Recently, Zhejiang Shengzhao Pharmaceutical Technology Co., Ltd. (hereinafter referred to as "Shengzhao Pharmaceutical") disclosed a prospectus to be listed on the Beijing Stock Exchange, with a public offering of no more than 42,666,666 shares.
Titanium Media APP noticed that Shengzhao Pharmaceutical, which has been established for 10 years, has not yet commercialized its products, and it is losing money every year, and the more it loses, the more it loses. In particular, it should be noted that Chen Yunjun, one of the actual controllers of Shengzhao Pharmaceutical, also received "kickbacks" from the company through related party transactions.
Losing every year, the more you lose, the more you lose
Shengzhao Pharmaceutical is mainly engaged in the R&D and industrialization of complex injections, and is one of the few complex injection R&D and industrialization enterprises in China that has multiple clinical pipelines in the two major fields of long-acting sustained-release preparations and targeted preparations.
From 2020 to 2022 (hereinafter referred to as the "reporting period"), Shengzhao Pharmaceutical achieved operating income of 19.872 million yuan, 25.8799 million yuan, and 21.5937 million yuan respectively, and net profit of -118.0501 million yuan, -131.9896 million yuan, and -144.4645 million yuan respectively, and the company lost more and more, with a total loss of nearly 400 million yuan in three years.
The main factor that led to the increasing loss of Shengzhao Pharmaceutical was due to its high R&D expenses. During the reporting period, the R&D expenses of Shengzhao Pharmaceutical were 86.7807 million yuan, 101.8206 million yuan and 108.4909 million yuan respectively.
In particular, Shengzhao Pharmaceutical was established in August 2011, and as of the end of 2022, the products of Shengzhao Pharmaceutical, which has been established for 10 years, have not yet been commercialized, and the above-mentioned annual revenue of more than 20 million yuan mainly relies on the agency distribution of externally sourced drugs and devices.
Titanium Media APP noticed that there are many doubts in the agency distribution business of Shengzhao Pharmaceutical. In 2022, the top five customers of Shengzhao Pharmaceutical are as follows:
It can be seen that in 2022, Shuangfeng County Kangde Medical Device Co., Ltd. (hereinafter referred to as "Kangde Medical") and Zhejiang Tianmei Supply Chain Management Co., Ltd. (hereinafter referred to as "Zhejiang Tianmei") ranked the company's first and third largest customers with 2.8362 million yuan and 1.193 million yuan respectively.
First of all, look at Kangde Medical. Tianyancha shows that Kangde Medical was established in June 2021 with a registered capital of 500,000 yuan, and the company's social security information in 2022 is as follows:
In 2022, where will Kangde Medical get the funds to purchase 2.8362 million yuan of products from Shengzhao Pharmaceutical?
Secondly, Zhejiang Tianmei. Tianyancha shows that in April 2023, Zhejiang Tianmei was fined a total of 1.1 million yuan by the Market Supervision and Administration Bureau of Nanhu District, Jiaxing City for violating price management regulations.
In the face of such customer quality, why did the above two companies become major customers of Shengzhao Pharmaceutical in the second year after their establishment?
In addition to profits, the net cash flow generated by Shengzhao Pharmaceutical's operating activities was also poor. During the reporting period, the net cash flow generated by the operating activities of Shengzhao Pharmaceutical was -104 million yuan, -103 million yuan and -133 million yuan respectively, with a net outflow of at least 100 million yuan every year.
Buy a large amount of wealth management products, but want to raise funds to replenish the flow
From the perspective of fund-raising projects, Shengzhao Pharmaceutical's IPO on the Beijing Stock Exchange intends to raise 1.275 billion yuan for the industrialization research and development of complex injections, the construction project of the headquarters and the first phase of the production line of high-end complex injections, and replenishment of working capital.
It should be pointed out that in August 2020, Shengzhao Pharmaceutical raised a total of 263 million yuan through private placement, and in November 2021, the company raised a total of 311 million yuan through private placement, and raised a total of 574 million yuan through two private placements. I just raised 574 million yuan from the market, why do I have to ask the market to raise 1.275 billion yuan now?
In addition, in the above-mentioned fundraising projects, the reasonableness of Shengzhao Pharmaceutical's fundraising of 100 million yuan to supplement liquidity is also questionable. As of the end of 2023, the monetary funds of Shengzhao Pharmaceutical are 196 million yuan, the trading financial assets are 170 million yuan, and the total assets are 562 million yuan, in other words, the total monetary funds and transactional financial assets account for 65.12% of the total assets. With so much monetary funds and the company still has 170 million yuan to purchase bank wealth management products, why does Shengzhao Pharmaceutical raise 100 million yuan from the market to supplement liquidity?
The actual controller ate "kickbacks" and was named by the regulator
Shengzhao Pharmaceutical was established in 2011, as of the signing date of the prospectus, Chen Yunhua directly held 18.75% of the shares of Shengzhao Pharmaceutical, and controlled 3.13% of the shares of Shengzhao Pharmaceutical through indirect shareholding of Dusheng Investment, Wu Jian, Chen Yunjun, Pan Xiaoling, Liu Zhiyou, Chen Chuangeng, Jiang Chaojun controlled a total of 7.71% of the shares of Shengzhao Pharmaceutical by direct shareholding, and at the same time, the above 7 people signed relevant concerted action agreements, so the above 7 people are the actual controllers of Shengzhao Pharmaceutical.
Titanium Media APP noticed that Chen Yunjun, one of the actual controllers of Shengzhao Drug, "kept moving". It is reported that from 2017 to 2020, Shengzhao Pharmaceutical's subsidiaries Wanhui Biotechnology and Dingzhao Pharmaceutical purchased raw materials and medical devices such as bioactive powders and needle presses from three affiliated companies controlled by Chen Yunjun, including Jiayun Hongkai, Ningbo Luoheng and Ceqi International, with a purchase amount of 37.806 million yuan.
It should be noted that the terminal purchase value of the above-mentioned goods was 4.4945 million yuan, and the difference between the two was 33.3115 million yuan, which was finally transferred into the bank card account controlled by Chen Yunjun and others. This can't help but make people wonder, is Chen Yunjun taking "kickbacks" through Shengzhao Drugs?
In April 2022, Shengzhao Pharmaceutical disclosed the above-mentioned transactions, and in May of the same year, the National Equities Exchange and Quotations Company took self-regulatory measures of verbal warning to the company and its chairman Chen Yunhua (one of the actual controllers of Shengzhao Pharmaceutical, Chen Yunjun's brother) for failing to perform the review procedures and information disclosure obligations of the above-mentioned related party transactions in a timely manner from 2017 to 2019. In June 2022, Chen Yunjun returned a total of 40.0433 million yuan in principal and interest of the above-mentioned capital occupation. In other words, the above-mentioned transaction was discovered two years after it occurred, and if it was not discovered, would this be regarded as a transfer of benefits?
It can also be seen from the above situation that the internal control system of Shengzhao Pharmaceutical is extremely lax.
In particular, it should be noted that the reason why Chen Yunjun has the phenomenon of "kickbacks" may be related to his debts. It is reported that Chen Yunjun's external liabilities are about 124 million yuan, of which 51.3 million yuan is a loan from the internal personnel of Shengzhao Pharmaceutical, of which the loans from other actual controllers of Shengzhao Pharmaceutical are as follows: Chen Yunhua, Wu Jian, Liu Zhiyou, Jiang Chaojun loan funds of 12.7 million yuan, 6 million yuan, 3.86 million yuan, 1.8 million yuan, and Wu Jian 21.8 million yuan.
Perhaps because of too much debt pressure, in May 2023, Chen Yunjun transferred 4,301,600 shares of Shengzhao Pharmaceutical to Jinqiao Fund, Yaokang Private Equity Fund (Hangzhou) Co., Ltd. - Yaokang Material Preferred No. 3 Private Securities Investment Fund, Luo Huajie, Tang Zhijun, etc. at a price of 19.41 yuan per share through after-hours block trading, with a total transaction amount of 83.4941 million yuan.
A month later, in June 2023, the application draft submitted by Shengzhao Pharmaceutical was accepted by the Beijing Stock Exchange.
Surprisingly, the disclosure time of Shengzhao Pharmaceutical's prospectus is June 30, 2023, and searching for the above relevant information in its declaration draft, the above-mentioned equity transfer information cannot be found. Why is such a major equity transfer event not disclosed in the declaration draft? (This article was first published in the Titanium Media APP, author|Deng Haotian)