Source of this article: Times Weekly Author: Peng Chenyu
Source: Times Investment Research
Author: Peng Chenyu
Edited by Sun Yiming
Editor's note: On June 21, the IPO applications of Chuangzheng Electric, Omeisen and Jinhua New Materials were accepted by the Beijing Stock Exchange at the same time, which marked that they became the first batch of enterprises accepted by the Beijing Stock Exchange after the announcement of the new "National Nine Articles".
The on-site inspection was exposed that the implementation of the internal control system was not in place, and the performance fluctuated like a "roller coaster".
According to the official website of the Beijing Stock Exchange, on June 21, the listing application of Omeisen was accepted, becoming the first batch of companies to apply for the IPO of the Beijing Stock Exchange since March 16 this year.
Times Business School found that during the listing counseling period, the Guangdong Securities Regulatory Bureau conducted an on-site inspection of Aomeisen and found that its auditors were concurrently engaged in financial work and the collection of R&D expenses was wrong, reflecting the lack of implementation of its internal control system and non-standard financial accounting.
In addition, from 2021 to 2023 (hereinafter referred to as the "reporting period"), the performance of Aomeisen fluctuated significantly, and the net profit deducted from non-attributable to the parent company in 2022 plummeted by 70.5% year-on-year.
On June 27, Times Business School sent a letter to Aomeisen to inquire about the effectiveness of the internal control system, performance stability and other related issues, but as of press time, the other party has not replied. On June 28, Times Business School called Omeson again to inquire, but the phone went unanswered.
Focus on intelligent production equipment manufacturingAccording to the prospectus, the main products of Aomeisen include intelligent equipment for heat exchanger production, intelligent equipment for pipeline processing and other customized intelligent equipment, which can be widely used in electrical appliances, environmental protection, wind power and lithium battery new energy and its industries.
In the field of heat exchange and pipeline processing, Aomeisen has cooperated with Gree Electric (000651. SZ), Midea Group (000333. SZ), Hisense Home Appliances (000921. SZ), Sichuan Changhong (600839. SH) and other well-known home appliance companies to maintain long-term and stable cooperative relations.
As a professional intelligent equipment manufacturing manufacturer, as of the end of 2023, Aomeisen has 442 valid authorized patents, including 179 domestic invention patents, 9 international PCT patents, and 58 authorized copyrights, including 54 software copyrights.
In terms of shareholding structure, as of June 19, 2024, Zhongshan Aomeisen Industrial Technology Co., Ltd. is the controlling shareholder of Aomeisen, with a shareholding ratio of 45.75%. The actual controllers of Aomeisen are Long Xiaobin, Long Xiaoming, Guan Yinqiu and Lei Lin. Among them, Long Xiaobin and Long Xiaoming are brothers, Long Xiaobin and Guan Yinqiu are husband and wife, and Long Xiaoming and Lei Lin are husband and wife.
The on-site inspection was exposed to the lack of implementation of internal controlBefore submitting the form to the Beijing Stock Exchange, on April 9, 2024, Aomeisen, which was still in the listing counseling period, was inspected by the Guangdong Securities Regulatory Bureau on the spot.
On May 28, 2024, the "Notice of On-site Inspection Results" [(2024) No. 12] issued by the Guangdong Securities Regulatory Bureau showed that during the inspection, it was found that there were problems in the implementation of the internal control system and financial accounting.
In terms of internal control system, the on-site inspection of the Guangdong Securities Regulatory Bureau found that there was only one internal auditor of Aomeisen, and Yao Weihui, the head of the audit department, also served as financial work, and did not strictly achieve "separation of incompatible positions", which was also inconsistent with the provisions of the company's "internal audit management system" on "configuring no less than three full-time personnel".
Article 19 of the "Internal Accounting Control Standards" issued by the Ministry of Finance clearly stipulates that the control of the separation of incompatible positions requires units to reasonably set up accounting and related work positions in accordance with the principle of separation of incompatible positions, clarify responsibilities and authority, and form a mutual check and balance mechanism.
The term "incompatible functions" are those which, if held by a single person, are likely to be both likely to cause mistakes and malpractices and to cover up their wrongdoing and malpractices.
In general, in order to ensure the compliance of a company's finances and the effectiveness of internal controls, financial and audit responsibilities should be performed by different people. This allows for true, accurate and complete financial information and prevents potential financial risks.
The above-mentioned inadequate implementation of the internal control system of Aomeisen makes people worry about the failure of its internal control management.
In addition, the on-site inspection also found that there were irregularities in the financial accounting of Aomeisen.
Among them, during the reporting period, Aomeisen included all the patent annual fees of 71,800 yuan that should be included in the management expenses into the R&D expenses, and failed to transfer the direct labor costs of 465,000 yuan corresponding to the sales of R&D prototypes in the reporting period from the R&D expenses and included in the operating costs as required.
In addition, some subsidiaries of Aomeisen did not implement the parent company's inventory decline policy, and four subsidiaries with inventory age of more than 1 year did not make provision for inventory decline at 5%, and a total of 51,900 yuan should be supplemented.
The above-mentioned irregularities in financial accounting also reflect the weakness of the accounting foundation of Aomeisen.
The ups and downs of performance are like a "roller coaster"In fact, this IPO is not the first time that Omeson has hit the capital market. As early as December 2021, Aomeisen had submitted a listing application on the GEM, but on July 5, 2022, the company voluntarily withdrew its listing application.
So, why did Aomeisen choose to withdraw its GEM IPO?
In the filing documents of the IPO guidance of the Beijing Stock Exchange, Aomeisen said that considering the decline in the company's net profit in 2021 and the expected further decline in performance in 2022 at that time, the company's shareholders and management decided to adjust the listing plan in a timely manner based on the changes in the domestic capital market environment at that time, the GEM review environment and market dynamics.
It can be seen that the decline in performance from 2021 to 2022 is difficult to meet the requirements of the GEM for performance growth, which is one of the important reasons why Aomeisen decided to withdraw the GEM IPO.
According to the prospectus, from 2021 to 2023, Aomeisen's performance will rise and fall like a roller coaster.
Among them, in 2021, Aomeisen's revenue increased by 9.68% year-on-year, but its net profit decreased by 19.33% year-on-year; In 2022, the net profit of Aomeisen will both decline, of which the net profit will decrease by 56.75% year-on-year, and the net profit after deducting non-attributable to the parent company will plummet by 70.50% year-on-year.
In 2023, Aomeisen's operating income will increase by 16.6% year-on-year to 325 million yuan, but the net profit after deducting non-attributable to the parent has not returned to the level of 2020.
As for the reasons for the decline in performance in 2022, Aomeisen explained in the prospectus that it is mainly due to the delay in the installation and commissioning of non-standard automation equipment, the change in product sales structure, and the increase in expenses during the period due to the limited travel of employees and customers.
After calculation, in the past five years (2019-2023), the compound growth rate of Aomeisen's operating income is only 4.4%, and the performance growth is relatively weak.
As early as the first round of inquiries on the GEM, the Shenzhen Stock Exchange had questioned the stability of the various products sold by Aomeisen and whether the business had growth.
In the IPO prospectus of the Beijing Stock Exchange, Aomeisen also said frankly that although the company's operating performance will resume growth in 2023 with the lifting of travel restrictions, if the electrical industry grows slowly or even declines due to factors such as the macroeconomic situation is less than expected and the decline in consumer spending, it may lead to a sluggish demand for production capacity in the industry, thereby reducing the procurement demand for equipment manufacturing, which will have a significant adverse impact on the company's business development.
It is worth mentioning that from the GEM to the Beijing Stock Exchange, Aomeisen has also significantly reduced the scale of fundraising.
According to the GEM prospectus, the amount of funds to be raised by Aomeisen is 365 million yuan. The prospectus of the Beijing Stock Exchange disclosed that the scale of its proposed fundraising was significantly reduced to 195 million yuan, a decrease of 46.58% compared with the previous IPO plan.
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