Xiamen Hengkun New Material Technology Co., Ltd. (hereinafter referred to as Hengkun New Material) is sprinting for the IPO (initial public offering) of the Science and Technology Innovation Board, and its performance is mainly composed of two parts: self-produced products and imported products. During the reporting period (i.e., from 2021 to 2023 and the first half of 2024, the same below), although the proportion of self-produced product revenue in the main business income gradually increased to more than 60%, the gross profit from the sales of Hengkun New Material's introduced products accounted for nearly 70% of the company's main business gross profit in the first half of 2024.

The reporter also noticed that Hengkun New Materials and its subsidiaries have repeatedly conducted equity transactions with natural person Kang Wenbing. It is worth mentioning that in November 2019, Kang Wenbing received 30,000 shares of Hengkun New Materials held by Yi Rongkun, the actual controller of Hengkun New Materials, at a price of 300,000 yuan. After the distribution of bonus shares in October 2020, the number of shares held on behalf of the company was changed to 120,000 shares. Five years later, in November 2024, Yi Rongkun invested 1.02 million yuan to repurchase all the above-mentioned nominee shares, and the equity nominee relationship between the two parties was terminated.

The introduction of products is the main source of profits, and the concentration of customers is high

According to the prospectus (declaration draft), Hengkun New Materials is mainly engaged in the research and development, production and sales of lithography materials and precursor materials, and its product sources include self-produced products and imported products.

From the perspective of performance, during the reporting period, the operating income of Hengkun New Materials was 141 million yuan, 322 million yuan, 368 million yuan and 238 million yuan respectively, and the net profit attributable to the parent company was 30.1286 million yuan, 101 million yuan, 89.8493 million yuan and 44.1044 million yuan respectively.

Image source: Screenshot of the prospectus (declaration draft).

In terms of products, the proportion of the main business income of Hengkun New Material's introduced products has gradually decreased from 71.78% in 2021 to 38.36% in the first half of 2024, and the proportion of the main business income of its self-produced products has increased from 28.22% in 2021 to 61.64% in the first half of 2024, gradually becoming the company's main revenue generator.

However, the introduction of products has always played the role of the main source of profit for Hengkun New Materials. During the reporting period, the gross profit of Hengkun New Material's imported products was 94.1951 million yuan, 189 million yuan, 168 million yuan and 88.6376 million yuan respectively, accounting for 99.30%, 82.05%, 74.42% and 68.48% of the gross profit of the company's main business respectively.

Image source: Screenshot of the prospectus (declaration draft).

The reporter noted that the two wholly-owned subsidiaries responsible for the procurement and sales of the introduced products basically contributed to the entire net profit of Hengkun New Materials. Among them, the net profit of Hengkun Precision Industry Hong Kong Co., Ltd. (hereinafter referred to as Hong Kong Hengkun) in 2023 and the first half of 2024 will be 67.9363 million yuan and 12.6141 million yuan respectively, and the net profit of Chukun (Shanghai) New Material Technology Co., Ltd. in 2023 and the first half of 2024 will be 43.0182 million yuan and 43.943 million yuan respectively.

At the same time, Hengkun New Materials also has a high concentration of customers. During the reporting period, the revenue of the top five customers of Hengkun New Materials (calculated on a consolidated basis under the same control) accounted for 99.40%, 99.22%, 97.92% and 97.35% of the main business income respectively. Among them, the revenue of the largest customer accounted for 72.91%, 72.35%, 66.47% and 63.85% respectively.

In addition, during the reporting period, the government subsidies included in the current profit and loss were 30.5466 million yuan, 19.1172 million yuan, 16.762 million yuan and 8.3151 million yuan respectively, accounting for 100.78%, 15.24%, 16.05% and 15.56% of the company's total profit in each period.

Acquisition of a non-substantial company? Company: It will serve as an overseas business platform

According to the prospectus (declaration draft), in November 2022, Hong Kong Hengkun, a wholly-owned subsidiary of Hengkun New Materials, signed the "Equity Transfer Agreement of Jingrong Co., Ltd." with Kang Wenbing, Tao Zheng and Makoto Murata, stipulating that Kang Wenbing would transfer 80% of the equity of Jingrong Co., Ltd. (hereinafter referred to as Japan Jingrong) to Hong Kong Hengkun, which paid the equity transfer money in December 2022 and actually obtained control of Japan Jingrong.

It is worth mentioning that the prospectus (declaration draft) shows that Japan Jingrong has not carried out substantive business during the reporting period. So, what is the necessity of Hong Kong Hengkun to acquire 80% of the shares of Japan Jingrong held by Kang Wenbing?

Hengkun New Materials replied in writing to the reporter of "Daily Economic News" on April 9, saying that the company hopes to set up a subsidiary in Japan to learn from the advanced development experience of leading enterprises in the industry, build a bridge for continuous exchanges with overseas advanced technology, and provide effective support for the company's future technology research and development direction and strategic layout planning. At the same time, considering that overseas entities are more conducive to carrying out cross-border sales and procurement business, the company acquired the control of Japan Jingrong, but due to the impact of changes in the overseas business transaction environment, it has not yet carried out actual business activities. The follow-up company will carry out the commercial layout of overseas business through Japan Jingrong, and Japan Jingrong will serve as a platform for overseas business development.

As for the price of the above transaction, Hengkun New Materials only said that it was determined according to the net assets of Japan Jingrong after negotiation between the two parties.

At the same time, Tianyancha shows that Hengkun New Materials also acquired 45% of the shares of Fujian Hengjing New Material Technology Co., Ltd. (hereinafter referred to as Fujian Hengjing) held by Kang Wenbing in April 2023. The prospectus (declaration draft) of Hengkun New Materials did not disclose this. In this regard, Hengkun New Materials told reporters that the above-mentioned equity purchase price is 0 yuan. The prospectus (declaration draft) did not disclose the above-mentioned equity acquisition because the company acquired a minority stake in Fujian Hengjing and did not pay the consideration, which is not a material matter that should be disclosed.

Hengkun New Materials also confirmed that Kang Wenbing, the transaction object of this acquisition, is the same person as Kang Wenbing, the transaction object of Hong Kong Hengkun's acquisition of 80% of the equity of Japan Jingrong.

In fact, Hengkun New Materials and Kang Wenbing have intersected before. The prospectus (declaration draft) disclosed that in 2021, Jiuri New Materials (688199. SH), a holding subsidiary of Dajing Information Chemicals (Xuzhou) Co., Ltd. (hereinafter referred to as Dajing Information), increased its capital and shares, and Hengkun New Materials participated in the subscription with 20 million yuan and obtained 10% of the shares of Dajing Information. At that time, the other shareholder and legal representative of Dajing Information was Kang Wenbing, who held 6.67% of the shares of Dajing Information before the capital increase and share expansion.

In addition, during the period from January 2018 to May 2021, Hengkun New Materials was listed on the New Third Board, and there were many shareholders holding shares on behalf of others. Among them, in November 2019, Kang Wenbing acquired 30,000 shares of Hengkun New Materials held by Yi Rongkun, the actual controller of Hengkun New Materials, for 300,000 yuan. After the bonus shares were distributed in October 2020, the nominee shares were changed to 120,000 shares. In November 2024, Yi Rongkun invested 1.02 million yuan to buy back all the above-mentioned nominee shares, and the nominee shareholding relationship was terminated.

Cover picture source: Daily Economic News Wen Duo photo (data map).