Recently, the information disclosed by the Shanghai Stock Exchange shows that Shanghai Jiangen Pharmaceutical Technology Co., Ltd. (hereinafter referred to as "Jiangen Pharmaceutical") and its sponsor Guojin Securities have withdrawn their listing application documents. As a result, the Shanghai Stock Exchange decided to terminate its review of the company's initial public offering and listing on the STAR Market.
According to Beduo Finance, Jiangen Pharmaceutical submitted a prospectus on the Shanghai Stock Exchange in November 2022 to be listed on the Science and Technology Innovation Board. In this sprint listing, Jiangen Pharmaceutical originally planned to raise 1.023 billion yuan, of which 350 million yuan will be used for organ transplantation innovation and R&D platform projects, and 175 million yuan will be used for kidney transplant equipment localization and upgrading R&D projects.
It is worth mentioning that Jiangen Pharmaceutical "failed" on the Science and Technology Innovation Board for the second time. Previously, the company had submitted a prospectus in May 2020, which was originally scheduled to meet on December 18, 2020. On the day before the meeting (December 17), the company withdrew its application for issuance and listing, and Guojin Securities withdrew its sponsorship, so it was terminated from the issuance and listing review.
Tianyancha App shows that Jiangeng Pharmaceutical was established in March 2003 with a registered capital of 70,401,689 yuan, the legal representative is Wu Yunlin, and the shareholders include Sunshine Life, Legend Capital, Nanjing Hi-Tech, etc. Previously, Jiangen Pharmaceutical was listed on the New Third Board in July 2015 and delisted in November 2016.
According to Beduo Finance, the two applications of Jiangen Pharmaceutical have been two years apart, and the amount of funds to be raised has also been adjusted many times. Earlier, the company planned to raise 1.143 billion yuan, which will be used for organ transplantation innovation research and development platform projects, the acquisition of 31.33% of the equity of Shanghai Yunwo, and innovation and development reserve funds.
In the draft submitted in December 2020, Jiangen Pharmaceutical has lowered the amount of funds raised. According to the prospectus (the previous draft), the company plans to raise 810 million yuan, which will be used for organ transplantation innovation research and development platform projects, innovation and development reserve funds, and deleted the project of "acquiring 31.33% of the equity of Shanghai Yunwo".
According to the prospectus submitted in November 2022, Jiangen Pharmaceutical plans to raise 1.023 billion yuan, which will be used for organ transplantation innovation R&D platform projects, kidney transplant equipment localization and upgrade R&D projects, liver transplant equipment and in vitro diagnostic reagent product registration and promotion projects in the field of transplantation, and replenishment of working capital, which is very different from earlier.
In response to inquiries, Jiangen Pharmaceutical said that after the raised investment funds are used to replenish liquidity, they may be used to repay debts. According to reports, Jiangen Pharmaceutical borrowed 117 million yuan from the bank to acquire the equity of Shanghai Yunwo held by Sunshine Life, and the bank's loan was pledged with 162 million offshore RMB deposits of overseas subsidiaries.
At the same time, the bank loan contract sets up arrangements for obtaining the consent of the lender in advance or notifying the lender for major investments, acquisitions and dividends of Jiangeng Pharmaceutical. The CNH 162 million is currently restricted, but the issuer expects the funds to be used in RMB for onshore spending.
In this regard, the Shanghai Stock Exchange required Jiangen Pharmaceutical to explain the reasons and reasonableness of borrowing from banks with the funds of overseas subsidiaries as pledges instead of directly using them as acquisition funds or domestic funds as acquisition funds, whether there are restrictions on the use of funds of overseas subsidiaries or other arrangements, and whether there is a plan for repatriation of relevant funds to China and relevant approval procedures.
In particular, during the listing of the New Third Board, Jiangen Pharmaceutical was taken regulatory measures by the stock transfer system for using the raised funds to repay debts and pay for goods in advance. After investigation, from February 26, 2016 to April 26, 2016, Jiangen Pharmaceutical used a total of 24 million yuan of raised funds to repay debts and pay for goods, and did not return all of them.
It is not difficult to see that there are certain problems in the internal control of Jiangeng Pharmaceutical, and it is very likely to "enter the palace twice". The NEEQ believes that Jiangeng Pharmaceutical's behavior constitutes a violation of stock issuance, and takes self-regulatory measures against Jiangen Pharmaceutical, such as making appointments and interviews and requiring written commitments.
Although it will no longer raise funds for the "acquisition of a 31.33% stake in Shanghai Yunwo", Jiangen Pharmaceutical has achieved this goal. According to the prospectus, the company signed an equity transfer agreement with Sunshine Life Insurance in March 2021, spent 275 million yuan to acquire 31.33% of the equity of Shanghai Yunwo, and completed the transaction in June 2021.
After the completion of the transfer, Jiangen Pharmaceutical holds 100% of the equity of Shanghai Yunwo. Prior to this, Jiangen Pharmaceutical had signed an "Equity Transfer Agreement" with Xinjiang Jiacai in August 2019 to acquire 8.67% of the equity of Shanghai Yunwo at a price of 59 million yuan. In March 2020, Jiangen Pharmaceutical proposed an installment plan to Sunshine Life and paid 3 million yuan to obtain 0.5% equity.
However, in November 2020, Jiangen Pharmaceutical terminated the aforementioned acquisition (pointing to Sunshine Life's acquisition of 31.33% equity interest in Shanghai Yunwo). The reason why Shanghai Yunwo was established was to privatize LSI, an American company listed on the London AIM market, which mainly develops advanced equipment and services for organ transplantation.
In 2016, Jiangen Pharma introduced an investment consortium formed by Sunshine Insurance Group to acquire and privatize LSI in cash through the establishment of a special purpose company, Shanghai Yunwo, and the design of a two-tier structure, with a transaction size of about US$87 million, or about 580 million yuan. Eventually, the transaction was completed in December 2016.
Jiangen Pharmaceutical said that before the acquisition, LSI's equity was relatively dispersed, and the main shareholders were investment institutions. Upon completion of the acquisition, LSI became its holding subsidiary. Jiangen Pharma has cooperated with LSI for many years, and the management team at home and abroad is closely connected, and the acquisition of LSI by Jiangen Pharma is an integration between industries, which is conducive to the common development after the acquisition. After the acquisition, LSI's performance increased significantly.
According to Beduo Finance, the source of funds for the acquisition is the capital increase of Sunshine Life Insurance and Xinjiang Jiacai to Jiangeng Pharmaceutical and Shanghai Yunwo. As financing support for the acquisition, Sunshine Life Insurance and Xinjiang Jiacai, as financial investors, increased the capital of Jiangen Pharmaceutical according to the post-investment valuation of 1 billion yuan, and increased the capital of Shanghai Yunwo according to the post-investment valuation of 600 million yuan.
As far as Jiangeng Pharmaceutical itself is concerned, the company's net profit in 2020 and 2021 has declined to varying degrees, and there has been a situation of "increasing revenue but not increasing profits". In this regard, the company attributed the impact of the new crown epidemic to the tight supply of some raw materials for its SPS-1 organ preservation solution product, which led to the failure of OEMs to produce the product normally in the second half of 2021.
According to the prospectus, Jiangen Pharmaceutical is a medical device product and service provider in the field of organ transplantation. At present, the product line of Jiangen Pharmaceutical includes equipment for organ preservation, transportation, evaluation and repair during transplantation, transplantation medical consumables, in vitro diagnostic reagents, etc., covering the whole stage of preoperative evaluation, perioperative treatment and long-term postoperative management of organ transplantation.
From 2019 to the first half of 2022, the revenue of Jiangen Pharmaceutical was 397 million yuan, 421 million yuan, 480 million yuan and 124 million yuan respectively, the net profit was 127 million yuan, 72.7539 million yuan, 63.2198 million yuan and 12.1475 million yuan respectively, and the net profit after deducting non-profits was 15.4934 million yuan, 29.5664 million yuan, 71.9582 million yuan and 12.2762 million yuan respectively.
During the reporting period, the sales revenue of kidney perfusion consumables of Jiangen Pharmaceutical was 262 million yuan, 286 million yuan, 337 million yuan and 87.0704 million yuan respectively, accounting for 71.54%, 73.53%, 75.87% and 83.98% of the main business income respectively, which is the company's main source of income.
According to the second round of inquiry letters, Jiangen Pharmaceutical's performance in 2022 has recovered. Specifically, the company's revenue in 2022 will be about 541 million yuan, an increase of 12.80% from 480 million yuan in 2021, and its net profit will be about 108 million yuan, an increase of 28.15% from 84.1919 million yuan in 2021.
Before the listing, the actual controller of Jiangen Pharmaceutical was Wu Yunlin, chairman and general manager of the company, who directly held 28.02% of the shares, and held 4.48% of the shares through the controlled shareholding platform Shanghai Jingsheng Investment Enterprise (Limited Partnership), which directly and indirectly controlled a total of 32.51% of the shares of Jiangen Pharmaceutical.
At the same time, Sunshine Life holds 23.78% of the shares, Legend Capital holds 6.13%, 3.07% and 1.84% of the shares through Legend Chengye, Legend Yikang and Legend Jiayun respectively, with a total shareholding of about 11.04%, and Nanjing Hi-Tech holds 5.84%, 1.71%, 0.82% and 0.12% of the shares through Nanjing Xinjun, Xinjun Venture Capital, Gaoke Venture Capital and Nanjing Yujun, with a total of about 8.49% of the shares.
In addition, Borun Investment holds 2.66%, 1.11%, 1.11% and 0.41% of the shares respectively through Borun Investment, Borun New Third Board, Hangzhou Boshui and Tonglu Kangrun, with a total shareholding of about 5.29%.