This week (April 22~28), 7 companies to be listed in the A-share market terminated the review, all of which withdrew their application materials.
Among them, 3 companies applied for the Shanghai Science and Technology Innovation Board, namely Shanghai Jiangen Pharmaceutical Technology Co., Ltd. (hereinafter referred to as "Jiangen Pharmaceutical"), Changchun Jieyi Automobile Technology Co., Ltd. (hereinafter referred to as "Jieyi Technology"), and Suzhou Great Wall Precision Technology Co., Ltd. (hereinafter referred to as "Great Wall Precision"); Sichuan Zhongbang New Materials Co., Ltd., 1 company applied to the Beijing Stock Exchange, namely Henan Red Oriental Chemical Co., Ltd. (hereinafter referred to as "Red Oriental").
Among these companies, Jieyi Technology, Great Wall Seiko, Ruxing Technology, etc., have a "clearance" dividend phenomenon. The total amount of dividends in two years is close to 780 million yuan, which exceeds the company's net profit in the same period, and the huge dividends have flowed to the actual controller of 100% of the shares; Great Wall Precision is still "liquidated" dividends in the case of high debt; Ruxing Technology is also the sum of the cash dividends in two years exceeding the net profit attributable to the parent company.
In addition, Jiangen Pharmaceutical's second breakthrough on the science and technology innovation board failed. The company's revenue depends on the company's products acquired from abroad in 2016, and its own core technology and R&D capabilities have been questioned by the exchange twice.
A number of companies "liquidate" dividends
This year, the regulator has repeatedly emphasized that it is necessary to strictly investigate and prevent the "clearance" dividend situation before listing, and implement negative list management. Among the companies to be listed that cancelled orders last week, many of them involved "clearance" dividends.
Jieyi Technology is a typical case of "hollowed-out" dividends. The company's two-year dividend amount exceeded the net profit in the same period. The huge dividends have flowed to the actual controllers Zhou Lixin and Wang Chao's mother and son, who directly and indirectly control 100% of the shares of Jieyi Technology.
According to the prospectus, the company will pay cash dividends of 480 million yuan and 298 million yuan in 2021 and 2022 respectively, totaling about 778 million yuan. The net profit in the same period was 333 million yuan and 199 million yuan respectively, totaling about 532 million yuan.
Most of the huge dividend funds come from monetary funds. According to the data, at the end of 2020, the company's monetary funds still had 590 million yuan, but by the end of 2021, this figure had decreased to 82.6923 million yuan, a decrease of 86%. Jieyi Technology also said that the company's monetary funds at the end of 2021 were significantly lower than those at the end of 2020, mainly due to the company's payment of more cash dividends to shareholders that year.
After the "hollowed-out" dividends, Jieyi Technology's debt rose sharply. In 2020, Jieyi Technology did not have short-term borrowings, while at the end of 2021 and 2022, the company's short-term borrowings amounted to 24.469 million yuan and 331 million yuan, respectively. Among them, short-term borrowings increased by nearly 13 times in 2022. At the same time, the company's long-term borrowings at the end of 2022 amounted to 90.0622 million yuan.
Great Wall Seiko still carries out "clearance" dividends in the case of high debt. According to the prospectus, in 2020, 2021 and 2022 1~9 months, Great Wall Precision will pay cash dividends of 45.0007 million yuan, 105 million yuan, and 92.375 million yuan respectively, with a total dividend of 243 million yuan, and the total net profit attributable to the parent company in the same period is 248 million yuan, and the dividend amount is equivalent to the net profit attributable to the parent company.
The company has a lot of short-term debt during the reporting period (2019~2021 and January~September 2022), and there is a short-term debt repayment risk. According to the prospectus, at the end of 2020~2021 and September 30, 2022, Great Wall Seiko's short-term borrowings were 117 million yuan, 136 million yuan, and 71 million yuan, and the notes payable were 138 million yuan, 265 million yuan, and 215 million yuan respectively.
According to the company, its current ratios are 1.34, 1.29, 1.20, 1.57, and quick ratios are 0.94, 0.97, 0.83, and 1.13, respectively, and the short-term solvency indicator is low.
Ruxing Technology also has a two-year cash dividend amount exceeding the net profit attributable to the parent company. In 2020 and 2021, the company paid cash dividends of 75 million yuan and 400 million yuan respectively, with a cumulative total of 475 million yuan, and the net profit attributable to the parent company in the same period was 225 million yuan and 223 million yuan respectively, with a cumulative total of about 448 million yuan.
After the large dividends, Ruxing Technology plans to raise 1.5 billion yuan, of which 418 million yuan will be used to supplement liquidity, accounting for nearly 30% of the total funds raised. The company predicts that the working capital gap will reach 497 million yuan in 2023~2025.
In addition, Red Oriental was questioned about the reasonableness of replenishing liquidity in the context of large dividends. According to the application documents, since 2020, Red Oriental has paid two cash dividends, with a total amount of 820 million yuan, and mainly to the actual controller and the enterprises controlled by it. As of the end of March 2023, the company's trading financial assets amounted to 412 million yuan. The company plans to use 200 million yuan to raise funds to supplement liquidity.
In this regard, the Beijing Stock Exchange requires the company to explain the necessity and rationality of supplementing liquidity and capital scale in combination with the situation of book money funds at the end of the reporting period, the dividends of each period of the reporting period, the expenditure of large wealth management products, the production and operation plan, working capital needs and the calculation process and basis of capital needs.
Jiangen Pharmaceutical failed to break through the Science and Technology Innovation Board for the second time
After four rounds of inquiries, Jiangen Pharmaceutical originally planned to hold a meeting on December 18, 2020, but on the eve of the meeting, the company and the sponsor withdrew the application materials, and the IPO review was terminated.
In 2022, Jiangen Pharmaceutical applied for the Science and Technology Innovation Board again, and the IPO application was accepted on November 24 of that year, and entered the inquiry session on December 21 of that year, but there was no new progress since then, until it was announced that the IPO review was terminated on April 22 this year.
Jiangen Pharmaceutical is a medical device product and service provider in the field of organ transplantation. In 2016, the company completed the acquisition of LSI, a U.S. organ transplantation company, whose main products are the lifePort kidney perfusion chamber and its supporting disposable kidney perfusion consumables and organ preservation solution products, as well as the LifePort liver perfusion chamber and its supporting consumables that have completed clinical trials and are in the FDA (Food and Drug Administration) registration stage.
The company's revenue is mainly dependent on the acquisition of this single product. According to the prospectus, in 2019~2021 and the first quarter of 2022, the sales revenue of kidney perfusion consumables of Jiangen Pharmaceutical accounted for 71.54%, 73.53%, 75.87% and 83.98% of the main business income respectively, which is the main source of main business income.
In the second inquiry, the exchange also asked whether Jiangen Pharmaceutical has the ability to continue independent research and development. Since the acquisition of LSI's organ preservation and repair product line, other technical improvements have not yet been applied in practice, except for the upgrading of kidney perfusion consumables and the improvement of the production process of preservation and perfusate.
In addition, the company's net profit attributable to the parent company has been declining year by year. From 2019 to the first quarter of 2022, the operating income of Jiangen Medical was 397 million yuan, 421 million yuan, 480 million yuan and 114 million yuan respectively, and the net profit attributable to the parent company was 97.1484 million yuan, 50.0992 million yuan, 49.963 million yuan and 12.1969 million yuan respectively.
(This article is from Yicai)