First give the boss 3 billion, and then find shareholders to ask for 2.3 billion to fill the hole! Fortunately, this IPO is yellow!
Source | Deep Blue Finance
Written by | Yang Bo
Following Zhejiang Guoxiang, Fuhua Chemical and Belon Precision, another super IPO company was "spit out" by shareholders.
That's it - Ward Farm Machinery.
Simply put, it is the surprise dividend of 4 billion yuan before the listing of Ward Agricultural Machinery, and the actual controllers Wang Weiyao and Zhang Amei can share nearly 3 billion according to the proportion; But the IPO raised 6 billion, and 2.3 billion was used to supplement liquidity!
It is equivalent to "hollowing out the company first, and then finding shareholders to raise funds to replenish the flow"! Because he is engaged in the agricultural machinery industry, he is also jokingly called "driving a large leek harvester" by shareholders.
(Image source: Snowball)
Previously, Deep Blue Finance paid attention to the IPO of Fuhua Chemical, which also caused a strong response from shareholders. ("First dividend 2.9 billion to the boss, and then find shareholders to raise 2.7 billion to pay off debts!") Private equity boss turns angrily: robbery? 》）
1
"Came in a big leek harvester"
On October 25, the Shenzhen Stock Exchange updated the approval announcement on the termination of the initial public offering registration of Jiangsu Ward Agricultural Machinery Co., Ltd. (hereinafter referred to as Ward Agricultural Machinery).
Previously, after the IPO of Wardde Agricultural Machinery was submitted for registration, the CSRC may have found problems from some of the feedback information and declaration content before, so it launched an on-site inspection of the company's IPO in the second half of 2022. According to the on-site inspection results of the China Securities Regulatory Commission, there are abnormalities in many aspects such as the authenticity of income, the effectiveness of internal control, and the accuracy of information disclosure.
According to the declaration materials, Ward Agricultural Machinery is a leading manufacturer of large-scale modern agricultural machinery and equipment in China, mainly engaged in the research and development, production and sales of agricultural machinery products. At present, a product matrix has been formed with combine harvesters and tractors as the core, rice transplanters, balers, sugarcane machines, plant protection drones, sprayers, dryers, etc. as the combination. In terms of performance, the operating income of Ward Agricultural Machinery from 2020 to 2022 was 6.989 billion yuan, 9.884 billion yuan and 11.215 billion yuan, and the net profit for the same period was 1.151 billion yuan, 1.385 billion yuan and 1.474 billion yuan respectively.
Performance is just two words - "beautiful boy"!
However, what aroused strong concern among shareholders was the "operation" of huge dividends before listing. After all, this smells the same as Fuhua Chemical!
According to publicly disclosed information, Ward Agricultural Machinery did not pay dividends before 2018. In 2018, Wode Agricultural Machinery paid cash dividends of 2.6 billion yuan; In 2020, Wode Agricultural Machinery will pay cash dividends of 400 million yuan; In 2022, Ward Agricultural Machinery will further implement cash dividends of 1 billion yuan. In total, from 2018 to 2022, Ward Agricultural Machinery will lose a total of 4 billion yuan. Wang Weiyao and Zhang Amei, the actual controllers of Wode Agricultural Machinery, indirectly hold a total of 73.62% of the shares of Wode Agricultural Machinery through Danyang Industrial. According to this calculation, the actual controller received nearly 3 billion yuan in cash (before tax).
After the implementation of huge dividends, 2.3 billion yuan of the 6 billion yuan raised by the IPO of Ward Agricultural Machinery was actually used to supplement working capital!
Therefore, the end result of Ward Farm Machinery is that the sponsor voluntarily withdraws the application. In accordance with relevant regulations, the CSRC terminated the registration procedure for the issuance of companies.
2
"Cash for yourself, debt to the company, find shareholders to take money to pay off debts"
Let's review the case of Fuhua Chemical. This is also a typical example of the "spitting" of shareholders.
Before the IPO of Fuhua Chemical, it implemented large dividends for two consecutive years, with 700 million yuan in 2021 and 2.6 billion yuan in 2022, with a total cash dividend of 3.3 billion yuan. According to the shareholding ratio of Zhang Hua, the actual controller of the company, and his concerted actors, the actual controller will probably receive about 2.93 billion yuan. However, in the IPO fundraising project, 2.751 billion yuan was actually used to supplement liquidity and repay bank loans!
It is equivalent to "first dividends of 2.9 billion to the boss, and then find shareholders to ask for 2.7 billion to pay off debts!" ”
Regarding large dividends, the company's explanation is to solve the problem of non-operating capital transactions with related parties such as controlling shareholders. In fact, as of the end of 2021, the total balance of non-operating funds was only about 580 million yuan. According to common sense, the majority shareholder should pay the money back to the company (Fuhua Chemical) out of his own pocket, but the company settles the account through dividends. In fact, the closing fund only needs 580 million yuan, and the other 2.35 billion yuan is smoothly loaded into the private "pocket" of the major shareholder.
On the other hand, Fuhua Chemical has a high debt ratio. As of the end of 2022, Fuhua Chemical's total borrowings (short-term borrowings, long-term borrowings, long-term borrowings due within one year) were about 5.774 billion yuan. Among them, short-term borrowings amounted to 4.412 billion yuan.
It is equivalent to owing a debt, and making money is not to pay the debt first, but to pay dividends to the actual controller! From the perspective of the actual controller, it is "cash for themselves, debts to the company, and shareholders to take money to pay off debts".
On September 27, according to the website of the Shenzhen Stock Exchange, the review status of the IPO on the main board of Fuhua Chemical has been updated to "suspended".
3
"It's so ugly to eat, it's disgusting"
To sum up in one sentence, the interest drive is relieved.
In Encyclopedia, IPO is defined this way. IPO refers to the initial public offering, that is, the process of an enterprise issuing additional shares to investors for the first time through a stock exchange in order to raise funds for the development of the enterprise. Therefore, no matter what market it is in, the core purpose of an IPO is to "raise funds for development".
So the question is, if the company is not short of money, or not so short of money, why is there an IPO?
Of course, access to long-term, almost zero-cost development funds. In the words of shareholders, it is "circle money".
From the cases of Fuhua Chemical and Ward Agricultural Machinery, it can be seen that these companies are actually "not so short of money". It's just that the company's money is "appropriated" by the actual controller, and most of this money is used in other industries (such as real estate) of the actual controller. Even at the expense of saddling the company with huge debts (such as Fuhua Chemical).
Xueqiu netizen "29-year-old shareholder in Zhejiang" posted that many IPO companies will pay huge dividends before listing, because dividing the money on the company's account will not affect the valuation of the company's IPO. Before the IPO, the company was a "cow full of meat", and the major shareholders tried their best to hollow out the body of the cow, even if they took out huge loans to banks to distribute dividends. In the end, after huge dividends, all that is left for secondary market investors is the skeleton of the cow. The most important thing is that the current law does not prohibit such behavior!
Think about it in another way, if you were a major shareholder, would you do such a "good thing"? Probably too, after all, who doesn't care about money? However, such a "naked" hollowing out behavior is, in the eyes of shareholders, "eating is too ugly and disgusting."
In response to the matter of Ward's agricultural machinery, Xueqiu netizen "Stock Sea Bald Chen", certified as "chairman of Anhui Meitong Private Equity Management Co., Ltd.", issued an article denouncing: "I estimate that the other 3.7 billion investment direction raised, many projects are made up, really can't be made up, that is, take the remaining money to supplement liquidity, in fact, there is no need to raise so much, or even lack of money, but the money of shareholders and basic people is not circled..."
In addition, "Stock Sea Bald Chen" also said, "Check it, 80% of the IPO queue companies have to take the initiative to withdraw!" He finally appealed that "the registration system needs the legal system to keep up, the supervision should maintain a normalized on-site spot check ratio, and the strict inspection of investment banks and audits that are actively withdrawn, they have money, fine!" ”