Zhejiang Yanpai Filtration Technology Co., Ltd. (hereinafter referred to as "Yanpai Shares") is applying for an IPO on the Growth Enterprise Market .D.C. During the reporting period, the first major customer of Yanpai shares was an overseas dealer named "Yanpai", and we found that its main personnel were likely to have worked as sales personnel in Yanpai shares, but Yanpai shares hid this sensitive information. Moreover, there is a discrepancy between the product revenue and sales volume disclosed by the company, so that the data is not comparable, and the operation of the subsidiary disclosed in the prospectus does not seem to be true.
The sales director of the largest customer is suspected to be a former employee of the company
The predecessor of Yanpai Co., Ltd. was the Southwest Filter Cloth Factory established in 1991, and the share restructuring was completed in 2014, and the actual controllers were Sun Shiyan and Sun Shangze. The company mainly provides environmental protection filter cloth and bags and other key components and materials for industrial filtration, including non-woven filter cloth, non-woven filter bags, woven filter cloth, woven filter bags and so on with polyester, PPS, polypropylene as raw materials. According to the prospectus, from 2017 to January to June 2020, Yanpai shares achieved operating income of 290.4954 million yuan, 369.8424 million yuan, 472.0201 million yuan and 266.373 million yuan respectively, and achieved net profit attributable to 38.5705 million yuan, 54.0023 million yuan, 62.1943 million yuan and 56.5235 million yuan respectively, and the operating growth seems to be good.
From 2017 to January to June 2020, Yanpai Deutschland and YP Brasil under the same control have always been the largest customers of Yanpai Shares, with sales amounts of 17.6928 million yuan, 17.4767 million yuan, 21.7165 million yuan and 10.3468 million yuan respectively, accounting for 6.09%, 4.73%, 4.60% and 3.88% of the operating income, respectively. Yanpai Deutschland and YP Brasil are distributors in Germany and Brazil, respectively, responsible for promoting the products of Yanpai shares in Europe and Brazil, and Yanpai shares allow the two companies to use "yanpai" and "YP" business names for free. Yanpai shares said that the company did not sign distribution agreements with YP Brasil and Yanpai Deutschland, did not provide financial support to them, and did not participate in the management of its inventory, personnel and operations.
(From Yanpai Shares Prospectus)
According to the prospectus, YP Brasil is owned by Rui Patrick Konrad Mendes, Jorge Manuel Konrad Mendes, Kiana Weltzien 40%, 10%, 50% respectively, Yanpai Deutschland by Rui Patrick Konrad Mendes, Carlos Graf von Ysenburg Philippseich, Falk Weltzien holds 15%, 10% and 75% of the shares, respectively. In January 2020, Rui Patrick Konrad Mendes and Kiana Weltzien transferred their stake in YP Brasil to Angela Cristiane de Oliveira Mendes (wife of Rui Patrick Konrad Mendes).
According to the prospectus, Phelip de Oliveira Mendes is responsible for sales at Yanpai Deutschland. However, Yanpai shares may have concealed another important identity of it. According to LinkedIn, Phelip Mendes, sales director at Yanpai Deutschland, has been with the company since 2017 and previously worked as a sales clerk at Yanpai Filtration Technology Co., Ltd. It is worth noting that the Yanpai Filtration Technology Co., Ltd. in Phelip Mendes' resume is the official English name of Yanpai Shares.
(From linkedIn, a global workplace platform)
(From the official website of Yanpai Shares)
If the information on LinkedIn is true, is Phelip Mendes, sales director at Yanpai Deutschland, the same person as Phelip de Oliveira Mendes, head of sales at Yanpai Deutschland, disclosed by Yanpai Shares? Taking a step back, even if Phelip Mendes and Phelip de Oliveira Mendes are not the same person, based on the biographical information, we can determine that Phelip Mendes, sales director of Yanpai Deutschland, was a former employee of Yanpai Shares, why did Yanpai Shares conceal this important information? Or is the company unable to give a reasonable explanation?
(From the official reply of Yanpai shares)
We have sent a letter to Yanpai shares to inquire about Phelip de Oliveira Mendes' suspected former sales staff of the company, but Yanpai shares only said that Phelip de Oliveira Mendes is not an employee of the company, as to whether it is a former employee, Yanpai shares have not made a positive reply, and the truth of this issue still needs to be clarified by the exchange.
Revenue and sales disclosures are incomparable, prospectuses or misrepresentations
In addition to the relationship with the first major customer, there are also many problems in the disclosure of information in other aspects of Yanpai shares. Yanpai shares disclosed in the main business income classification that from 2017 to January to June 2020, the total income of non-woven filter cloth and non-woven filter bags was 131.966 million yuan, 177.7051 million yuan, 247.1933 million yuan and 163.2731 million yuan, and the total sales volume was 6.7007 million square meters, 8.0519 million square meters, 9.8391 million square meters and 9.5339 million square meters, respectively; the income of other non-woven products was 2.1094 million yuan, respectively. 1,959,500 yuan, 2,156,600 yuan and 567,700 yuan, with sales of 1,708,900 square meters, 2,142,800 square meters, 2,343,800 square meters and 622,700 square meters, respectively.
At the same time, Yanpai shares disclosed in the comparison of industry revenue and production and marketing scale that from 2017 to January to June 2020, the income of non-woven industrial dust removal materials was 134.0753 million yuan, 179.6645 million yuan, 249.3499 million yuan and 163.8407 million yuan, respectively. Combined with the above table data, it can be seen that the revenue disclosed here is the total revenue amount of non-woven filter cloth, non-woven filter bags and other non-woven products, so the corresponding sales volume should be the total sales volume of non-woven filter cloth, non-woven filter bags and other non-woven products, that is, 8.4096 million square meters, 10.1947 million square meters, 12.1829 million square meters, 10.1566 million square meters. However, the corresponding sales volume disclosed by Yanpai shares here is 6.7007 million square meters, 8.0519 million square meters, 9.8391 million square meters, 4.0972 million square meters, that is, only the sales of non-woven filter cloth and non-woven filter bags. In other words, the revenue of Yanpai shares with 3 types of products (non-woven filter cloth, non-woven filter bags, other non-woven products) corresponds to the sales volume of 2 types of products (non-woven filter cloth, non-woven filter bags), the disclosure caliber is not consistent at all, and the revenue and sales volume are not comparable.
Moreover, Yanpai shares noted in the above figure that non-woven industrial dust removal materials include mask material products. However, the amount of revenue from dust removal materials in the non-woven industry does include the income from mask materials, but the sales data excludes it, is this including or not including mask materials?
Beijing Yanpai Filter Cloth Co., Ltd. (hereinafter referred to as "Beijing Yanpai") is a wholly-owned subsidiary of Yanpai Co., Ltd. established in March 2009. According to the prospectus, Beijing Yanpai has not actually operated business since its establishment and has been deregistered in July 2017.
Is It true that Beijing Yanpai has not actually operated? According to CenmentRen, in March 2012, CementRen's commercial manager visited Beijing Yanpai, and the general manager of Beijing Yanpai mentioned in an interview, "The northern market will be centered on Beijing... The company will expand its production this year and is expected to increase production by 15 million square meters over the same period last year."
(from CementRen.com)
At the same time, Yanpai shares disclosed in the related party transaction that "beijing Yanpai personnel, the scale is small, there is a situation where Ye Xiaohong has capital transactions with them, which are used to pay daily expenses and wages, and then Settled by Ye Xiaohong and the company". The expression here seems to contradict the statement that Beijing Yanpai has not actually operated, and combined with CementRen's report, can the claim that Beijing Yanpai has not actually operated still stand?