Dexin Technology's performance growth turned to the Beijing Stock Exchange's IPO for six years, and it paid a dividend of 363 million yuan and planned to raise 331 million yuan

Yangtze River Business Daily News ● Yangtze River Business Daily reporter Xu Jia

Two years after the GEM IPO was cancelled, Chengdu Dexin Digital Technology Co., Ltd. (hereinafter referred to as "Dexin Technology") rerouted its IPO to the Beijing Stock Exchange.

A few days ago, the official website of the Beijing Stock Exchange disclosed that it had accepted the initial offering application of Dexin Technology. In June 2021, Dexin Technology planned to sprint to the GEM IPO, but on the eve of the meeting in September 2022, it suddenly withdrew its application for issuance and listing.

The Yangtze River Business Daily reporter noticed that in the few years after the withdrawal of the GEM IPO, the profitability of Dexin Technology has increased significantly. From 2021 to 2023, its operating income and net profit attributable to owners of the parent company (hereinafter referred to as "net profit") increased from 263 million yuan and 81.4496 million yuan to 411 million yuan and 128 million yuan respectively. In the first quarter of this year, the company's performance declined.

It is worth noting that during the period of sprinting to the GEM IPO, the large dividends of Dexin Technology were inquired about by the regulatory authorities. At the beginning of this year, Dexin Technology once again paid a dividend of 60 million yuan. Roughly calculated, since 2018, the cumulative dividend amount of Dexin Technology has reached 363 million yuan.

In this IPO, the company plans to raise 331 million yuan, an increase of nearly 20% compared with the previous IPO plan.

The GEM IPO was rerouted to the Beijing Stock Exchange two years later

Before preparing for the IPO of the Beijing Stock Exchange, Dexin Technology had planned to IPO on the GEM.

According to the data, Dexin Technology was established in 2008, and after completing the shareholding restructuring in early 2016, the company was listed on the New Third Board in June of that year. In June 2021, the Shenzhen Stock Exchange officially accepted the initial offering application of Dexin Technology.

According to the plan, Dexin Technology originally planned to issue no more than 20 million new shares and list them on the GEM, raising a total of no more than 277 million yuan.

After several rounds of review and inquiry responses, on September 29, 2022, Dexin Technology faced the assessment at the meeting. However, on the eve of the meeting, that is, on September 28, 2022, the Shenzhen Stock Exchange suddenly issued an announcement that in view of the withdrawal of the issuance and listing application of Dexin Technology and the withdrawal of sponsorship by GF Securities, the review meeting of the Listing Committee cancelled the review of the issuance and listing application of Dexin Technology.

On the eve of the meeting, the order was suddenly withdrawn, and Dexin Technology once became the target of public criticism. Nearly two years after the GEM IPO failed, Dexin Technology switched to the IPO of the Beijing Stock Exchange.

Recently, the official website of the Beijing Stock Exchange disclosed that it had accepted the initial offering application of Dexin Technology, and the sponsor was still GF Securities.

The Yangtze River Business Daily reporter noticed that during the sprint GEM IPO period, the large dividends of Dexin Technology were inquired about by the regulatory authorities. According to the previous prospectus, from 2018 to 2021, Dexin Technology implemented cash dividends of 108 million yuan, 72 million yuan, 75 million yuan, and 48 million yuan respectively, totaling 303 million yuan. In the same period, the company's total net profit was 282 million yuan.

The Shenzhen Stock Exchange has asked Dexin Technology to explain the reasons for continuing to pay large cash dividends during the reporting period and not using relevant funds for production, reconstruction and expansion, and explain the necessity of the construction of this fund-raising project and the necessity of raising funds in combination with the company's growth space, market development space, capacity utilization rate and digestion capacity.

In the IPO of the Beijing Stock Exchange, the problem of large dividends of Dexin Technology still exists. At the beginning of this year, Dexin Technology implemented the 2023 semi-annual profit distribution, distributing a cash dividend of 10 yuan (tax included) to all shareholders for every 10 shares, with a total cash dividend of 60 million yuan.

Roughly calculated, since 2018, the cumulative dividend amount of Dexin Technology has reached 363 million yuan.

It should be noted that the company plans to issue no more than 20 million new shares and be listed on the Beijing Stock Exchange, and the total amount of funds raised will be increased to 331 million yuan, an increase of nearly 20%, but the fund-raising projects will remain unchanged, namely the technical transformation construction project of the headquarters production base, the marketing network construction project, and the upgrading and construction project of the technology research and development center, and the investment amount of the three major fund-raising projects will be increased from 170 million yuan, 54.2388 million yuan and 52.7377 million yuan to 176 million yuan respectively. 58.2377 million yuan and 96.2131 million yuan.

Accounts receivable carried forward from large projects have soared

Since its establishment, Dexin Technology has been focusing on the R&D, manufacturing and sales of professional-grade audio and video signal processing software and hardware integrated equipment and system integration such as digital TV, professional audio-visual, emergency broadcasting, etc.

The Yangtze River Business Daily reporter noticed that in the few years after the withdrawal of the GEM IPO, the profitability of Dexin Technology has increased significantly, but the high growth needs to be examined.

Financial data show that from 2021 to 2023, Dexin Technology will achieve operating income of 263 million yuan, 334 million yuan, and 411 million yuan respectively, net profit of 81.4496 million yuan, 102 million yuan, and 128 million yuan respectively, and net profit after deducting non-recurring profits and losses (hereinafter referred to as "non-net profit") of 80.8226 million yuan, 99.7042 million yuan, and 126 million yuan respectively.

Dexin Technology said that the company's operating performance in 2023 will increase more mainly due to the carry-over income of the "terrestrial digital TV 700 MHz frequency migration project", and with the completion of the project, the company's operating performance may fluctuate in the next few years.

And the fluctuation of the company's performance has already occurred this year. In the first quarter of 2024, Dexin Technology achieved operating income of 33.7508 million yuan, a year-on-year decrease of 47.81%; The net profit and non-net profit were 10.8696 million yuan and 10.6871 million yuan respectively, a year-on-year decrease of 40.74% and 41.26%.

In this regard, Dexin Technology said that the main reason is affected by the company's end customer financial budget, bidding and investment schedule and other factors, the first quarter revenue is an off-season compared with the overall revenue of the whole year, and the company's system integration projects are affected by the implementation progress of projects in different regions and the acceptance progress of end customers, and the first quarter of 2024 The system integration project is less than the amount of revenue accepted by customers and carried forward, which leads to a certain decline in revenue in the first quarter compared with the same period.

Dexin Technology also said that as of May 31, 2024, the company's orders in hand were about 149 million yuan, and the relevant orders in hand will be converted into the company's revenue after the project is implemented and accepted by customers, and there is no major abnormal situation in the company's production and operation.

The Yangtze River Business Daily reporter also noticed that in 2023, when the performance will skyrocket, the scale of accounts receivable of Dexin Technology is also rising. From 2021 to the end of 2023, the book value of the company's accounts receivable will be 20.8192 million yuan, 18.3662 million yuan and 92.9076 million yuan respectively, accounting for 6.26%, 3.81% and 16.99% of the current assets at the end of the current period.

Among them, the book balance of accounts receivable at the end of 2023 increased by 405.86% compared with the end of the previous year, much higher than the company's operating income growth rate of 22.83% in the same period.

In addition, it should also be noted that at present, Dexin Technology adopts the sales model of "integrator sales, supplemented by direct sales". From 2021 to 2023, the company's sales revenue through integrators accounted for 68.12%, 75.20%, and 85.63% respectively.

Since it is impossible to directly implement effective control and management of the integrator, this means that if the integrator's product integration and after-sales service capabilities cannot meet the end customers or they have product quality problems, management chaos, illegal operations and their own poor management, it will have an adverse impact on the local market expansion and brand reputation of Dexin Technology.