Source | Times Business School
Author | Chen Che
Edit | Sun Yiming
Judging from the current IPO environment, passing the meeting does not mean that it can be successfully registered. There are also cases where it has not been issued and listed after successful registration.
Fujian Qiaolong Emergency Equipment Co., Ltd. (hereinafter referred to as "Qiaolong Emergency") passed the meeting on September 30, 2022 and plans to land on the GEM, and then successfully registered on June 8, 2023. But 11 months have passed, and Qiaolong Emergency has not yet been issued and listed.
Times Business School research found that Qiaolong Emergency was found in two spot checks in 2018 and 2019, and received the "Order to Rectify Instruction within a Time Limit" twice. In addition, the actual controller borrowed the capital contribution from the company after making a capital contribution, which was repaid after many years, and the Shenzhen Stock Exchange questioned whether it constituted a withdrawal of capital contribution or false capital contribution.
In terms of performance, Qiaolong's emergency response was not satisfactory. During the reporting period (2019 to the first quarter of 2023), its revenue and net profit in 2020 fell by 20.13% and 34.46% year-on-year respectively; In the first quarter of 2023, its net profit was -746,700 yuan, the first loss in the reporting period, and the net profit fell 104.69% year-on-year. In this regard, the Shenzhen Stock Exchange requires it to explain whether the main products are growing and sustainable.
On April 29, Times Business School sent an emergency letter to Qiaolong to inquire about the problems such as the rectification instruction letter and the decline in performance within a time limit. On May 11, Times Business School called again to inquire, but as of press time, the other party has not replied to the above questions.
The formulated industry standards fill the domestic gap
According to the prospectus, Qiaolong Emergency is the earliest domestic manufacturer of water supply and drainage emergency rescue equipment using hydraulically driven pump technology, and its main products are water supply and drainage emergency rescue equipment.
As of the signing date of the prospectus (May 31, 2023), Qiaolong Emergency has obtained a total of 247 authorized patents, including 35 invention patents.
However, Times Business School found that as a supplier of emergency rescue equipment for water supply and drainage, Qiaolong Emergency was found to have hidden dangers in two spot checks.
Chart 1: Results of the Authority's emergency spot check on Qiaolong
Source: Tianyancha
According to Tianyancha, on September 5, 2018 and February 14, 2019, the Safety Production Supervision and Administration Bureau of Xinluo District, Longyan City, and the Emergency Management Bureau of Xinluo District, Longyan City, respectively conducted spot checks on Qiaolong Emergency, and found that there were hidden dangers in Qiaolong Emergency Response in both spot checks, a total of 13 places, and Qiaolong Emergency was twice issued the "Order to Rectify Instruction within a Time Limit".
The actual controller was questioned by the Shenzhen Stock Exchange for withdrawing capital contributions
In terms of internal control, the actual controller borrowed 9.5 million yuan from Qiaolong to repay the debt, and the loan was repaid many years later.
According to the prospectus, Qiaolong Emergency was formerly known as Fujian Qiaolong Special Purpose Vehicle Co., Ltd. (hereinafter referred to as "Qiaolong Co., Ltd."), which was jointly funded by Lin Zhiguo and Lin Chaowang in 2000. As of May 31, 2023, Lin Zhiguo held 4.55% of the equity of Qiaolong Emergency and was one of the actual controllers of Qiaolong Emergency.
In the early days, Lin Zhiguo borrowed funds from a third party for the establishment of Qiaolong Co., Ltd. and the first capital increase in 2004, of which 5 million yuan was invested at the time of establishment and 5 million yuan was invested in the first capital increase in 2004. In order to pay off the debt, Lin Zhiguo borrowed 9.5 million yuan from Qiaolong Co., Ltd. after making a contribution.
Qiaolong Emergency said in the prospectus: "Due to the instability of the company's early business, in order to avoid idle funds, after the completion of the capital verification procedure, the actual investor Lin Zhiguo lent part of the two capital contributions of 9.5 million yuan to repay the debt, thus forming Lin Zhiguo's debt of 9.5 million yuan to the company." ”
It was not until many years later that Lin Zhiguo fully repaid the loan.
According to the prospectus, between 2000 and 2010, Lin Zhiguo and his family successively paid off such debts to Qiaolong Emergency with cash or non-cash assets. As for what non-cash assets are and whether interest is charged, Qiaolong's emergency prospectus does not have a relevant explanation.
In this regard, the Shenzhen Stock Exchange asked in the first round of inquiry letters whether the nature of Lin Zhiguo's capital contribution and then lending capital from Qiaolong Co., Ltd. constituted a withdrawal of capital contribution or false capital contribution, whether the act complied with the provisions of the Company Law, and whether it constituted a major violation of laws and regulations.
It is worth noting that in January 2022, Lin Zhiguo made an emergency donation of 1.5 million yuan to Qiaolong through bank transfer to consolidate the amount of 1.1886 million yuan in kind in the above-mentioned repayment process. In August 2022, Lin Zhiguo once again made an emergency donation of 1.75 million yuan to Qiaolong through bank transfer to consolidate the "receivables and payables" part of the above-mentioned repayment process of 1.7445 million yuan.
In the first quarter of 2023, it has lost money
From the perspective of market space, the industry in which Qiaolong Emergency is located is relatively subdivided and belongs to the emergency equipment industry. According to the prospectus, from 2022 to 2024, the estimated industry market space will be 1.497 billion yuan, 1.964 billion yuan, and 2.577 billion yuan respectively, and the market capacity is small.
From 2020 to 2022, the revenue of its water supply and drainage emergency rescue equipment accounted for 93.94%, 97.86% and 96.97% respectively.
For enterprises that rely on a single product, downstream demand fluctuations have a greater impact on them. During the reporting period, Qiaolong's performance has declined.
In the latest version of the prospectus (disclosed on May 31, 2023), Qiaolong Emergency also stated that during the reporting period, the company's orders in hand fluctuated due to changes in external objective conditions and other factors, and the amount of orders in hand at the end of the reporting period decreased year-on-year.
According to the prospectus, from 2020 to 2022, Qiaolong's emergency revenue will be 159 million yuan, 370 million yuan and 378 million yuan respectively, with year-on-year growth rates of -20.13%, 133.2% and 2.23% respectively; The net profit was 33 million yuan, 105 million yuan and 106 million yuan respectively, with a year-on-year growth rate of -34.46%, 219.41% and 0.97% respectively.
From the changes in the data, it can be seen that in 2020, Qiaolong's emergency revenue and net profit both declined year-on-year; In 2022, its revenue and net profit will both grow by less than 3% year-on-year.
The prospectus also shows that in the first quarter of 2023, its revenue will be 24 million yuan, a year-on-year decrease of 59.72%; The net profit was -746,700 yuan, a year-on-year decrease of 104.69%, and there was a loss for the first time during the reporting period.
After that, Qiaolong Emergency did not disclose new performance data.
In this regard, in the first round of inquiry letters, the Shenzhen Stock Exchange also raised questions, requiring Qiaolong to urgently explain whether the market space of the subdivided industry is small, and whether the main products have growth and sustainability.
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