Guide: In 2020, although the IPO of NetEase Technology was rejected by the GEM listing committee members due to unclear ownership of equity and unclear definition of actual controller, in retrospect, the failure of its listing is indeed not unjust - even in terms of the definition of ownership of equity and actual controller, NetEase Technology believes that there is still "room for debate", However, when Wangjin Technology finally failed to list for trading in that year, it practically avoided the harm that another explosion of enterprises might bring to a large number of investors.
This article was originally launched by Kookou Finance (ID: koukouipo)
Author: Zhao Qing @ Beijing
Editor: Zhai Rui @ Beijing
After nine months of listing counseling, it was learned by Knock Finance that on May 24, 2024, Jiangsu Wangjin Technology Co., Ltd. (hereinafter referred to as "Wangjin Technology") applied for public offering of shares and the acceptance of listing counseling at the Beijing Stock Exchange was finally formally passed by the regulators on the same day.
As a result, the listing journey of Wangjin Technology on the Beijing Stock Exchange has basically completed all the preparatory work before the official declaration, which is only one step away from the official call for breakthrough to the Beijing Stock Exchange.
As for the domestic capital market, Wangjin Technology is not a new face for a long time - this is also the third time that Wangjin Technology has tried to enter the A-share market and become a listed enterprise in the past four years.
As for its identity recognition, the title of the first GEM IPO under the registration system in that year has attracted the attention of the outside world so far.
As early as June 29, 2020, when the GEM registration system was unveiled, NetEase Technology, which wanted to take advantage of the policy reform of Dongfeng to realize its dream of listing, could not wait to submit an IPO application for the GEM to Shenzhen Stock Exchange.
Who would have expected that, four months later, at the 44th Review Conference of the Municipal Committee of the GEM in 2020 held on November 11, 2020, the listing application of NetEase Technology was unexpectedly rejected, and the listing committee members thought that it "did not meet the requirements for issuance, listing and information disclosure".
Before the IPO of Wangjin Technology was rejected this time, there were no enterprises that had been voted "no" by the listing committee members under the GEM registration system reform.
It was also this painful and humiliating experience that made the name of Wangjin Technology embedded in the history of A-share IPO reform as the first case of being rejected by the Listing Committee under the GEM registration system reform.
Where you fall, you want to get up.
After a painful reflection, in September 2022, NetEase Technology planned to break through the A-share market again and officially restarted the GEM listing deployment.
Unfortunately, half a year later, in March 2023, when the opportunity for the first meeting was not available, NetEase Technology terminated the second GEM IPO by voluntarily withdrawing listing materials.
As for the result of the second time of going public on the GEM, which was ultimately defeated, some people close to NetEase Technology explained to KOKO Finance that on the one hand, the sponsor of its IPO, Huajin Securities, was punished by suspending relevant business due to other matters during the review process, on the other hand, Wangjin Technology also learned that Beijing Stock Exchange was about to launch major favorable policies such as direct joint review at this time, so it timely adjusted the capital market listing plan in combination with its own actual situation.
So it also led to the prelude of the third time that NetEase Technology passed the A-share market and passed through the Beijing Stock Exchange.
After announcing the failure of the second application for GEM listing in March 2023, NetEase Technology launched a series of preparations for listing on the Beijing Stock Exchange.
At the beginning of June 2023, Wangjin Technology submitted an application for listing and transfer to the Stock Transfer Center, and officially landed on the NEEQ on July 12, 2023.
On August 15, 2023, just at the full moon when the NEEQ was listed for trading, Wangjin Technology signed a guidance agreement with Changjiang Securities to publicly issue shares and list on the Beijing Stock Exchange. On August 25, the Jiangsu Securities Regulatory Bureau also officially accepted the filing materials of its listing guidance, thus, Wangjin Technology entered the pre listing guidance stage for the third time.
On March 15, 2024, Wangjin Technology was transferred to the innovation layer of the new third board.
Three days later, on March 18, 2024, Changjiang Securities quickly submitted a report on the completion of online access technology listing counseling to Jiangsu Securities Regulatory Bureau, and applied for the final acceptance of the regulators.
Until May 24, 2024, after more than two months of acceptance, the listing guidance of Wangjin Technology Beijing Stock Exchange was finally completed.
"At present, enterprises and intermediaries are also seizing the time to complete some closing work in order to submit relevant materials to the Beijing Stock Exchange as soon as possible. If all goes well, it is expected that the listing review phase of the Beijing Stock Exchange will be officially entered around July 2024, which is the first anniversary of the listing of NetEase Technology on the New Third Board." On May 24, 2024, The above-mentioned people close to NetAccess Technology once again disclosed to KOKOK Finance.
According to Koukow Finance and Economics, the specific issuance plan and fundraising details of Wangjin Technology's third attempt at A-share and listing on the Beijing Stock Exchange have also been basically finalized.
When Wangjin Technology applied for listing on the GEM for the first time that year, under the recommendation of Founder Securities, it planned to raise 460 million funds by issuing no more than 19.4 million new shares.
After the failure of the initial IPO, the second resumption of GEM listing may be due to the lack of confidence in performance and valuation. On the basis of the same plan to issue no more than 19.4 million new shares, NetEase Technology has significantly reduced its financing scale, and only plans to raise 304 million yuan.
After learning from the previous two times, the latest Beijing Stock Exchange listing plan of NetEase Technology adjusted the scale again to 346 million yuan. Although there is still a big gap compared with the initial IPO, it has risen compared with the second listing.
According to the details of a newly determined listing financing plan of Beijing Stock Exchange obtained by Knock Finance, its plan to issue no more than 19.333 million shares in Beijing Stock Exchange, and the 346 million of the funds raised will be used to invest in two major projects, namely, "upgrading of digital application platform and improvement of marketing system" and "construction of research and innovation center". In addition, Another 40 million yuan will be used to replenish working capital.
As the saying goes, "There are no more than three things".
After the first two IPOs were frustrated by "the weather is not favorable, the land is not favorable, and people are not harmonious" respectively, the enterprise management structure was reorganized, the sponsor was changed again, and the Beijing Stock Exchange, which has a more "inclusive" listing threshold, was chosen as the second place. It is obvious that NetEase Technology is determined to win this A-share listing plan.
"If the problems identified by the actual controller of Wangjin Technology and the clearing up of some disputes over the historical equity transfer can be recognized by the regulatory authorities, there is still great hope for the success of this listing of Wangjin Technology on the Beijing Stock Exchange." An intermediary who has cooperated with Wangjin Technology said to Koko Finance more than three years ago, The reason why NetEase Technology was rejected for its first entry into the GEM was because of this series of "hard injuries". In addition, the sustainability of NetEase Technology's performance in recent years and the completeness of its internal control may also be variables that affect its listing results.
1) Whether the IPO of GEM was the first call to Beijing Stock Exchange under the registration system reform
"The GEM Listing Committee considered that your company failed to fully and accurately disclose the equity transfer between relevant shareholders and their capital flows and tax payments, the reasons for identifying the actual controller, whether the ownership of the shares held by the actual controller in your company is clear, and the reasonableness of the Culture, Commerce and Tourism Group as a financial investor, which is inconsistent with Article 6 and Article 12 of the Measures for the Administration of the Registration of Initial Public Offerings of Shares on the Growth Enterprise Market (for Trial Implementation) and Article 15 and Article 28 of the Shenzhen Stock Exchange's Rules for the Review of the Issuance and Listing of Shares on the Growth Enterprise Market (hereinafter referred to as the "Review Rules") ", which were rejected at the municipal party committee meeting on November 11, 2020, Reasons given by Shenzhen Stock Exchange.
More than three years ago, at the review meeting of the Listing Committee, which decided the listing fate of NetEase Technology and recorded it in the history of A-share issuance review and reform, the listing committee members put forward three major questions to NetEase Technology, of which the first two questions were related to whether the identification of the controller of NetEase Technology and the ownership of shares were clear.
According to the information disclosed by Wangjin Technology, before 2016, its controlling shareholder and actual controller was not Pan Chenghua, the current natural person, but a Chinese American named Huang Yulong.
From March to May 2016, Huang Yulong transferred 60.00% of his original equity in NetEase Technology. Among them, in April 2016, Huang Yulong transferred 6% of the equity of Wangjin Technology to Suzhou Black Point Investment Bank (Limited Partnership) at a price of 2.0906 million yuan (hereinafter referred to as "Black Point Investment").
Pan Chenghua is the executive partner of Pointe Noire Investment, and holds 57% of the latter's property share.
At the same time as Huang Yulong transferred his equity, another natural person shareholder named Zhang Yajuan also transferred his 30% equity in NetEase Technology to Pan Chenghua at a price of 10.4531 million yuan.
Through the above two equity transfers, Pan Chenghua has become the actual controller of Wangjin Technology.
However, it is doubtful that at the same time of the above-mentioned equity transfer, Huang Yulong's bank card had a transfer record of investing in an investor named Chen Xin and Zhang Yajuan in Black Point respectively.
Among them, the transfer amount of Huang Yulong to Zhang Yajuan is exactly 10.4531 million yuan, which is exactly the same as the amount of Pan Chenghua's transfer of relevant equity of Zhang Yajuan.
The transfer amount of Huang Yulong to Chen Xin was about 2.0906 million yuan, which was just in line with the price of 6% equity of NetEase Technology transferred by Blackpoint Investment. Chen Xin is also the current deputy general manager of Wangjin Technology.
That is to say, whether it is the equity of NetEase Technology obtained by Black Point Investment under the control of Pan Chenghua or the relevant equity obtained by Pan Chenghua from Zhang Yajuanchu, the actual source of capital is still Huang Yulong himself.
So does Huang Yulong have the motive of deliberately hiding the fact of shareholding? Who exactly owns the relevant equity held by Pan Chenghua?
This has cast a thick shadow on the equity clarity of Wangjin Technology.
In this regard, Wangjin Technology also explained that the above fund transfer is the real estate project income that Pan Chenghua and others should receive because of their contributions to the real estate project led by Huang Yulong.
However, this obviously did not dispel the doubt about the true ownership of Wangjin's technology related equity.
It turned out that Pan Chenghua and others did not directly participate in the investment in the real estate projects developed by Huang Yulong, but only engaged in coordination, communication, matching transactions and handling formalities.
The real estate project led by Huang Yulong began to be sold as early as 2005, but the real estate income paid to Pan Chenghua and others has not been paid until 2016, when the relevant equity was transferred, it was suddenly paid.
Not only that, the so-called real estate income agreement between Huang Yulong and Pan Chenghua also has no relevant contract voucher, which is only an oral agreement, and there is also a difference between the actual income obtained and the four thousandths of the real estate sales income agreed orally.
In addition, Huang Yulong withheld and remitted the individual income tax on the property income obtained by Pan Chenghua and others from Huang Yulong's premises, but Wangjin Technology also failed to provide relevant tax payment vouchers.
In 2016, while Huang Yulong transferred relevant equity to Black Point Investment, he also transferred 40% of his shares in NetEase Technology to Kunshan Culture Business Travel Group Co., Ltd. (hereinafter referred to as "Culture Business Travel Group").
After a series of subsequent capital increase and share expansion, in 2020, the Culture, Commerce and Tourism Group still holds 34.48% of the shares of NetEase Technology, making it the largest shareholder of NetEase Technology.
In the application materials for the IPO of the first GEM, Wangjin Technology said that although Culture, Commerce and Tourism Group is the largest shareholder of the company, it has no significant impact on the board of directors, board of supervisors and shareholders' meeting of the company, and is only a financial investor.
However, in fact, the Culture Business Travel Group not only nominated two directors in the board of directors of Wangjin Technology at that time, but also Xue Renmin, secretary of the Party Committee and chairman of the board of directors of Culture Business Travel Group, was the chairman of Wangjin Technology at that time.
Therefore, in the GEM Listing Committee's deliberation in the same year, the listing committee members focused on the equity transfer between Huang Yulong, Zhang Yajuan and Pan Chenghua, as well as their capital flow and tax payment, whether the reason for the actual controller of NetEase Technology to identify Pan Chenghua was sufficient, and whether the ownership of the relevant shares held by the actual controller was clear; At the same time, the largest shareholder, Culture, Commerce and Tourism Group, holds more than one-third of the shares, and two people from Culture, Commerce and Tourism Group serve as directors, one of whom serves as the chairman of the company. In this case, Culture, Commerce and Tourism Group is also recognized as having neither control nor significant influence over Internet Access Technology, and only as a financial investor. Is this reason sufficient.
Obviously, after the listing committee members passed the hearing, the answers were all negative.
Having learned the disastrous lesson of the first time of going public, when Wangjin Technology applied for listing on the GEM for the second time, it had already rectified the identification of the actual controller.
Although the shareholding structure of Wenshang Travel Group, Pan Chenghua and others in Wangjin Technology has not changed, Xue Renmin, Secretary of the Party Committee and Chairman of Wenshang Travel Group, resigned as Chairman of Wangjin Technology due to work reasons on January 29, 2021, and was replaced by Pan Chenghua.
At this time, Xue Renmin still has nearly two years to go before his tenure as chairman of the board of Wangjin Technology.
In September 2021, Cong Hong, another director assigned by Culture, Commerce and Tourism Group to NetEase Technology, also resigned as a director for work reasons during his tenure.
On December 6, 2022, when NetEase Technology was re elected to the new board of directors, Xue Renmin was officially removed from the list of NetEase Technology's board of directors because he was not nominated.
After the above operations, although the shareholding of Culture Business Travel Group in NetEase Technology is not far from that of Pan Chenghua, Culture Business Travel Group only left one supervisor in the team of directors, supervisors and senior executives of NetEase Technology, which to some extent consolidated Pan Chenghua's qualification as the actual controller of NetEase Technology.
Although Wenshang Travel Group is only the "evidence" of the rationality of financial investors, which has been more strongly supported by the adjustment of the directors, supervisors and senior management team, the historical problems left over by the equity transfer between Huang Yulong, Zhang Yajuan and Pan Chenghua are still likely to be difficult to resolve.
"The ownership of relevant equity is also the focus of this time's guidance on the listing of Beijing Stock Exchange. In the new round of guidance work conducted by Changjiang Securities on NetEase Technology, it further combed and standardized all previous equity transfers of the company by means of shareholder interviews and shareholder survey letters, checking relevant capital flow of shareholders, and reviewing confirmation documents issued by relevant parties However, due to the particularity of the event, whether it can be recognized by the Beijing Stock Exchange is also a major difficulty that needs to be overcome. " The above people who are close to NetAccess Technology said frankly.
2) Behind the "Sudden Change" of Performance
We have to admit that in 2020, although the IPO of NetEase Technology was rejected by the GEM listing committee members due to unclear ownership of equity and unclear definition of the actual controller, in retrospect, the failure of NetEase Technology's listing is indeed not unjust.
Even in terms of the definition of equity ownership and actual controller, NetEase Technology believes that there is still "debatable" space, but when NetEase Technology failed to finally achieve listing transactions, it practically avoided the harm that another explosion of enterprises might bring to a large number of investors.
This should start with the "false" overestimation of the performance of Wangjin Technology for its successful listing that year.
At the beginning of November 2020, after more than four months of preliminary inquiry, NetEase Technology was finally allowed to arrange its first GEM IPO for trial.
Immediately, Wangjin Technology officially released the last draft of its prospectus.
In this conference draft, the growth of Wangjin Technology also meets the requirements of GEM listing.
According to the financial information released in the public materials, from 2017 to 2019, NetEase Technology recorded operating revenue of 273 million, 389 million and 436 million respectively, and the corresponding non net profit deduction also achieved a sustained growth year by year, which was 34.575 million, 54.7642 million and 61.6251 million respectively.
Similarly, in this prospectus (the last draft) released on November 4, 2020, NetEase Technology also predicted its annual performance in 2020.
In the first three quarters of 2020, the performance of NetEase Technology continued to maintain a stable and slightly growing trend, achieving an operating revenue of 227 million, a year-on-year decrease of 3.67%, but the net profit deducted reached 20069900 yuan, an increase of 1.45% over the same period of the previous year.
As a result, according to the operating conditions achieved from January to September 2020 and the orders currently on sale, NetEase Technology predicted that its operating revenue in 2020 would reach 467 million yuan, with a year-on-year growth of 7.21%, and the net profit deducted would be about 64.6766 million yuan, with a year-on-year growth of 5.10%.
However, it was only two years later when NetEase Technology, which failed to go public for the first time, launched its GEM listing again, that the outside world was shocked to learn that the performance of NetEase Technology in 2020 was not only far from the forecast data submitted to the regulatory authorities that year, but even compared with 2019, the decline was far greater than the regulatory authorities' definition of "face changing" of the performance of listed companies.
According to the IPO application materials submitted to Shenzhen Stock Exchange by NetEase Technology on September 2, 2022, in 2020, the audited operating revenue of NetEase Technology was only 329 million, a huge reduction of 138 million compared with its earlier forecast data, while the non net profit deduction was only 22.1013 million, a year-on-year decline of more than 64% in 2019, only completing about 30% of its forecast.
Imagine how many investors would be betrayed and cheated if Wangjin Technology was listed on the GEM with this performance?
"The performance forecast submitted by NetEase Technology to Shenzhen Stock Exchange in 2020 is indeed full of mysteries. Even if it happened more than three years ago, there is still a lack of a reasonable explanation, otherwise it will always make people worried." The above intermediary who has cooperated with NetEase Technology said frankly.
"There may be two possibilities behind the performance forecast of NetEase Technology, which is quite different from the fact, given in the critical period of its listing in 2020. One is that NetEase Technology may indeed have an extreme situation in the last two months of 2020, which greatly exceeds the company's own control and perception of its own business, but it also reflects that the company may have internal control in management and operation Lack of operational risks, and the financial foundation may also have normative problems. Another possibility is that Wangjin Technology has seen the failure of its initial listing; In order to create a better financial basis for the second IPO, the relevant operating data in 2020 were artificially adjusted, and the financial data was "bathed" in 2020. " The above intermediaries believe that, whatever the possibility, the "abnormal change" in the performance of Webjin Kejin in 2020 deserves further consideration.
Just because of the sudden change in the performance of NetEase Technology in 2020, NetEase Technology again showed a high growth rate in the new round of listing reporting period starting from 2020, that is, from 2020 to 2022.
In June 2023, according to the financial data disclosed by Wangjin Technology when it applied for listing on the NEEQ, from 2020 to 2022, its operating revenue will be 329 million, 504 million and 558 million respectively, and the corresponding non net profit deduction will be 22101300, 53179500 and 57.69 million respectively.
Of course, with the current fundamentals of online access technology, under the new rules of GEM to raise the profit threshold, it is difficult to meet the listing standards of GEM, but it is not difficult to surpass the basic threshold of Beijing Stock Exchange.
However, in addition to the "abnormal change" of the performance in 2020 or the need for NetEase Technology to make a reasonable explanation, in the past 2023, the profit scale of NetEase Technology also showed a downward trend again.
According to the 2023 annual report released by Wangjin Technology a few days ago, in the past year, its operating revenue still maintained a certain growth to 613 million, but its net profit declined by more than 10%, and its current non net profit was only 53.683 million.
According to Koukow Finance and Economics, NetEase Technology, which is about to go public for the third time in A-share market, also encountered a big and small "episode" before it was about to start its journey of listing on the Beijing Stock Exchange.
On August 15, 2023, NetEase Technology has officially signed a listing guidance agreement with Changjiang Securities. For NetEase Technology that has been listed on the NEEQ, it should timely disclose relevant matters in accordance with the regulatory requirements for information disclosure of public companies.
However, it was not until August 21, 2023, that the relevant announcement came too late in the form of a supplementary statement.
Wangjin Technology also admitted that "the announcement was not disclosed in time due to the negligence of the company's internal information communication", and said that "it will further strengthen the management of information disclosure in the future work, improve the standard operation level of the company, and ensure the accuracy and timeliness of the company's information disclosure".
Does this inauspicious start indicate that the next listing path of Beijing Stock Exchange will be a bumpy journey full of challenges? Knock Finance will also continue to pay attention.
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