Whether the production capacity of Q&D Circuit's fundraising project can be digested has been tortured and there are flaws in the internal control of Zhongjiang Communication

Company dynamics:

【Youju New Materials Terminates GEM IPO】

On April 19, the Shenzhen Stock Exchange announced that the Shenzhen Stock Exchange decided to terminate its issuance and listing review due to the withdrawal of the application for issuance and listing of Guangdong Youju Advanced New Materials Co., Ltd. (hereinafter referred to as "Youju New Materials") and the sponsor Haitong Securities. Youju New Materials originally planned to raise 650 million yuan, of which 450 million yuan was used for the composite modification project of special engineering plastics with an annual output of 16,000 tons, and 200 million yuan was used to supplement the working capital project.

[China Securities Regulatory Commission approves the IPO registration of Zhongli shares on the Shanghai Stock Exchange]

On April 19, the China Securities Regulatory Commission approved the registration application for the initial public offering of shares of Zhejiang Zhongli Machinery Co., Ltd. (hereinafter referred to as "Zhongli Shares"). It is reported that Zhongli shares plan to be listed on the main board of the Shanghai Stock Exchange, and the IPO sponsor is Guotai Junan Securities, which plans to raise 1.336 billion yuan. Zhongli Co., Ltd. is a high-tech enterprise focusing on the R&D, production and sales of electric forklifts and other motor industrial vehicles.

[Chongqing Military IPO terminated]

On April 19, the information disclosed by the Shanghai Stock Exchange showed that Chongqing Military Industry Group Co., Ltd. (hereinafter referred to as "Chongqing Military Industry") and its sponsor CITIC Securities withdrew their listing application documents. As a result, the SSE decided to terminate the review of the company's initial public offering and listing on the Main Board. It is reported that Chongqing Military Industry was established in February 2014, is a member of Chongqing Electromechanical Holding Group, is a company mainly engaged in special equipment manufacturing industry.

Corporate Public Opinion:

[Q&D Circuit: Capacity utilization continues to shrink, and whether the capacity of fundraising projects can be digested is questioned]

As early as March 31, 2023, at the 16th review meeting of the Listing Committee of the Growth Enterprise Market of the Shenzhen Stock Exchange held in 2023, Q&D Circuit successfully "unconditionally" obtained the review results of "meeting the issuance conditions, listing conditions and information disclosure requirements" given by the listing committee, but it has gone through 387 days of waiting, and Q&D Circuit has still not been able to smoothly advance to the registration process of the CSRC.

In the previous two rounds of inquiries, what made the regulator doubt was whether there was a risk of overcapacity.

According to the Q&D Circuit fundraising plan, its IPO plans to raise 600 million yuan for investment in Nantong Q&D Circuit Technology Co., Ltd. with an annual output of 960,000 square meters of multi-layer boards, HDI board projects and supplementary working capital, of which the former will cost 1 billion yuan and plan to invest 480 million yuan in raised funds.

It is worth noting that from 2019 to 2023, the production capacity of Q&D Circuit will be 479,400 square meters, 500,600 square meters, 517,100 square meters, 526,700 square meters, and 506,900 square meters, respectively, and the capacity utilization rate of the IPO fundraising project will far exceed the production capacity of each period in the reporting period, and the capacity utilization rate during the same period will be 73.14%, 80.88%, 93.94%, 84.76%, and 83.97% respectively, and the capacity utilization rate has continued to shrink in the past two years. If the implementation of its fundraising is completed, the production capacity of Q&D Circuit will increase by 89.39% to 960,000 square meters on the basis of the current 506,900 square meters. (Source: Huiju Finance)

[Zhongjiang Communication: Internal control is flawed, and the top five customers are in high performance]

Recently, Zhonggan Communications submitted a prospectus to be listed on the Hong Kong Stock Exchange. From 2020 to 2023, the performance of Zhonggan Communication is on the rise, and almost all of them are from the company's top five customers. In terms of internal control, Zhongjiang Communication still has many irregularities, such as failing to pay social security and provident fund to employees, and having loan entanglements with channel parties.

Zhonggan Communications has also repeatedly confronted employees in court. Tianyancha shows that there are 34 legal litigation cases in Zhongjiang Communications, of which 9 are labor disputes and 4 are disputes over the liability of labor service providers, and the litigation cases related to labor providers account for 38.24%. In addition, Zhongjiang Communication has also become a historical executor for 3 times. (Source: Titanium Media APP)

[Ketong Technology IPO cancelled: R&D investment accounts for less than 1% of revenue, and there are only 4 invention patents since its establishment]

On April 17, the Shenzhen Stock Exchange announced that the Shenzhen Stock Exchange decided to terminate its issuance and listing review due to the withdrawal of the application for issuance and listing by Ketong Technology and its sponsor. In the prospectus, Ketong Technology bluntly stated that it mainly achieves product revenue through chip distribution. That is to say, a company to be listed on the Growth Enterprise Market (GEM) is in the wholesale industry, and profits are mainly obtained through the difference between purchase and sales, which cannot help but make people have huge doubts about whether it is a growth-oriented innovative and entrepreneurial enterprise and whether it is in line with the positioning of the GEM.

From the perspective of R&D results, among the 23 domestic patents obtained by Ketong Technology and its subsidiaries, there are only 4 invention patents with technical content, and all of them were applied for in 2020.

Further analysis of the details of Ketong's technology R&D expenses can find that the company's R&D investment in R&D materials accounts for a very low proportion, with only 6.22% in the highest period, and it will continue to decline from 2020 to 2022. In addition, from 2020 to 2022, the proportion of R&D investment in each year of Ketong Technology to operating income was only 0.67%, 0.60% and 0.73% respectively, all of which were less than 1%. The company with a total operating income of nearly 20 billion yuan in three years has a total R&D investment of only 133 million yuan. (Source: Huacai Information)

[Another IPO second declaration! The previous reporting brokers and sponsors were supervised]

Tianwei New Materials applied for the GEM on September 28, 2020, and was selected for on-site inspection in 2021 and withdrew its IPO application on January 5, 2022. Five months later, the Shenzhen Stock Exchange issued a regulatory letter on Tianwei New Materials and a regulatory letter on Dongguan Securities (the sponsor for the first time), Xing Jianchen and Pan Yunsong (for the first time to declare and sign the insurance agency). In this application for the IPO of the Beijing Stock Exchange, only the law firm has changed among the intermediaries, and the sponsor is still Dongguan Securities.

Previously, when Tianwei New Materials applied for the GEM of the Shenzhen Stock Exchange, it was issued a regulatory letter because the issuer's former director Zhou Guowei still approved the issuer's important operation and management matters after his resignation, there was a personal card cash on behalf of the deposit during the reporting period, and some key customer personnel were not fully disclosed as former employees of the issuer and related parties, and overlapping suppliers with related parties. The above questions were asked by the Beijing Stock Exchange in this IPO, in which the key personnel of some customers were former employees of the issuer and related parties, and overlapping suppliers with related parties were separately questioned, and the remaining questions were listed as financial irregularities and required to explain the effectiveness of rectification. (Source: Under the Sycamore Tree V)