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Product: research Institute of Sina Finance listed Company
Author: IPO refinancing Group / Zheng Quan
Recently, Haitong Securities was criticized by the Shanghai Stock Exchange, mainly due to the lack of due diligence in the verification of the company's IPO sponsors, the carelessness of due diligence by the core department of quality control in investment banks, and the weak links in the internal quality control of the sponsor business.
Haitong Securities has been punished by the Securities Regulatory Commission and the Stock Exchange for its IPO recommendation business many times in the past year, but the company has failed to make practical corrections. The Shanghai Stock Exchange also requires Haitong Securities to conduct a comprehensive self-examination of the listing sponsor projects and take practical measures to ensure that the rectification is in place.
According to the public information of the three major exchanges in Shanghai, Shenzhen and North China, Haitong Securities is currently reviewing a total of 35 IPO projects (taking acceptance as the standard, excluding registration valid and terminated projects).
Among the 35 companies, Zhejiang Yatong New Materials Co., Ltd. (Yatong New Materials) is worth paying attention to, because it does not answer some regulatory inquiries, Haitong Securities not only fails to correct the problem in time, but also avoids the conclusion of sponsor verification. Yatong new materials selected comparable peer listed companies, there are multiple versions, in the comparison of different indicators to choose different comparable companies, there is not a unified standard.
Avoid some regulatory inquiries without answering sponsors not only fail to correct but also "copy homework"
As of the date of signing the prospectus, the Metallurgical Institute directly owns Yatong New Materials 51Baccaratbarware.396% of the shares are the direct controlling shareholder of the company. Hangzhou Iron and Steel Group controls Yatong New Materials 59 through Metallurgical Institute and Suichang Gold Mine.Baccaratbarware.8212% of the voting shares are the indirect controlling shareholders of the company.
Historically, Yatong Xincai has more overlap with controlling shareholders and indirect controlling shares (see below for details). At the end of 2021, after consolidating the assets of its controlling shareholders, Yatong Xincai sprinted for IPO.
In the application draft of the prospectus published in June 2023, Yatong Xincai believes that it not only meets the conventional indicators of science and technology attributes, but also meets three of the five exception indicators of science and technology attributes (items 1, 2 and 5).
The exchange requires the issuer to meet the basis of three of the five exception indicators of science and technology. If it does not, please delete the relevant statement.
However, in its reply to the exchange, Yatong Xincai avoided answering the company's "basis for three of the five exception indicators of science and technology attributes", but said that the relevant expressions had been deleted directly in the updated prospectus. The reason given is that the company "has met the relevant requirements of the evaluation criteria of science and technology attributes".
What is puzzling is that if Yatong's new material meets three of the five exception indicators of science and technology, why not list the basis, after all, it can make investors more optimistic about the company's science and technology? If Yatong new material does not actually meet three of the five exception indicators of science and technology, is the first edition of the prospectus a false statement?
By reading the information in the prospectus, we can know whether Yatong New Materials meets the five exception indicators of scientific innovation attribute, "the core technology has been determined by the national competent department to play an international leading role or is of great significance to the national strategy." there is some doubt, because the national competent department the company is looking for is the Department of Economics and Information of Zhejiang Province, and the Department of Economics and Information of Zhejiang Province also entrusts experts to identify it. It is not identified by the Economic Information Bureau of Zhejiang Province.
Among the listed Science and Technology Innovation Board IPO enterprises, Sinopec believes that it meets the requirements of "the core technology is recognized by the national competent authorities to be internationally leading, leading or of great significance to the national strategy" is based on the official documents of the two central departments of the National Health Commission and the Ministry of Industry and Information Technology. The official documents of the central government departments are more authoritative and persuasive than the experts entrusted by the provincial government departments at the bureau level.
Interestingly, Haitong Securities did not correct the questions that Yatong Xincai avoided but did not answer the exchange's inquiries. On the contrary, Haitong Securities said in the verification opinion: "in view of the fact that the issuer has met the relevant requirements of the scientific and technological attribute evaluation criteria, the issuer has deleted in the prospectus and relevant application materials the statement of three of the five exception indicators of the scientific and technological attribute of the issuer," which is almost consistent with the statement of Yatong Xincai.
Comparable companies have multiple versions of "wayward" switching.
In addition to avoiding answering some of the questions asked by regulators, Yatong New Materials also has the problem of choosing different versions of comparable companies for comparison.
For example, in the chapters of "Gross margin and Gross margin Analysis" and "period expense Analysis" in the prospectus, Yatong New Materials will take only Special couple, Huaguang New Materials and Kaili New Materials as comparable peer companies.
In the chapter of "comparison between issuers and companies in the same industry", there are research powder and Yuean new materials as comparable peer listed companies.
In reply to the inquiry letter from the exchange, Yatong Xincai will only special couple, Huaguang new material, Kelly new material, Youyan powder material four companies as comparable companies.
To sum up, Yatong Xincai takes five listed companies as comparable peer companies in the prospectus, but when comparing in different chapters, it always selects three or four to compare, is there anything fishy? Is Haitong Securities diligent and conscientious?
Independence in doubt, performance skyrocketed after the integration of assets owned by the controlling shareholder
The independence of the personality of Yatong New Materials Company is more worthy of attention than the letter cloak. In history, the company and other related parties such as controlling shareholders have crossed or even confused in many aspects, such as asset business, R & D projects, personnel social security, office system, etc., especially when the company applied for IPO, the company also shared financial system and office system with Hangzhou Iron and Steel Group.
According to the application materials, it was not until the end of November 2022 that information systems such as Yatong Xincai Finance operated independently (still sharing the system). Before realizing independent operation, the basic configuration of Yatong New material Finance and other information system shall be uniformly managed and configured by Hangzhou Iron and Steel Group; some financial personnel of Hangzhou Iron and Steel Group and Metallurgical Institute have access to the company's financial statements; and the employee system authority of Yatong New material Financial system and OA system can only be configured and implemented after examination and approval by Hangzhou Iron and Steel Group.
Until the IPO filing (June 2023), Yatong New Materials will continue to use the financial and other information systems built by Hangzhou Steel Group, its indirect controlling shareholder, and promises to launch a complete set of independent financial systems, office systems and other information management systems before December 31, 2024. system. Since the company's financial system and office system cannot achieve formal independence, why should we rush to file for an IPO?
After December 1, 2021, Yatong Xincai achieved personnel independence. Before December 1, 2021 (Gu Xiaolong is before January 2022), some employees in the company's history signed labor contracts with the Metallurgical Institute and Suichang Gold Mine, and some employees 'salaries, social security and provident funds were paid or paid by the Metallurgical Institute and Suichang Gold Mine.
In particular, the independence of R & D personnel related to the scientific and technological innovation attributes of YATong New Materials will not achieve formal independence until July 31, 2021. Since then, the Metallurgical Institute has no longer undertaken scientific research projects related to Yatong's New Materials business from the Science and Technology Department of Zhejiang Province and other units, and has not incurred related expenses. During the reporting period (2020 and January to July 2021), Yatong New Materials employees participated in a total of 11 scientific research projects undertaken by the Metallurgical Institute.
After November 30, 2021, Yatong Xincai achieved asset independence. The company no longer participated in other R & D activities of the Metallurgical Institute, and the acquisition of related equipment and patent assets has been completed.
In November 2021, Yatong New Materials and Weitong Catalytic, a subsidiary of the Metallurgical Institute, completed the stock exchange merger. After the reorganization of Weitong Catalysis (precious metal catalyst business), Yitong Xincai's performance has reached a higher level. In the fiscal year before the reorganization (2020), the operating income, total assets and net assets of the reorganized party (Weitong Catalytic) accounted for 47.33%, 27.5% and 55.83% of the relevant indicators of Yatong New Materials, respectively, accounting for about 50%.
Yatong Xincai said that it belongs to the non-ferrous metal materials industry with Weitong Catalysis and has similarities and correlations in its business system and some links. However, judging from the photos of the products, Yatong Xincai's original main products (brazing materials) look quite different from the products of Weitong catalysis (precious metal catalysts)(see the figure below for details).
In addition, the types of major customers between the two businesses are also quite different. The main major customers of the brazing materials business are industrial groups such as BYD and Hisense Group, while the main customers of precious metal catalysts are WuXi AppTec, Haizheng Pharmaceutical, Aoxiang Pharmaceutical and other pharmaceutical companies.
After reorganizing its holding company's business (precious metal catalyst business), Yatong Xincai's performance has reached a higher level. Its net profit attributable to the parent company in 2022 has doubled compared with 2020, which is beneficial to the company's high valuation and high fundraising.
In this IPO, Yatong New Materials plans to issue no more than 14.66 million new shares, no less than 25% of the company's total share capital after this issuance, and is expected to raise 508 million yuan.