Aupu Shares Hong Kong Stock Back To A "Not Bad Money": Fund-Raising 918 Million Yuan, Dividends 936 Million

Under the pressure of real estate regulation and intensified competition, the home decoration industry, which has gradually stepped into a downward cycle, has ushered in a trend of listing.

Following Dongpeng holdings, on Friday night, the CSRC announced that oppu home furnishings will also be launched on November 7.

According to the public information, OPP home is mainly engaged in the R & D, production, sales and related service provision of household products such as Yuba and integrated ceiling. After years of development, the product series has gradually expanded from Yuba and integrated ceiling to kitchen electricity, lighting and clothes hangers.

From the perspective of financial data, in recent years, with the aggravation of market competition, real estate regulation and other aspects, the growth rate of OPP household performance has slowed down.

In 2015-2017 and the first half of 2018, OPP home realized operating revenue of 945 million yuan, 1.25 billion yuan, 1.584 billion yuan and 889 million yuan respectively, of which the year-on-year growth in 2016 and 2017 was 32.24% and 26.76% respectively.

In the same period, in 2015-2017, OPP home realized net profits of 245 million yuan, 268 million yuan and 274 million yuan, respectively, with a year-on-year growth of 9.37% and 2.31% in 2016 and 2017. In the first half of 2018, net profit reached 178 million yuan.

It is worth mentioning that as of November 23, 2018, OPP home has 8 holding subsidiaries (grandchildren) companies and 4 joint-stock companies, of which 6 companies were in a loss state in the first half of 2018.

Dividend: 936 million

Opper's A-share trip is not the first time it has access to the capital market.

As early as December 2006, AUPU GROUP HOLDING COMPANY LIMITED (hereinafter referred to as "AUPU GROUP"), the former indirect controlling shareholder of AUPU home furnishing Co., Ltd., had publicly issued and listed shares on the stock exchange of Hong Kong, but the trend of stock price has been quite low.

According to wind data, during the listing period of Aopu group on the Hong Kong stock exchange, the share price has been hovering at a low level. Even on the eve of delisting, the share price of Aopu group is only 2.69 Hong Kong dollars, corresponding to a total market value of about 2.8 billion Hong Kong dollars.

On May 18, 2016, OPP group received a proposal from upwind holding, the offeror, to privatize OPP group. The purchase price is mainly composed of two main aspects: first, paying HK $2.71 per share to the public shareholders as the cancellation price; and two, paying the HK $0.64 of each share option to the share holder as the cancellation price.

Nearly 10 years after listing, in September 2016, OPP group successfully delisted from the Hong Kong Stock Exchange and completed privatization.

In less than two years after dormancy, Aupu will continue to apply for listing on A shares. The sponsor is the China Merchants Securities. It intends to issue 41 million new shares (10% of the total share capital after issuance), and raise 918 million yuan for Aupu (Jiaxing) production base construction project, "marketing channel construction project" and "supplementary Liquidity Fund".

This means that the total market value of the company at the time of IPO is more than 9.18 billion yuan, more than three times the total market value of the company at the time of delisting of Hong Kong shares.

Another interesting point is that during the IPO application period, OPP home has paid dividends for many times, and the total amount of dividends exceeds the IPO fundraising amount.

According to the public data, from 2015 to the first half of 2018, opper household made nine dividend distributions, with the dividend amount of 6 million yuan, 199 million yuan, 100 million yuan, 30.85 million yuan, 200 million yuan, 16 million yuan, 140 million yuan, 205 million yuan and 39.6 million yuan, with a total amount of 936 million yuan.

The situation that the total amount of dividends is higher than the amount of IPO fundraising causes the market to question instantly, and more insiders point to "or for encircling money".

"Although in the eyes of investors, high dividend is an important index to measure the value of a company's investment, the dividend of too high scale and frequency is not conducive to the development of enterprises, because capital can be used for company development and strategic expansion. In addition, there may be a suspicion of interest transmission before tight dividends are made before IPO." In November 4th, a senior investor in Southern China analyzed.

However, a person from a private equity firm in Shanghai also pointed out that "while returning investors, we must also take into account the needs of enterprise development. However, there are many factors that affect the IPO of enterprises. Some enterprises may not lack funds. On the one hand, listing is to expand financing channels, on the other hand, it is to realize asset securitization, so as to facilitate the capital operation of the company, such as merger and acquisition, equity incentive and so on. "

In response to this query, opper home said to the 21st century economic reporter, first of all, the company's dividend distribution strictly complies with the provisions of relevant laws, regulations and the articles of association, attaches importance to the reasonable return on investment for investors, and maintains a continuous and stable profit distribution policy. The specific distribution proportion shall be proposed by the board of directors of the company according to the operation and development of the company and implemented after the resolution of the general meeting of shareholders.

Secondly, the company's public offering of A shares to raise funds will be put into the project. On the one hand, it will expand the production scale of household products such as integrated ceiling and integrated stoves, optimize product mix, better meet market demand, and increase investment in brand promotion and advertising and marketing, increase the coverage rate in the three or four line market, and expand the popularity, reputation and trust of the company's brand so as to further enhance the company's comprehensive competitiveness.

Selling assets at high premium

During the preparation of IPO, the capital operation of OPP household is also frequent. However, the transaction pricing of its multiple acquisitions and purchases of assets has caused market controversy.

In December 2016, in order to avoid horizontal competition and enrich the product categories of the company, OPP home acquired 51.23% of the equity of Chengdu bolangni under the control of the same parent company.

As of September 30, 2016, the book value of Chengdu bolangni's shareholders' equity was 54.717 million yuan, the assessed value was 54.7532 million yuan, the assessed value added was 36200 yuan, and the value-added rate was only 0.07%. The purchase price corresponding to 51.23% equity of Chengdu bolangni is 28 million yuan.

In April 2017, OPP home acquired Hangzhou bolangni, a related party. The prospectus shows that as of the benchmark date, on October 31, 2016, the appraisal value of the assets related to the integrated kitchen business owned by Hangzhou bolangni was RMB 19.3178 million, and the transaction consideration was RMB 23.5597 million (including tax).

In sharp contrast to the above "low" price acquisition, the premium of OPP home furnishings in selling the company's "loss" assets is very high.

Opp home said that in order to meet the requirements of business strategic development, the company has divested the assets unrelated to its main business, mainly for the sale of Chengdu qianyin equity in May 2017.

According to the prospectus, Chengdu qianyin is jointly invested and established by oppu home and Hangzhou qianyin in August 2010, mainly engaged in real estate development and operation, with oppu home holding 41.67% and Hangzhou qianyin holding 58.33%. In 2017, the total profit of Chengdu qianyin was -9.3464 million yuan.

As of March 31, 2017, the book value of shareholders' equity of Chengdu traction bank is 3.7424 million yuan, but the appraisal value is as high as 61.5316 million yuan, the appraisal value-added is 57.7892 million yuan, and the value-added rate breaks through 1544.16%. Aopu household 41.67% of the equity was sold to Aopu appliances at a price of 25640200 yuan.

It is worth mentioning that in 2017, the profit and loss on disposal of non current assets of OPP household reached 25.4393 million yuan, the highest value in the reporting period.

However, in the view of opper home, "relevant asset evaluation and pricing are fair, fair, legal and compliant."

In addition, the social security data of OPP home is also questioned.

Prospectus shows that in 2017, the number of Aupu social security payments was 1452. According to the market supervisory authority, the number of Aupu social security payments was 930 in 2017.

As of November 23, 2018, there are 8 subsidiaries within the scope of Aopu home furnishing consolidation. According to the data of the market supervision and Administration Bureau, in 2017, the total number of social security employees in the eight subsidiaries of oppu household was 214. This means that in 2017, there were 308 more people disclosed in OPP home furnishing prospectus than the official data.

"The competent department of social insurance and provident fund in the place where OPP home furnishing and holding subsidiary are located has issued the certificate. During the reporting period, the company and holding subsidiary have paid social insurance premium and housing provident fund according to law, without any arrears or administrative penalty record." Opp home replied.