After queuing for several months, the IPO of Beijing Sanqing Internet Technology Co., Ltd. (hereinafter referred to as "Sanqing Internet") on the GEM ushered in new progress, and the company disclosed a round of inquiries and responses. During the reporting period, Sanqing Interconnection's acquisition of a controlling stake in Cororina Electric Co., Ltd. (hereinafter referred to as "Cororina") was the subject of regulatory attention. Judging from this acquisition, there are more doubts about the price of Cororina, the net profit performance before the performance commitment period, the middle and post-period, etc., and from the penetrating point of view, Sanqing Internet and Cororina not only have an equity relationship, but also Junlang Shares, a former subsidiary of Junlang Electric Co., Ltd. (hereinafter referred to as "Junlang Electric"), a major customer of Sanqing Interconnection, also belonged to Cororina's related parties.
The underlying is not profitable but gives a high premium
In the case that Corona was not profitable, Sanqing Internet won the controlling stake of the company at a super high premium.
According to the data, the target Cororina was established on March 5, 2012, and its main business is the production and sales of distribution switch control equipment and accessories, circuit breakers, high and low voltage electrical appliances and complete sets of equipment. Sanqing Internet is mainly engaged in the research and development, design, production and sales of power Internet of Things sensing layer terminals and complete sets of equipment.
In December 2020, Sanqing Internet acquired a total of 80% of the shares of Cororina held by Shanghai Yuanshi and Shanghai Sige with its own funds of 80 million yuan.
Before the above-mentioned equity changes, Shanghai Yuanshi, Shanghai Sige and Shanghai Haoxuan respectively held 50%, 30% and 20% of the shares of Cororina, and through the above transactions, Shanghai Yuanshi and Shanghai Sige withdrew.
According to financial data, from January to July in 2019 and 2020, the operating income was about 23.9692 million yuan and 14.2973 million yuan respectively, and the net profit was 1.7231 million yuan and -787,000 yuan respectively. Although the net profit loss from January to July 2020, the acquisition is based on July 31, 2020, and the market value of all the equity of Ruruina shareholders is 107.19 million yuan, which is 93.0554 million yuan higher than the book owner's equity of 14.1347 million yuan, with an appreciation rate of 658.35%.
The above situation has also attracted regulatory attention, and the Shenzhen Stock Exchange requires Sanqing Interconnection to explain the difference, connection and synergy between Cororina's products, business and the company, and the reasons and necessity for the company's acquisition of Cororina in the case of fierce competition in the primary equipment market, low threshold, and loss of Cororina's performance.
In addition, the Shenzhen Stock Exchange also requires Sanqing Internet to explain the specific method and process of Cororina's acquisition pricing, key parameters such as revenue growth rate, gross profit margin, discount rate, etc., as well as the basis and rationality of their selection, and explain the fairness of the company's purchase price.
The underlying performance commitment period is followed by a loss
In response to the above-mentioned acquisition, the counterparty has also made performance commitments, and from the perspective of the net profit performance of Cororina before, during and after the performance of the performance commitment, there are also doubts to be solved.
According to the equity acquisition agreement signed between Sanqing Internet and Shanghai Yuanshi, Shanghai Sige, Shanghai Haoxuan and Li Futian, the counterparty promised that the net profit of Keruorena from 2020 to 2022 would not be less than 6.7 million yuan, 14.85 million yuan and 15.65 million yuan respectively. According to the audit report issued by Daxin's auditors, the actual performance of Keruo Rena from 2020 to 2022 was 7.1819 million yuan, 15.2164 million yuan, and 15.999 million yuan respectively, and the completion rate of performance commitments in each year was 107%, 102%, and 102% respectively. The report reference number indicates that all three audit reports were issued in 2023.
It is not difficult to see that if Reina's profit before the acquisition was small, or even a loss, but after the acquisition, the net profit turned positive and increased significantly. In this regard, the Shenzhen Stock Exchange also requires Sanqing Internet to explain the reasons and reasonableness of the above-mentioned changes in the performance of Cororina, and to explain in detail the main financial data of Cororina, major contract acquisition, customer development, sales collection, whether there have been major changes in its main customers and suppliers, and whether there is any overlap with the company's customers and suppliers.
It is worth mentioning that just after the performance commitment period, that is, from January to March 2023, Keruorena's net profit turned into a loss again, and the net profit during the reporting period was -1.9914 million yuan.
In addition, the data shows that from 2020 to 2022 and from January to March 2023, the gross profit margin of Cororina will be 26.2%, 23.68%, 22.83%, and 11% respectively, which is in a downward trend. The acquisition of a controlling stake in Keruo Ruina, Sanqing Internet also formed a goodwill of 61.8236 million yuan.
The Shenzhen Stock Exchange requires Sanqing Internet to explain the reasonableness of the failure to make provision for goodwill impairment at the end of each period in combination with the reasons for the continuous decline in gross profit margin and loss from January to March 2023 during the reporting period.
The major customer was a related party of the target
A deep study of the relationship between Sanqing Internet and Cororina shows that in addition to the equity relationship, the two companies also have other connections.
According to the sponsorship work report, Li Futian is the original actual controller and current legal representative of Cororina, and Li Futian's son is Li Yaoyao.
According to the prospectus, in 2021 and 2022, in the list of the top five customers of Sanqing Interconnection, Junlang Electric is listed, which is the second and third largest customers of the company, and the sales amount of Sanqing Internet to it is about 28.9924 million yuan and 18.058 million yuan respectively, accounting for 5.96% and 3.12% of operating income respectively.
It is worth mentioning that before June 2021, Junlang Electric had a subsidiary, Junlang Shares, and Li Yaoyao was a director of Junlang Shares. This also means that Junlang shares previously belonged to Cororina's related parties.
In view of the above-mentioned relationship, the Shenzhen Stock Exchange also requires Sanqing Internet to explain the source of the acquisition funds, but the use and whereabouts of the funds after receiving the equity transfer money from Li Futian, the former actual controller of Ruoruina, the equity, personnel arrangements, business dealings or other potential benefit arrangements between Li Futian and his affiliates and Junlang Electric and Junlang Shares, the reasons and reasonableness of the company's significant increase in the sales amount of Junlang Electric since 2021, and whether there is any abnormality in the sales proceeds.
In the view of Xu Xiaoheng, an investment and financing expert, the past "related-party" transactions of any IPO company are the focus of the regulator's attention, and the fairness and rationality of its pricing will be questioned.
In response to related questions, a reporter from Beijing Business Daily sent an interview letter to Sanqing Internet, but as of press time, the other party did not reply.
Beijing Business Daily reporter Ma Changchang