Shaoxing Xingxin New Materials Co., Ltd. (hereinafter referred to as Xingxin New Materials) is about to start its initial public offering, which marks that the company's IPO road has entered the issuance stage. It is reported that the public offering plans to raise funds 5500 million yuan, of which 1500 million yuan will be used to supplement working capital, and the remaining 400 million yuan will be invested in projects related to the company's main business.
Caiwen.com learned that the road to the IPO of Xingxin New Materials is not smooth, and it has been pointed out that in just 4 years, the company has all come to the IPO of the three major sectors of the A** field, "Main Board, Growth Enterprise Market, and Science and Technology Innovation Board", and also pointed out that Xingxin New Materials has been reported in the IPO of the Science and Technology Innovation Board, and a series of problems have been found during the on-site inspection of the main board IPO.
In 2020, the company transferred to the GEM, and failed again due to factors such as profitability and inquiry response, in February this year, Xingxin New Materials began to plan to sprint to the main board of the Shenzhen Stock Exchange, and the IPO was successfully passed in May, and it was officially submitted for registration in July.
However, after a series of twists and turns, Xingxin New Materials' IPO finally came to the final sprint stage of the upcoming subscription, but the company's IPO was questioned by the market. According to incomplete statistics from Caiwen.com, 20 companies have issued questions about R&D investment, fundraising projects, cash dividends, operating data, core technologies and other aspects of Xingxin New Materials' IPO. So, what are the market doubts about the IPO of Xingxin New Materials that make it the target of public criticism?
The IPO is still overshadowed
During the first declaration period, the then sponsor of Xingxin New Materials received the "Brief Explanation of the Violations of the Regulations of Ye Ting, the Actual Controller of Shaoxing Xingxin New Materials Co., Ltd., during his tenure in Jiangxi Changjiu Jinqiao Chemical", sent by Yu Qingxiang, a shareholder of Jiangxi Changjiu Jinqiao Chemical.
In this regard, the lawyer of Jinqiao Chemical believes that Ye Ting, the actual controller of Xingxin New Materials, transferred the production technology of piperazine series products to Xingxin New Materials without the consent of the board of directors, and transferred benefits to Xingxin New Materials, which caused the loss of state-owned assets.
After a series of twists and turns, Xingxin New Materials finally achieved an IPO. However, the company's recently released results for the third quarter of 2023 were a big disappointment. According to the report, Xingxin New Material's operating income and net profit in the third quarter both declined. This undoubtedly cast a shadow over the company's IPO path.
The reasons for the decline in performance may be multifaceted. First of all, as an enterprise with new chemical materials as its main business, Xingxin New Materials' performance may be greatly affected by the macroeconomic environment and industry trends. At present, the global economic situation is complex and changeable, and the new chemical materials industry is also facing great uncertainty. This may be one of the important reasons for the decline in the company's revenue and net profit.
The company may have some management problems or strategic decision-making errors during the reporting period. For example, Xingxin New Materials may have some problems in R&D, production and sales, resulting in a decline in the company's product competitiveness or market share. In addition, the Company may be overly reliant on market demand in certain customers or in certain regions, which can adversely affect the Company's performance if there are changes in those markets or changes in customer needs.
From the perspective of corporate governance, Xingxin New Materials may have some problems in equity transfer. According to reports, during the company's application for the Science and Technology Innovation Board, the sponsor at the time received a "brief explanation", pointing out that Ye Ting, the actual controller of the company, had violations during his tenure at Jiangxi Changjiu Jinqiao Chemical. This incident has raised questions in the market about Xingxin New Material's governance structure and internal control. Although the company resolved these issues during the eventual IPO process, these issues still had a negative impact on the company's reputation and image.
For investors, the IPO road of Xingxin New Materials can be described as twists and turns. Since the application for the Science and Technology Innovation Board, the company's IPO plan has attracted much attention. However, as the company's performance declines and governance issues are exposed, investors may have doubts about the company's prospects and investment value. This also adds more uncertainties to the company's IPO path.
The twists and turns of Xingxin New Material's IPO road and the recent decline in performance have had a negative impact on the company's reputation and image. For the company, how to maintain a stable development momentum and improve the level of governance in the highly competitive market environment will be an important challenge in the future. At the same time, it will also be a challenging task for investors to screen out companies with real investment value among many IPO projects.
The antecedents of the alleged embezzlement of state-owned assets
It is understood that during the IPO of Xingxin New Materials, it was reported that it was suspected of embezzling state-owned assets, which aroused widespread concern in the market about Xingxin New Materials.
Ye Ting served from July 2002 to December 2009, but was still the general manager of Jinqiao Chemical, and at the same time, during the above time period, Ye Ting successively served as vice chairman, general manager and chairman of Xingxin New Materials. The report letter detailed a brief description of Xingxin New Material's violations during his tenure in Jiangxi Changjiu Jinqiao Chemical, pointing out that Xingxin New Material was suspected of transferring state-owned assets to private enterprises through a series of complex equity transactions and internal operations, and seeking private interests from them.
According to the disclosure, in August 2019, the then sponsor of Xingxin New Materials received a brief explanation of the company's actual controller Ye Ting's violations during his tenure at Jinqiao Chemical, sent by Yu Qingxiang, a shareholder of Jiangxi Changjiu Jinqiao Chemical. The note shows that Ye Ting transferred the production technology of piperazine series products to Xingxin New Materials without the consent of the board of directors of Jinqiao Chemical.
The report also pointed out that Ye Ting established Xingxin New Materials without the consent of the shareholders' meeting of Jinqiao Chemical, and had a large number of related party transactions with Jinqiao Chemical, which harmed the legitimate rights and interests of Jinqiao Chemical and other shareholdersYe Ting illegally embezzled the receivables of Jinqiao Chemical, which is suspected of constituting the crime of embezzlement or misappropriation of funds.
According to public information, ST Changjiu, a listed company of Jinqiao Chemical Industry, was established as a joint venture with Nanchang Jinqiao in 2002, mainly engaged in the research and development, production and sales of piperazine and its series products. At the beginning of its establishment, ST Changjiu held 55% of the shares, and later became a shareholding subsidiary of ST Changjiu after several capital increases by Ye Ting and others.
According to the prospectus, Xingxin New Materials is mainly engaged in the research and development, production and sales of organic amine fine chemicals, including piperazine series, amide series, etc., of which piperazine series products are the main products during the reporting period, accounting for about 85% of the main business income in each period, mainly covering electronic chemicals, environmental protection chemicals, polymer materials, pharmaceuticals and other application fields.
It can be seen that piperazine, the previous product of Jinqiao Chemical, has now become the main product of Xingxin New Materials. The lawyer of Jinqiao Chemical believes that Ye Ting, the actual controller of Xingxin New Materials, transferred the production technology of piperazine series products to the issuer without the consent of the board of directors, and transferred benefits to the issuer, which caused the loss of state-owned assets.
The performance increase does not increase profits, and the R&D investment is too low
In recent years, although Xingxin New Material's operating income has continued to grow, its net profit has shown a downward trend, which has aroused the market's doubts about whether Xingxin New Material's IPO performance will increase revenue or not profits.
According to the publicly available financial data, Xingxin New Material's operating income from 2018 to 2020 and from January to June 2021 (hereinafter referred to as the reporting period) was 30.2 billion yuan, 31.1 billion yuan, 37.4 billion yuan and 20.9 billion yuan, showing a trend of increasing year by year. However, correspondingly, the company's net profit showed a downward trend, which was 6174250,000 yuan, 5982010,000 yuan, 5127620,000 yuan and 4204380,000 yuan. This phenomenon of "increasing income but not increasing profits" makes investors doubt the future development prospects of Xingxin New Materials.
For this phenomenon of "increasing revenue but not increasing profits", Xingxin New Materials explained that it was mainly due to the company's increased investment in expanding market share, optimizing product structure and improving R&D capabilities, which led to rising costs and affecting net profit. However, this explanation did not dispel the market's doubts, and investors are still cautious about Xingxin New Material's IPO performance.
In addition, Xingxin New Materials, an influential enterprise in the field of new chemical materials, has begun to surface with the further disclosure of its prospectus, among which the company's R&D investment is too low.
According to public financial data, the proportion of R&D investment in operating income of Xingxin New Materials during the reporting period is far lower than the industry average. From 2018 to 2020 and from January to June 2021, the company's R&D investment was 1649200,000 yuan, 1985570,000 yuan, 2485730,000 yuan and 1379990,000 yuan, accounting for the proportion of operating income respectively. 64% and 659%。The industry average is generally above 10%, and some leading companies are as high as 20%.
For an enterprise with new chemical materials as its main business, too low R&D investment will not only affect the company's product innovation ability and market competitiveness, but also may affect the company's scientific and technological attributes and future development potential. This also raised questions in the market about the technological attributes of Xingxin New Materials' IPO.
Some investors pointed out that Xingxin New Material's R&D investment is too low, indicating that the company's scientific and technological innovation capabilities and R&D strength need to be strengthened. If the company cannot increase investment in R&D, strengthen the introduction and training of talents, and improve R&D efficiency and quality, then its competitiveness in the field of new chemical materials will be difficult to maintain.
**business and customers overlap, relying on **business disadvantages are highlighted
From 2020 to 2022, the proportion of the total amount of Xingxin New Material's purchases from the top five ** merchants to the total procurement in the current period is respectively. 09% and 7884%, of which the proportion of the purchase amount from Nouryon is. 17% and 3518%, Xingxin New Materials has the risk of high business concentration.
Xingxin New Materials sells anhydrous piperazine to Nouryon, and the relevant sales revenue is classified into "sales in the field of new materials". From 2019 to the first half of 2022, Xingxin New Materials sold anhydrous piperazine to Nouryon with an amount of 10.23 million yuan, 7.77 million yuan, 4.58 million yuan, and 6.65 million yuan respectively, and Nouryon corresponded to the issuer's anhydrous piperazine products.
II. I.
Third, the first major customer. The gross profit margins of Xingxin New Material's sales of anhydrous piperazine to Nouryon were % and -2., respectively36%。
According to Xingxin New Material's prospectus, the company's main ** merchants are relatively concentrated and overlap with major customers. This situation is not common in the industry, which has raised questions about Xingxin New Material's business model and governance structure. It is understood that one of the main raw materials of Xingxin New Materials, six or eight piperazine, including Nouryon, Dow, BASF and other multinational companies, the high concentration of business is mainly determined by the characteristics of the global chemical industry.
If the major international basic chemical raw material suppliers reduce their cooperation with the company due to market reasons or other reasons, the company's operation will be adversely affected. Coincidentally, during the reporting period, the proportion of overseas procurement of the main raw materials of Xingxin New Materials was relatively high, respectively. 79% and 5032%, accounting for an upward trend.
During the reporting period, Xingxin New Materials purchased 68piperazine** from Nouryon Sweden in Sweden, and partially purchased 68piperazine** from Dow in the United States. Affected by factors such as changes in the international situation and first-class friction, it is not excluded that the United States, Sweden and other countries will adjust the export policy of the issuer of 68piperazine in the future, so Xingxin New Materials will face the risk of restricted or interrupted overseas procurement of 68piperazine.
If the overseas procurement of 68piperazine is restricted or the supply is interrupted in the future, and Xingxin New Materials is unable to purchase a sufficient amount of 68piperazine from domestic ** suppliers or independently produce a sufficient amount of 68piperazine, it is likely to face the risk of 68piperazine** tightness, which will have an adverse impact on the company's production and operation.
At the same time, due to the influence of multiple factors such as market supply and demand, transportation time, the overall purchase of overseas 68piperazine is lower than that of domestic 68piperazine**. In the future, if the purchase of overseas six or eight piperazines is substantial, it will directly lead to an increase in the cost of raw material procurement of Xingxin New Materials.
According to the current situation of Xingxin New Materials, the cost of raw materials accounts for the vast majority of production costs, but the raw materials are not stable, which will greatly affect the cost control of Xingxin New Materials and the stability of the price of finished products, which will directly affect the company's sales and performance.
In addition, according to **, there are inconsistencies between the purchase and sales data between Xingxin New Materials and customers disclosed in the IPO prospectus and the data in the annual report for industry and commerce. Specifically, the ratio of sales to operating income of the top five customers disclosed in the prospectus is 7490%, but the proportion is 54 in the annual report of industry and commerce97%。In addition, the proportion of the purchase amount of the top five ** merchants disclosed in the prospectus to the operating cost is 6909%, compared to 78 percent in the annual report for industry and commerce63%。This data fight has raised questions about the authenticity and reliability of Xingxin New Material's financial data.
Purchase and sale data is critical to a business's financial health and business operations. If there are inconsistencies or errors in the data, it can mislead investors and analysts in their judgments and affect the reputation and credibility of the business. Therefore, Xingxin New Materials needs to take this issue seriously and take measures to solve the problem of data fighting to ensure the authenticity and reliability of financial data.