Yangtze River Business Daily News ● Yangtze River Business Daily reporter Xu Jia
Jingsheng Electromechanical(300316. SZ), a holding subsidiary of Zhejiang Meijing New Materials Co., Ltd. (hereinafter referred to as "Meijing New Materials"), is still queuing for an IPO on the Growth Enterprise Market.
A few days ago, Meijing New Materials updated its prospectus. Driven by the continuous increase in photovoltaic installed capacity, the net profit attributable to the owners of the parent company (hereinafter referred to as the "net profit") will be 1.778 billion yuan in 2023, an increase of more than 100 times compared with 2021.
Behind the rapid expansion of business scale, Meijing New Material's dependence on large customers is also increasing. In 2023, the proportion of sales revenue from the top five customers of Meijing New Materials will exceed 80% for the first time, reaching 82.24%, of which the proportion of revenue from TCL Zhonghuan, the largest customer, will increase to 41.87%.
Not only that, with the rapid growth of revenue scale, from 2021 to 2023, the R&D expense ratio of Meijing New Materials will be 5.1%, 3.62%, and 2.27% respectively, declining for two consecutive years.
The Yangtze River Business Daily reporter also noticed that based on the rapid growth of performance, before queuing up for IPO, Meijing New Materials made a surprise dividend distribution. According to the prospectus, at the end of June 2023, the company decided to distribute cash dividends of 90 million yuan, which is also the first time that Meijing New Materials has implemented dividends in the past three years. The biggest beneficiary of this dividend is its controlling shareholder Jingsheng Electromechanical, which can directly receive a cash dividend of 52.056 million yuan.
The net profit from selling quartz crucibles has increased by 100 times in two years
As a holding subsidiary of Jingsheng Electromechanical, Meijing New Materials has been queuing up for the GEM IPO for more than half a year.
According to the data, Meijing New Materials was initiated and established by Jingsheng Electromechanical in 2017. In October 2021, due to the completion of the performance appraisal and the successful development of quartz crucible products for 8-12 inch semiconductor monocrystalline silicon rods, Jingsheng Electromechanical implemented equity incentives to the core management team of Meijing New Materials, that is, Hangzhou Yongsheng transferred 34% of the equity of Meijing Co., Ltd. (the predecessor of Meijing New Materials) held by Jingsheng Electromechanical.
In June 2022, Hangzhou Ruitong and Hangzhou Laitong, employee shareholding platforms composed of the core technology, business and management personnel of Jingsheng Electromechanical and Meijing Co., Ltd., increased the capital of Meijing Co., Ltd. A month later, Meijing Co., Ltd. increased its capital again and introduced Hainan Tianchen, an external shareholder. In March 2023, Meijing Co., Ltd. completed the shareholding system restructuring. In September of the same year, the IPO of Meijing New Materials GEM was accepted by the Shenzhen Stock Exchange, and the following month, the Shenzhen Stock Exchange issued the first round of review inquiry letters.
However, half a year later, Meijing New Materials has not yet announced its reply to the first round of inquiry letters. But recently, the company updated its prospectus for the first time.
Since its establishment, Meijing New Materials has been mainly engaged in the R&D and production of quartz crucibles, which are important consumables that must be used in the process of monocrystalline silicon rod growth in the semiconductor and photovoltaic fields. In 2023, the revenue of photovoltaic quartz crucible and semiconductor quartz crucible of Meijing New Material will account for 97.59% and 2.41% respectively.
In recent years, with the continuous increase in photovoltaic installations, the upstream consumables market has been greatly expanded, and the business performance of Meijing New Materials, which has not been established for a long time, has skyrocketed.
According to the prospectus, from 2021 to 2023 (hereinafter referred to as the reporting period), Meijing New Materials achieved operating income of 171 million yuan, 1.073 billion yuan and 3.671 billion yuan respectively, net profit of 15.2114 million yuan, 301 million yuan and 1.778 billion yuan, and non-net profit of 15.094 million yuan, 335 million yuan and 1.67 billion yuan. In the past two years, the overall increase in net profit and non-net profit of Meijing New Materials was 115.89 times and 109.66 times respectively, expanding more than 100 times.
During the above-mentioned reporting period, the average sales price of Meijing New Material's quartz crucible products increased from 3,500 yuan/piece to 23,000 yuan/piece, and the gross profit margin of the main business increased from 25.54% to 61.44%.
However, Meijing New Materials also suggested that there is a risk that the performance level of high growth and high gross profit will not be sustainable. At present, the company's main business income comes from quartz crucible products, and the product structure is relatively single, if there is no new performance growth point, once the market fluctuates, the performance of Meijing New Materials will also be affected.
Surprise dividends, Jingsheng Electromechanical received 52.05 million
Behind the rapid expansion of business scale, Meijing New Material's dependence on large customers is also increasing.
According to the prospectus, from 2021 to 2023, the sales revenue of Meijing New Materials from the top five customers accounted for 78.60%, 79.02%, and 82.24% of the main business income respectively, and exceeded 80% for the first time in 2023.
Among the main customers of Meijing New Materials, TCL Zhonghuan's revenue accounted for 29.33%, 32.74% and 41.87% respectively during the reporting period. Among them, in 2022 and 2023, TCL Zhonghuan will be the company's largest customer, and the proportion of revenue will continue to increase.
In addition, in 2023, JinkoSolar, Hongyuan New Materials, Trina Solar, and Canadian Solar are also the top five customers of Meijing New Materials, accounting for 19.85%, 7.33%, 6.86%, and 6.34% of revenue, respectively.
The Yangtze River Business Daily reporter noted that as the controlling shareholder of Meijing New Materials, Jingsheng Electromechanical currently holds 5.88% of the shares of Zhonghuan Leading, which is a company in the TCL Zhonghuan system.
It is worth noting that, based on the rapid growth of performance, before queuing up for IPO, Meijing New Materials made a surprise dividend distribution. According to the prospectus, at the end of June 2023, the company decided to distribute cash dividends of 90 million yuan, which is also the first time that Meijing New Materials has implemented dividends in the past three years.
Due to the seldom introduction of external shareholders, the biggest beneficiary of Meijing New Material's dividend is its controlling shareholder Jingsheng Electromechanical. At present, Jingsheng Electromechanical directly holds 57.84% of the shares of Meijing New Materials, and Cao Jianwei and Qiu Minxiu, as the actual controllers of Jingsheng Electromechanical Co., Ltd., directly and indirectly control 53.03% of the voting rights of Jingsheng Electromechanical Co., Ltd., and control 53.67% of the voting rights of Jingsheng Electromechanical Co., Ltd. together with the persons acting in concert with them, and the two of them control 62.81% of the shares and corresponding voting rights of Meijing New Materials, and are the joint actual controllers of Meijing New Materials.
Based on this rough calculation, the above-mentioned dividends of Meijing New Materials, Jingsheng Electromechanical can directly receive cash dividends of 52.056 million yuan. According to the annual report, in 2023, Jingsheng Electromechanical will achieve operating income of 17.983 billion yuan, a year-on-year increase of 69.04%, and net profit and non-net profit will be 4.558 billion yuan and 4.375 billion yuan respectively, a year-on-year increase of 55.85% and 59.64%.
According to the plan, Meijing New Materials plans to issue no more than 40 million new shares and raise a total of no more than 1.5 billion yuan, which will be invested in the semiconductor quartz crucible industrial park, the R&D center construction project, the Ningxia Xinjing quartz crucible expansion project, and the replenishment of working capital.
However, it should be noted that with the rapid growth of revenue scale, the R&D expense rate of Meijing New Materials has declined significantly. From 2021 to 2023, the company's R&D expenses will be 8.7407 million yuan, 38.8793 million yuan, and 83.2729 million yuan respectively, and the R&D expense rates will be 5.1%, 3.62%, and 2.27% respectively. In the past three years, the cumulative R&D investment of Meijing New Materials accounted for 2.66% of the cumulative operating income.