Recently, the IPO of Zhejiang Zhongli Machinery Co., Ltd. on the main board of the Shanghai Stock Exchange was approved by the Listing Committee meeting. Zhejiang Zhongli Machinery Co., Ltd. is a high-tech enterprise focusing on the R&D, production and sales of electric forklifts and other motor industrial vehicles.
According to the prospectus, Zhongli's main products include electric forklifts and internal combustion forklifts, which are widely used in logistics and warehousing, electrical machinery, food and beverage, e-commerce, automobile manufacturing, wholesale and retail, petrochemical and other fields. According to the statistics of the Industrial Vehicle Branch of China Construction Machinery Industry Association, since 2013, the production and sales volume of electric storage forklifts of Zhongli Co., Ltd. has ranked first in the domestic industry for 10 consecutive years, and the sales volume will account for more than 40% of the sales volume of electric storage forklifts in China in 2022.
However, although Zhongli shares successfully passed the meeting, there are still many problems worthy of attention when looking through the company's prospectus information.
The major customer is also a shareholder, and the related party transaction is suspicious
The prospectus of Zhongli shares shows that the company is involved in many related party transactions, and the proportion of major related party sales to operating income during the reporting period is. 17%；Among them, Linde Forklift became a strategic investor in the company in 2019 and appointed directors, and Linde Forklift has always been the company's largest customer during the reporting period. From 2020 to the first half of 2023, the proportion of the company's major related party purchases to operating costs is as follows: 06%。
From this point of view, Zhongli shares may have a certain dependence on the sales of related parties, and the fairness of related party transactions is worth paying attention to.
During the reporting period, Zhongli shares also had related party capital loans. In 2020, the company will lend a total of 22 million yuan to the controlling shareholder Zhongli Hengzhi and the related party Hangzhou ZhongliFrom 2020 to 2021, the overseas investment platform set up by Hong Kong EPK Company had a total of 3,316 funds borrowed from the related party Hong Kong Zhongli and the enterprises controlled by it070,000 yuan;In January 2021, the bank accounts of Hong Kong Zhongli and the enterprises controlled by Hong Kong Zhongli were cancelled, and with the consent of the management of Hong Kong Zhongli and the enterprises controlled by Hong Kong, the company's debts at the end of 2020 were exempted from 315820,000 yuan and the interest payable on the above-mentioned borrowed funds according to the interest rate not lower than the bank loan interest rate for the same period 321740,000 yuan. It is also interesting to see whether the company is exempted from creditor's rights after borrowing funds overseas, and whether this operation involves compliance or tax penalty risks.
In addition, during the reporting period or within one year before the reporting period, Zhongli shares were cancelled and transferred more than 30 related parties, among which Anji Amu was one of the domestic sales platforms controlled by the actual controller of the company, and was later cancelled before the reporting period, and had participated in 67 sales companies. Before the IPO, Zhongli shares were cancelled and transferred a large number of related parties, and there were also questions about whether it involved the avoidance of disclosure of information or other interest arrangements.
Rely on tax subsidies to raise investment and repay debts
We note that during the reporting period, the performance of Zhongli shares was greatly affected by tax incentives and subsidies.
From 2020 to the first half of 2023, the impact of tax incentives on the total profit of Zhongli shares was 2,380270,000 yuan, 3,898640,000 yuan, 5,011$990,000 and $3,180520,000 yuan, accounting for respectively. 65% and 648%。
From 2020 to the first half of 2023, the company's revenue-related subsidies included in other income were 3,292920,000 yuan, 686980,000 yuan, 909480,000 yuan and 140900,000 yuan, accounting for the proportion of total profit.
21% and 029%。
It should be noted that the company's current high-tech enterprise qualification is valid from 2021 to 2023, and after the expiration of the high-tech enterprise qualification, if it cannot meet the conditions for continuous compliance, it will not be able to continue to enjoy tax incentives, which will have an adverse impact on performance.
At the same time, the total investment amount of Zhongli Co., Ltd. in this fundraising project is 146,487030,000 yuan, and 133,626 yuan of raised funds are planned120,000 yuan, including 250 million yuan planned to repay bank loans and replenish liquidity, accounting for about one-fifth of the amount raised.
However, judging from the actual financial report data, Zhongli shares have abundant liquidity, and as of the end of June 2023, the company's monetary funds on the books are 108,446420,000 yuan, and the company's current ratio, quick ratio, and asset-liability ratio are lower than the industry average, and the company has also paid cash dividends totaling 76.8 million yuan twice in 2021 and 2022. Under such circumstances, the reasonableness of the company's plan to use the raised funds to repay bank loans and replenish liquidity may be relatively lacking.
The subsidiary defaulted on taxes and was frequently subject to administrative penalties
In this fundraising project, the implementation body of the "Hubei Zhongli Machinery Electric Forklift Production Line Phase I Project" is Hubei Zhongli Machinery, a subsidiary established in 2021. It is worth noting that according to public information inquiries, on October 9, 2023, Hubei Zhongli Machinery was included in the list of tax arrears announcements due to tax arrears, and the details of the announcement show that Hubei Zhongli is in arrears of property tax 3991563 yuan.
According to the disclosure in the prospectus, the housing and land assets under the name of Hubei Zhongli are only the land use right on the west side of Guanghua Avenue (north side of Chuhan East Road) in Laohekou City and the land lease on the west side of Changyuan Langhong in Zhulou Village, Lilou Town. The former is the construction land of the fund-raising project of Zhongli Co., Ltd., which is currently under constructionThe latter has not yet been changed to state-owned construction land, and the company has transferred the land to a third party and used it for agricultural planting, and will be used for plant construction and production and operation after the nature of the land is changed to state-owned construction land.
This can't help but make people curious about the specific situation of Hubei Zhongli's arrears of real estate tax, whether it is related to the construction of the fund-raising project, and whether there will be penalties in the future. In fact, during the reporting period, the company's subsidiaries were repeatedly subject to administrative penalties by the customs for violating safety regulations and evading taxes.
Among them, in January 2021, Zhongli Import and Export was fined 8,500 yuan for the error between the verified weight and the actual weight of the loaded container exceeding 5% and the maximum error exceeding 1 ton
In April and May of the same year, Zhongli Import and Export was fined 7,875 yuan for violating the "Regulations on the Safety Supervision and Administration of Dangerous Goods Carried by Ships".
In June, Zhongli Import and Export was fined 10,000 yuan for failing to go through the formalities of declaration of cargo suitability with the maritime safety administration in accordance with the regulations
In July, Zhongli Lianzhong missed a total of 44,847 taxes due to the discrepancy between the actual freight cost of imported goods and the declared freight rate$10 and was fined 270,000 yuan;
In March 2023, Zhongli Import and Export was fined 70,000 yuan by the customs for violating the Maritime Traffic Safety Law of the People's Republic of China by reporting dangerous goods as general cargo
In April of the same year, Zhongli Import and Export was again fined 60,000 yuan for failing to notify the carrier of the dangerous nature of the consigned dangerous goods and the protective measures that should be taken, in violation of the "Maritime Traffic Safety Law of the People's Republic of China".
Judging from the repeated punishment of the same problem, Zhongli Import and Export seems to have learned no lessons at all, and there is no sign of rectification and standardization, the lack of internal control and compliance of the company is surprising, and the risk of being severely punished in the future may not be ignored.