Recently, the Shanghai Stock Exchange disclosed information showing that Taiying Technology Group Co., Ltd. (hereinafter referred to as "Taiying Technology") and its sponsor CICC withdrew their listing application documents. As a result, the Shanghai Stock Exchange decided to terminate the review of the company's initial public offering and listing on the main board.
According to Beduo Finance, Taiying Technology will pre-disclose the prospectus in January 2023 and prepare to be listed on the main board of the Shanghai Stock Exchange. After the implementation of the full registration system, Taiying Technology moved to the Shanghai Stock Exchange in March 2023 to submit a prospectus and continue the IPO process.
In this sprint listing, Taiying Technology originally planned to raise 896 million yuan, of which 516 million yuan was used for the operation center construction project, 200 million yuan was used for the headquarters and R&D center project, and the other 180 million yuan was used to supplement the working capital project, and the sponsor was CICC.
Tianyancha App shows that Taiying Technology was established in December 2007 and was formerly known as Shandong Taiying Technology Co., Ltd. At present, the registered capital of the company is about 199 million yuan, the legal representative is Wang Zhili, and the shareholders include Taiying Anrui Holdings (Hainan) Co., Ltd., Hainan Yingguang Technology Consulting Partnership (Limited Partnership), etc.
First, the customer concentration is high
According to the prospectus, Taiying Technology is a business process outsourcing service provider, focusing on providing enterprises with digital middle and back office operation management services. Among them, digital middle and back office outsourcing services refer to maintaining the relationship between customers and brand business through voice, online and other communication methods; or provide audit, annotation and other services for the normal operation of the front-end system platform.
Taiying Technology said in the prospectus that the companies it serves cover the Internet, finance, consumer goods intelligent manufacturing, media and communications, logistics and travel and other industries and their vertical segments, providing them with diversified services such as customer experience services, customer care services and digital operation services.
In 2019, 2020, 2021 and the first half of 2022, Taiying Technology's revenue was 1.085 billion yuan, 1.450 billion yuan, 1.904 billion yuan and 1.085 billion yuan respectively, the net profit was 62.0928 million yuan, 126 million yuan, 140 million yuan and 76.6697 million yuan respectively, and the net profit after deducting non-profits was 44.8266 million yuan, 116 million yuan, 113 million yuan and 65.4132 million yuan respectively.
It is worth mentioning that the customers of Taiying Technology are relatively concentrated. During the reporting period, the company's top five customers contributed a total of 685 million yuan, 882 million yuan, 1.111 billion yuan and 598 million yuan respectively, accounting for 63.17%, 60.85%, 58.37% and 55.10% respectively.
In this regard, the Shanghai Stock Exchange requires Taiying Technology to explain the basic information of its main customers, customer acquisition methods, business types, rights and obligations stipulated in the main terms of the contract, cooperation history, and the share of its services in the procurement of similar services of major customers; Stratify customers according to the amount of sales, explain the changes in the number of customers, the addition and exit of customers, and the reasons.
At the same time, explain how to meet customer needs, how to reflect the core competitiveness, whether the main customer's own employees are engaged in similar business, whether there is overlap or conflict between the services provided by Taiying Technology and the customer's own customer service, whether the company's business is at risk of being replaced by the customer's own customer service or peers, and whether its business is in line with the changing trend of the customer's business model.
According to the prospectus, the top five customers of Taiying Technology include Alibaba, China CITIC Bank, China Merchants Bank, China Mobile, Ant Group, Didi, etc. Among them, China CITIC Bank began to cooperate in 2015, China Merchants Bank began in 2016, Alibaba and Ant Group both started in 2014, and China Mobile began to cooperate in 2008.
In addition, Taiying Technology's main customers also include Industrial Bank, Guangfa Bank, China Construction Bank, Bank of Communications, Everbright Bank, ByteDance, Meituan, Jingdong Group, Pinduoduo, China Radio and Television, China Telecom, SF Group, etc., with annual cooperation of more than 10 million yuan.
Taiying Technology said that in 2020, the company's revenue from Shuidi Mutual Aid Group rose to more than 50 million yuan, and its income from Bank of Communications, Meituan, and Bank of Ningbo rose to more than 10 million yuan. At the same time, the business volume of Hainan Airlines Group and Tianan Life Insurance decreased, and its income also fell to less than 10 million yuan.
In 2021, Taiying Technology's revenue from Meituan, Jingdong Group, and Bank of Communications will rise to more than 50 million yuan, and its income from ByteDance, Huaxia Bank, Ping An of China, Beijing Zhongqi, Dongfang Dadi, and Hisense will rise to more than 10 million yuan, and its income from Shuidi Mutual Aid Group will drop to less than 50 million yuan, and its income from Haier, Ctrip, and Bank of Ningbo will drop to less than 10 million yuan.
In 2022, Taiying Technology's income from ByteDance will rise to more than 50 million yuan, and its income from Xiaohongshu, Everbright Bank, Ruijie Network, Postal Savings Bank, China Telecom, and Tianan Life Insurance will rise to more than 10 million yuan, and at the same time, its income from Didi will drop to less than 50 million yuan, and its income from Shuidi Mutual Aid Group and Beijing Zhongqi will drop to less than 10 million yuan.
2. Listed on the U.S. stock market
It is worth mentioning that Taiying Technology has been listed on the U.S. stock market. According to the prospectus, the predecessor of Taiying Technology, CCRC (BVI), was listed on the NASDAQ in the United States on December 21, 2015, issuing 2.4 million ordinary shares and raising a total of 9.6 million US dollars. On July 6, 2021, CCRC (BVI) completed its privatization transaction and delisted from NASDAQ.
According to reports, the main source of funds for the privatization transaction of CCRC (BVI) is China Merchants Bank loans. On July 1, 2021, China Merchants Bank Jinan Branch issued a loan of US$37 million to Parent. On November 26, 2021, Parent repaid the loan.
While promoting the delisting of CCRC (BVI), Taiying Technology is also dismantling the red-chip structure and terminating the VIE agreement. In November 2021, China BPO transferred its 100% stake in Hainan Herun (WFOE) to Hainan Taiying, a wholly-owned subsidiary of Yutaiying Co., Ltd. During the same period, Taiying Co., Ltd., Hainan Taiying and Hainan Herun jointly signed an agreement to terminate the VIE control agreement.
In this regard, the Shanghai Stock Exchange asked Taiying Technology to explain the process of building, operating and dismantling the red-chip structure; The reasons for setting up the red-chip structure, the reasons and reasonableness of the CCRC (BVI) after transferring the equity of China BPO, and the background, specific circumstances and impact of not completing the registration of Circular 37 in the process of building the red-chip structure.
Explain whether the process of construction, operation and dismantling of the red-chip structure complies with relevant domestic and foreign laws and regulations such as taxation, foreign investment, foreign exchange management, etc., whether there are disputes and potential disputes, whether complete approval and filing procedures have been performed, and whether it constitutes an obstacle to the issuance and listing.
In addition, Taiying Technology is required to explain the background, reasons, financing, share transfer, dividends and financial support for domestic entities of overseas listing; During the period of overseas listing, whether Shandong Juncheng is responsible for the company's main business, and whether it retains the core assets during the overseas listing period, and the difference between the assets during the overseas listing period.
Taiying Technology said that during the overseas listing operation, the company's main business is still operated by itself. At present, the company retains the core assets during the overseas listing period, and there is no substantial asset difference with the overseas listing period, and the small number of non-material asset differences are mainly due to the opening of new subsidiaries and the cancellation of some subsidiaries due to the termination or non-operation of business operations.
As for the reasons for the delisting, Taiying Technology explained that since the listing of CCRC (BVI), its stock secondary market has insufficient liquidity, low valuation level, weak follow-up refinancing function, and relatively high cost of maintaining its listing status. Therefore, the company decided to privatize and delist and apply for domestic listing after considering its future business plan.
As for the source of the repayment of China Merchants Bank's loans, Taiying Technology said that Parent's repayment of the US$37 million loan to China Merchants Bank was financed by the equity transfer price paid to China BPO by the company's subsidiary Hainan Taiying for the acquisition of Hainan Herun, and China BPO paid to Parent through dividends after receiving the equity transfer price.
Third, the executive compensation is higher
Before this listing, the actual controller of Taiying Technology was Wang Zhili, who directly held the voting rights corresponding to 100% of the company's shares. According to the prospectus, Wang Zhili directly holds 59% of the shares of Taiying Anrui and serves as the chairman of Taiying Anrui, which can actually control the business decisions of Taiying Anrui and control the voting rights corresponding to 88.58% of the company's shares through Taiying Anrui.
At the same time, Wang Zhili is the general partner and executive partner of Zhongren Investment, Zhongjie Investment, Zhongjia Investment and Zhongrun Investment, and controls the voting rights corresponding to 3.41%, 0.37%, 0.45% and 0.52% of the shares of Taiying Technology through Zhongren Investment, Zhongjie Investment, Zhongjia Investment and Zhongrun Investment respectively.
In December 2021, Taiying Anrui, Wang Zhili and Hainan Yingguang and its executive partner Qi Yuxiang signed the "Concerted Action Agreement", confirming that from the date of the agreement, Taiying Anrui, Wang Zhili, Hainan Yingguang and its executive partner Qi Yuxiang have acted in unison and made joint decisions on various major matters involving the company.
If it is not possible to reach an agreement on major matters after full consultation, the opinions of Taiying Anrui and Wang Zhili shall be the final opinion. Through the "Concerted Action Agreement", Wang Zhili can effectively control the voting rights corresponding to the 6.67% shares of Taiying Technology held by Hainan Yingguang.
Accordingly, Wang Zhili can directly or indirectly control the voting rights corresponding to 100% of the shares of Taiying Technology, and serve as the chairman and president of the company. In this regard, the Shanghai Stock Exchange asked Taiying Technology to explain whether its existing governance and internal control mechanisms can effectively prevent the actual controller from harming the interests of the company, and whether it can effectively protect the rights and interests of small and medium-sized investors.
In particular, the remuneration of the senior management of Taiying Technology is higher. In 2020, the average salary of the company's senior executives was 6.0592 million yuan and 5.2338 million yuan respectively, and 1.969 million yuan in 2022.
Among them, the average salary of the new senior personnel (mainly some directors, supervisors and senior executives (including independent directors)) of Taiying Technology is relatively lower than that of the original senior personnel (president, senior vice president), thus reducing the average salary level of senior personnel. At the same time, the company's performance did not reach the target set at the beginning of the year, and the bonuses of senior personnel decreased compared with the previous year.
In contrast, the average salary of senior personnel of Taiying Technology is higher than the average level of comparable companies in the same industry, and although the salary of senior personnel has decreased in 2022, it is still higher than that of comparable companies in the same industry.