Kunpeng Project
Produced by |Bullet Finance.
Author |Left Xingyue.
Edit |Hu Fangjie.
American Editor |Qianqian.
Audit |Ode.
On December 24, Zhejiang Deste New Materials Co., Ltd. (hereinafter referred to as "Destai") updated its prospectus and declared its listing on the Growth Enterprise Market of the Shenzhen Stock Exchange.
According to public information, DESTE is a company specializing in PVB interlayer film and its photovoltaic modules. The IPO is expected to raise 400 million yuan, which will be mainly used for the company's annual output of 40,000 tons of PVB functional film project.
It is worth noting that unresolved patent disputes and complicated related party transactions are still "roadblocks" on the road to Deste's listing.
However, at the end of the year, the capital market is showing new changes. As early as August 27, 2023, the China Securities Regulatory Commission announced a phased tightening of the IPO rhythm. However, by the end of 2023, the Shenzhen Stock Exchange began to declare IPOs on a large scale. Bullet Finance noted that on December 25, 2023 alone, 19 companies have applied for the latest IPO on the GEM of the Shenzhen Stock Exchange and the main board of the Shenzhen Stock Exchange.
Figure: Oriental Fortune Network).
The "explosive" growth of IPO approval on the Shenzhen Stock Exchange at the end of the year needs to be further observed whether it can increase the chances of Deste's listing.
DESTE is a high-tech enterprise specializing in the R&D, production and sales of PVB interlayer film and its photovoltaic modules, the main products are automotive-grade, architectural-grade, photovoltaic-grade PVB interlayer film and PVB double-glass photovoltaic modules.
It is reported that PVB interlayer film is a polymer material film formed by PVB resin plasticized with plasticizer and extruded cast. PVB interlayer film is an indispensable raw material for the production of laminated glass, and the properties of laminated glass such as safety and reliability, controllable transparency, sound insulation, heat insulation, and ultraviolet resistance are mainly achieved through PVB interlayer film.
At present, DEST's PVB interlayer film and other products have been widely used in well-known downstream enterprises, including Fuyao Glass, Yao Pi Glass, Xinyi Glass, Huaneng International, etc.
From 2020 to the first half of 2023 (hereinafter referred to as the "reporting period"), DESTEL's operating income was 44.3 billion yuan, 70.1 billion yuan, 136.6 billion yuan, 53.3 billion yuan;The net profit attributable to the parent company in the same period was 5957200,000 yuan, 5812460,000 yuan, 9431660,000 yuan, 6208320,000 yuan.
Figure wind (unit: 10,000 yuan)).
It can be seen from the data that during the reporting period, Destex's operating income is in rapid growth, with a year-on-year growth rate of 94 in 202277%。
Bullet Finance noted that although Destex's performance has increased, it is not stable. In 2021, Destex's revenue increased by 58% year-on-yearAt the same time, the net profit attributable to the parent company fell by 243%。
In addition, behind the high growth of revenue, it cannot be ignored that the gross profit margin of Deste is declining year by year.
During the reporting period, the gross profit margins of Destex's main business were as follows: 67%。From 2020 to 2022, the gross profit margin of the company's main business declined year by year. Although it has rebounded in the first half of 2023, there is still a gap between the gross profit margin level and that of 2020.
Figure Deste Prospectus).
From the perspective of specific products, the gross profit margin of DESTE PVB interlayer - automobile increased from 34 in 202084% down to 26. in the first half of 202330%。In addition, during the reporting period, the gross profit margins of PVB double-glass modules were respectively. 74%、-6.44%, the profitability of the product is not stable, and it will still be in a state of "losing money and making money" in the first half of 2023.
Regarding the reason for the decline in the gross profit margin of the company's PVB interlayer film-automobile, Bullet Finance noticed that this is related to the fact that in order to open up the market and strengthen cooperation with downstream head automotive glass manufacturers, Deste has to sell to customers at a relatively low price.
The main domestic customers of Destetech PVB interlayer - automotive-grade products are Fuyao Glass, SYP Glass and Xinyi Glass, which account for a high market share of domestic automotive glass. Therefore, for the domestic market, Destex's bargaining power is not high.
In contrast, Deste's export has a slight advantage. According to the prospectus, during the reporting period, the company's gross profit margin of export sales were. 69%, much higher than the gross profit margin of domestic sales in the same period.
Figure Deste Prospectus).
However, during the reporting period, Destai's overseas sales revenue was 7475700,000 yuan, 9128080,000 yuan, 13.5 billion and 6098170,000 yuan, accounting for the proportion of main business income in the same period. 98% and 1147%。
Figure Deste Prospectus).
Destai's export business with strong earning power is relatively low, which shows that the company's ability to develop overseas markets is not strong. Under the "small profits and quick turnover" in the domestic market, how can DESTE further expand the overseas market and make both domestic and foreign sales "blossom" is still a problem for the company to consider in the future.
If you want to gain greater bargaining power in downstream customers, it is essential to continuously improve your technological innovation capabilities and develop new products that are more competitive and cost-effective.
According to the prospectus, during the reporting period, Destex's R&D expenses were 2297210,000 yuan, 4240380,000 yuan, 5235510,000 yuan, 2696420,000 yuan, accounting for the proportion of the current operating income respectively. 06%, the R&D expense rate fluctuates greatly.
Figure Deste Prospectus).
So what are the results of Destex's R&D?
According to the prospectus, as of the end of 2023, Deste and its subsidiaries have 18 invention patents and 92 utility model patents.
Generally speaking, invention patents can more strongly prove the company's R&D strength. However, from the perspective of 18 invention patents, only the patent of "a TPU film with good adhesion and its preparation method" was applied for on July 27, 2021, while the rest of the patents were obtained before 2020.
Figure Deste Prospectus).
It can be seen that in recent years, DEST's R&D achievements are not abundant, and the company needs to continue to make efforts on the road of R&D and innovation. It is worth mentioning that Deste is on the road to sprinting to the capital market, and the unresolved R&D patent litigation cannot be ignored.
On June 30, 2023, DESTE received the Notice of Response to Civil Cases from the Intermediate People's Court of Ningbo Municipality, Zhejiang Province (2023) Zhe 02 Zhi Min Chu No. 347, in which SEKISUI Chemical sued DESTE for infringement of its invention patent, and requested DESTE to immediately stop infringing ZL201580016679The company paid a total of CNY 50.34 million to Sekisui Chemical for the use of the temporary protection period, damages for infringement and other reasonable expenses.
On August 28, 2023, the Ningbo Intermediate People's Court in Zhejiang Province issued a ruling rejecting Sekisui Chemical's lawsuit.
However, Sekisui Chemical did not give up after losing the lawsuit. On November 1, 2023, DESTE again received the Notice of Response to a Civil Case, suing the Company for infringing its invention patent, and requesting the Company to immediately stop infringing on the infringement of the ZL201680018425. owned by Sekisui ChemicalThe Company paid a total of CNY 30.5 million in royalties for the temporary protection period, damages for infringement and other reasonable expenses to Sekisui Chemical.
Figure Deste Prospectus).
At present, the dispute case is in the stage of appealing against jurisdiction, and has not yet been substantively heard.
In response to the dispute, Deste stated in the prospectus that the patent foundation of Sekisui Chemical was weak, and the court finally found that the risk of infringement of the patent in question was low.
However, once Deste loses the lawsuit, the company will not only have to stop the infringement, but also pay tens of millions of yuan in compensation, and the company's operation will also be affected.
In fact, Destai's road to capital can be described as twists and turns.
As early as June 2019, Deste applied for listing on the GEM, but the company withdrew its first application after the on-site inspection. In the course of due diligence, the intermediary found that before 2018, Deste had problems with the occupation of funds by the actual controller, the payment of employee remuneration by procurement, the adjustment of sales withdrawal confirmation after the period, and the disclosure of supplementary information on the scope of related parties and related party transactions.
However, there are still many irregularities in this round of Deste, which hit the IPO again.
According to the prospectus, from December 2020 to January 2022, Jiaxing Fuying, a subsidiary of Destai, had a situation where the proportion of labor dispatch employees exceeded 10% of its total number of employees.
According to Article 4 of the Interim Provisions on Labor Dispatch, an employer shall strictly control the number of dispatched workers, and the number of dispatched workers used shall not exceed 10% of its total number of employees. The proportion of labor dispatch of Deste's subsidiaries obviously exceeds the "red line" of 10%, which does not comply with the relevant provisions of the Interim Provisions on Labor Dispatch, and there is a possibility of being administratively punished for violating the relevant regulations on labor and employment.
Not only that, but the company also has not fully paid the social security provident fund.
According to the prospectus, during the reporting period, the number of employees of the company was 508, 681, 876 and 1035 respectively, of which the number of employees who did not pay social security was 42, 115, 27 and 79, respectively, and the proportion of unpaid employees was. 63%。
Figure Destai letter of inquiry reply).
During the same period, the number of employees who did not pay provident fund was 44, 118, 29 and 97 respectively, accounting for respectively. 37%。
Figure Destai letter of inquiry reply).
It can be seen that in 2020 and 2021, the company's social security provident fund contribution ratio is not high, and the company still needs to make up or all employees pay social security and provident fund, which will have an adverse impact on business performance.
Bullet Finance also noted that there are also risks associated with Destex's related party transactions.
According to the prospectus, in each period of the reporting period, Deste sold PVB interlayer film to Chongqing Langdeng. It is reported that Chongqing Langdeng is 9750% and served as Executive Director and Manager.
During the reporting period, the sales amount of Deste to Chongqing Langdeng was 1816510,000 yuan, 1741540,000 yuan, 1515770,000 yuan, 498370,000 yuan, accounting for the proportion of the current operating income respectively. 94%。
In response to the reasons for the related party transaction, Deste stated in the prospectus that in order to further develop the southwest regional market and maintain customer relations, Chongqing Langdeng reached a cooperation with Chongqing Langdeng after comprehensively considering its financial strength and customer resources.
However, Bullet Finance noticed that Deste always sells products to Chongqing Langdeng at a "friendly price".
According to the reply to the inquiry letter, during the reporting period, the gross profit margins of products sold by Deste to Deste were respectively. 75%；The gross profit margins of Deste sales to third-party distribution customers are respectively. 77%。
Figure Destai letter of inquiry reply).
The gross profit margin of Deste's sales to Chongqing Langdeng is much lower than that of third-party customers, so is the transaction between the two parties fair and reasonable?Further explanations from Deste are needed.
In addition, Chongqing Langdeng is a distributor specializing in the sale of Deste products, and in this regard, the regulator also inquired about the related party transactions between Deste and Chongqing Langdeng, and asked Deste to explain the realization of terminal sales with Chongqing Langdeng, as well as the authenticity of business and income.
On the whole, in the context of declining gross profit margin, patent disputes and related party transactions may become "roadblocks" for Deste's IPO.
The title picture in the article comes from: Destal official website.