Reading guide:Valin Electronics' termination of listing may be the result of comprehensive considerations for many reasons,But in the previous review process,Whether it is the special equity structure that has no actual controller and employee shareholding platform as the largest shareholder,Or the illegal information disclosure flaws derived earlier under this special structure,It is the focus of the regulator's attention。
This article was originally published by Koukouipo (ID: koukouipo).
Author: Yao Yi @ Beijing
Editor: Zhai Rui@Beijing
Although it took up to 4 years of preliminary counseling to obtain the qualification to apply for listing on the GEM of the Shenzhen Stock Exchange, Shandong Valin Electronics Co., Ltd. (hereinafter referred to as "Valin Electronics") still failed to grasp this hard-won IPO opportunity.
On February 29, 2024, eight months after Valin Electronics officially submitted its GEM IPO application and was accepted by the Shenzhen Stock Exchange, with the issuance of a paper decision of the Shenzhen Stock Exchange on terminating the initial public offering** and listing on the GEM, Valin Electronics' efforts to enter the A** field for many years were ruined.
More than a month ago, the Shenzhen Stock Exchange had just issued an inquiry letter for the second round of review of Valin Electronics' IPO.
Now it seems that the regulator can no longer wait for the relevant feedback from Valin Electronics and its intermediaries.
According to the above-mentioned termination review decision, on February 27, 2024, two days ago, Valin Electronics and its IPO sponsor Dongxing** applied at the same time and voluntarily withdrew the relevant documents of its IPO application, and according to the "Shenzhen **Exchange** Issuance and Listing Review Rules", the Shenzhen Stock Exchange decided to terminate the continued review of Valin Electronics' IPO on February 29.
This is the third IPO company to terminate the listing promotion of the GEM by voluntarily withdrawing its application after the Spring Festival holiday in 2024.
As a high-tech enterprise specializing in the R&D, production, sales and technical services of thermal printheads, Valin Electronics claims to be able to provide customers with a variety of series and multi-purpose thermal printheads with various printing densities, different printing speeds and different print widths, with more than 1,000 specific specifications, and is the world's most advanced R&D and production manufacturer of thermal printheads.
In the IPO application materials submitted to the regulator, Valin Electronics also boasted that it "took the lead in realizing the localization of thermal printing core components - thermal print heads, breaking the monopoly of thermal printing heads by foreign manufacturers for a long time".
According to Valin Electronics' original plan, in the listing application officially submitted to the Shenzhen Stock Exchange on June 26, 2023, it had hoped to issue no more than 3186670,000 shares to raise 6500 million yuan was invested in three major projects: "industrialization of high-end thermal printing core modules", "industrial basic R&D center" and "informatization construction".
Unlike most of the other pre-IPO companies that have recently been listed and have suffered from the increasingly weak performance, Valin Electronics is difficult not to admit that it meets the positioning of the "growth innovation and entrepreneurship" enterprise of the Growth Enterprise Market (GEM) in terms of operation and R&D investment.
Public data shows that from 2020 to 2022, Valin Electronics' operating income will be 47.1 billion, 589.7 billion and 59.8 billion, and the corresponding non-net profit deducted in 2020 was 9663In addition to 840,000, the remaining two years have continued to exceed 100 million, reaching 12.7 billion and 119.8 billion.
From January to June 2023, Valin Electronics still maintained a good performance growth trend, with its revenue exceeding 300 million in just half a year, and the corresponding non-net profit also recorded 7538210,000 yuan.
In terms of R&D investment, an important indicator that can best measure the innovation ability of enterprises, Valin Electronics is not far behind among the companies that plan to be listed on the GEM.
In the three years from 2020 to 2022, its R&D investment accounted for about 10% of its revenue, and the cumulative investment has reached nearly 1700 million yuan, far exceeding the standard of "the cumulative R&D investment amount in the last three years shall not be less than 50 million yuan" required by the positioning of the GEM.
However, it is such a seemingly high-quality company, but after 8 months of applying for listing, it has just completed the first round of feedback and replies from the exchange and entered the second round of inquiries.
Valin Electronics' plan to adjust the IPO may be related to its earlier controversial equity history. On February 29, an intermediary close to the regulator told Knock Financial News that the termination of Valin Electronics' listing may be the result of comprehensive considerations, but in the previous review process, whether it is the special equity structure of the largest shareholder without the actual controller and employee shareholding platform, or the flaws in the disclosure of illegal information derived earlier under this special structure, are the focus of the regulator's attention.
This IPO is not Valin Electronics' first capital journey.
As early as May 17, 2017, Valin Electronics successfully landed and listed, and it was not until July 2020 that Valin Electronics, which had already entered the IPO counseling process at that time, terminated the transaction.
At that time, Valin Electronics continued to supervise the brokerage during the listing period, and it is now the sponsor that escorts its GEM listing - Dongxing**.
Perhaps, if there is no implementation of Valin Electronics' plan to plan an A-share IPO a few years after being listed, its deliberate concealment of the letter and approval of important shareholders held on behalf of the company will not be revealed.
In addition to the controversy over the historical evolution of equity, whether Valin Electronics has really achieved "the first to realize the localization of thermal printing core components - thermal printheads, and break the long-term monopoly of thermal printheads by foreign manufacturers", I am afraid that it will also play a big question mark.
Due to the high barriers to entry in the thermal printhead industry, the industry concentration is high. Since the advent of thermal printheads in the 60s of the last century, after fifty or sixty years of development, the market share of the world's four major thermal printhead manufacturers has exceeded 85%, namely Kyocera, Rohm, Valin Electronics and AOI. With the exception of Valin Electronics, all of them are concentrated in Japan.
Now, based on the data of 2022, the sales volume of Valin Electronics' thermal printhead products accounted for about 32% of the global market that year, ranking first in the world; It accounts for about 19% of sales, ranking third in the world.
However, Valin Electronics not only has the current general manager and main technical core personnel from outside Japan, but its dependence on Japanese top businessmen has not been effectively solved in the past many years.
1) Concealing the past of major shareholders in violation of regulations
Founded in 1995, the Sino-Japanese joint venture - Valin Electronics *** hereinafter referred to as "Valin Co., Ltd.") is the predecessor of today's Valin Electronics.
By August 2014, when Valin Co., Ltd. was formally restructured into Valin Electronics, it was now listed on the A-share market, and the company SNBC was 34With a shareholding ratio of 8%, it became its largest shareholder. Shihezi Xinhaike Equity Investment Partnership (Limited Partnership) (hereinafter referred to as "Xinhaike"), as the employee shareholding platform of Valin Electronics, also ranked second in the list of shareholders with a shareholding ratio of 30% after SNBC.
At the beginning of 2017, on the eve of Valin Electronics' declaration and listing, after several rounds of capital increase and equity transfer, the employee shareholding platform Xinhaike became its largest shareholder, with a shareholding ratio of 35%.
In April 2017, also under the sponsorship of Dongxing**, Valin Electronics disclosed the public transfer prospectus, and it was in this document that Valin Electronics made it clear that "the company does not exist or has ever had a situation of equity holding, the company does not have any problems affecting the clarity of the company's equity, and there is no ownership dispute over the company's existing equity." ”
In the above-mentioned public transfer prospectus, Valin Electronics describes the employee shareholding platform Xinhaike as follows - established on December 5, 2013, with a registered capital of 46.8 million yuan, funded by 21 natural persons, three of whom are general partners, and the remaining 18 are limited partners.
This is far from the case.
According to Valin Electronics, six years later, when it applied for the GEM IPO in June 2023, it had to admit that 21 natural persons who were prominent shareholders in Xinhaike held relevant shares on behalf of 712 shareholders.
In addition to the more than 690 former Valin Electronics employees who are working, retired and resigned, the real 712 shareholders of Xinhaike also include 13 external shareholders, who hold a total of 25.74 million yuan of capital contribution of Xinhaike, accounting for 52 of the total capital contribution8%。
However, during the period from the official listing in May 2017 to the termination of the listing of Valin Electronics in July 2020, as a public company, it has been concealing the fact that its major shareholder Xinhaike has the above-mentioned nominee shares, insisting that the company does not exist or has ever had a nominee shareholding situation.
Perhaps, if it were not for Valin Electronics to start preparing for the A-share IPO in 2019, the truth about Xinhaike's equity holding may continue to be hidden.
As long as the reasons and rationality are explained to the regulator and restored, it will not cause substantial obstacles to the capital operation such as the listing of the enterprise, but why did Valin Electronics insist on concealing this matter during the declaration and listing of the year?
It turned out that according to Article 10 of the old "** Law" that was being implemented that year, the cumulative number of people who issued ** to specific targets should not exceed 200.
Obviously, if it is admitted that Xinhaike has equity holding, it is estimated that the shareholders of Valin Electronics will greatly exceed 200 people. That is to say, Valin Electronics, as the subject of the declaration and listing, had violated the clear provisions of the "** Law" at that time.
It is precisely because of this that Valin Electronics was able to be listed and continue to trade for nearly three years at the risk of false disclosure.
After the revision of the ** Law in 2020, it is clear that the number of employees who implement the employee stock ownership plan in accordance with the law is not counted in the cumulative number, which means that after the restoration of the holding, the number of shareholders of Valin Electronics has met the relevant regulations. The above-mentioned intermediary person close to the regulator said frankly.
As early as July 2019, Valin Electronics signed a counseling agreement with Dongxing** to kick off its A-share IPO, and submitted the initial public offering** and listing guidance and filing materials on the Science and Technology Innovation Board to the Shandong Securities Regulatory Bureau in the middle of the same year. Until May 2023, which lasted nearly 4 years, during which a total of *** times were carried out, the IPO of Valin Electronics finally completed the counseling and acceptance.
According to Knock Financial News, the main reason why Valin Electronics' IPO counseling period is so long also comes from how to solve its employee shareholding platform, that is, the problem of holding hundreds of shareholders of its major shareholder Xinhaike and the problem of standardization.
No matter what the factors are, there is no doubt that Valin Electronics concealed important facts and disclosed information during the listing and trading period, and its related behaviors will inevitably be held accountable by the regulators. The above-mentioned intermediaries believe that once they are punished by the regulators, they will inevitably form an obstacle to the IPO of Valin Electronics.
2) The dependence of Japanese ** merchants on the "knot".
The thermal print head industry has high entry barriers, the industry concentration is high, the world's main thermal print head manufacturers market mainly from Japan, this is indeed an indisputable fact, but whether Valin Electronics is really as it said in the IPO application materials has essentially "broken the thermal print head monopoly by foreign manufacturers for a long time", which may still need to be discussed.
As an early Sino-Japanese joint venture, although Valin Electronics said that its products have been localized, nearly ten years after the departure of the Japanese major shareholder, its relationship with the Japanese side has not diminished a little.
In 1995, at the beginning of the establishment of Valin Co., Ltd., it was jointly funded by Beiyang Group, Mitsubishi Electric, Itochu Corporation and Hualong Fax Machine. At the time of its establishment, it had a registered capital of US$16 million (total investment of US$32.28 million), of which US$5.6 million was invested by the Beiyang Group, US$4.16 million by Mitsubishi Electric, US$3.84 million by Itochu Corporation, and US$2.4 million by Hualong Fax Machine.
At the time of its establishment, according to the Joint Venture Agreement signed by the Sino-Japanese joint venture parties in September 1995, Valin Limited had an operating term of 20 years, which expired in 2015. The Japanese shareholder proposed to transfer its 40% stake in Valin Electronics Co., Ltd. by the end of March 2014.
But now, sitting in the position of general manager of Valin Electronics is still a Japanese person.
According to Valin Electronics, there are 4 senior managers identified by it, including Japanese Katagiri Kata（katagiri jo）He served as the General Manager and Director of the Board.
According to public information, Katagiri was born in 1956, is 67 years old, served as vice chairman and general manager of Valin Electronics from December 2003 to January 2014, and has been the director and general manager of Valin Electronics since January 2014, and has worked in Valin Electronics for 20 years.
Not only is he directly at the helm of Valin Electronics, but among the core technical personnel recognized by Valin Electronics, Katagiri is also the No. 1 existence.
As a Japanese, Katagiri is very important to such Valin Electronics, and it can also be seen from the salary he gets in Valin Electronics.
In addition to Valin Electronics, Katagiri currently holds a direct 265%, in 2022, the salary it only received from Valin Electronics is as high as 3.06 million, almost 10 times that of other core technicians who are identified as core technicians.
Luan Wenhua, another Chinese director and deputy general manager of Valin Electronics, is ranked next to Kataguni, and his salary in 2022 is only 8690 thousand.
In the first half of 2023, Kata's salary will be even higher to 2.38 million, while in the same period, the total salary of directors, supervisors, senior executives and core technical personnel of Valin Electronics will be 513690,000.
Compared with the Japanese personnel controlling the overall situation of the enterprise, Valin Electronics' dependence on Japanese top companies may be its greater risk.
Valin Electronics admits that during the three-year IPO reporting period from 2020 to the first half of 2023, the proportion of its total purchase amount to the total procurement amount of the top five material suppliers was respectively. 79% and 6797%。During the same period, the proportion of raw material purchases from three major overseas suppliers, including Mitsubishi**, Maruwa (Malaysia) and Qinyuan Technology, to the total procurement amount was respectively. 43% and 599%, especially Mitsubishi, which is the largest supplier of Valin Electronics, has the proportion of its raw material procurement amount to the total procurement amount. 96% and 4234%。
Although during 2022, Valin Electronics' procurement ratio of Mitsubishi ** has decreased, the proportion will rebound in the first half of 2023 and will always be around 4%.
Regarding the procurement dependence on Mitsubishi **, Valin Electronics explained that the main reason for the large purchase amount from Mitsubishi ** is the high maturity of the development of Japan's thermal printhead industry, and the upstream raw material industry has mature technology and complete supporting facilities, and Japan's distribution model is mature and the distribution service system is perfect.
However, Valin Electronics also added that the company has actively expanded domestic raw material procurement channels in recent years, and the main imported raw materials have been tested in batches or batches, reducing the dependence on Japanese manufacturers for raw material procurement, but there is still a certain gap between the quantity and quality of some raw materials of domestic manufacturers and overseas manufacturers.
As early as 2017, when Valin Electronics was listed, it admitted in the public transfer prospectus that "the key materials required by the industry mainly rely on imports, and the domestic raw material suppliers have poor stability in quality control and do not have the best advantages".
At that time, in the first ten months of 2017, Valin Electronics' procurement of Mitsubishi ** accounted for about 46 of the total procurement amount in the current period15%。
It can be seen that after many years, although Valin Electronics has publicly claimed that its products have broken the "monopoly situation" of foreign investors, various details still show that the fact that it relies on imports of key raw materials has still not been substantially improved.
The biggest impact of the setback of Valin Electronics' IPO is that in addition to the employee shareholding platform that is its largest shareholder, the listed company SNBC is the first to bear the brunt.
It currently holds a total of 2562 in Valin Electronics080,000 shares of SNBC is its second largest shareholder.
If Valin Electronics' IPO is completed, it will only be issued with its plan to "issue no more than 3186."670,000 shares to raise 6500 million funds", even if the valuation appreciation of Valin Electronics in the secondary market is excluded, the market value of the shares held by SNBC will exceed 522.5 billion. It is worth noting that earlier, SNBC just announced its 2023 performance forecast, saying that it expects its net profit attributable to listed companies in 2023 to be only between 14 million yuan and 21 million yuan.
That is to say, under the premise of the successful IPO of Valin Electronics, SNBC's holding value in Valin Electronics will reach dozens of times its annual profit in 2023.
However, all this will temporarily disappear with the "order evasion" of Valin Electronics' IPO.
ENDS).