Chinese And British Technology Two Impact On GEM Failure Margin Difference Narrowed By "Manual Adjustment"

In October 24th, when the 4 companies, such as postal savings bank, Dongpeng holdings, Yongjin technology, overseas Chinese bank and environmental protection company, made their way through the IPO, the Changzhou China UK Polytron Technologies Inc (hereinafter referred to as "Sino British technology") was cancelled due to the "further verification of related matters" and the second time before the door of the issuance examination committee.

As a hi-tech communication enterprise, the high and new technology enterprise, which mainly engaged in R & D, production and sales of high frequency communication materials, was hit by gem in November 2017.

After the first IPO defeat, Chinese and British technology did not give up the dream of listing. In September 6, 2018, Chinese and British science and technology reported the draft prospectus again for the two time.

Although the reason for the cancellation of the audit is unknown, but from the prospectus, the high margin rate problem that Chinese and British science and technology were concerned about at a meeting was still in use. The practice of replacing the comparable company with "simple and crude" was very thought-provoking.

In addition, as a typical family business, there are many frequent behaviors between Chinese and British technology and related parties, such as loans and bills financing without real transaction background, which are also worrying.

In June this year, the SFC also requested the Chinese and British technology to explain why the first application was not approved by me, and explained the relevant rectification measures and rectification effect in detail.

A "secret" that can be narrowed than gross margins.

Founded in March 28, 2006, the main products include D and CA two types of high frequency copper clad laminate and high frequency polymer matrix composites.

From the perspective of volume, the technology in China and Britain is relatively small, with a revenue of 175 million yuan in 2018 and a net profit of 52 million 750 thousand yuan.

This is not the first time that Chinese and British technology will meet.

As early as December 9, 2016, Sino British technology began to accept Haitong Securities's listing guidance, and the first time it submitted a prospectus in April 14, 2017. However, when the first meeting was held in November 8, 2017, its first application was rejected.

According to the results of the thirty-seventh meeting of the seventeenth issuance examination committee in 2017, the issuance examination committee focused on five major issues of Sino British technology, including the gross margin of the combined industry was significantly higher than that of the listed companies in the same industry, the related transactions were frequent and the amount was relatively large, the proportion of the revenues made under different revenue recognition methods changed greatly, the amount of accounts receivable in the reporting period was large, and the new production rate of the main production equipment was low.

Sino British technology October 2017 prospectus shows that in 2014 -2016, its consolidated gross profit margin was 46.9%, 53.5% and 59.11% respectively, while the average gross profit margin of 3 listed companies in the same industry was 36.79%, 34.25% and 35.11%, respectively.

The 3 Chinese and British listed companies in the same industry are listed as 600183.SH, 002618.SZ and 300615.SZ respectively.

It is interesting to note that Sheng Yi technology is a famous CCL manufacturer in China. It is closest to the Sino British technology business. But in the past 2014-2016 years, the gross profit margin of biotechnology is far below the level of 29% to 39% of Sino British technology.

However, in the latest prospectus submitted in September 2019, in June 2016-2019, the combined gross profit margin of technology in China and Britain was 59.11%, 59.11%, 59.11% and 47.87% respectively. However, in 2016, the average gross profit margin of comparable industries in the same industry increased from 35.11% to 43.3%, and the difference in the current comprehensive profit margin between China and Britain dropped from 24 percentage points to 15.81 percentage points.

In twenty-first Century, the economic news reporter found that the difference in the gross margin was narrowed because the direct substitution of technology between China and Britain was comparable to that of the same industry.

This time, the technology industry in China and Britain can be increased from 3 to 4, and the technology with lower gross profit margins has been eliminated. The gross profit margin (NYSE:ROG) and the new 300731.SZ (300731.SZ) have increased.

Frequent associated transactions in family businesses

Sino British technology is a typical family business.

In September 2019, the prospectus showed that Yu Weizhong, Dai Lifang and his son Yu Cheng, three of the company's actual controllers, jointly controlled 83.86% of the Sino British technology.

When the first meeting was held in 2017, there were loans between Chinese and British technology and related parties, such as paper financing without real transaction background. The amount was larger and more frequent, which was also one of the focuses of the Commission.

In 2016, the Sino British technology and the Yu Weizhong family controlled the Sino British pipeline and the couple of Yu Weizhong split about 30000000 of the funds; and Yu Weizhong's brother Yu Yingzhong controlled Leonard machinery also made short-term loans to Sino British technology, borrowing about 6000000, but because of difficulties in operation and unable to repay the debts, Sino British technology had not yet transferred the relevant claims to the Sino British pipeline.

In addition to lending money to his brother Yu Yingzhong, Yu Weizhong also launched an external sale through his brother's subsidiary star technology. In 2014 -2016, CCC sold 1 million 937 thousand and 300 yuan, 5 million 798 thousand and 900 yuan and 976 thousand and 900 yuan to star technology.

However, Sino British technology emphasizes that since May 2016, it has no longer been distributed through the help of star technology.

In addition, although known as "high-tech enterprises", but at present, the technology attributes of Chinese and British technology remain to be tested by the market.

In 2016 -2019 June, the R & D expenses of Chinese and British technology were 4 million 972 thousand yuan, 6 million 662 thousand and 500 yuan, 8 million 986 thousand and 500 yuan and 4 million 450 thousand and 700 yuan respectively, accounting for 4.35%, 4.58%, 5.14% and 4.31% respectively.

As of June 2019, Sino British technology had 114 employees, 18 R & D personnel, 6 invention patents and 2 utility model patents.