Image source: Visual China
Blue Whale financial reporter Li Minghao
On December 27, the information on the website of the Shenzhen Stock Exchange showed that the initial public offering of shares of Peptide Biotech was terminated and listed on the Growth Enterprise Market for review.
According to public information, the IPO application of Peptide Biotech was accepted on June 28 this year, with a planned amount of 1.245 billion yuan, and the main fund-raising projects are peptide industrial park construction projects, pharmaceutical peptide research and development projects, cosmetic peptide research and development projects, and replenishment of working capital. The sponsor is Huatai United Securities.
On July 23, the company received the first round of review inquiry letter from the Shenzhen Stock Exchange, but the company has not replied to the inquiry letter. On September 26, due to the update of financial information, Peptide Biotech took the initiative to apply for the suspension of the issuance and listing review process.
In accordance with Article 62 of the Rules for the Review of Stock Issuance and Listing on the Shenzhen Stock Exchange, the Shenzhen Stock Exchange decided to terminate the review of its initial public offering and listing on the GEM.
Miss the "diet pills" outlet
Founded in 2015, Peptide Biotech is engaged in the research and development, production, sales and related services of peptide products, mainly supplying peptide cosmetic raw materials and peptide pharmaceutical products and providing related services for downstream customers.
According to the prospectus, the revenue of Peptide Biotech in 2020, 2021 and 2022 will be 86.17 million yuan, 143 million yuan and 215 million yuan respectively, the net profit will be 10.6886 million yuan, 35.68 million yuan and 69.764 million yuan respectively, and the net profit after deducting non-profits will be 14.38 million yuan, 32.69 million yuan and 57.8575 million yuan respectively.
In terms of business performance, the company's operating income growth rate will remain above 50% in 2021 and 2022. In 2021, the growth rate of net profit attributable to the parent company of Papeptide Biotech reached 210.57%, but in 2022, the year-on-year growth rate of its net profit attributable to the parent company decreased to 86.11%.
The products and services of Peptide Biotech mainly include peptide cosmetic raw materials and peptide pharmaceutical products and related services, among which peptide cosmetic raw materials are an important source of the company's operating income, and well-known cosmetics companies such as Proya, Bloomage Biotech and Marubeni are important customers of Peptide Biotech. In 2022, the operating income contributed by peptide cosmetic raw materials will be 138 million yuan, accounting for 64.61% of the total operating income.
In terms of peptide pharmaceutical products, the company mainly develops, produces and sells peptide APIs/advanced pharmaceutical intermediates, and its product pipeline covers well-known varieties such as leuprolide, semaglutide, liraglutide, and linaclotide. At the same time, Peptide Biotech also provides customers with peptide API R&D and customized manufacturing services (CDMO/CMO) and peptide pharmaceutical research services (CRO).
In recent years, peptide drugs have become one of the popular tracks for drug research and development, and they have been widely used in tumors, hepatitis, diabetes, AIDS and other diseases due to their wide indications, high safety and remarkable efficacy. Since the beginning of this year, with the popularity of the concept of weight loss drugs, the stock prices of many related companies have increased significantly.
During the reporting period, the proportion of peptide cosmetic raw materials and APIs/advanced pharmaceutical intermediates increased from 53.64% and 12.35% in 2020 to 64.61% and 17.25% in 2022, respectively. CDMOs/CMOs decreased to 11.43% from 24% in 2020.
However, the APIs/advanced pharmaceutical intermediates produced by Peptide Biotech are mainly used for R&D and experimental purposes, and the formulation products of downstream customers are still in the preclinical trial and R&D stage.
Not only did Peptide Bio fail to catch up with the "concept of diet pills", but its comprehensive gross profit margin also showed a downward trend year by year.
According to the prospectus, in 2020, the gross profit margin of the main business of Peptide Biotechnology was 68.79%, and in 2022, its gross profit margin will drop to 66.2%. In the same period of 2022, the average gross profit margin of listed companies in the same industry was 71.69%, and the average was five percentage points behind the average, and nearly 20% behind Jinbo Bio, which had the highest gross profit margin.
Business dependence on shareholders
From the perspective of biotechnology companies currently queuing up for IPO, most of the company's equity is relatively concentrated, while the equity of Peptide Biotechnology is relatively dispersed, and there is no direct shareholder with a shareholding ratio of more than 30%, so the company is in a state of no controlling shareholder.
As of the signing date of the prospectus, Xing Haiying directly held 13.49% of the shares and controlled 32.77% of the voting rights of the company through Hanyuan Investment, Fuyue Investment, Zhongxin Enterprise and Xinghan Investment, and was the actual controller of the company.
In March 2021, the registered capital of Peptide Biotech increased from 20 million yuan to 31.65 million yuan, and China Resources Shuanghe subscribed for nearly 10.55 million yuan of registered capital, spending 258 million yuan, and the corresponding price was about 24.5 yuan per share. More than a year later, in June 2022, Bloomage Biotech subscribed for about 680,000 yuan of registered capital for 30 million yuan, and the corresponding stock price has risen to 43.92 yuan per share.
CR Shuanghe and Bloomage Biotech are not only shareholders of Peptide Biotech, but also important customers of Peptide Biotech. In 2020, the top five customers of Peptide Biotech contributed 48.4387 million yuan in sales, accounting for 56.09% of the current operating income. Among them, China Resources Shuanghe and Bloomage Biotech alone contributed more than 40% of the revenue.
In 2021 and 2022, the operating income of Peptide Biotech is still relatively concentrated, with the top five customers accounting for 55% and 59.59% of the sales amount, respectively. In the face of such a high customer concentration, if the company's main customers are lost or the business conditions of major customers deteriorate in the future, it will have a great adverse impact on the company's business.
IN 2022, THE TOP FIVE CUSTOMERS OF THE COMPANY ARE PROYA, BLOOMAGE BIOTECHNOLOGY, SHANGHAI JIUQIAN CHEMICAL, CHINA RESOURCES SHUANGHE AND EMPOWER CLINIC SERVICES, L.L.C., FOUR OF WHICH ARE SHAREHOLDERS OF THE PEPTIDE BIOTECHNOLOGY.
According to the prospectus, the immediate family members of Shanghai Jiuqian Chemical shareholders became shareholders in May 2019 through Hanyuan Investment, and currently hold a total of 1.34% of the company's shares. Tang Zhijun, the wife of Cao Liangguo, a former director of Proya, and his son Cao Zheng acquired shares through Hainan Ruizheng in June 2022 and currently hold a total of 4.91% of the company's shares, while Cao Liangguo stepped down as director and deputy general manager of Proya in September 2021.
This also means that 121 million yuan of the 215 million yuan of operating income generated by Peptide Biotech in 2022 will be "paid" by its own shareholders.
Regarding the related party transactions of major shareholders, the company said that it is expected that the company's related party transactions with China Resources Shuanghe will continue to occur and the transaction amount may increase. If the Company is unable to effectively implement the internal control system related to related party transactions in the future, and the effectiveness of internal control and governance are insufficient, there may be a risk that related parties may use related party transactions to harm the interests of the Company or minority shareholders.