaging Material Suppliers	PE bags, adhesive films, etc.	Discloses reasons for changes in procurement quantities and average prices
Hardware Suppliers	Blades, metal parts, etc.	Provides explanations for the rationality of price discrepancies
Plastic Raw Material Suppliers	Various plastic pellets	Mentions price fluctuations caused by changes in market supply and demand

• Distinction between outsourcing processing and outsourcing production
• Division between raw material procurement and outsourcing processing fees
• Changes in classification standards for domestic and overseas suppliers

• Changes in procurement valuation methods
• Changes in logistics cost allocation methods
• Adjustments to exchange rate conversion standards

Indicator	June 30, 2025	End of 2024	End of 2023	End of 2022
Book Value of Inventory (CNY 10,000)	Approximately 29,900	25,200	18,100	14,600
Inventory as a Percentage of Current Assets	46.88%	40.35%	40.34%	44.18%

is an important indicator for measuring a company’s operational efficiency, where Inventory Turnover Days = 365 ÷ Inventory Turnover Rate.

If there are discrepancies in outsourcing procurement data, it may affect:

• Accuracy of Cost Accounting
  : Changes in the way outsourcing fees are recorded in costs directly affect operating costs, which in turn affects the calculation of inventory turnover rate
• Inventory Recording Timing
  : Differences in timing between the turnover of outsourced processing materials and the management of self-owned inventory
• Recognition of Goods Shipped
  : There may be differences in the timing of recognition for shipments of outsourced-produced products and self-produced products

Since more than 97% of the company’s revenue comes from overseas sales, mainly through e-commerce platforms such as Amazon, inventory turnover has the following characteristics:

• Long Lead Time for Overseas Warehouse Stocking
  : The transportation cycle of products from production bases to overseas warehouses is relatively long
• Obvious Seasonal Fluctuations
  : E-commerce sales have seasonal characteristics
• Impact of Platform Policies
  : Amazon FBA warehouse inventory management policies will affect actual inventory turnover

Based on analysis of public information, discrepancies in outsourcing procurement data may have the following impacts on inventory turnover days:

• Changes in the timing of cost carry-over will directly affect current period operating costs
• Adjustments to inventory valuation methods will lead to changes in the ending inventory amount

• Changes in the allocation of supplier management fees
• Adjustments to the statistical caliber of logistics cost accounting

According to the responses to review inquiry letters, the verification procedures implemented by the reporting accountants include:

• Supplier site visits (visit amount accounts for 74%-78% of total procurement)
• Confirmation procedures
• Alternative verification procedures (for overseas inventory)
• On-site inventory counting (counting proportion ranges from 84% to 95%)

Based on public information, the discrepancies in outsourcing procurement data of Bangze Chuangke between different versions may mainly stem from:

• Complexity of Business Model
  : The company adopts a cross-border production network covering “China + Vietnam”
• Supply Chain Diversification
  : A large number of suppliers (220-329 suppliers in each reporting period)
• Requirements for Refined Accounting
  : As the IPO review progresses, disclosure requirements become more detailed

• The cross-border e-commerce model itself has relatively slow inventory turnover
• Impact of overseas warehouse stocking policies
• Inventory management model of Amazon FBA warehouses

• Intermediaries have implemented relatively comprehensive verification procedures
• The proportion of on-site inventory counting remains at a high level of 84%-95%
• For overseas inventory that cannot be counted on-site, system data reconciliation, confirmation and alternative procedures have been adopted

1. Pay Attention to Responses to Review Inquiry Letters
   : The BSE has raised detailed inquiries about the company’s outsourcing procurement disclosure; investors need to pay attention to the company’s subsequent responses

2. Verify Inventory Quality
   : Focus on changes in the amount of obsolete products (CNY 10,000: 1,157.51 at the end of 2022, dropping to 193.75 at the end of 2024)

3. Assess Business Sustainability
   : The company’s dependence on the Amazon platform is approximately 60%; investors need to pay attention to the risk of changes in platform policies

4. Verify Cost Structure
   : The changing trend of the proportion of outsourcing costs is worthy of attention

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[1] Eastmoney - Bangze Chuangke Faces Doubts Over Outsourcing Procurement Disclosure; Dongguan Securities Repeatedly Cited by Regulators
[2] Sina Finance - Past VAM Agreement Between Bangze Chuangke and Midea: Sales Expense Ratio Far Higher Than Peers
[3] Eastmoney Choice Data - Financial Summary of Bangze Chuangke
[4] Prospectus and Responses to Review Inquiry Letters (PDF) - Application Documents for the Public Offering of Stocks and Listing on the Beijing Stock Exchange by Guangdong Bangze Chuangke Electric Co., Ltd.