The Listing Committee of the Beijing Stock Exchange is scheduled to hold the second review meeting in 2024 at 9 a.m. on January 12, 2024, at which time it will review the matters of Guangdong Bawei Biotechnology Co., Ltd. *** (hereinafter referred to as "Bawei Shares"). The prospectus disclosed that Bawei shares planned to raise 8,400 yuan this time000,000 yuan, which will be used for intelligent production workshop construction projects, R&D center construction projects, and supplementary working capital projects.
According to the data, the main business of Ba Wei Co., Ltd. is the research and development, production, sales and testing of cosmetics, and the product categories cover skin care products, first-class washing and care, makeup and other categories. Ba Wei Co., Ltd.'s product sales cover domestic and foreign markets, serving more than 1,000 cosmetics brands in total, and has established relatively stable business cooperation with well-known cosmetics brands at home and abroad, such as Unilever, Renhe Ingenuity, HBN, Skintific, Marubeni, Dr. Ling, New West Mystery, Gu Yu, Hongzhi and so on.
In terms of performance, from January to June 2020, 2021, 2022 and 2023 (hereinafter referred to as the "reporting period"), Bawei shares achieved operating income of 31,404 respectively270,000 yuan, 41,558880,000 yuan, 45,937$970,000 and $21,319710,000 yuan;Net profit attributable to shareholders of the parent company was 2,835670,000 yuan, 2,125130,000 yuan, 3,803$950,000 and $2,172180,000 yuan;Net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses was 2,583610,000 yuan, 1,997010,000 yuan, 3,485$540,000 and $1,913690,000 yuan.
From the above financial data, it can be seen that in 2021, the company's profit is declining while its operating income is growing, of which the company's operating income in 2021 increased by 32% year-on-year34%, but the net profit attributable to shareholders of the parent company fell by 25% year-on-year06%, net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses decreased by 22 year-on-year70%, a large decline.
In addition, according to industry data, the total retail sales of cosmetics in 2022 will decrease by 4% year-on-year compared with 20215%, 2022 is the first negative growth in China's total cosmetics retail sales in the past decade;The performance of comparable companies in the same industry in 2022 has declined to varying degrees, mainly due to the suppression of consumer demand for cosmetics in 2022. However, the performance of Ba Wei shares has achieved positive growth, which is mainly due to the substantial increase in the company's sales revenue to Renhe Group, a major customer. In 2022, the company's sales revenue to Renhe Group will be 8,660$170,000, up from $2,547 in 2021570,000 yuan, an increase of 6,112690,000 yuan, an increase of 23994%, while the company's operating income in 2022 increased by only 4,379090,000 yuan. It can be said that if the company's sales revenue to Renhe Group increased significantly in 2022, the company's performance in 2022 would also decline.
It is worth noting that during the reporting period, the company's gross profit margin on sales to Renhe Group was significantly lower than the company's average gross profit margin. In each period of the reporting period, the gross profit margin of the company to Renhe Group was as follows. 53% and 1536%, and the company's average gross profit margin in the same period was respectively. 47% and 3523%。In this regard, Ba Wei shares explained, on the one hand, in order to deepen the cooperative relationship with Renhe Group, fully cooperate with and support Renhe Group's marketing and promotion strategy for individual products;On the other hand, due to economic considerations, if the company does not carry out the above sales, the company's capacity utilization rate will be significantly reduced, the fixed expenses to be shared by other existing customers will increase significantly, and the company's overall gross profit margin and profitability will be significantly reduced.
Judging from the above-mentioned explanation of Ba Wei shares, the company's bargaining power for Renhe Group's sales of products is obviously weak, and if the company does not sell at a low price to Renhe Group, the company's capacity utilization rate will be significantly reduced, which shows that the company's core competitiveness of products is obviously insufficient. In fact, even though the company sells to Renhe Group at a low price in order to improve capacity utilization, there is still a lot of idle capacity utilization rate in the reporting period. In each period of the reporting period, the company's capacity utilization rate was as follows: 07% and 8241%, almost half of the production capacity is idle.
The controlling shareholder and actual controller of Bawei shares are Leng Qunying and Liu Ruixue. Prior to the issuance, Leng Qunying held 19,350,000 shares of Ba Wei shares, accounting for 25 of the total number of shares of Ba Wei shares2611%, the largest shareholder of Bawei shares, during the reporting period, Leng Qunying has been serving as the company's chairman and general manager. Liu Ruixue holds 10,800,000 shares of Ba Wei shares, accounting for 14 of the total number of shares of Ba Wei shares0992%, during the reporting period, Liu Ruixue has been serving as a director of the company. Leng Qunying and Liu Rui are husband and wife, and hold a total of 39 companies36% of the shares, and a total of 60% control of the company through a concerted action agreement11% stake.
According to the prospectus, from September 1998 to June 2003, Leng Qunying served as the general manager of Guangzhou Yagaoli Cosmetics *** hereinafter referred to as "Yagaoli"). According to public information, Yagaoli was established in September 1999, which is a year later than Leng Qunying began to work in Yakoli.
According to the prospectus, from December 2002 to March 2004, Liu Ruixue served as a R&D engineer of Guangzhou Tianyi Cosmetics (hereinafter referred to as "Guangzhou Tianyi"). According to public information, Guangzhou Tianyi was established in December 2005. In other words, during Liu Ruixue's tenure at Guangzhou Tianyi, Guangzhou Tianyi had not yet been established.
In addition to the above-mentioned prospectus contradicting the resumes of the actual controllers Leng Qunying and Liu Ruixue with public information, the prospectus of Bawei shares also has the same problem with the resumes of other directors, supervisors and senior managers.
Leng Zhigang is currently serving as the director and deputy general manager of Bawei Co., Ltd., and the prospectus discloses that from January 2000 to January 2002, Leng Zhigang served as the project manager of Hunan Baker Tilly Zixin Certified Public Accountants Co., Ltd. (hereinafter referred to as "Baker Tilly Zixin"). According to public information, Baker Tilly Zixin was established in August 2000, which was half a year later than Leng Zhi's first time in Tilly Zixin.
Chen Biao is currently serving as the director and deputy general manager of Bawei Co., Ltd., and the prospectus discloses that from August 1992 to December 2002, Chen Biao served as the senior manager of Zhentai Group, hereinafter referred to as "Zhentai Group").From January 2003 to January 2005, he continued to complete his personal studies at Beijing Foreign Chinese UniversityFrom February 2005 to August 2006, freelancing;From September 2006 to June 2009, he continued to complete his personal studies at Jinan UniversityFrom March 2007 to June 2018, he successively served as the deputy general manager, vice president, executive vice president and executive director of Guangdong Danzi Group. According to public information, Zhentai Group was established in August 1994, two years later than Chen Biao began to work in Zhentai GroupDanzi Group was established in September 2010, more than 3 years later than Chen Biao started working at Danzi Group.
Li Shiwei is now the chairman of the board of supervisors of Bawei shares, the head of the testing center, the prospectus discloses, from June 2006 to December 2009, Li Shiwei served as Guangzhou Lide Technology Testing, now renamed: Guangzhou Bureau Veritas Technical Testing, hereinafter referred to as "Lide Technology") test engineer. According to public information, Lide Technology was established in November 2007, more than one year later than Li Shiwei started working at Lide Technology.
Chen Qingyun is currently serving as a supervisor of Bawei Co., Ltd. and deputy general manager of the delivery center, and the prospectus discloses that from October 2003 to March 2005, Chen Qingyun served as an IE engineer of Liangte Electronic Technology (Dongguan)**hereinafter referred to as "Liangte Electronics"). According to public information, Liangte Electronics was established in April 2006, half a year later than Chen Qingyun began to work in Liangte Electronics.
On the whole, the resumes of directors, supervisors and senior managers disclosed in the prospectus of Ba Wei shares have repeatedly contradicted the public information, which also shows that there are still many flaws in the information disclosure of the prospectus of Ba Wei shares.
The promotion of cosmetics must strictly comply with the provisions of laws and regulations such as the Advertising Law of the People's Republic of China, the Regulations of the People's Republic of China on the Protection of Consumer Rights and Interests**, the Regulations on the Prohibition of Pyramid Selling, the Regulations on the Supervision and Administration of Cosmetics, and the Regulations on the Administration of Cosmetics Labeling. If Bawei shares and the company's customers can not properly handle the relevant public opinion or in the process of terminal marketing intellectual property infringement, false or misleading publicity and other non-standard behaviors, it may lead to damage to the company's brand and image and even cause the company to bear relevant responsibilities, which will have a certain adverse impact on the company's operation. In fact, Ba Wei shares were caught in a trademark infringement dispute case.
On August 26, 2021, Shaanxi Shengxiyuan Biotechnology***, as the plaintiff, filed a lawsuit with the People's Court of Haidian District, Beijing, on the grounds that Bawei Co., Ltd. used the plaintiff's trademark on the cleansing lotion, cosmetics and other goods produced by Bawei Co., Ltd. without its permission, Li Xiaohui Beauty and Health Center in Shangzhou City sold the above-mentioned goods in its store without its permission, and Li Xiaohui jointly infringed the plaintiff's registered trademark rights on the Douyin short** platform of Beijing Weibo Vision Technology. On March 10, 2023, the Beijing Haidian District People's Court made the (2021) Jing 0108 Min Chu No. 68984 Civil Judgment, ruling that Bawei shares should immediately stop the infringement and compensate the plaintiff for economic losses of 150,000 yuan and reasonable expenses of 10,000 yuan.
After receiving the judgment, Bawei has submitted an appeal petition to the Beijing Intellectual Property Court on April 14, 2023 to file an appeal.