Source: Yicaixin
Author: Mazov
The IPO application of Suzhou Kema Material Technology Co., Ltd. (hereinafter referred to as Kema Technology) was accepted by the Shenzhen Stock Exchange on June 29, 2022, and successfully passed the meeting on January 20, 2023, and the registration application has not yet been submitted.
According to the Rules for the Examination and Approval of the Issuance and Listing of Stocks on the Growth Enterprise Market of the Shenzhen Stock Exchange, the listing criteria selected by Kema Technology is the criterion (1): "the net profit in the last two years is positive, and the cumulative net profit is not less than RMB 50 million".
Entering the supply chain of car companies through mergers and acquisitions, audit institutions are caught in a storm of financial fraud
Kema Technology is a high-tech enterprise that provides customers with advanced ceramic materials and parts and surface treatment services in the fields of pan-semiconductor, electronic (including lithium battery) material powder crushing and classification, fuel cell manufacturing, chemical and environmental protection, automobile manufacturing, biomedicine, and traditional textile and papermaking.
According to the prospectus, from 2019 to January to June 2022 (hereinafter referred to as the reporting period), Kema Technology achieved operating income of 175.5964 million yuan, 254.1588 million yuan, 345.0158 million yuan and 223.6255 million yuan respectively, and net profit of 12.5763 million yuan, 45.6886 million yuan, 67.0888 million yuan and 44.9082 million yuan respectively.
At the end of the reporting period, the book value of accounts receivable of Kema Technology was 58.2792 million yuan, 75.5033 million yuan, 123.2509 million yuan and 158.1338 million yuan respectively, accounting for 33.19%, 29.71%, 35.72% and 70.71% of the current operating income respectively, and the proportion of accounts receivable showed an overall upward trend during the reporting period.
In addition to the fields of semiconductors, display panels, lithium batteries and fuel cells, Kema Technology relies on existing materials, processes and technologies, and researches and develops new materials, processes and technologies to promote the in-depth development of advanced ceramic materials and components in multiple application fields such as automobiles, chemical and environmental protection, medical devices, biomedicine, textiles, and papermaking.
During the reporting period, Kema Technology mainly produced products such as welding pins and positioning pins made of zirconia and alumina. The welding pin is used in the production of welding equipment for medium and high-end automobiles, which can play the functions of high temperature and spark protection, and the positioning pin plays the positioning function in the assembly process.
In order to open up the automotive industry market, Kema Technology has obtained the supply chain access ticket of internationally renowned car companies through mergers and acquisitions.
In 2020, Kema Technology acquired the entire equity of Wuxi Sem Hi-Tech Cermet Co., Ltd. (hereinafter referred to as Wuxi Sem), which is a supplier directory enterprise of internationally renowned automotive industry chain enterprises such as BMW Brilliance, Schaeffler, Faurecia, etc., and has become the main body of sales and marketing of the company's related products in the automotive field after being acquired by the company.
Founded in September 2011, Wuxi Sam is mainly engaged in the manufacture and sales of high-performance industrial ceramics, the main products are blue zirconium ceramic positioning pins, and its customers are mainly automobile manufacturers and bearing mold tooling manufacturers. Kema Technology finally acquired 100.00% of the shares of Wuxi Sem held by DANIEL KECK, a German natural person, at a price of RMB 1.6232 million, and the acquisition formed a goodwill of 1.1513 million yuan.
The prospectus does not mention the evaluation of Wuxi Sem, nor does it disclose the pricing basis of the transaction.
The prospectus discloses the financial data of Wuxi Sem in the last year and the first period, and the net profit of each period is only 228,500 yuan and 218,200 yuan.
In addition, PricewaterhouseCoopers, the auditor of Kema Technology, is also on the cusp of financial fraud in Evergrande Real Estate.
On March 18, the China Securities Regulatory Commission issued a penalty decision on Evergrande Real Estate. The auditor of Evergrande Real Estate is PricewaterhouseCoopers, the auditor of Kema Technology.
PwC's partnership with Evergrande Real Estate began in 2009 when China Evergrande went public in Hong Kong, and issued unqualified audit reports in 2019 and 2020 on Evergrande's financial fraud. At present, the China Securities Regulatory Commission has not imposed penalties on intermediaries that provide services to Evergrande Real Estate, and whether PwC can retreat from the market is uncertain.
IPO fundraising is duplicated, and the fundraising project procedures may be flawed
According to the prospectus, Kema Technology intends to raise 90,000.00 yuan in this IPO, which will be used for advanced materials production base projects, pan-semiconductor core component processing and manufacturing projects, R&D center construction projects and supplementary working capital.
The main body of the advanced materials production base project is Kema Technology, with a total investment of 440.183 million yuan, and 35000.00 yuan of the funds raised from this issuance are planned to be used. The construction cost of the project is 410.7168 million yuan, the preparatory fee is 8.2143 million yuan, and the working capital is 21.2519 million yuan.
The total investment of the pan-semiconductor core components processing and manufacturing project is 15,000.00 yuan, and it is planned to use the raised funds of this issuance of 12,000.00 yuan. The project includes 138,441,800 yuan of construction costs, 2,768,800 yuan of preparatory costs, and 8,789,400 yuan of working capital.
The main body of the R&D center construction project is Kema Technology, with a total investment of 347.1122 million yuan, and it is planned to use the raised funds of this issuance of 28,000.00 yuan. The construction of the project includes 290.7463 million yuan of engineering construction costs, 49.5599 million yuan of research and development expenses, and 6.8061 million yuan of basic preparation costs.
In addition to the direct replenishment of working capital of 15,000.00 yuan, the other three construction projects all have reserve fees and bottom working capital, and there is a phenomenon of duplicate replenishment.
According to the prospectus, the advanced materials production base project has obtained the "Jiangsu Province Investment Project Record Certificate" issued by the Administrative Examination and Approval Bureau of Suzhou High-tech Zone (Huqiu District), Jiangsu Province (record number: Su Gaoxin Xiangbei [2022] No. 88), and has obtained the "Reply to the Environmental Impact Report Form of the Advanced Materials Production Base Project of Suzhou Kema Material Technology Co., Ltd." (Su Huanjian [2022] 05 No. 0099) issued by the Suzhou Municipal Ecological Environment Bureau.
The prospectus also disclosed that at the end of 2021, the advanced materials production base project began to organize bidding. According to a public report by local officials on April 28, 2022, the advanced materials production base project has officially started construction.
(Screenshot from Suzhou Science and Technology City WeChat public account)
It is worth noting that the online approval and supervision platform for investment projects in Jiangsu Province shows that the advanced materials production base project was completed on March 28, 2022, but according to Suhu Xing's review and investment (2022) No. 15 document, the approval time of its energy-saving review report is June 21, 2022, which is later than the construction time of the project reported by local officials.
(Screenshot from Jiangsu Provincial Investment Project Online Approval and Supervision Platform)
The Measures for the Review of Energy Conservation in Fixed Asset Investment Projects (Order No. 44 of the National Development and Reform Commission in 2016) stipulates that the review opinions on energy conservation of fixed asset investment projects are an important basis for the start of project construction. For enterprise investment projects, the construction unit shall obtain the energy-saving review opinion issued by the energy-saving review authority before the start of construction. Not in accordance with the provisions of these measures for energy-saving review, or energy-saving review of the project, the construction unit shall not start construction. For the energy conservation review not carried out in accordance with the provisions of these measures, the construction of construction without authorization or the production and use of fixed asset investment projects, the energy conservation review authority shall order the construction or stop production and use, and the relevant responsible persons shall be held accountable in accordance with the law.
In addition, according to the document No. 0099 of Su Huanjian (2022) 05 of the Suzhou Municipal Bureau of Ecology and Environment, the EIA approval of the advanced materials production base project was issued on June 21, 2022, which is also later than the start time of the project. According to the Environmental Impact Assessment Law, according to the circumstances and harmful consequences of the violation, Kema Technology may face a fine of not less than 1% but not more than 5% of the total investment amount of the advanced materials production base project, and the person in charge and other persons directly responsible for the advanced materials production base project will be given administrative sanctions in accordance with the law.
(Screenshot from the EIA approval of the advanced materials production base project)
At the same time, the prospectus has also clearly disclosed that as of June 30, 2022, the construction projects of Kema Technology are also as high as 27.2521 million yuan, accounting for 8.70% of non-current assets, mainly for the construction of the "advanced materials production base project".
To sum up, the construction of the advanced materials production base project, one of the fundraising projects of Kema Technology's IPO, has violated laws and regulations in terms of construction or procedures.