Recently, the National Bureau of Statistics released the national consumer price index (CPI) and producer price index (PPI) for September 2021. The CPI only edged up by 0.7%, while the PPI rose by 10.7%. The gap between the PPI and the CPI of 10.0 percentage points set a record. This means that the difficulties faced by industrial enterprises will increase, and the operating pressure of enterprises that are heavily dependent on certain raw materials will increase suddenly. For example, Chongqing Wangbian Electric (Group) Co., Ltd. The procurement cost of the main raw materials such as raw material oriented silicon steel coils and finished oriented silicon steel coils will skyrocket.
Wangbian Electric’s proposed listing site is the Shanghai Stock Exchange. On October 21, the status of Wangbian Electric was feedback. As early as November 24, 2020, Wangbian Electric changed the sponsor agency Shengang Securities to CITIC Securities, and then disclosed the prospectus on July 1 this year. On July 4, 2021, the China Securities Regulatory Commission will inspect the information disclosure quality and intermediary practice quality of 19 IPOs, and Wangbian Electric is listed.
Wangbian Electric plans to issue no more than 83,291,900 ordinary shares in RMB this time, and the total amount of publicly issued shares accounts for no less than 25% of the company’s total share capital after issuance. It plans to raise 855 million yuan for Intelligent complete sets of electrical equipment industrial base construction project (390 million yuan), 110kV and below energy-saving transformer intelligent factory technical transformation project (73.3059 million yuan), low iron loss and high magnetic induction silicon steel core intelligent manufacturing project (1. 2.8 billion yuan), R&D centers and informatization construction projects (62.5 million yuan), and supplementary working capital (200 million yuan).
Wangbian Electric family controls more than half of the equity, and the new third board has raised more than 200 million; gross profit margin has declined, and the R&D expense rate is much lower than the average of its peers; product quality issues have been suspended for several times or the qualification to win the bid; the sales area is concentrated, and the top five customers are established The time is short, the registration scale is small; the receivables are high, and the lawsuits demand payment;
The family controls more than half of the equity, and the New Third Board has raised more than 200 million
Wangbian Electric, formerly known as Changshou Jinfeng Electric Appliance Factory, was established in August 1994, and was transformed into Wangbian Limited in December 2009. As of the date of signing the prospectus, Yang Zemin held 21.06% of the company’s shares, and Qin Huilan held 16.08% of the company’s shares. Yang Zemin and Qin Huilan were husband and wife, and they were the controlling shareholders of the company. Yang Yao is the son of Yang Zemin and Qin Huilan, holding 7.20% of the company’s shares; Yang Qin is the daughter of Yang Zemin and Qin Huilan, holding 7.20% of the company’s shares. Yang Zemin, Qin Huilan, Yang Yao and Yang Qin are acting in concert. The four held a total of 128.79 million shares of Wangbian Electric, with a shareholding ratio of 51.54%.
As a subdivided leading enterprise in the southwest region, Wangbian Electric was founded by Yang Zemin and Qin Huilan 26 years ago with 200,000 yuan, and its revenue in 2020 has reached 1.298 billion yuan. If the actual controller improperly controls the company’s business decision-making, profit distribution, foreign investment and other major matters, it will still cause damage to the interests of the company or other shareholders.
As of the date of signing the prospectus, apart from the actual controllers Yang Zemin, Qin Huilan, Yang Yao, and Yang Qin, the shareholders holding more than 5% of the company’s shares are Pusi Guanghe, and the corresponding shareholding ratio of 22,222,200 shares is 8.89%. Among the shareholders, Chongqing Changshou Economic and Technological Development Zone Development and Investment Group Co., Ltd. is a state-owned shareholder with a shareholding ratio of 2.2233%.
Wangbian Electric was listed on the New Third Board on July 30, 2015, and terminated on September 6, 2019. After listing, Wangbian Electric has increased its capital three times. In 2015, it raised 9.8 million yuan with 2 yuan per share; in 2016, it raised 33.912 million yuan with 3.6 yuan per share; in 2017, it raised 3.6 yuan per share. Shares, raised 200 million yuan; three rounds of financing during the New Third Board raised a total of 243.712 million yuan.
Gross profit margin declined, R&D expense rate was far lower than the peer average
Wangbian Electric’s main business is the research and development, production and sales of power transmission and distribution and control equipment and grain-oriented silicon steel. From 2018 to 2020, the company’s operating income was 893 million yuan, 1.108 billion yuan and 1.298 billion yuan respectively, and the revenue in 2019 and 2020 increased by 24.08% and 17.15% respectively; The net profit in 2019 and 2020 increased by 105.66% and 32.11% respectively, and the growth rate of net profit was much higher than that of revenue. It is worth noting that from 2018 to 2020, the amount of government subsidies received by the company was 7.9567 million yuan, 7.7334 million yuan and 22.8814 million yuan respectively. The government subsidies in 2020 exceeded the sum of 2018 and 2019.
From the perspective of revenue product structure, the proportion of the company’s power transmission, distribution and control equipment in revenue fell from 69.52% in 2018 to 56.63% in 2020; the proportion of oriented silicon steel increased from 30.45% in 2018 43.37% in 2020. The downstream of the company’s power transmission and distribution and control equipment industry is mainly used in the power grid, industry, rail transit, infrastructure construction and other fields. The downstream of the company’s grain-oriented silicon steel industry is mainly used for the processing and manufacturing of transformer cores.
It is worth noting that the company’s operating performance is closely related to the overall development status and prosperity of the downstream industry, and the prosperity of the industry is closely related to the development of the country’s macro economy.
From 2018 to 2020, the gross profit margins of Wangbian Electric’s main business were 21.90%, 25.79% and 21.78%, respectively, and in 2020, it fell by 4.01% compared with 2019. From 2018 to 2020, the R&D expense rates of Wangbian Electric were 1.78%, 1.47%, and 1.39%, respectively, which were 4.23%, 4.42%, and 4.29% of the average levels of comparable companies in the same industry. %, well below the peer average.
Product quality problems have been suspended for several times or the qualification to win the bid
Weighing Finance noticed that Wangbian Electric has been granted a suspension of bidding or bid-winning qualifications for a certain period by some provincial companies of the State Grid due to general quality problems in the random inspection of some products.
In August 2018, the State Grid Sichuan Electric Power Company suspended the bid-winning qualification for 4 months, and the restricted product type was 10kV distribution transformer; Suspended bid-winning qualification for 12 months; in November 2020, its 10 (20) kV distribution transformer was imposed by State Grid Xinjiang Electric Power Co., Ltd. with “suspended bid-winning qualification for 12 months. This is enough to show Wangbian Electric’s internal control of product quality. There are major loopholes.
If the company conducts business in the future if the bad behavior in the relevant regulations of State Grid or other supplier management occurs again or the company’s products have quality problems, it may still be suspended by the major customers such as State Grid. The issuer’s bidding qualifications for some products or staged restrictions the company’s bid qualification, which could adversely affect future operating results.
The sales area is concentrated, the top five customers have a short establishment time, and the registration scale is small
From 2018 to 2020, the sales revenue of Wangbian Electric to the southwest region accounted for 70.01%, 54.63% and 54.72% of the main business revenue in the same period, respectively, and the sales area was relatively concentrated. Although the proportion of sales revenue from the southwest region to the main business revenue has shown a downward trend year by year, the problem of the company’s sales regional concentration is still relatively prominent. If the demand for the company’s products by customers in the region declines in the future or the company’s market share in the region declines, it will have an adverse impact on the company’s production and operation activities.
Weighing Finance noticed that among the top five customers of Wangbian Electric, they may have become the top five customers for a short period of time, or the number of social security payers is zero or several.
From 2018 to 2020, the company’s sales revenue to Foshan Wangzhong Trading Co., Ltd. and its associated companies was 36.6696 million yuan, 48.5822 million yuan and 48.79 million yuan respectively, with a total transaction amount of 134 million yuan in three years. According to public information, Foshan Wangzhong Trading Co., Ltd. was established on December 29, 2017 with a registered capital of 1 million yuan; Foshan Hangwan Electric Co., Ltd., an affiliate of Foshan Wangzhong Trading Co., Ltd., was established on October 19, 2017. Day, the registered capital of 1 million yuan. The two companies have been established for a short time, and in 2018, they jointly became Wangbian Electric’s second largest customer.
Hunan Haiweisi Materials Co., Ltd. is the third largest customer of Wangbian Electric in 2020, with a transaction amount of 48.0425 million yuan. According to public information, it was established in August 2019, and the number of social security payments in 2020 is 0.
The fifth largest supplier of grain-oriented silicon steel products in 2018 is Shanghai Sanjing Industrial Co., Ltd., with a transaction amount of 11.0591 million yuan. According to the public information, it was established on June 13, 2016, and the number of people who paid social security in 2018 was 1 people.
Wuhan Shangrui Technology Co., Ltd. is the company’s second largest supplier of oriented silicon steel products in 2018, with a transaction amount of 36.3018 million yuan.
Receivables are high, lawsuits demand payment
From the end of 2018 to the end of 2020, the net accounts receivable of Wangbian Electric were 385 million yuan, 438 million yuan and 497 million yuan respectively, and the amount of notes receivable was 79.5145 million yuan and 1.13 million yuan respectively. RMB 100 million and RMB 172 million, accounts receivable and notes receivable accounted for 60.24%, 66.56% and 58.37% of current assets at the end of the same period, respectively. The amount of bad debt reserves of the company at the end of each period was 28.4578 million yuan, 43.7841 million yuan and 51.7454 million yuan. In the balance of accounts receivable, the provision for bad debts based on individual items is 2.7037 million yuan, 13.0387 million yuan and 13.2488 million yuan respectively, and the proportion of accounts receivable at the end of the current period is 0. .65%, 2.71% and 2.42%.
From 2018 to 2020, Wangbian Electric’s accounts receivable turnover ratios were 2.35, 2.47 and 2.52, respectively. If affected by the economic environment and industrial policies in the future, there will be significant adverse changes in the operating conditions of some customers. The company will face the risk of not being able to collect its accounts receivable on schedule or not being able to collect its accounts receivable, which will adversely affect the company’s net cash flow from operating activities.
Wangbian Electric and Inner Mongolia Juneng Electric Power Engineering Construction Co., Ltd. in the sales contract dispute. In May 2020, Wangbian Electric filed a lawsuit with the People’s Court of Changshou District, Chongqing City for a dispute over a sales contract with Inner Mongolia Juneng Electric Power Engineering Construction Co., Ltd. (hereinafter referred to as “Inner Mongolia Juneng Company”), requesting an order for the defendant Inner Mongolia Juneng Company It paid Wangbian Electric a payment of RMB 2,942,235,000 and overdue interest, and assumed the lawyer’s fee of RMB 147,000, as well as litigation fees and preservation fees. In July 2020, the People’s Court of Changshou District, Chongqing City made civil mediation, and Inner Mongolia Juneng Company paid Wangbian Electric 800,000 yuan before July 30, 2020, and Wangbian Electric 1.3 million yuan before September 30, 2020, Pay the balance of RMB 842,235,000 before November 30, 2020; if Inner Mongolia Juneng Company fails to pay on time, it shall bear the overdue interest and pay Wangbian Electric’s lawyer fees of RMB 147,000 to realize the creditor’s rights; and It is agreed that Inner Mongolia Juneng Company shall bear the property preservation fee and litigation fee in this case.
In November 2020, Wangbian Electric applied to the People’s Court of Changshou District, Chongqing City for compulsory execution because Inner Mongolia Juneng Company failed to pay the payment due on schedule in accordance with the aforementioned civil mediation agreement. In January 2021, the People’s Court of Changshou District, Chongqing City issued an enforcement ruling, ruling to enforce the unpaid amount of 2.294235 million yuan from Inner Mongolia Juneng Company. As of the date of issuance of the prospectus, the above case is still in the process of implementation.
In May 2020, Wangbian Power filed a contract with Wuhan Jiede Industrial Equipment Co., Ltd. (hereinafter referred to as “Wuhan Jiede”) and Xinjiang Tianwei Electric Power Construction Co., Ltd. (hereinafter referred to as “Xinjiang Tianwei”) for a construction project subcontract dispute. The Qinghe County People’s Court of Xinjiang Uygur Autonomous Region filed a lawsuit, requesting that Wuhan Jiede be ordered to pay RMB 1 million for the project and the corresponding overdue fines and interest for the use of funds. Xinjiang Tianwei shall be jointly and severally liable for Wuhan Jiede.
In September 2020, the Qinghe County People’s Court of Xinjiang Uygur Autonomous Region issued a civil judgment, ordering Wuhan Jiede to pay Wangbian Electric Power Supply Project price of 1 million yuan within 15 days after the judgment came into effect, pay the corresponding interest, and bear the preservation fee of the case .
In December 2020, Wangbian Electric Power applied to the People’s Court of Qinghe County, Xinjiang Uygur Autonomous Region for compulsory execution because Wuhan Jiede failed to fulfill its obligation to pay the project payment in accordance with the aforementioned judgment. As of the date of issuance of the prospectus, the above cases are still in the process of applying for enforcement.
Related party transactions continue to be on-lending
During the reporting period, Wangbian Electric purchased goods and received labor services from related parties, mainly purchasing products from Sichuan Mingzhu Electrical Materials Co., Ltd. The transaction amount from 2018 to 2020 was 16.6562 million yuan and 21.8467 million yuan respectively. and 34.1156 million yuan. Sichuan Mingzhu Electrical Materials Co., Ltd. holds 51% of the shares for Wangbian Electric shareholder Xia Qiang and serves as executive director and manager.
From 2018 to 2020, Wangbian Electric sold goods and provided labor services to related parties with a total amount of 12.5145 million yuan, 13.1114 million yuan and 11.6893 million yuan respectively.
In addition, during the reporting period, the amount of guarantee provided by related parties for Wangbian Electric reached 1.07 billion yuan; in 2018 and 2019, the company borrowed funds from related parties of 68 million yuan and 38.5 million yuan respectively. It is worth noting that during the reporting period, the company had on-lending behavior, and the total amount of confirmed on-lending was 67.5109 million yuan.
During the reporting period, after receiving large-value bills from customers, the company endorsed small-value bills to customers to get change. The amounts involved from 2018 to 2020 were 2.12 million yuan, 7.4217 million yuan and 3.7969 million yuan respectively, accounting for The proportion of operating income in each period was 0.24%, 0.67% and 0.29% respectively. In 2020, after paying the large bills from the suppliers, the company collected 250,000 yuan in small bills from the suppliers.
In addition, in order to meet the company’s capital turnover needs, in 2019, the company discounted bills of 3.44 million yuan to non-financial institutions. In 2018 and 2019, Wangbian Electric opened bank acceptance bills of RMB 3.0443 million and RMB 1.5 million respectively to its subsidiary Wangbian Electric Power, which were used for endorsement to its suppliers to pay for material purchases.
Repeated violations of tax administration
On May 22, 2018, the Environmental Administrative Law Enforcement Detachment of Changshou District, Chongqing City imposed a fine of 10,000 yuan on the company’s behavior of “has not established a management account for hazardous waste, failed to improve identification signs, and mixed with general industrial solid waste and domestic waste”. ; On August 27, 2019, the Public Security Fire Detachment of Changshou District, Chongqing City imposed a fine of 5,000 yuan on Wangbian Electric’s fire protection facilities for failing to keep them in good condition and effective; From 1 to September 30, 2018, for failing to declare urban land use tax and resource tax, the State Administration of Taxation, Dujiangyan City Taxation Bureau Shiyang Taxation Branch imposed a fine of 200 yuan on it. In addition, from January 1, 2018 to March 31, 2018, Tianyuan Power violated tax management by failing to file corporate income tax (taxable income) on time.
According to the “Situation Statement” issued by the Duyun Municipal Taxation Bureau of the State Administration of Taxation on April 7, 2021, from January 1, 2018 to the date of issuance of the certificate, there were a total of 13 violations of tax management, mainly including: Failure to submit data on time or overdue tax payment Qian Yu Wang Bian violated tax management during the reporting period.
Wangbian Electric’s long-standing problem of high accounts receivable ratio affects the cash flow of the company. The company borrows a lot to maintain operations, and the scale of liabilities increases and a lot of interest expenses are incurred, which in turn embezzles corporate profits to a certain extent. Conducive to long-term operation. Companies planning to be listed on the main board often have a relatively long review process, and Wangbian Electric has not yet released its semi-annual report. Its performance in the first half of the year is due to the increase in PPI this year. If the increase in raw materials is digested, the gross profit margin will not be maintained. The decline, or the smoothness of its IPO process, has a greater relationship with it.