On 8 April, Ping Pong (China) Limited (hereinafter referred to as "Ping Pong" )) submitted a prospectus on the Hong Kong Stock Exchange for listing on the Main Board of the Hong Kong Stock Exchange. According to Bedo Finance, Ping Pong Xiang was listed on the New Third Board in April 2016 and terminated on August 30, 2019, with the code "836365".
It is understood that Ping Ping Xiang is a canteen food supply chain integrated service provider, mainly to Shanghai enterprises and institutional customers (mostly kindergartens and educational institutions) to supply a wide range of agricultural products and other food. In 2019, 2020 and 2021, the company had 222, 239 and 287 corporate and institutional clients, respectively.
According to the prospectus, Ping Pong's main customers are local kindergartens and educational institutions. During the track record period, Ping Pong had 156, 156 and 215 kindergarten and educational clients, representing a combined 83.2%, 59.4% and 63.4% of the Company's total revenue respectively.
Public information shows that the full name of Ping Pong Xiang is Shanghai Ping Pong Xiang Agricultural and Sideline Products Distribution Co., Ltd., which was established in 2012. At present, the company has three wholly-owned subsidiaries, Shanghai Ping-Pong Xiang Agricultural and Sideline Products Processing Co., Ltd., Shanghai Ping-Pong Xiang Catering Management Co., Ltd. and Shanghai East Coast Agricultural Products Co., Ltd.
In the prospectus, Ping Pong Xiang disclosed that the company's predecessor (Ping Pong Xiang Agricultural and Sideline Products) was established in September 2012, listed on the New Third Board in February 2016, and terminated in August 2019. However, Bedo Finance inquired about Ping Pong Xiang's previous announcement and learned that the company was only transferred by agreement in February 2016, and it was not publicly transferred until April 19 of the same year (that is, "official listing").
In terms of finance, Ping Ping's revenue in 2019, 2020 and 2021 was RMB143 million, RMB123 million and RMB223 million, gross profit was RMB41.276 million, RMB47.176 million and RMB75.417 million, and net profit was RMB22.689 million, RMB27.291 million and RMB36.609 million, respectively.
Source: Prospectus.
During the reporting period, Ping Pong's gross profit margin decreased steadily, from 28.9% in 2019 to 38.2% in 2020, and again decreased to about 33.8% as of 2021. Ping Ping-rang said in the prospectus that the decline in gross profit margin in 2021 was mainly due to the company's strategic reduction in gross profit margin in order to increase market share and competitiveness of product prices.
In the shareholder structure before the listing, the controlling shareholders of Ping Pong Xiang are Huang Jianyi and Zhang Weiping, who together hold 100% of the equity. Among them, Huang Jianyi is the chairman of the board, chief executive officer and executive director of Ping Pong Xiang, and Huang Jianyi's daughter Huang Xianzhi is an executive director of Ping Pong Xiang.
According to reports, Huang Xian has more than a decade of experience in the media industry, that is, since July 2010, he has worked as a journalist and editor at Kan dongfang (Shanghai) Media Co., Ltd. (i.e. "Look at News Network"). At the same time, from August 2016 to November 2019, he also served as a director of Ping Pong Xiang Agricultural and Sideline Products, a subsidiary of Ping Pong Xiang.
On 1 April 2022, Wong was appointed as a Ping Pong Chi Director and subsequently reassigned as an Executive Director, primarily responsible for the Investor Relations and General Administration of the Group. On the same day, Ping Pong appointed Chen Zhengqin, Chief Financial Officer of Ping Pong Xiang Agricultural and Sideline Products, as a director (executive director) and Chief Financial Officer of the Group, and was later appointed as the joint company secretary.
Bedo Finance found that Ping Pong Xiang also made a surprise dividend before the listing. In March 2022, Ping Pong Xiang's wholly-owned subsidiary Ping Pong Xiang Agricultural and Sideline Products declared a dividend of $23.4 million to shareholder Ping Pong Hong Kong, which had not been paid as of the last practicable date. In other words, the actual controllers of Ping Pong, Huang Jianyi and Zhang Weiping, will "cash out" 23.4 million yuan in advance.
Ping Pong said the dividend would be paid to Ping Pong Hong Kong prior to its listing so that Ping Pong Hong Kong could use the money to pay off bank loans arising from the restructuring. Previously, in August 2019, the company also announced a cash dividend of 12 million yuan to shareholders, which was paid in March 2021.
Source: Prospectus.
In particular, in March 2022, several positive CASEs of COVID-19 occurred in several areas of Shanghai, China, and several social distancing measures have been imposed. In particular, kindergartens and educational institutions have been required to move to online classes, residential areas have been temporarily blocked and restricted from movement, businesses have been required to implement closed production or work from home, and all public transport has been suspended.
Ping Ping Xiang said in the prospectus that it has obtained permission from the local government to continue to operate, and in order to fulfill its social responsibilities during the outbreak of COVID-19 in Shanghai, it provides temporary and emergency services and agricultural products to residents of Chuansha New Town in Pudong, Shanghai and Lijing Village in Shanghai, mainly including group purchases of vegetables and meat.
Ping-Pong also said that it is currently impossible to accurately predict the impact of the recent COVID-19 epidemic on future business operations and financial results. However, according to the unaudited integrated management accounts, the company generated revenue of approximately $23.5 million and $25.6 million (both unaudited) for the two months ended February 28, 2021 and February 28, 2022, respectively.
At the reminder of the risks, Ping Pong Said that its business, operating results and financial performance may be adversely and materially affected.