The purchase of major customers of Lokai shares has fallen sharply, and there may be a risk that the product may be replaced

It is reported that in the first half of 2017, the amount of products purchased by Jiangsu Lokai Electromechanical Co.
, Ltd.
(hereinafter referred to as "Lokai Co.
, Ltd.
") multinational customers General Electric (GE) and Schneider Electric (Schneider) from the company fell sharply by 22.
18% and 15.
79% respectively compared with 2016, and the proportion of similar products purchased by the company's products accounted for the main customers Shanghai Electric, Chint Electric and Xiamen Shilin Electric Co.
, Ltd.
was also sharply reduced, and the risk of the company's products being replaced by similar products was highlighted
。

The main business of Lokai Co.
, Ltd.
is the research and development, production and sales
of key components, accessories, parts and other supporting products of power transmission and distribution switchgear of circuit breakers.
The company's products are mainly used in power system distribution facilities, the main products include low voltage and medium and high voltage circuit breaker frame (draw) frame and operating mechanism
.

The procurement of major customers of Lokai has fallen sharply, and the risk of product substitution has been highlighted
.
The data shows that from 2014 to the first half of 2017, the operating income of Luokai shares was 427 million yuan, 432 million yuan, 443 million yuan and 224 million yuan, and the net profit attributable to the company's shareholders was 41.
38 million yuan, 43.
27 million yuan, 52.
2 million yuan and 22.
52 million yuan
respectively 。 During the reporting period, the company's main customers were General Electric (GE), Shanghai People's Electric Factory, Chint Electric, Schneider, Delixi Electric (DELIXI), etc.
, during the reporting period, the total sales of the company's top five customers accounted for 50.
42%, 52.
61%, 53.
08% and 48.
62
% of the operating income respectively.
Although the company says that the risk of the product being replaced is less
.
However, it is understood that the proportion of the company's products purchased by some of the company's main customers in the purchase amount of their respective products is constantly decreasing, and the scale of products purchased by some customers from the company is also greatly reduced, and the concern of "whether the product is substitutionary risk" questioned by the issuance and examination committee of the CSRC is emerging
.