According to public information, the main business of Liju Thermal Energy is the research and development, production and sales of hot water boilers and steam boilers, and the products are used for heating and domestic water, as well as steam required for industrial production. The company passed the meeting on August 15, 2023 and plans to land on the main board of the Shanghai Stock Exchange.
Selling expenses are unusually high
The sales expenses of Liju Thermal Energy once attracted more attention from the outside world. From 2020 to 2022 and from January to June 2023 (hereinafter referred to as the "reporting period"), the sales expenses of Liju Thermal Energy were 7,557360,000 yuan, 9,344450,000 yuan, 9,344$870,000 and $4,844330,000 yuan, and the corresponding sales expense rates were. 50% % and 1193%。During the reporting period, the average sales expense ratio of comparable companies in the same industry was as follows. 63% and 261%, which is much lower than the power of the thermal energy.
According to the data, the sales expenses of Liju Thermal Energy are mainly composed of three parts: employee salaries, quality assurance service fees and business entertainment expenses, accounting for more than 76% of the total sales expenses. Taking 2022 as an example, Liju Thermal Energy will pay nearly 4,695 salaries to 105 sales personnel$40.
Screenshot**: Liju Thermal Energy Prospectus (Registration Draft).
From 2020 to 2022 during the reporting period, the average salary of sales personnel of Liju Thermal Energy reached 45510,000 yuan, 45800,000 yuan and 42300,000 yuan, the average salary of sales staff of comparable companies in the same industry is 28060,000 yuan, 31630,000 yuan and 32070,000 yuan, far lower than the power of heat energy.
An industry insider said that the anomaly of sales expenses, especially the fact that salespeople are paid much higher than their peers, can easily be suspected by regulators of possible bribery of customers through employees.
High qualifications may not be guaranteed
According to the prospectus, after years of professional operation and research and development, the company has mastered a series of core technologies of industrial boilers such as water-cooled premixed combustion technology, flue gas condensation heat exchange technology, vacuum phase change heat technology, etc., and has obtained the certification of high-tech enterprises.
For high-tech enterprises, a very competitive indicator is R&D capabilities. As of June 30, 2023, Liju Thermal Energy has obtained 10 domestic invention patents, 3 overseas invention patents, 78 utility model patents and 1 design patent. It was found that 5 of the 10 domestic invention patents of Liju Thermal Energy were obtained through transfer. In addition, 2 of the company's invention patents were obtained after 2019, 1 was obtained in April 2016, and the remaining 7 were obtained before 2016.
So, what is the level of the number of invention patents of Liju Thermal Energy compared with companies in the same industry?
Among comparable companies, in the 2022 annual report of Huaguang Huaneng, as of December 31, 2022, Huaguang Huaneng has a total of 982 valid patents, including 160 invention patents.
According to the 2022 annual report of Hailu Heavy Industry, as of April 11, 2023, the disclosure date of Hailu Heavy Industry's 2022 annual report, Hailu Heavy Industry has obtained a total of 144 valid patents, including 48 invention patents.
According to the 2022 annual report of Decision Co., Ltd., as of December 31, 2022, Decision Co., Ltd. has a total of 66 invention patents, 269 utility model patents and 45 appearance patents.
As of June 30, 2021, XIZICE signed the prospectus for the public issuance of convertible corporate bonds, and as of June 30, 2021, XIZICE had a total of 69 invention patents.
It can be seen that the number of invention patents of Liju Thermal Energy is at the bottom of comparable companies in the same industry.
It is worth mentioning that Liju Thermal Energy stated in the prospectus that its high-tech enterprise certificate will expire on November 30, 2023, and the certificate number is GR202033008358.
According to the Ministry of Science and Technology, the Ministry of Finance, and the State Administration of Taxation revised and issued the "Administrative Measures for the Identification of High-tech Enterprises" at the beginning of 2016, the conditions to be met for the identification of high-tech enterprises, the proportion of enterprises with sales revenue of more than 200 million yuan in the latest year is not less than 3%;In addition, it is also clearly stipulated that R&D personnel must account for more than 10% of the total number of employees of the enterprise in the current year.
As of the date of issuance of the prospectus, Liju Thermal Energy has re-declared the conditions for the re-identification of high-tech enterprises, and the year before the application for recognition should be 2022.
According to the prospectus, as of the end of 2022, there are 72 R&D personnel in Liju Thermal Energy, accounting for 9 of the total number of employees39%, less than 10%. From the perspective of the proportion of R&D personnel, Liju Thermal Energy does not meet the evaluation conditions of high-tech enterprises.
The outsourcing company is suspected of being a former employee shareholding company
According to the prospectus, the surface treatment process of some non-core components is produced in the form of outsourcing processing, mainly including boiler outer packaging plate spraying processing, grate nickel plating processing, etc.
The cooperation model of outsourcing processing is mainly for the company to provide raw materials, and the outsourcing processing manufacturer provides the production site, production personnel, necessary production conditions and is responsible for the production and processing of a single or several processes, and the company pays the processing fee to it. During the reporting period, the amount of outsourcing processing and installation services procured by Liju Thermal Energy was 5,286390,000 yuan, 6,614330,000 yuan, 7,342130,000 yuan and 4,021400,000 yuan, accounting for the proportion of operating costs in each period. 53% and 1747%。
Qingdao Zhuo Neng Electromechanical Equipment*** hereinafter referred to as Zhuo Neng Electromechanical) is the main outsourcing installation manufacturer of force heat energy during the reporting period. According to industrial and commercial information, Zhuo Neng Electromechanical was established in April 2012, with Hou Guozhu holding 60% of the shares and Ma Guijuan holding 40% of the shares as the supervisor.
At the same time, industrial and commercial information shows that Ma Guijuan once served as the person in charge of Zhejiang Liju Water Heater *** Qingdao Branch, which is a branch of Liju Thermal Energy, established in September 2016 and cancelled in June 2017. However, in the prospectus, Liju Thermal Energy did not disclose the company's former employees' public participation in the outsourcing business.