Black Sesame Intelligence has lost nearly 10 billion yuan in 3 years, and the necessity and rationality of Matsui's share fundraising are questionable

Company dynamics:

【Mobvoi Launch】

Mobvoi will officially offer shares on April 16, and is expected to be listed on the Hong Kong Stock Exchange on April 24, 2024, with CICC and CMB International jointly sponsoring. It is reported that the international placement of Mobvoi on the first day has been fully subscribed. Founded in 2012, Mobvoi is an artificial intelligence company with generative AI and voice interaction technology as its core business, and is committed to providing AI CoPilot solutions for users including global content creators, enterprises and consumers.

[Lixuan Sports IPO terminated]

On April 16, the Shanghai Stock Exchange terminated the review of its initial public offering and listing on the main board due to the withdrawal of the application for issuance and listing of Zhejiang Lixuan Sports Technology Co., Ltd. and its sponsor Huatai United Securities Co., Ltd. The main business of Lixuan Sports is the design, research and development, production and sales of fitness equipment and related accessories, and is committed to becoming a "world-class fitness equipment manufacturer".

Corporate Public Opinion:

[Jerrys IPO failure: the "core" is not strong, the "bloodline" is not alive, and eighty percent of the R&D investment is used to pay wages]

Suzhou JRS Intelligent Technology Co., Ltd. (hereinafter referred to as "JRIS"), which was accepted by the Shenzhen Stock Exchange on June 30, 2022, and walked to the threshold of the Listing Committee's review meeting on December 7, 2023, but was cancelled due to major matters, ended its IPO journey on April 11, 2024 by voluntarily withdrawing the application materials.

According to the analysis of its prospectus, the problem of high accounts receivable has no tendency to improve for the time being, the hidden dangers of cash flow are large, and the relatively small business scale and R&D investment make it difficult to form the core product competitiveness that occupies an advantage in the same industry.

At the same time, there are also many doubts about the composition of Jerrys' R&D expenses. During the reporting period, the total remuneration of the company's R&D personnel was 41.9727 million yuan, 56.5622 million yuan, 61.8992 million yuan and 31.576 million yuan respectively, accounting for more than 80% of the annual R&D expenses. In 2022, for example, the total salary of Jerrys R&D personnel accounted for 84.72% of R&D expenses, while the industry average was 74.37%. (Source: Huacai Information)

[The second submission of Jingfa Property: gross profit declines, bad debts surge, valuation and competitiveness need to be solved]

Recently, Xi'an Economic Development Property, the largest state-owned property enterprise in Shaanxi, submitted a prospectus to the Hong Kong Stock Exchange, which is the second submission since its first impact on the Hong Kong Stock Exchange in September last year. Founded in 2000, Jingfa Property is a veteran property enterprise in Shaanxi, and the actual controller is the Management Committee of Xi'an Economic Development Zone, with 90.17% of the beneficial shares.

Although it has a large number of government-related projects, the local property enterprises are more dependent on related parties and the regional concentration is too high, which to a certain extent leads to the fact that the gross profit margin and net profit margin of Jingfa Property are at a low level compared with the industry average, and there is a downward trend, especially in the core business. In 2021, 2022 and 2023, the gross profit margin of the property will be 14.5%, 14.3% and 13.7% respectively. According to the statistics of the China Index Research Institute, in the first half of 2023, the average gross profit margin of Hong Kong-listed property companies will be 25.94%.

Aside from the influence of major shareholders, in the context of the decline in gross profit and the surge in bad debts in recent years, the independent survival model and market competitiveness of Jingfa Property need to be tested. At the same time, due to the low industry valuation and the above-mentioned performance, it will be difficult for a "pocket-sized" economic property to maintain a market value of not less than HK$500 million, even if it succeeds. (Source: Titanium Media App)

[With a loss of nearly 10 billion in 3 years, Black Sesame Intelligence broke into the IPO again]

Recently, Black Sesame International Holding Limited (hereinafter referred to as "Black Sesame Smart") updated its prospectus on the Hong Kong Stock Exchange to apply for listing on the Hong Kong Stock Exchange, with CICC and Huatai International as its joint sponsors.

It is worth noting that Black Sesame Intelligence has been sought after by capital before it is listed. As of the IPO, Black Sesame Intelligence has completed a total of 10 rounds of financing, and has received investment from Tencent, Xiaomi, SAIC, China Merchants Group, Bosch Group, Dongfeng Group, NIO Capital and Geely Holdings. In the latest round of C+ round of financing, Black Sesame Intelligence raised US$218 million, and its valuation rose to US$2.218 billion, or about more than 15.5 billion yuan.

Despite this, Black Sesame Intelligence has not yet come out of the situation of performance loss. According to the prospectus, the net profit of Black Sesame Intelligence has been losing for 3 consecutive years, and from 2021 to 2023, the losses of Black Sesame Intelligence will be 2.357 billion yuan, 2.754 billion yuan, and 4.855 billion yuan respectively, with a cumulative loss of 9.966 billion yuan in three years. Black Sesame Intelligence said that the continuous loss was mainly due to continuous investment in research and development, as well as changes in the fair value of preferred shares issued to investors. (Source: PE Cailianxun)

[Ruilian Technology submitted for registration for 346 days after the meeting, and the related party transactions with the cousin company of the actual controller exceeded 10 million]

On January 6, 2023, Shenzhen Ruilian Technology Co., Ltd. (hereinafter referred to as "Ruilian Technology") passed the review of the Listing Committee meeting, but it took 346 days to submit the registration on December 18, 2023.

The data shows that in the past four years, Ruilian Technology's revenue and profit have maintained continuous growth, and its performance has continued to improve, of which the non-net profit growth rate in 2020 is as high as 237.91%. However, a closer look shows that the risks are hidden under its beautiful performance, and the revenue almost all depends on the overseas market and more than 60% of the sales come from the Amazon platform, and with the gradual increase of global trade frictions and geopolitical conflicts, it is worth paying attention to whether the follow-up performance can maintain sustained growth.

In addition, during the inquiry, Ruilian Technology's related party transactions with Huafeng Security, a company 100% owned by Luo Cheng, the cousin of the actual controller Wang Aijun, during the reporting period, entered the attention of the regulator. What is strange is that after Ruilian Technology terminated its related party transactions in November 2021, Huafeng Security was cancelled three months later, that is, in February 2022. According to the prospectus, in 2019, 2020 and 2021, Ruilian Technology entrusted processing to Huafeng Security, with transaction amounts of 159,900 yuan, 5,812,200 yuan and 5,827,600 yuan respectively. (Source: Huiju Finance)

[The necessity and rationality of Matsui's fundraising are questionable]

In January 2024, Hunan Matsui New Materials Co., Ltd. (hereinafter referred to as "Matsui shares") submitted an application to the exchange to issue convertible corporate bonds to unspecified objects, and the total amount of funds to be raised does not exceed 620000000 yuan (including this number), after deducting the issuance costs, the raised funds are intended to be used for automotive coatings and special resin projects (phase I) and replenish working capital to enhance their advantages in the field of passenger cars.

It is reported that the previous fund-raising project of Matsui shares was a 20-year listing financing project, and the five construction projects raised at that time only changed slightly in the investment amount of the "high-performance water-based coating construction project" (project 1), and the investment amount of other projects changed greatly. In addition, the project progress is seriously lagging behind, and no measures have been taken in advance to manage the project progress, and the management capacity needs to be strengthened. In addition, in June 22, it has been decided to extend it for 2 years, and there is a high possibility of further extension.

In the case of the previous fundraising project undergoing a major change and postponement of the investment amount, the rationality and necessity of the planning of the fundraising project of Matsui shares are doubtful. According to the analysis of the valuation house, the benefit calculation process of the Songjing fundraising project may be optimistic, the data disclosure is insufficient, the rigor is questionable, and the production capacity of comparable companies is expanding simultaneously, and there may be a risk of capacity digestion in the future of Songi shares, and there may be duplication of construction between the previous fundraising and investment projects. (Source: Valuation House)