Marco Polo's "three major questions": Evergrande's "unresolved", hidden affiliations, and questionable fundraising motives

Expedition to see finance

2024-05-15 17:47Posted on the official account of Chongqing Zhengtan Finance

Huang Jianping, who was born in 1963, devoted his life to building a ceramic empire: Marco Polo.

On May 16, Marco Polo Holding Co., Ltd. (hereinafter referred to as "Marco Polo") will usher in the big test. This is also the first company to attend the IPO listing committee meeting after a pause of several months in 2024.

According to the official website of the Shenzhen Stock Exchange, Marco Polo plans to raise 3.158 billion yuan on the main board of Shenzhen, and its listing application will be accepted on March 2, 2023. In June of the same year, the first inquiry was ushered in, and then the implementation letter of the audit center was quickly received, so as to enter the stage of waiting for the meeting.

After conducting research on Marco Polo and its actual controller Huang Jianping, "Morse IPO" found that the companies controlled or held shares by Huang Jianping and Evergrande-related companies jointly established a number of companies, and almost all of these companies are currently mired in debt disputes, and related litigation cases are still ongoing, but Marco Polo's listing documents did not disclose this.

At the same time, Morse IPO also found that among Marco Polo's customers, suppliers and subcontractors, there were a large number of companies with secret affiliations with Marco Polo and the actual controller, and Marco Polo did not explain the reasons and reasonableness of the co-investment company and whether there was a transfer of interests.

In the end, Marco Polo has already "hoarded" a large amount of land for the construction of fund-raising projects, but related projects seem to have been in the stage of "waiting for rice to be cooked", and it is obvious that Marco Polo is not short of money for construction, and its reporting period also paid dividends of 820 million yuan. Marco Polo's own capacity utilization rate has been declining year after year, is it really necessary to expand production? Or is it fundraising for the sake of "fundraising"?

01 Evergrande "is not in love"?

When Evergrande is in full swing, many companies have become its strategic partners, including Evergrande's suppliers.

Huang Jianping, who has created the first brand of Chinese ceramics and is good at direct sales, also once enjoyed the benefits of Evergrande. Evergrande, the "No. 1 real estate company in the universe", became Marco Polo's second largest customer. In 2017, Marco Polo Tiles also became the only annual "excellent strategic partner" of Evergrande Group in the ceramic tile industry.

However, the relationship between Marco Polo and his actual controller Huang Jianping and Evergrande is not only a business relationship, the companies controlled or held shares by Huang Jianping and Evergrande-related companies have jointly established a number of companies, and almost all of these companies they established together are currently facing major debt disputes, and many litigation and enforcement cases are still ongoing.

On the eve of becoming Evergrande's 2017 "Excellent Strategic Partner", Huang Jianping established an unusual "secret" connection with Evergrande through his subsidiaries.

On August 23, 2016, Guangdong Weitou Holdings Co., Ltd. (hereinafter referred to as Guangdong Weitou) was established, with Huang Jianping as the legal representative and Dongguan Zhongqiang Industrial Investment Partnership (Limited Partnership) and Huang Jianping as shareholders, holding 99% and 1% of the shares respectively. Penetrating Zhongqiang Industry, the shareholders behind it appeared Huang Jianping, Xie Yuezeng, Deng Jianhua and Liu Huangqiu, these four people served as directors, supervisors and senior executives in Marco Polo.

On October 28, 2016, Chongqing Zhaozhuojia Enterprise Management Co., Ltd. (hereinafter referred to as Zhaozhuojia) with a registered capital of 750 million yuan was established. Through the company's initial shareholders, you can see the figure of Evergrande Life. Three days later, Chongqing Zhaoshui Enterprise Management Co., Ltd., with a registered capital of 1.53 billion yuan, was also established, and the shareholders were Evergrande Real Estate Group Chongqing Co., Ltd. and Zhaozhuojia, holding 50.98% and 49.02% of the shares respectively. A year ago, in November, Evergrande Real Estate acquired Sino-Singapore Great Eastern Life Insurance Co., Ltd., and Evergrande Real Estate received a steady stream of blood transfusions.

At this time, the two companies in Chongqing could not see the trace of Huang Jianping's company.

"Morse IPO" noted that Guangdong Weitou, controlled by Huang Jianping, has invested in 5 companies. Tianyancha shows that Guangdong Weitou holds 0.4807% of the equity of Evergrande Real Estate through Guangdong Weimei Pearl Investment Co., Ltd. Guangdong Weitou also invested in Foshan Yuezhu Industrial Investment Co., Ltd. (hereinafter referred to as Yuezhu Investment, formerly known as Foshan New Pearl Industrial Investment Co., Ltd.), whose equity has been frozen and has become a dishonest person subject to execution, and there are many lawsuits at the same time.

Another year later, on September 18, 2017, Foshan Yuezhu Industrial Investment Co., Ltd. (Yuezhu Investment, formerly known as Foshan New Pearl Industrial Investment Co., Ltd.) was registered and established with a registered capital of 53.34 million yuan. So far, its largest shareholder is still Guangdong Weitou, which is actually controlled by Huang Jianping, holding 46.8691% of the shares (50% of the shares held at the time of establishment). According to the prospectus, Huang Jianping was the vice chairman of Yuezhu Investment and stepped down in January 2022.

From this point on, the contact between Evergrande and Huang Jianping, the actual controller of Marco Polo, will be slowly unfolded. Over the years, Yuezhu Investment has invested in a total of 11 companies (including two companies that have withdrawn their shares), many of which have direct or indirect equity ties with Evergrande companies.

Specifically, Zhaoqing Hengjin Real Estate Co., Ltd. (hereinafter referred to as Hengjin Real Estate) was established on December 19, 2017, with Yuezhu Investment and Evergrande Real Estate Group Guangdong Real Estate Development Co., Ltd. as shareholders, with a registered capital of 10 million yuan. According to the company's investigation, the company has been involved in many litigation cases and has been listed as a restricted high-consumption enterprise. On May 6, 2024, Hengjin Real Estate also added a new case of execution, and the amount of the subject matter exceeded 175 million yuan. In addition, the company has also been involved in a number of bill dispute cases.

Hengjin Real Estate, registered in Evergrande Yujing Garden, Jinfu Avenue, Jinli Town, Gaoyao District, Zhaoqing City, plays more than just a local real estate development role, and in July 2019, it also became the sole shareholder of Chongqing Zhaozhuojia. Previously, after a series of ingenious operations, Chongqing Zhaozhuojia, a shareholder with Evergrande Life, has quietly retired.

Yuezhu Investment also participated in the investment in Zhanjiang Hengyang Real Estate Development Co., Ltd. The company was registered on December 18, 2017, with a registered capital of 71.007 million yuan, and is held by Evergrande Internet Information Service (Shenzhen) Co., Ltd., Evergrande Real Estate Group Guangdong Real Estate Co., Ltd., and Yuezhu Investment 51%, 41.8176%, and 7.1824% respectively. The company is a dishonest company publicized by the Supreme People's Court. The cases involved cover disputes over commercial housing pre-sale contracts, housing sales contracts and bills.

Huzhou Yue Real Estate Co., Ltd. was established on December 11, 2017, and its shareholders are Evergrande Real Estate Group Shanghai Shengjian Real Estate Co., Ltd. and Yuezhu Investment. The latest enforcement case of Yue Resettlement Industry occurred on May 13, 2024, and the subject matter of its execution was nearly 236 million yuan.

Taiyuan Delusheng Real Estate Development Co., Ltd., established on December 9, 2016, the company's shareholders are Taiyuan Evergrande Ji'an Real Estate Development Co., Ltd. and Yuezhu Investment, holding 80.01% and 19.99% of the shares respectively, and it is currently involved in three lawsuits, including bill disputes.

Yuezhu Investment also invested in Tongling Yuecheng Real Estate Co., Ltd., which was established on January 9, 2018. In July 2020, Yuezhu Investment, which holds 51% of the equity of Tongling Yuecheng Real Estate Co., Ltd., transferred all the equity to Evergrande Real Estate Group Hefei Co., Ltd. At present, Tongling Yuecheng Real Estate Co., Ltd. is also involved in many lawsuits, being limited in height and freezing equity, and the lawsuit also involves a bill dispute.

Nanchang Tuyun Real Estate Co., Ltd. (hereinafter referred to as Nanchang Tuyun) was established on January 29, 2018 with a registered capital of 10 million yuan. At the time of establishment, Yuezhu Investment and Evergrande Real Estate Group (Jiangxi) Co., Ltd. subscribed for a capital contribution of 5 million yuan respectively, holding 50% of the shares each. On March 6, 2019, Yuezhu Investment completely withdrew. However, after Yuezhu Investment withdrew, it was also caught in a lawsuit. In a civil case with case number (2020) Gan 11 Min Chu No. 724, the plaintiffs were Jiangxi Sanqing Trip Investment Co., Ltd. and Jiangxi Sanqing Honghu Investment Co., Ltd., and the defendants were Foshan New Pearl Industrial Investment Co., Ltd. (i.e., Yuezhu Investment, which was subsequently renamed) and Nanchang Tuyun.

On May 19, 2016, Guangzhou Bopi Enterprise Management Consulting Co., Ltd. (hereinafter referred to as Guangzhou Bopi) was registered. At present, its shareholders are Shenzhen Qijin Investment Co., Ltd. (hereinafter referred to as Shenzhen Qijin) and Evergrande Real Estate Pearl River Delta Real Estate Development Co., Ltd., holding 51% and 49% of the shares respectively. Shenzhen Qijin was established on March 3, 2021 and is 100% owned by Yuezhu Investment. On June 28, 2021, it became the largest shareholder of Guangzhou Bopi. At present, the equity of 233,689,400 yuan held by Shenzhen Qi Jintou has been frozen. Why did it get involved with Evergrande when Evergrande was already thunderous in 2021, there may be more hidden secrets.

An even more strange thing also happened to Jiangsu Jiahexin Industrial Co., Ltd. (hereinafter referred to as Jiahexin), which is 99% owned by Yuezhu Investment. This enterprise is a typical case of Huang Jianping's company's participation in the Evergrande system.

Jiakai City, which has been delisted, used to be a part of Xu Jiayin's capital layout. In June 2016, the ambitious Xu Jiayin manipulated Evergrande Real Estate to become the controlling shareholder of Jiakai City, holding 52.78% of the shares.

Jiahexin was established in April 2009 with a registered capital of 2000000 yuan. Jiahexin, whose business performance was poor, was sold by Jiakai City in 2019, but Yuezhu Investment came in a hurry. In the end, the "Crazy Stone" landed, and the listing price of Jiahexin was only 150 million yuan, but the transaction price was as high as 990 million yuan.

For people in the industry, they can't understand the magic operation of "sending money" of Yuezhu Investment at that time. After all, Genor Shin was largely out of operation from 2018 to 2019. Its revenue in 2018 was only 5 yuan, but its net profit was a loss of 220 million yuan. In 2019, when the sale was sold, the revenue in the first three quarters was only 765,000 yuan, the net profit loss was 35.33 million yuan, and the asset-liability ratio was as high as 99% in the same period.

At that time, the situation of the transferee Yuezhu Investment was not good. At the end of 2018, Yuezhu Investment's total assets were 3.09 billion, but its net assets were only 55 million. Could it be that after winning the honorary title of "Outstanding Strategic Partner" of the golden Evergrande in 2017, Huang Jianping had to "return the flesh to his mother"?

Now, Jia Hexin is even more miserable. According to Tianyancha, there are dozens of risks, of which their own risks alone include being listed by the court as a restricted high-consumption enterprise, 20 pieces of case filing information, etc.

According to the prospectus, the thunderous Evergrande is still Marco Polo's second largest customer. In 2023, Marco Polo's sales revenue to Evergrande will be nearly 400 million. Marco Polo's actual controller Huang Jianping's Yuezhu Investment and other companies have been steadily increasing in related cases recently. The secret "marriage" in the past was exchanged for constant sorrow.

The above-mentioned companies have often been listed as judgment debtors or even dishonest judgment debtors, and are facing follow-up risks such as bankruptcy liquidation. Article 35 of the Enterprise Bankruptcy Law stipulates that if the debtor's investor has not fully fulfilled its capital contribution obligation after the people's court accepts the bankruptcy application, the administrator shall require the investor to pay the subscribed capital contribution, regardless of the time limit for capital contribution. The criminal liability of a major shareholder who makes a false capital contribution may be investigated for criminal liability because of his insufficient capital contribution, which constitutes the crime of false capital contribution or evasion of capital contribution. Article 159 of the Criminal Law provides that if a promoter or shareholder of a company violates the provisions of the Company Law by failing to deliver money, goods or transfer property rights, or making false capital contributions, or withdrawing their capital contributions after the establishment of the company, and the amount is huge, the consequences are serious, or there are other serious circumstances, he shall be sentenced to fixed-term imprisonment of not more than five years or short-term detention, and/or shall be fined not less than 2% but not more than 10% of the amount of false capital contributions or the amount of capital contributions withdrawn.

According to the information publicly disclosed by Marco Polo, Huang Jianping, the actual controller, has not yet confirmed in writing whether he has fulfilled his obligations under the Company Law in the process of investing in Evergrande-related companies during his tenure as a director or senior executive of a related company related to Evergrande.

At present, the relevant state departments are conducting an in-depth investigation into the problems of Xu Jiayin and Evergrande. After the lid is completely lifted, will it further affect the above-mentioned companies? Has Huang Jianping himself participated in the actual operation and management of related companies, and will he bear the corresponding responsibilities? Is it possible that it will be recovered by the relevant creditors in the future, which will cause trouble for Marco Polo and its actual controller?

After these hidden matters are made public, should the sponsor conduct a potential debt risk investigation for the above-mentioned companies involved in Evergrande in which Huang Jianping indirectly participates in or controls shares?

Previously, at the time of the IPO of Guangzhou TOPSFL, the Shenzhen Stock Exchange issued an inquiry letter on the risks brought by the actual controller's foreign investment. The issuer is required to explain whether it is currently at risk of being applied for bankruptcy liquidation due to poor operation based on its business conditions, equity freezing matters, litigation matters, etc.; Whether the actual controller and the enterprise in which it invests abroad have undisclosed external debts, guarantees or disputes, etc.

02 Hidden "Corner"

In addition to the existence of many co-investment behaviors between the actual controller and Evergrande-related companies, Morse IPO also found that there may be quasi-related relationships between Marco Polo and a number of suppliers, customers and subcontractors (referring to the related relationships that are not clearly recognized by laws, regulations and regulatory authorities, but there are other relationships that are prone to interest exchange, such as minority shareholders of the issuer, employees or former employees of the issuer, ordinary relatives or friends of the actual controller of the issuer, and other entities that have related relationships with the issuer).

Because such transactions are not related-party transactions in accordance with relevant laws and regulations, the level of detail of their disclosure is lower than that of related-party transactions, and there is no need to perform special voting procedures, but because these entities have a relatively close relationship with the issuer and its related parties, the question of whether such transactions are genuine and whether there is benefit transfer has also attracted regulatory attention.

Marco Polo said in the inquiry letter that during the reporting period, among the top five suppliers of the company's mud and sand, color accessories, packaging, energy, etc., except for the enterprises controlled by the actual controller, Foshan Baile Tao Chemical Co., Ltd. (hereinafter referred to as Baile Tao Chemical) and its affiliates, Foshan Huizheng Ceramic Raw Materials Co., Ltd. (hereinafter referred to as Huizheng Ceramics) and its related parties are enterprises controlled by the close relatives of the actual controller. Fengcheng PowerChina Bridge New Energy Co., Ltd. (hereinafter referred to as PowerChina Bridge) is a shareholding company of the issuer, and the other major suppliers have no relationship with the issuer, controlling shareholders, actual controllers and their close relatives, directors, supervisors, senior executives and their close relatives.

It is reported that among the top five suppliers of chemical color accessories in Marco Polo, Huizheng Ceramics is a company actually controlled by Huang Shaohui, Huang Jianping's sister. Huizheng Ceramics is also one of the top five suppliers of accounts payable to Marco Polo. Among the top five power suppliers, one of the shareholders of the supplier, PowerChina Bridge, is Jiangxi Weimei Ceramics Co., Ltd. (5%), which is a wholly-owned subsidiary of Marco Polo. The shareholders of the supplier, Baile Tao Chemical, are Tan Huichan and Tan Guopeng, who are the siblings of Huang Jianping's spouse.

However, "Morse IPO" found that in addition to the above-mentioned superficial related relationships, Marco Polo and the relevant related parties of the actual controller have jointly invested in some enterprises with many partners in the ceramic industry, and a large number of Marco Polo's suppliers and customers are controlled or invested in by these partners.

Specifically, among the top five mud and sand suppliers disclosed by Marco Polo, Jiangxi Xingmei Industry and Trade Co., Ltd., controlled by Huang Jianping, and Yichun Liuhe Logistics Co., Ltd., a supplier, jointly invested in Fengcheng Hemei Multimodal Transport Co., Ltd.

Xiong Xiaohong and Wang Baishan, shareholders of the supplier Jiangxi Maohua Industrial Co., Ltd., have deep ties with Huang Zhimin. Xiong Xiaohong shares in Huang Zhimin's Jiangxi Lushan Tianmu Real Estate Development Co., Ltd. and Jiangxi Lushan Tianmu Hot Spring Resort Co., Ltd., and Wang Baishan serves as a supervisor of Tianmu Real Estate. Huang Zhimin and Deng Jianhua (Chairman and Shareholder of the Board of Supervisors of Marco Polo) jointly invested in Zhuhai Hengqin Yuekun Enterprise Management Partnership (Limited Partnership), and Hengqin Yuekun participated in Xinghui Co., Ltd. (300464. SZ).

Zhu Yuanxi, the actual controller of the supplier Jiangxi Ketao New Materials Co., Ltd., is an executive of the Dow Technical Ceramics Division, and Huang Jianping through his actual control of Sitong Co., Ltd. (603838. SH) and Dow Technology jointly invested in Guangzhou Private Investment Co., Ltd.

Among Marco Polo's top five suppliers of chemical color accessories, He Weigong, the historical shareholder of Foshan Jiaohong Glaze Technology Co., Ltd. (who withdrew in July 2021), also has a connection with He Xinming, chairman of Dongpeng Holdings, and the two have appeared together in Foshan Meishang United Investment Co., Ltd., and He Xinming, Huang Jianping, Jia Feng, the actual controller of Huanai Home Furnishing, and others jointly invested and served as a director of Marco Polo's related party, Zhongtao Investment and Development Co., Ltd. (hereinafter referred to as Zhongtao Development). Huanai Home Furnishing is also Marco Polo's largest customer.

Among the top five suppliers of packaging materials, Zhang Qingxiang, the controlling shareholder of Dongguan Zhenxing Paper Products Co., Ltd. (hereinafter referred to as Zhenxing Paper Products), is Zhang Yuqi's son, and the address of the company is the same as that of Dongguan Jiamei Decoration Co., Ltd., an affiliate of Marco Polo.

Historically, Zhang Yuqi was a minority shareholder of Marco Polo's subsidiaries Jiangxi Hemei, Guangdong Jiamei and Industrial Park, and Marco Polo purchased a minority stake in the subsidiary held by Zhang Yuqi. Zhang Yuqi also invested 4.45% of Marco Polo's equity through Dongguan Guoxuan Investment Consulting Co., Ltd. (hereinafter referred to as "Guoxuan Investment"), which happened to be less than 5% of the shareholding ratio, thus circumventing the criteria for identifying related parties, but this does not rule out the suspicion that Zhenxing Paper Products is a potential related party of Marco Polo.

In 2021, 2022 and 2023, Marco Polo purchased 146.2915 million yuan, 104.9887 million yuan and 69.5609 million yuan of cartons from Zhenxing Paper Products respectively, accounting for 28.87%, 25.25% and 19.92% of the purchase value. Zhenxing Paper ranked first, first and second among Marco Polo's packaging material suppliers.

Among Marco Polo's top five accounts payable suppliers, Zhenxing Paper ranked first in 2021, 2022 and 2023, with accounts payable amounting to 46.202 million yuan, 41.1329 million yuan and 29.3441 million yuan respectively, accounting for 5.35%, 4.51% and 3.25% of Marco Polo's accounts payable.

In terms of outsourcing manufacturers, Wang Yanqing, director of Guangxi New Goldman Sachs Thin Building Ceramics Co., Ltd., is also the chairman of Huida Sanitary Ware, which invested in Marco Polo's related party Zhongtao Development; Wang Wenpin, director of Jinjiang Guoxing Ceramic Building Materials Co., Ltd., is also a director of Fujian Jinshang Investment Co., Ltd., and Liang Zhibin, director of Zhongwei Investment Group Co., Ltd., a related party of Marco Polo, and Shi Nengkeng, the actual controller of Fujian Jinshang Investment Co., Ltd., jointly invested in China Basketball Federation (Beijing) Sports Co., Ltd.; Luo Lixia, the actual controller of Guangdong Huatao Building Materials Co., Ltd., and Ye Delin, the actual controller of New Pearl Group, jointly invested in Foshan Ceramic Industry Alliance Investment Co., Ltd., and Ye Delin invested in Guangdong Lijia Real Estate Co., Ltd. (cancelled in March 2021), a former related party of Marco Polo; Liu Lingkong, a shareholder of Guangdong Tianbi Ceramics Co., Ltd., and Zhang Qikang, a director of Mona Lisa, jointly established Foshan Changcheng Ceramics Co., Ltd., and Zhang Qikang invested in Foshan Taolian Technology Development Co., Ltd., a related party of Marco Polo. 

In terms of customers, Huanai Home Furnishing is Marco Polo's largest customer, and its actual controller, Jia Feng, has a close relationship with Huang Jianhua. Jia Feng and Huang Jianhua jointly invested in China Ceramics Development and Beijing Sino-foreign Innovation Culture Media Center (Limited Partnership).

In addition, Tan Guopeng, the controlling shareholder of the client, Foshan Xin Zhuo Zhuo Building Materials Co., Ltd., is the brother of Huang Jianping's spouse. The client, Hainan Lijia Fubang Decoration Materials Co., Ltd. and Deng Jianhua, jointly invested in Ningbo Meishan Bonded Port Area Luxin Yunxiu Investment Management Partnership (Limited Partnership).

It is worth noting that Huanai Lijia Building Materials Co., Ltd., Foshan Xin Zhuo Building Materials Co., Ltd. and Hainan Lijia Fubon Decoration Materials Co., Ltd. are the top five contract liability customers of Marco Polo. Why are these "close" Marco Polo customers willing to pay in advance, and are their payment methods significantly different from those of other "not close" customers?

For transactions between an issuer and its suppliers, customers and subcontractors with whom it has a "quasi-affiliated relationship", the regulator usually needs to pay attention to the reasons, necessity and reasonableness of the issuer's co-investment with multiple customers, suppliers and subcontractors; the reasons for the transaction between the issuer and the customer or supplier with a "quasi-related relationship", and whether the transaction is necessary and reasonable, and whether the transaction price is fair; Whether the issuer and such suppliers and customers have disbursed costs, adjusted income and profits, and whether there are capital exchanges and benefit transfers.

All of these questions need to be further explained by Marco Polo to investors.

03 Is there a mystery in expanding production?

The prospectus disclosed that Marco Polo owned a large amount of industrial land in various places and was a proper "big landowner".

The abundant land provided room for Marco Polo to implement capacity expansion. The prospectus discloses that the raised funds will be invested in six projects, including the construction project of Jiangxi Jiamei Ceramics Co., Ltd. Intelligent Ceramic Home Furnishing Industrial Park (Phase I), which will add 10 million square meters of production capacity, and the project of Guangdong Dongwei New Materials Co., Ltd. will add an annual production capacity of 5.4 million square meters of special high-performance ceramic plates.

Will the new capacity lead to further overcapacity? According to public data, Marco Polo has experienced a continuous decline in capacity utilization for many years, with 92.65% in 2021, 87.33% in 2022, and 86.95% in 2023.

Judging from the forecast information for the first half of 2024 disclosed in the prospectus, Marco Polo's business situation is not optimistic. The company expects to achieve operating income of about 3.55 billion yuan to 3.75 billion yuan in the first half of 2024, a year-on-year decrease of 12.17% to 16.86%; the net profit attributable to the parent company was about 630 million yuan to 710 million yuan, a year-on-year decrease of 8.06% to 8.42%; The net profit attributable to the parent company after deducting non-profits was about 590 million yuan to 670 million yuan, a year-on-year decrease of 5.91% to 17.14%.

While revenue declined and capacity utilization continued to decline, Marco Polo still insisted on raising funds to expand production.

According to the prospectus, the construction project of Jiangxi Jiamei Ceramics Co., Ltd. Intelligent Ceramic Home Furnishing Industrial Park (Phase I) plans to build a single production line with a production capacity of 5 million square meters, a total investment of 674 million yuan, and a planned investment of 674 million yuan to raise funds, with a construction period of 36 months.

However, Morse IPO checked the relevant EIA documents and the project registration form and found that there was a discrepancy between the total investment amount of the project and the prospectus. The EIA document shows that the total investment of the project is 654.8837 million yuan, and the project duration is 24 months. Also in the Jiangxi Provincial Enterprise Record Investment Project Registration Information Form, in addition to the total investment data consistent with the EIA document, the project construction period is shown as 2022-2025, covering an area of 300 acres.

Obviously, there is a discrepancy of nearly 20 million between the total investment amount in the prospectus and the investment amount shown on the legally valid EIA document and the project filing registration form. In addition, according to the requirements of the environmental impact assessment and other requirements, as well as local publicity, it seems that the project should start in 2022.

However, the progress of the project was not disclosed in the prospectus. According to the "Morse IPO", Jiangxi Jiamei Ceramics Co., Ltd. has won the B-3-04-1 plot of Fengcheng High-tech Zone for 55 million yuan on March 25, 2022. According to the prospectus, the land has an area of 329,656 square meters and the concession period is until May 21, 2072.

"Morse IPO" checked the prospectus and found that during the reporting period, the original value of Marco Polo's fixed assets continued to increase, from 611,612.11 million yuan at the end of 2021 to 649,529.39 million yuan at the end of 2023. The explanation is that during the reporting period, the company continued to expand the production capacity of advantageous products, built a number of new production lines, and gradually promoted the construction of supporting facilities in the existing production base, resulting in the continuous increase in the original value of the company's buildings and buildings, electronic equipment and office equipment; At the same time, the company conforms to the upgrading trend of production and manufacturing in the industry, vigorously promotes the application of intelligent manufacturing in manufacturing, and continuously purchases automated production equipment, so that the original value of machinery and equipment continues to increase. However, it did not specify whether it was an increase in the original value of fixed assets caused by the construction of fundraising projects.

The ground has already been photographed, so why not build it? Moreover, during the reporting period, Marco Polo also happily distributed more than 800 million dividends to shareholders. At this time, why not use your "spare money" to build an expansion project first? Or is the company just planning to wait for the funds to be raised before starting the construction project?

In addition, if the investment intensity and floor area ratio and other indicators do not meet the requirements after the construction and commissioning of the new project, Marco Polo will also face penalties from the local government, which is not clearly explained in the risk warning in the prospectus. In the investment contract jointly signed by Party A's Fengcheng Municipal Government of Jiangxi Province and Party B's Guangdong Marco Polo Ceramics Co., Ltd., Party A provided 1,000 acres of land to Party B to build the "Phase III Building Ceramics Expansion Project - Intelligent Ceramic Home Furnishing Industrial Park", with an investment intensity of not less than 3 million per mu and a building plot ratio of more than 1.2.

The agreement also stipulates that after Party B's project is fully put into production, if the investment intensity and floor area ratio and other indicators do not meet the requirements, the land area of the lowest approved project and the excess usable area shall be recovered according to law or the land transfer fee of 112,000 yuan per mu shall be paid according to the law.

Will Marco Polo invest in the construction of the expansion project as promised after raising funds?

Marco Polo's actual controller Huang Jianping has done something similar before. Guangdong Dongwei was established in April 2019 and was originally a wholly-owned subsidiary of Sitong Co., Ltd., and in June 2021, Marco Polo bought Guangdong Dongwei from Sitong Co., Ltd. When Guangdong Dongwei was still a subsidiary of Sitong Co., Ltd., it had raised capital once.

In June 2020, Sitong Co., Ltd. raised 333 million yuan through a private placement, all of which was used for the "Special High-performance Ceramic Plate Project with an Annual Output of 8 Million Square Meters (Phase I)", and Guangdong Dongwei was the main body of the fundraising project. However, only a year later, in May 2021, Sitong announced the termination of the fundraising project and used all the remaining raised funds to replenish the flow. As of the end of March 2021, the investment progress of the project was only 2.48%.

This time, Marco Polo will be listed, and intends to use Guangdong Dongwei New Materials Co., Ltd. to continue to raise funds to build a special high-performance ceramic plate project with an annual output of 5.4 million square meters.

Huang Jianping continued to use this project to try to raise funds in the capital market, does he really plan to use the raised funds to expand production and expand the main business?

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