After the previous A-share listing, after a full six years of rest and planning, Shanghai Longchuang Automobile Design Co., Ltd. is hereinafter referred to as"Longchuang design"Finally, it is a critical time to enter the capital market.
Retrospectively, the road to A-share capitalization designed by Longchuang is quite early! As early as more than six years ago, on June 22, 2017, Longchuang Design submitted the application materials for an initial public offering** and listing on the Growth Enterprise Market (GEM) and was accepted.
However, just three months later, due to the adjustment of its listing plan, Longchuang Design's initial listing journey was forever halted on October 13, 2017, when the China Securities Regulatory Commission officially announced that it had voluntarily withdrawn its listing application and terminated its IPO consideration.
On January 29, 2021, a memorable day for Longchuang Design four years after the cloud of initial listing failure, the Shanghai Regulatory Bureau disclosed the information of Longchuang Design's proposed initial public offering** and listing on the domestic ** exchange. As a result, it also kicked off the prelude to the second march of Longchuang Design to the A** field.
After years of dormancy and the transformation of performance development, Longchuang Design will still choose to be listed on the GEM this time.
Combing the timeline Huiju Finance found that on June 16, 2023, the IPO of Longchuang Design was accepted, the inquiry was accepted on July 12, and the first round of inquiries was replied to on January 8, 2024, more than six months later, and the second round of inquiries was quickly issued by the Shenzhen Stock Exchange on January 30.
In this round of inquiry, the Shenzhen Stock Exchange issued 14 soul torture questions to Longchuang Design, and conducted in-depth inquiries on issues such as the sustainability of performance growth, the rationality of gross profit margin changes, and large dividends, and the Shenzhen Stock Exchange further required to improve the quality of information disclosure in the prospectus.
According to public information, Longchuang Design, founded in 2003, is mainly engaged in the whole process design business of automobiles, and its main domestic customers include BYD Automobile, Great Wall Motor, Jiangling Motors, Geely Automobile and Dongfeng Motor.
Once again, Longchuang Design is obviously more prudent and more prepared.
According to the latest application materials of Longchuang Design, this time it selected Hualin ** as the escort of its IPO second palace, rather than the earlier GF**, not only that, but the audit institution was also changed from Zhonghua Certified Public Accountants to Lixin Certified Public Accountants.
The reason given by Longchuang Design is that the former intermediary is no longer suitable to act as an IPO intermediary due to its own problems.
In 2017, the then auditor Zhonghua Certified Public Accountants and Signing Accountants were deeply involved in the financial fraud scandal of Yabaite - forging letters from Pakistani dignitaries to fictitious company business projects, and the investigation results of the CSRC showed that Yabaite had a cumulative inflated operating income of about 5 from 2015 to September 2016800 million yuan, inflated profits of nearly 2600 million yuan.
What's more noteworthy is that GF ** is not only the sponsor brokerage of Longchuang Design when it was declared last time, but also the eighth largest shareholder of the company, it is understood that GF ** held Longchuang Design 133 before the issuance800,000 shares, accounting for 153%。
This time, Longchuang Design launched the IPO again, and the first choice for its listing is still the GEM, but compared with the first declaration six years ago, due to changes in fundamentals and fundraising needs, there has been a considerable increase compared with the previous time.
According to the listing application materials submitted for the first time on June 22, 2017, Longchuang Design had planned to issue no more than 2134 through the IPO200,000 shares to raise 21.9 billion funds invested"Automobile model manufacturing and design center construction project"、"Prototype manufacturing center construction project"with"Intelligent electric vehicle R&D center construction project"and other three major projects and replenish liquidity.
Longchuang Design, which restarted the capital journey this time, is much more high-profile. In the face of the sharp increase in performance, the target valuation of Longchuang Design's IPO is as high as 1.9 billion yuan, and the issuance scale is slightly increased to no more than 2841At the same time, the amount of funds raised increased to 4800 million yuan, an increase of 11917% went to"Pure electric intelligent vehicle platform project"、"R&D project of electronic and electrical architecture"、"Collaborative R&D platform system construction project"and other three major projects and supplementary liquidity 1800 million yuan.
After six years of dormancy, the restart of the listing plan, obviously, the revenue scale that plagued Longchuang Design at that time was small, and the low profitability level had been successfully broken through, but whether the performance growth was sustainable has inevitably become an important issue that cannot be ignored on the road to its second IPO journey.
In the previous IPO, the net profit of the year was more than 60%.
Revenue growth slows down and the sustainability of performance growth is questionable
Longchuang Design itself admits that its revenue scale was small and its profitability was low when it first declared.
According to the previous IPO application materials of Longchuang Design, from 2014 to 2016, Longchuang Design's revenue was 11.6 billion, 13.2 billion, 1900 million, and the corresponding non-net profit was 1123610,000, 1959920,000, 3118850,000, in the past three years, revenue and profit have maintained continuous growth, in terms of revenue and profit scale, the fundamentals are also qualified.
However, in 2017, the net profit of Longchuang Design fell sharply.
According to wind data, in 2017, the net profit attributable to the parent company of Longchuang Design that year was only 1129790,000 yuan is 65% higher than that in 2016**, perhaps this is the real reason why Longchuang Design withdrew its IPO.
The surge in net profit in 2022 is the strongest catalyst for Longchuang Design's IPO.
According to the latest version of the prospectus updated by Longchuang Design on January 22, 2024, its operating income in the first half of 2023 reached 41.8 billion, a year-on-year increase of 1627%, net profit exceeded 5421110,000 yuan, a year-on-year increase of 867%。
In the three years leading up to 2023, Longchuang Design's revenue has maintained a continuous growth trend.
According to public data, in the three years from 2020 to 2022, Longchuang Design's revenue was 34.7 billion yuan, 53.8 billion yuan, 76.1 billion yuan, deducting non-net profit of 2655120,000 yuan, 3671370,000 yuan, 1100 million yuan.
Obviously, the performance explosion of Longchuang Design in 2022 is the biggest confidence for the IPO of Longchuang Design.
The IPO was submitted in June 2023, just when Longchuang Design's business performance was very good, and in 2022, its operating income has exceeded 76.1 billion, an increase of 4150%, to achieve a deduction of non-net profit of 1100 million yuan, an increase of 19918%。
Huiju Finance noticed that in the three years before 2023, Longchuang Design's revenue showed a rapid growth trend, and from 2020 to 2022, the compound growth rate of operating income was 4816%, ushering in the best performance highlight time.
However, according to the data of Longchuang Design's 2023 interim report, in the first half of 2023, its operating income will be 41.8 billion, an increase of only 16 percent year-on-year27%, compared to 2021 and 2022. The 50% revenue growth rate has slowed significantly.
In the first half of 2023, it is obviously difficult for Longchuang Design to continue to maintain the high growth in 2021 and 2022, and it has shown a downward trend.
It is precisely because of the slowdown in revenue growth that the sustainability of Longchuang Design's performance growth has been the first to be concerned by regulators in the inquiry.
In fact, the sustainability of Longchuang Design's performance growth is the biggest question in the regulator's inquiry about its IPO.
Therefore, in the first round of inquiries issued by the Shenzhen Stock Exchange, it asked for an explanation"Whether the performance growth is sustainable and whether there is a risk of a significant decline in performance"。
Longchuang Design said frankly in the latest updated prospectus"The company's revenue growth rate is likely to decline further in the coming period. In addition, during the reporting period, the company's revenue growth was mainly in the new energy vehicle design and overseas automobile design business, if the automobile market boom declines or the penetration rate of new energy vehicles stagnates or the company's overseas market development is unfavorable, the company will face the risk of declining operating income growth. "
The high growth of performance has brought the hope of Longchuang Design to go public, but how to continue to grow to prove its growth and innovation has also become a must-answer question for Longchuang Design's IPO. A senior investment banker in Shenzhen told Huiju Finance.
The actual controller has been recorded in the integrity file
Staking 1874% of the shares were not disclosed in a timely manner
25 years old is a watershed in Wang Xun's life.
In 2000, Wang Xun, who graduated from Nanjing University of Aeronautics and Astronautics at the age of 25, gave up his stable job at the Shanghai Aircraft Factory and founded Shanghai Longchuang Automobile Design Co., Ltd"Longchuang Automobile Design", become the earliest batch of automobile research and development team in China, began to move towards"Chinese design"way.
Like other successful entrepreneurs, Wang Xun, the actual controller of Longchuang Design, is also full of sadness about entrepreneurship. In 2005, when China's auto market encountered an unprecedented trough, many companies were eliminated, and Longchuang Design was still facing the moment of life and death when it could not pay wages for three months.
After thousands of sails, from the listing in August 2015 to the submission of the GEM, it is not yet known how far Longchuang Design is from the A-share dream.
Huiju Finance noticed that Wang Xun directly held 30 of the company04% shares, and also serves as the executive partner of Dican Investment, Longshou Investment, Longren Investment, Chuangshou Investment, and Shanghai Longyao, which respectively hold the company. 63% and 058% of the shares, Wang Xun controls a total of 54 of the company86% of the voting rights of the shares.
Looking through the latest version of the prospectus, Huiju Finance noticed that the problems in compliance with Longchuang Design were particularly eye-catching.
In December 2019, Longchuang Design was issued a warning letter by the Shanghai Regulatory Bureau of the China Securities Regulatory Commission (CSRC) for failing to timely disclose foreign investment matters, failing to review and disclose related party transactions in a timely manner, and failing to timely disclose the pledged shares held by the controlling shareholder.
In April 2020, due to the above matters and the failure to review and disclose in advance the guarantee provided by the company to the shareholding company Dingchuang Automobile in April 2019, the company, the company's chairman Wang Xun and the secretary of the board of directors Yang Hong were given a disciplinary punishment of notice of criticism by the National Equities Exchange and Quotations Company and recorded in the integrity file.
It is worth noting that the amount of money involved in these violations is very large.
In January and April 2019, Longchuang Design made two investments in Dingchuang Automobile, with a total subscribed capital contribution of 29 million yuan, accounting for 1372%。
From April to July 2019, Longchuang Design signed the Technology Development Contract and related supplementary agreements with Dingchuang Automobile, with a total contract amount of 40,414050,000 yuan, accounting for 191 of its audited net assets in 201820%。
In April 2019, Longchuang Design and Top Design, as the guarantors of Dingchuang Automobile, signed a contract with Dingchuang Automobile and VIN Fast with a total amount of 97.5 million US dollars, and Longchuang Design assumed a maximum guarantee amount of 13,123500,000 yuan, accounting for 62 percent of the company's audited net assets in 201809%。
In July 2019, Wang Xun, the actual controller and chairman of Longchuang Design, pledged 12 million shares of the company to Bank of Hangzhou Shanghai Branch, accounting for 18 of the company's total share capital at that time74%, the purpose of the pledge is to provide equity pledge guarantee for the company's loan to Bank of Hangzhou Shanghai Branch.
In view of this, the Shenzhen Stock Exchange requires Longchuang to explain whether it meets the requirements"Production and operation conform to the provisions of laws and administrative regulations, and conform to national industrial policies"requirements.
In the eyes of industry insiders, for information disclosure violations, whether intentional or improper, it is unavoidable that there is an obvious lack of internal control behind it, and the effectiveness of internal control of enterprises to be listed has always been the key point of listing compliance review, and whether the effectiveness of the internal control system can be recognized by the regulator is an important issue that cannot be ignored in the process of IPO.
The low R&D expense rate has been subject to regulatory scrutiny
Whether it matches revenue and profit growth
Before the performance problem is not enough to form an inevitable stumbling block to the listing of Longchuang Design, another key indicator of listing on the Growth Enterprise Market - "innovation", Longchuang Design has attracted the attention of regulators.
From 2020 to mid-2022, Longchuang Design not only has a lower R&D investment ratio than Altai and Ivey in the same industry, but also has a large gap between the number of 24 invention patents and the 57 invention patents of comparable companies.
Generally speaking, the amount of R&D investment will directly determine the company's level of innovation and creativity to a large extent.
Longchuang Design's relatively low R&D investment ratio should prove that it is in line with the GEM"Three innovations and four innovations"positioning, obviously, still needs some convincing explanation.
According to the application data of Longchuang Design, from 2020 to the first half of 2023, its R&D expenses will be 2902450,000 yuan, 3415920,000 yuan, 4791430,000 yuan, 2709810,000 yuan, the proportion of employee compensation in R&D expenses is respectively. 88%。
Not only that, in the IPO reporting period from 2020 to 2022, the proportion of Longchuang design and R&D expenses in the current revenue was respectively. 29%, showing a downward trend year by year.
"Whether the R&D investment matches the company's revenue and profit growth, the reasons why the R&D expense ratio is significantly lower than the average level of comparable companies in the same industry, and whether there is a risk of business competitiveness and market share decline due to insufficient R&D investment in the automotive design business. ", the Shenzhen Stock Exchange issued a soul torture on this.
GEM is currently required'Three innovations and four innovations'If a company has technological innovation, but its R&D investment ratio is very low, it has to make people doubt whether it has technological advancement and core competitiveness, the above-mentioned investment bankers pointed out.
Gross margins have fluctuated significantly
The reasonableness of the change was questioned by the Shenzhen Stock Exchange
This time, the gross profit margin of Longchuang Design's large fluctuations is also a problem that cannot be ignored on the way to its listing.
Behind the high revenue and net profit brought about by the continuous growth of new energy vehicle sales, the sharp changes in its gross profit margin during the IPO reporting period are also particularly noteworthy.
As we all know, gross profit margin is one of the key indicators to measure the profitability of a business.
Public data shows that from 2020 to 2022, in the initial 2020 years, the gross profit margin of Longchuang Design's main business can still reach 4186%, but this trend took a sharp turn in 2021.
In 2021, the gross profit margin of Longchuang Design's main business suddenly increased from 41 beforeThe high of 86% fell to 3089%, down 1097 percentage points.
It was also in this year that the net profit of Longchuang Design was 4041950,000 yuan, compared with 4059 in 2020Compared with the net profit of 320,000 yuan, it fell by 0 year-on-year43%。
But the big changes in gross margins have only just begun.
In 2022, the gross profit margin of Longchuang Design will rebound to 3502%, and in the first half of 2023, it will further increase to 3876%。
It is worth noting that the gross profit margin of Longchuang Design's new energy vehicle design has increased from 43 in 202196% fell sharply to 37 in 202211%, a significantly higher decline than Alter, the main competitor in the industry.
In view of this, the Shenzhen Stock Exchange requires a quantitative analysis of the specific reasons for the large fluctuations in the gross profit margin of the main business during the reporting period, the key factors affecting the gross profit margin of each segment, and whether the relevant change trend is in line with the characteristics of the industry and whether it is consistent with comparable companies in the same industry.
The VinFastSCP project achieved a revenue of 2,103 in 2022660,000 yuan, accounting for 475%, the project's gross profit margin in 2022 is only -375%, which significantly reduced the gross profit margin of the new energy vehicle design business in 2022"Longchuang Design explained that the gross profit margin of new energy vehicle design will decline sharply in 2022. Longchuang Design also calmly believes that if the future of the automobile market prosperity changes greatly or the company's business structure, customer resources, cost control and other aspects of the large adverse changes, or the intensification of industry competition leads to the decline of the company's orders, the intensification of competition in talent reserves, the rise of human resources costs and other adverse changes, the company will face the risk of large fluctuations in the comprehensive gross profit margin.
In today's GEM review, a large fluctuation in gross profit margin is not an inevitable obstacle to the promotion of IPO, but mainly requires the enterprise to explain the reasons for the large fluctuation and whether this reason will have a continuous impact on the future operating conditions of the enterprise. ", a senior sponsor representative in Beijing told Huiju Finance.
The founding shareholders withdrew at a low price of 75% off
The failure of the three types of shareholders to cooperate with the ** verification attracted attention
Judging from the letter of inquiry, Hu Zhengnan, as the founding shareholder of Longchuang Design, withdrew from the stock exchange at a low price after holding the shares for eight years, which also attracted great attention from the regulators.
According to the prospectus, the predecessor of Longchuang Design was jointly funded and established by Wang Xun and Hu Zhengnan in July 2003, but Hu Zhengnan, as one of the founders, chose to withdraw in October 2011.
Huiju Finance learned that Wang Xun and Hu Zhengnan, the actual controllers of Longchuang Design, are alumni of Nanjing University of Aeronautics and Astronautics, and the two parties jointly invested in the establishment of Longchuang Co., Ltd. in the form of currency on July 18, 2003, of which Wang Xun invested 500,000 yuan and held 50% of the shares, and Hu Zhengnan invested 500,000 yuan and held 50% of the shares.
In October 2011, Hu Zhengnan will hold the remaining 245% equity (85750,000 yuan) for 54820,000 yuan was transferred to Langqi Investment, and after the completion of this equity transfer, Hu Zhengnan no longer holds the company's equity.
What is puzzling is that Hu Zhengnan's equity transfer when he withdrew from Longchuang Design was 639 yuan, which is significantly lower than the **8 of the transfer of equity by Japan Ark to the actual controller Wang Xun on the same day57 yuan, which is equivalent to a seven-to-five discount, why is this?
In view of this, the Shenzhen Stock Exchange requires Hu Zhengnan to participate in the background of establishment and withdrawal, the fairness of pricing, and whether he currently holds shares of the company.
As for the reason for the withdrawal, the explanation given by Longchuang Design is"Due to the adjustment of Hu Zhengnan's personal development plan and other reasons, he plans to withdraw from the company's operation and no longer hold shares. "
In addition, as of June 30, 2023, Longchuang Design also has 1 contractual private equity investment ** shareholder, namely Yaru Value Growth No. 2 *** Investment** (hereinafter referred to as "Yaru Value Growth No. 2 Investment**")."Yaru Growth No. 2**"), which belong to three categories of shareholders.
It is understood that Yaru Growth No. 2**, the manager is Shanghai Yaru Asset Management Partnership (Limited Partnership), which purchased shares through the national stock transfer system in 2017, and as of June 30, 2023, the ** holds 8,000 shares of Longchuang Design, with a shareholding ratio of 00094%。
What is strange is that, according to the reply letter, the sponsor took the initiative to contact the relevant handling personnel of Yaru Growth No. 2 through **, text messages, emails, etcHowever, as of the date of signing the reply to the inquiry, Yaru Growth No. 2** has not cooperated in providing relevant information required for the verification of the **.
Assault dividend 07.8 billion will also raise funds to replenish the flow
What is the intention?
Surprise dividends before the IPO are often suspected of deliberately collecting money for listing, and Longchuang Design also has surprise dividends before the IPO.
Huiju Finance flipped through the prospectus and found that the funding gap of Longchuang Design was not very large, and at the end of 2022, the monetary funds on the company's books were 25.5 billion yuan, corresponding to short-term borrowings of 2502940,000 yuan, however, by the first half of 2023, its monetary funds 22.9 billion yuan, but short-term borrowings are as high as 10.5 billion yuan, debt repayment pressure rose sharply.
According to the prospectus, from 2020 to the first half of 2023, the amount of short-term borrowings of Longchuang Design was 2302990,000 yuan, 4895270,000 yuan, 2502940,000 yuan, 10.5 billion yuan.
Huiju Finance noticed that from 2020 to 2022, the cash dividends of Longchuang Design were 1496750,000 yuan, 46.32 million yuan and 17.04 million yuan, and the cumulative cash dividend amount in three years is as high as 7832750,000 yuan, the signs of surprise dividends are very obvious.
From 2020 to 2022, the net profit attributable to the parent company realized by Longchuang Design will be 4059320,000 yuan, 4041950,000 yuan, 11.7 billion yuan, and the dividend of 46.32 million yuan in 2021 is equivalent to dividing all the net profits in 2021.
And the assault dividend is 7832750,000 yuan, which is equivalent to directly dividing 39 percent of the total net profit from 2020 to 202251%。
From the perspective of the equity structure of Longchuang Design, Wang Xun holds 30 of Longchuang Design04% shares, Wang Xun has received a total of 25.89 million yuan in cash dividends.
Generally speaking, the surprise dividend before the IPO, to a certain extent, means that the company is not bad for money, and while generously dividends, it reaches out to the capital market to make up for the flow. As far as the current market situation is concerned, a large proportion of dividends will basically encounter regulatory inquiries, and if a reasonable explanation cannot be made, it will inevitably end up like Fuhua Chemical and other companies.
Generally, the company's dividends will not exceed the net profit, and if a company's dividends exceed the net profit, the purpose of the dividend is very suspicious. Surprise dividends before the IPO, which means that the company is unwilling to invest the net profit into reproduction, in order to list the money is very suspicious, and it is not conducive to the development of the company, such a company will be responsible for the company after the listing, it is also very doubtful", the above-mentioned sponsor representative told Huiju Finance.
After six years of the previous IPO, how will the sustainability of Longchuang Design's performance continue? The answer to this question will directly determine the life and death of Longchuang Design's IPO, and whether Wang Xun, who has been in the road all the way, can usher in the change of his identity as the actual controller of A-shares, Huiju Finance will continue to pay attention to it in the future!