Sentai Materials IPO: The actual controller and his wife suddenly cashed out 92.4 million yuan and raised funds again?

"Electric Eel Finance" text / Gao Wei

Hebei Shengtai Materials Co., Ltd. (hereinafter referred to as "Shengtai Materials"), which has been listed on the New Third Board for less than a year, hit the main board IPO, and the Shenzhen Stock Exchange officially accepted its initial offering application a few days ago. The company plans to issue no more than 24 million new shares to the public, and the total amount of funds raised will not exceed 1.046 billion yuan.

"Electric Eel Finance" found that there are many doubts in the company's IPO prospectus, especially the two-and-a-half-year dividend of 154 million yuan to raise funds, which has become the focus of market attention. In the face of the verification of this website, Sentai Materials replied that it had been disclosed in detail in the prospectus.

The dividend of 154 million yuan in two and a half years

Relying on IPO to raise funds to make up for the company's cash flow is a common method used by many companies to be listed. However, this kind of operation has always been expressly prohibited by the regulator. However, Sentai Materials is not afraid of "high pressure", and is still calmly distributing dividends and raising funds one after another.

According to the observation of "Electric Eel Finance", Sentai Materials will be listed on the New Third Board in March 2023, and three months later, the 2022 annual profit distribution will be implemented, and the company will give 20 bonus shares for every 10 shares to all shareholders with undistributed profits based on the undistributed profits, distribute 30 yuan in cash, and transfer 5 shares to all shareholders for every 10 shares with capital reserve. It is estimated that the dividend amount will reach about 60.6467 million yuan.

The concentrated dividends after three months of listing do indeed seem to be in a hurry for shareholders to "cash out".

However, in 2021 and 2022, Sentai Materials will also achieve cash dividends before being listed on the New Third Board, with an amount of 81.3143 million yuan and 12 million yuan respectively, plus the dividends in the first half of last year, with a total dividend of 154 million yuan in the past two and a half years, accounting for about 33.77% of the company's total net profit attributable to the parent company in the same period.

As for the reasons for the rush to cash out dividends, we can also discern three reasons from its shareholding structure:

In November last year, Sentai Materials formulated an employee stock ownership plan, and the company's employee shareholding platform Shijiazhuang Jucheng acquired 365,300 shares of Sentai Materials held by Lu Jianmin through block trading. At present, Mei Yinping, chairman and general manager, directly holds 53.43% of the shares of Sentai Materials, and indirectly holds 0.28% of the company's shares through Shijiazhuang Jutuo, and directly and indirectly holds 53.71% of the company's shares, and is the controlling shareholder of the company. Mei Yinping and Peng Huazhen together control 60.42% of the shares of Shengtai Materials and are the actual controllers of the company.

In other words, in two and a half years, Mei Yinping and Peng Huazhen have cashed out 92.4 million yuan before the listing.

For a long time, equity concentration and "one dominant share" have been regarded as a stumbling block to improving the governance structure of listed companies. Especially in private enterprises, if the actual controller of the company is a natural person or family, the weakness of the corporate governance structure will be more prominent. The actual controller's concentrated dividend cashing out before listing is the focus of review by the regulatory authorities.

The chairman is entangled in hundreds of risks

Due to the high concentration of shareholding, the surrounding risks are of particular concern to the controlling couple.

According to Tianyancha, Mei Yinping, chairman and general manager of the company, currently has 5 pieces of information, 4 shareholders, 3 executives, and actual control of 8 companies. It is particularly noteworthy that there are as many as 27 risks around Mei Yinping, and there are 73 early warning reminders.

In terms of litigation, Shijiazhuang Haili Pharmaceutical Co., Ltd., of which he was an executive, was sued for a dispute over a sales contract, and Shijiazhuang Haili Pharmaceutical Co., Ltd., which was an executive, was sued for other causes of action.

In terms of administrative punishment, Hebei Shengtai Materials Co., Ltd., of which he served as the legal representative, has received three administrative penalties for other reasons: in 2016, it was administratively punished by Luancheng Safety Production Supervision and Administration Bureau; In 2017, Hebei Haili Hengyuan New Materials Co., Ltd., where it was a shareholder, had information on illegal processing; In 2018, due to the large number of leaks in the company's workshop, the Shijiazhuang Environmental Protection Bureau fined him 50,000 yuan; In 2021, because the combustible gas alarm in the company's first workshop is no longer applicable, it will be punished by the Emergency Management Bureau of Luancheng District, Shijiazhuang City, and fined 100,000 yuan.

The chairman is entangled in hundreds of risks, coupled with the successive penalties imposed on companies where he is an executive or shareholder, and the market is worried about the level of internal governance of the company he manages.

Who is the company that owes 330 million?

The main products of Sentai Materials are widely used in new energy vehicles, 3C and other fields. As of the first half of 2023, the company's net operating cash flow has been in deficit, from 107 million yuan at the end of 2022 to -20 million yuan.

According to the prospectus, Sentai Materials' products have covered major customers in the global lithium battery electrolyte industry, including Company B, Enchem, Tianci Materials, Cathay Huarong, Capchem, Zhuhai Saiwei, Kunlun New Materials, Farnlight and other manufacturers. During the reporting period, the company's sales to the top five direct customers accounted for 85.99%, 86.32%, 85.26% and 88.14% respectively, of which the sales to the terminals of Company B accounted for 32.07%, 42.06%, 50.64% and 64.05% respectively.

At the end of the reporting period, the company's accounts receivable accounted for 37.42%, 38.81%, 46.16% and 141.29% of the operating income respectively. In particular, in 2022, the proportion of accounts receivable balance in operating income has increased, and the company said that it is mainly due to the company's sales to Company B since October 2022 from the trader model to the direct sales model. Company B uses supply chain bills to settle the payment to the company, and the payment period is 9 months. In the first half of last year, all the sales of Sentai Materials to Company B were direct sales mode, and the payment had not been received from Company B as of the end of the period, resulting in the proportion of the company's accounts receivable balance in operating income reaching 141.29% during the period.

According to the amount of accounts receivable, as of the end of June 2023, the balance of accounts receivable to Sentai Materials B reached 334.6841 million yuan, and the age was less than 1 year, and the balance of accounts receivable accounted for 80.25%.

The company also made a risk warning in the prospectus, saying that with the growth of the company's revenue and the expansion of the terminal business of Company B, which has a relatively long supply chain bill redemption period, the growth of receivables will further increase the company's working capital turnover pressure.

However, the name of Company B, which has an absolute impact on the company's revenue and accounts receivable, is poorly understood, or even known. Sentai Materials also expects that there will still be a relatively high proportion of revenue from Company B's terminal in a certain period of time in the future, and there will be a significant dependence on Company B, but it will not constitute a material adverse impact.

However, confused investors do not know when the risk will come, and with what impact?