Source: Times Business School
Author|Lu Shuoyi
Edited by Sun Yiming
Editor's note: On March 15, the China Securities Regulatory Commission launched "four arrows" at the same time, directly pointing to the key point of the IPO market.
On the same day, the China Securities Regulatory Commission (CSRC) issued four policy documents, emphasizing the need to strictly control the entry of issuance and listing, strictly supervise high-priced over-offerings, and strictly review unprofitable enterprises;
On this occasion, Times Business School launched a series of special reports on "high-priced over-funding" to "take the pulse" for the healthy development of the capital market with all parties in the market, and dissect the strange phenomenon of high-priced over-offering of new shares one by one.
On the eve of the second anniversary of its listing, the former 100-yuan stock Zhongyi Technology (301150. SZ) seems to be no longer in the limelight, not only the stock price plummeted, but the net profit attributable to the parent company also fell sharply by more than 80% year-on-year in the second year of listing.
On April 21, 2022, in the case of CICC (601995. SH), Zhongyi Technology successfully landed on the GEM with an ultra-high issue price of 163.56 yuan per share, which once caused heated discussions in the market.
Wind data shows that Zhongyi Technology is expected to raise 866 million yuan in the initial offering, and the actual funds raised will reach 2.754 billion yuan, which will be overraised by 1.887 billion yuan. As the sponsor, CICC won 124 million yuan in sponsorship and underwriting fees.
However, Zhongyi Technology's high-priced over-offering is both "honey" and "arsenic" for CICC.
Times Business School found that due to the overpricing of the IPO issue, online investors abandoned their shares, and CICC could only pay more than 300 million yuan out of its own pocket to underwrite the shares. Unexpectedly, Zhongyi Technology broke nearly 25% on the first day of listing, and the shares held by CICC also lost tens of millions of yuan.
On March 27, Times Business School called the office of the secretary of the board of directors of Zhongyi Technology to inquire about the change in performance in the second year of listing and the frequent resignation of senior executives.
In the second year of listing, the performance changed face, and senior executives frequently resignedAccording to the prospectus, Zhongyi Technology was established in 2007, and its main product electrolytic copper foil is an important material for the manufacture of lithium-ion batteries, copper clad laminates and printed circuit boards. SZ) is its largest customer. The listing criteria selected by Zhongyi Technology are "positive net profit in the last two years, and the cumulative net profit is not less than RMB 50 million".
In 2019, Zhongyi Technology's net profit was only 41 million yuan, and then there was rapid growth.
Wind data shows that from 2020 to 2021 (that is, the first two years of listing), Zhongyi Technology's revenue and net profit have shown explosive growth, of which the revenue was 1.170 billion yuan and 2.197 billion yuan respectively, an increase of 40.80% and 87.80% year-on-year respectively, and the net profit attributable to the parent company was 124 million yuan and 381 million yuan respectively, an increase of 204.30% and 207.64% year-on-year respectively.
With the support of performance, Zhongyi Technology finally successfully landed on the GEM with a record of over-raising 1.887 billion yuan. However, in the year of listing, Zhongyi Technology's performance began to decline.
Wind data shows that in 2022, the year-on-year growth rate of Zhongyi Technology's revenue will drop from 87.80% in 2021 to 31.81%, while the year-on-year growth rate of net profit attributable to the parent company will drop from 207.64% in 2021 to 8.32%, and the performance has declined.
According to the 2023 performance forecast, in 2023, Zhongyi Technology's net profit attributable to the parent company is expected to plunge from 413 million yuan in 2022 to 48.5 million ~ 62.5 million yuan, a year-on-year decrease of 88.26% ~ 84.87%, and the net profit after deduction is expected to drop from 359 million yuan in 2022 to 4.5 million ~ 6.7 million yuan, struggling on the edge of loss.
It should be noted that the net operating cash flow of Zhongyi Technology has deviated from the growth trend of net profit for a long time.
Wind data shows that in the six years from 2017 to 2022, the net operating cash flow of Zhongyi Technology has accumulated to -888 million yuan. Among them, except for 2021, the net operating cash flow of Zhongyi Technology in the rest of the years is negative and shows an expanding trend. In 2021, although the net operating cash flow turned from negative to positive, it was only 30 million yuan. In contrast, in the same period, the comparable company NORD (600110. SH) and Chaohua Technology (002288.SZ) both had positive net operating cash flow. Jiayuan Technology (688388. SH) net operating cash flow was positive except for a negative value in 2022.
Regarding the problem of continuous negative net operating cash flow, Zhongyi Technology said in the prospectus that this is mainly due to the fact that the company's customers use more bill payment methods, while upstream raw material suppliers still rely on cash settlement, resulting in the company's net cash flow from operating activities continuing to be negative.
In addition to the "change of face" in performance, the changes in the senior management of Zhongyi Technology are also quite frequent.
On March 15, Zhongyi Technology announced that Tu Bigen, director and deputy general manager of the company, applied for resignation for personal reasons and no longer held any position in the company after resignation.
Times Business School found that this is the second deputy general manager of Zhongyi Technology to resign in less than one year. On July 25, 2023, Yin Xinheng also applied for resignation as the company's director and deputy general manager for personal reasons.
It is worth mentioning that on July 4, 2022, the announcement showed that Yin Xinheng was hired as the company's financial director, and Tu Bigen was hired as the general manager, and on November 30 of the same year, both were rehired as deputy general managers, and the head of the finance department became Cai Litao.
In addition, Zhongyi Technology announced the appointment of Zhang Ping as the head of the audit department on July 4, 2022, and Song Shaojun as the head of the audit department on September 6, 2023, but did not disclose Zhang Ping's whereabouts.
Not only are Zhongyi Technology's internal executives frequently replaced, but its sponsor representative has also changed in less than a year after its listing.
On March 21, 2023, Zhongyi Technology said that Liu Yilu, the original sponsor representative, could not continue to perform the duties of continuous supervision due to work changes, and in order to ensure the orderly progress of the continuous supervision work, CICC appointed Jiao Jingchong to replace Liu Yilu to continue to perform the continuous supervision work.
Less than two years after listing, the performance declined, coupled with the turmoil in the management, the share price of Zhongyi Technology continued to dive.
According to Flush iFinD data, as of March 26, the share price of Zhongyi Technology has fallen by 62.75% relative to the issue price (after the resumption, the same below). According to the prospectus of Zhongyi Technology, its total share capital after the IPO was 67.3472 million shares, and the issue price was 163.56 yuan per share, that is, the initial market value was about 11.015 billion yuan, and as of March 26, its market value was only 3.951 billion yuan, a decrease of 7.064 billion yuan.
The abandonment rate was nearly 12%, and CICC paid 300 million yuan to underwrite the sharesIn the first two years of listing, revenue and net profit doubled, creating conditions for Zhongyi Technology to over-raise at a high price.
According to the prospectus, Zhongyi Technology is expected to raise 716 million yuan, and the number of shares issued is 16.837 million shares, that is, the corresponding issue price is 42.51 yuan per share.
However, the listing announcement shows that after excluding invalid quotations, a total of 7,087 placement objects managed by 299 offline investors participated in the preliminary inquiry, among them, Haifutong Fund Management Co., Ltd., Shanghai Shenjiu Asset Management Co., Ltd., Shanghai Silver Leaf Investment Co., Ltd., Nomura Oriental International Securities Co., Ltd., Xinhua Asset Management Co., Ltd., GF Fund Management Co., Ltd. and other dozens of institutions gave quotations of more than 200 yuan per share.
It should be noted that HFT Fund Management Co., Ltd. has the highest quotation, reaching 225 yuan per share, which is 5.29 times the estimated issue price of Zhongyi Technology.
With the high quotation of institutions, the final issue price of Zhongyi Technology was pushed up to 163.56 yuan per share, and the actual raised funds reached 2.754 billion yuan. According to the prospectus of Zhongyi Technology, its sponsorship and underwriting fee is 4.5% of the total amount raised, so the higher the total amount raised, the higher the sponsorship and underwriting fee of CICC.
However, the high price of 100 yuan has also contributed to the high abandonment rate of Zhongyi Technology.
According to the listing announcement, the number of new shares subscribed by online investors of Zhongyi Technology was 1.9876 million shares, and the abandonment rate was as high as 11.81%. In the end, CICC had to underwrite all the abandoned shares, with an underwriting amount of 325 million yuan, much higher than its sponsorship and underwriting fee of 124 million yuan.
In addition, the ultra-high pricing also pushed the P/E ratio of Zhongyi Technology to 91.57 times, which was higher than the industry average P/E ratio (39.70 times) at that time, and the excess was 130.65%, and the valuation was relatively high.
Wind data shows that on the first day of listing, the share price of Zhongyi Technology broke by 24.62%, which means that the shares held by CICC lost 80.015 million yuan on that day.
According to the 2022 semi-annual report of Zhongyi Technology, as of the end of June 2022, CICC still held 1,949,400 shares of Zhongyi Technology. Wind data shows that as of June 30, 2022, the decline in Zhongyi Technology's share price has narrowed to 14.60% from the issue price, but the above 1.9494 million shares of CICC still have a floating loss of 46.5512 million yuan. After June 2022, CICC disappeared from the list of the top 10 shareholders of Zhongyi Technology.
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