(Image is AI-generated)
The "sword" hanging over the head of Chengdu Jiachi Electronic Technology Co., Ltd. (hereinafter referred to as "Jiachi Technology") still fell.
On May 14, the Shanghai Stock Exchange announced that the sponsor hired by Jiachi Technology was taken by the China Securities Regulatory Commission to restrict business activities, and its issuance registration procedures were suspended in accordance with relevant regulations. The sponsor here is Huaxi Securities (002926. SZ), which was suspended by the Jiangsu Securities Regulatory Bureau for 6 months due to the Jin Tongling fraud case.
(Source: Shanghai Stock Exchange official website)
Titanium Media APP noticed that Jiachi Technology's IPO road can be described as bumpy, and the review has been suspended for the second time since the prospectus was first disclosed in June 2022. Now it is on the doorstep, but it is dragged down by the sponsor, and it is still unknown when it will be listed.
Huaxi Securities was suspended from sponsorship for 6 months
As early as the evening of April 12 this year, Huaxi Securities announced that it had received a prior notice of administrative supervision measures from the Jiangsu Securities Regulatory Bureau 300091. SZ) in 2019, there were a number of problems in the process of private placement sponsorship projects, such as suspected failure to be diligent in due diligence work, and it is planned to take regulatory measures to suspend the sponsor business qualification for 6 months, and the suspension period will be from April 28 to October 27, 2024. At the same time, Huaxi Securities' project continued to supervise Zheng Yi and Chen Qingling, who were subject to the supervision of issuing warning letters, and Liu Jingfang and Zhang Ran were not allowed to hold positions related to the sponsorship business of securities issuance and listing or actually perform the above duties within 2 years.
From 2017 to 2022, the amount of inflated or inflated profits of Jin Tongling accounted for 103.06%, 133.10%, 31.35%, 101.55%, 5774.38%, and 11.83% of the company's total disclosed profits in each year, respectively.
When it comes to Jinlingtong's sponsorship and supervision business, Huaxi Securities is not only a securities firm that has been punished, but Huaxi Securities is the most severely punished. Zhou Ping and Wang Shiwei, the sponsors of Everbright Securities and the company's financial advisors, were taken to issue warning letters; Guohai Securities and the project continued to supervise and supervise Bao Dai Lin Ju and Tang Bin to be taken to issue warning letters; Soochow Securities and the project leader Wang Qiuming were taken to issue a warning letter for regulatory measures.
In addition, the Jiangsu Securities Regulatory Bureau also issued an administrative penalty against Dahua Certified Public Accountants, which was suspended from engaging in securities service business for 6 months, confiscated 6.8868 million yuan of business income, and imposed a fine of 34.434 million yuan.
In fact, Huaxi Securities' failure to fulfill its sponsorship responsibilities on the Jin Tongling project is only a microcosm of its investment banking business. In recent years, Huaxi Securities' investment banking business has frequently received fines. For example, on September 1 last year, the China Securities Regulatory Commission (CSRC) decided to take administrative supervision measures against the company, due to the company's lack of internal control independence, insufficient on-site inspection of quality control, and some investment banking projects hired a third party to strictly perform compliance review, etc., the company took responsibility to correct administrative supervision measures, and took administrative supervision measures against the company's investment banking business and quality control department in charge of senior executives and then the head of the quality control department.
A few days ago, the relevant person in charge of Huaxi Securities said in his reply to the titanium media APP: "It was indeed regulated and held accountable for related problems before, so the company attaches great importance to it, whether it is from the system process or employee training, and has been rectifying it in the past one or two years." The cost of being supervised is relatively large, but the company will effectively rectify and strengthen the internal strength. ”
Jiachi Technology was implicated
Jiachi Technology applied for IPO in June 2022, and the financial information expired on September 30 of the same year, and the issuance review was suspended; Update financial information by the end of 2022 and resume queuing; Adopted at the meeting on June 19, 2023; March 22, 2024 to submit the registration process. However, at present, due to the drag of Huaxi Securities, the issuance registration process has been suspended.
(Jiachi Technology's IPO process, source: official website of the Shanghai Stock Exchange)
In fact, long before Jiachi Technology, Sichuan Zhongbang New Materials Co., Ltd. and Dongguan Liuchun Intelligent Technology Co., Ltd., sponsored by Huaxi Securities, have terminated the issuance and listing review. According to the official website of the Shenzhen Stock Exchange, the former has been inquired and terminated on April 26; The latter met on July 27, 2022, but was also terminated on May 2 this year. However, the reason given by both companies was that "the issuer and the sponsor withdrew the application for issuance and listing", and the previous financial data of the two companies had expired.
Of course, it is not uncommon for intermediaries to be penalized or investigated and implicated in pre-IPO companies or listed companies. For example, in July 2020, ZWSOFT (688083. SH) suspended its IPO due to the drag of the sponsor and securities service agency GF Securities, which was suspended by the Guangdong Securities Regulatory Bureau for 6 months due to the fraud case of Kangmei Pharmaceutical. Later, ZWSOFT changed its sponsor to Huatai Securities, which was listed on March 11, 2021.
Coincidentally, Shangpin Home Delivery (300616. SZ) suspended the project twice in January 2022 due to the investigation of the China Securities Regulatory Commission (CSRC) by the China Securities Regulatory Commission (CSRC), and resumed the review one month later. However, in August of the same year, the review was suspended due to the investigation of the sponsor China Merchants Securities, and then resumed; It was not until the beginning of this year that the company completed the private placement, but the company did not change the law firm and sponsor.
According to the newly revised "Stock Issuance and Listing Review Rules" of the Shanghai Stock Exchange and the Shenzhen Stock Exchange this year, if the sponsor or securities service institution of an IPO enterprise has been taken by the China Securities Regulatory Commission in accordance with the law to restrict business activities, order it to suspend business for rectification, designate other institutions to take custody or take over, etc., and the review of issuance and listing must be suspended. After the suspension, the IPO company can choose whether to change the intermediary. If replaced, the replaced sponsor or securities service institution shall complete due diligence within 3 months from the date of suspension of the review, re-issue relevant documents, and review the documents issued by the original securities service institution, issue a review opinion, and explain the differences. If it is not replaced, the securities service institution shall issue a review report to the exchange in a timely manner.
This means that there are only these two roads in front of Jiachi Technology. However, Titanium Media APP called the securities department of Jiachi Technology, and the company replied, "I have not received any notice of relevant arrangements for the time being." Previously, when the titanium media APP asked the relevant person in charge of Huaxi Securities about relevant questions, it said, "It is communicating with customers." ”
Whether it is to change the sponsor or continue to cooperate with Huaxi Securities, the IPO process of Jiachi Technology has obviously been extended.
The longer the IPO front, the more variables
It is worth mentioning that as a military supporting enterprise, although the performance of Jiachi Technology has increased year after year, there are also many risk points. In other words, the longer an IPO drags on, the more variables there are.
Founded on July 18, 2008, Jiachi Technology is a major provider of electromagnetic functional materials and structures (EMMS) in China, and its main products are stealth functional coating materials and stealth functional structural parts used in the field of national defense.
According to the prospectus, from 2020 to 2023, the company will achieve revenue of 279 million yuan, 530 million yuan, 769 million yuan and 981 million yuan respectively, with growth rates of 89.90%, 45.04% and 27.55% respectively in the past three years; The net profit attributable to the parent company in each period was -13.6907 million yuan, 316 million yuan, 484 million yuan and 564 million yuan, with a growth rate of 2404.58%, 53.43% and 16.45% in the past three years. The growth rate of performance has slowed down significantly. Especially in 2023, most of the peers listed by Jiachi Technology have experienced a decline in performance.
At the same time, the company also has the problem of high accounts receivable. From 2021 to 2023, the total book balance of the company's accounts receivable and notes receivable will be 354.724 million yuan, 677.9111 million yuan and 984.1829 million yuan respectively, accounting for 66.91%, 88.16% and 100.34% of the revenue in each period respectively.
In addition, in the previous titanium media article "Jiachi Technology Founded by a Professor of the University of Electronic Science and Technology Plans to be Listed on the Science and Technology Innovation Board, Relatives and Students "Baoyuan" Key Positions | IPO Observation" mentioned that as a model for the transformation of "industry-university-research" achievements, the company's R&D expense rate is lower than that of its peers.
From 2020 to 2022, Jiachi Technology's R&D expenses were 21.3346 million yuan, 32.7864 million yuan, and 44.0533 million yuan respectively, and the R&D expense rates were 7.64%, 6.18%, and 5.73%, while the industry average was 8.85%, 7.70%, and 6.49%. Until 2023, the company's R&D expenses soared to 86.8641 million yuan, and the R&D expense ratio reached 8.86%, exceeding the industry average of 8.29% in the same period for the first time. (This article was first published in Titanium Media APP, author|Su Qitao)