Weicheng Technology s patent is involved in infringement and hollowed out dividends, and it wants to

Mondo Technology Updated on 2024-01-30

Author Tomato under the stars.

Edit Spinach's Starry Sky.

Typography Ice cream under the stars.

After the main board listing was tightened and the Beijing Stock Exchange issued incentive policies, many "".Specialized, special and new"Enterprises want to use the Beijing Stock Exchange as a springboard to the main board, and they have submitted tables to it. On November 2, 2023, Weicheng Technology (full name: Ningbo Weicheng Technology Co., Ltd.) submitted the form to the Beijing Stock Exchange and was accepted.

This company, which has Lu Yi and Bao Lei, a star couple, has been operating in the field of intelligent security protection systems for many years. It's just that the patent before the submission of the statement was sued and infringed by competitors, and the company paid a large amount of dividends during the reporting period, fattened the actual controller, and wanted to go public to make up for the flow, etc., all of which are worthy of careful study.

First, the receivables are high, and the research and development is doubtful

In 2006, Wen Lijun and Yu Bo, who have Canadian citizenship and permanent residency in China, founded Weicheng Technology. The company's main business is in the field of industrial security protection, providing cable safety bearing and intelligent fence protection services for large industrial customers, and trying to improve the user experience by improving product intelligence and personalization.

In recent years, Weicheng Technology has won the national levelSpecialized, special and newLittle Giant"CorporateNational high-tech enterpriseTitle. It's just that it's hard to say whether the company's real R&D strength can be worthy of the title of high-tech and specialized, special and new.

Not to mention, from 2020 to the end of June 2023 (referred to as: reporting period), its R&D expense rate has increased from 733% slipped all the way down to 586%, a decrease of 16%.。The vast majority of the R&D expenses of Wilson Technology are employee salaries. The total proportion of personnel costs plus outsourced R&D expenses is as followsbetween, occupiedAbsolutelyofBig head

Composition of R&D expenses Extracted from the Prospectus

In contrast, the direct input costs in R&D, such as equipment and raw materials, which are directly related to product testing and R&D results, are very small.

Generally, this situation is easy to appear, in order to meet the requirements of indicators such as the proportion of R&D personnel and the R&D expense rate in the high-tech assessmentEmployees in other positions are counted as R&D personnelBecause there is not much substantive R & D, it is easy to lead to a high proportion of personnel salary and benefits in R & D expenses.

At the same time, in the "Prospectus", Weicheng Technology said that as of the end of June 2023, 32 of the company's 231 employees are R&D personnel, accounting for the proportionIn this case, the educational background of the R&D personnel needs to be further refined and supplemented by Weicheng TechnologyThere are only 3 of themWhat is the quality of the R&D team of the core technical personnel, there is still a big question mark.

The educational background of the R&D personnel and employees of Weicheng Technology is extracted from the "Prospectus".

The company's R&D will gradually be reflected in the company's operation. During the reporting period, the revenue of Weicheng Technology was 12.9 billion yuan, 16 billion yuan, 15.4 billion and 09 billion yuan. In the past three full fiscal years, the overall revenue has increased

However, the company's accounts receivable growth was much higher than revenue growth. During the same period, the company's accounts receivable balance was 03 billion yuan, 04 billion yuan, 03.1 billion yuan and 05.3 billion yuan, the overall increase reachedMuch higherRevenue growth.

The accounts receivable of Weicheng Technology is extracted from the "Prospectus".

The increase in receivables is much higher than the increase in revenue, either because of problems in the operation of downstream customers, resulting in slower payment collection, or because of the fact that Weicheng Technology is trying to retain customersIncrease the billing period。Either way, it is the occupation of Weicheng Technology's funds by downstream customers, which not only affects the company's operating efficiency and increases the financial pressure, but also increasesBad debt riskwithPerformance changesrisk.

When it comes to the risk of performance change, we have to talk about the patent infringement of Weicheng Technology.

2. Important patents are involved in infringement

On October 18, 2023, about a month before the submission of the form, Weicheng Technology received a summons from the Ningbo Intermediate People's Court, and Legrand Intelligent Electric (Huizhou) ** abbreviation: Legrand) appealed, alleging that Weicheng Technology infringed its ZL200680025323Patent No. X, which was used in violation of regulations to produce and sell products.

The patent is titled "Connecting Splint for Cable Tray Section" and was applied for in 2006. The corresponding patent in Weicheng Technology is the No. 2020104646511 patent "cable tray" applied for in May 2020.

The patent "Connecting splint for cable tray section" is extracted from patent9**.

At the same time, the author also noticed that including the No. 2020104646511 patent, there are 26 invention patents of Weicheng Technology22 itemsfor those obtained in 2019 or later, and these patents are on the marketThe repetition is highand most of the acquisition timeLagto competitors. In other words, it is easy for Weicheng Technology to infringe on competing patents in actual production and be sued.

In response to Legrand's lawsuit, Wilson Technology stated in the prospectus that the sales of the products involved in the lawsuit accounted for less than 1/1000 of the issuer's operating income in each period during the reporting period. Even if the company is found to be infringing by the court, it is difficult for the court to fully support the amount of damages claimed by the plaintiff.

Patent Litigation Risks Extracted from the Prospectus

However, the truth is not as simple as Wilson imagined. Once the patent infringement is confirmed, compensate the other party for the loss, rightCorporate identityThe damage would be even greater. Moreover, if it is found to be an infringement during the listing review, it does not rule out that the review will not be approved due to the negative impact of this event. After all, R&D strength and the correct attitude towards R&D are the basic capabilities that specialized, special and new "little giants" and national high-tech enterprises need to have.

In addition, Weicheng Technology in recent yearsHollowed-out dividends, the appearance is really ugly.

Third, hollowed out dividends, ugly to eat

From its establishment to the end of the reporting period, the actual controllers of Weicheng Technology have always been Wen Lijun and Yu Bo. The husband and wife together control Weicheng Technologyof equity. At the same time, among the more than 5% of the major shareholders, there are also film and television stars Lu Yi and Bao Lei.

In 2017, Jiamu Chengjiu participated in the private placement of Weicheng Technology and held 924% of the shares. Lu Yi and Bao Lei hold 99% of the shares of Jiamu Chengjiu and are its absolute controllers.

And at the time of the shareholding, Jiamu Chengjiu signed a VAM agreement with Wen Lijun and Yu Bo, if Weicheng Technology fails to complete the application for an initial public offering on December 31, 2023 in China's A** market and is accepted by the China Securities Regulatory Commission. Jiamu Chengjiu can ask Wen Lijun and Yu Bo to repurchase the equity they hold.

On January 25, 2022, the parties signed a supplemental agreement on the modification of the "triggering circumstances of the share repurchase option", but the VAM agreement was not completely liquidated or terminated. At the time of the IPO review,VAM AgreementsVAM agreements that have not been fully cleaned up will become an obstacle in the review process.

Another obstacle is the companyHollowed-out dividends, and want to go public to raise funds to replenish the flow.

According to the current regulations, the funds raised by enterprises listed on the market can be used to repay debts or supplement liquidity. Therefore, the phenomenon of hollowing out dividends before listing has occurred repeatedly, and many companies have taken advantage of this loophole to pay large dividends, and then let the market pay for them, which is really ugly.

In 2022, Weicheng Technology will pay dividends2980.980,000 yuan, and the net profit of the year only3009.290,000 yuan, according to the actual controller couple control 8357% equity to calculate, there is approximately24.91 million yuanentered the pockets of Wen Lijun and Yu Bo. Later, Weicheng Technology plans to use the raised funds55 million yuanIt is used to replenish liquidity.

The dividends of Weicheng Technology are excerpted from the "Prospectus".

This kind of large-scale dividends while trying to raise funds to replenish the flow is to use the secondary market as an ATM, harming the interests of investors and making investors pay. And in the actual audit, because there is no clearAudit CriteriaThere are enterprises with large dividends, and there are situations where the final audit is passed or not, resulting in many enterprisesFluke mentality, willing to take risks, eventually leading to the phenomenon of hollowing out dividends often occurs.

How to find ways to achieve long-term and stable operation is the key, if you just want to make money, it is easy to backfire.

Note: This article does not constitute any investment advice. **There are risks, and you need to be cautious when entering the market. There is no harm in buying and selling.

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