Shulou(Shulou.com)11/24 Report--

Shuanggao issuers abandoned their purchases, and the underwriters lost money into shareholders, which was once regarded as the myth of "playing new".

Hubei Wanrun New Energy Technology Co., Ltd. (SH:688275, hereinafter referred to as "Wanrun Xinneng"), an upstream power battery company, listed on Science and Technology Innovation Board on September 29 at an offering price of 299.88 yuan per share, making it the most expensive new stock this year.

Wanrun Xinneng originally planned to raise 1.262 billion yuan, but the actual amount raised was about 6.389 billion yuan, with an excess of 5.127 billion yuan, which also became an important factor in the company's opening.

After the opening, Wanrun Xinneng fell nearly 30% at one time. If you choose to sell at this time, the loss of investors in the first lot (500shares) will exceed 45000. Data show that Wanrun Xinneng online purchase rate is only 0.04%, successful investors abandoned to buy 1.5309 million shares, abandoned purchase amount of 459 million yuan.

Pan Helin, a researcher and co-director of the Research Center for Digital economy and Financial Innovation at the International Joint Business School of Zhejiang University, believes that the reason for abandoning the purchase may be that the price is too high.

According to the Beijing Business Daily, the price-to-earnings ratio of Wanrun Xinneng is also high, at 75.25 times, while the industry average price-to-earnings ratio is 19.21 times.

Abandonment of purchases for retail investors, although reducing losses, but may also be punished by the Securities Association. According to the relevant requirements, if there are three successful lots that fail to pay the subscription funds in full within 12 consecutive months, they will not be able to apply for new shares and new bonds within half a year.

The 153.09 million shares abandoned by shareholders will be underwritten by Donghai Securities, a sponsor (lead underwriter), making Donghai Securities one of the top 10 shareholders of Wanrun Xinneng. The total underwriting fees and recommendation fees collected by Donghai Securities are 212 million yuan. Excluding floating losses of 130 million, Donghai Securities still has a surplus.

The chairman and his wife have an annual salary of 1 million yuan and a price of 8.4 billion yuan. Wanrun Xinneng, founded in 2010, is one of the early enterprises to enter the lithium battery cathode material industry. The company's main products include lithium iron phosphate cathode materials and precursors, lithium manganate cathode materials and so on. At present, the main income comes from the sales of lithium iron phosphate cathode materials.

According to the prospectus, the directors, supervisors and senior managers of Wanrun Xinneng Company will receive a total salary of 4.06 million yuan in 2020, of which the annual salary of Liu Shiqi, chairman and general manager is 439200 yuan, and that of director Li Fei is 563800 yuan. Liu Shiqi, chairman and general manager, and Li Fei, director, have a husband-and-wife relationship with director Li Fei, with a total annual salary of 1 million yuan. In addition, the annual salary of Gao Wenjing, secretary of the board of directors, is 612800 yuan in 2020.

Before IPO, the major shareholders of Wanrun Xinneng were Liu Shiqi, chairman and general manager, and Li Fei, director, who directly and indirectly controlled 2805.52 shares of the company, with a combined shareholding ratio of 43.9%.

If calculated at the issue price of 299.88 yuan per share, Liu Shiqi and director Li Fei and his wife would be worth 8.4 billion yuan.

After IPO, Liu Shiqi holds 23 per cent, Li Fei 8.83 per cent, Volume Kegao 5.9 per cent, Jintong New Energy Fund I holds 3 per cent and Wanxiang 123 holds 3 per cent.

From 2018 to the first half of 2021, Wanxiang was also one of the company's top five customers, and since 2020, Hubei Wanrun's average price and gross profit margin of selling lithium iron phosphate to this shareholder have been much higher than those of non-related parties, according to the prospectus. In this regard, the company said that what it sells to Wanxiang 123 is the customized lithium iron phosphate with high product performance.

Major customer dependence and capacity bottleneck in 2019,2020 and 2021, Wanrun Xinneng's income from lithium iron phosphate was 696 million yuan, 620 million yuan and 2.169 billion yuan respectively, accounting for 92.67%, 91.85% and 99.05% of the main business income, respectively.

Ningde Times is the largest customer of Wanrun Xinneng. From 2019 to 2021, the company's sales to Ningde Times and BYD accounted for 70.09%, 68.12% and 80.63% of the current operating income.

Wanrun Xinneng and Ningde era also have procurement and sales problems. Wanrun Xin can purchase lithium carbonate raw materials from Ningde era for its own production, and then sell lithium iron phosphate to Ningde era.

Relying on the top five customers, from 2019 to 2021, Wanrun Xinneng achieved revenue of 766 million yuan, 688 million yuan and 2.229 billion yuan respectively. In the first quarter of this year, its operating income reached 1.54 billion yuan, a sharp increase of 445.11% over the same period last year.

Wanrun Xinneng does not have a strong bargaining power with five major customers, and accounts receivable has soared from 174 million yuan in 2019 to 554 million yuan in 2021. The company mentioned in its prospectus that it had separately agreed with Ningde Times and BYD that if it failed to complete the annual guaranteed supply within the specified time, it would have to compensate BYD for the actual loss suffered by BYD due to underdelivery of the goods and bear the corresponding liquidated damages for Ningde era.

Wanrun Xinneng turned losses into profits in 2021, with figures of-73.3857 million yuan,-44.6116 million yuan and 353 million yuan respectively from 2019 to 2021. In the first half of this year, Wanrun Xineng achieved a net profit of 494 million yuan, an increase of 251.9% over the same period last year.

In terms of gross margin, the company is higher than the industry average. According to the prospectus, Wanrun Xinneng's gross profit margin from 2019 to 2021 was 22.98%, 18.52% and 31.12%, respectively.

At present, Wanrun Xinneng still faces the problem of insufficient production capacity. Wanrun Xinneng said that although the company makes up for the current bottleneck of insufficient production capacity by means of contracted processing and joint venture plants, however, due to factors such as capital investment in construction and the cycle of capacity release of the joint venture plant, the capacity gap is large.

The company raised a total of nearly 6.39 billion yuan, the funds will also be used for capacity expansion and replenishment of liquidity. According to the plan, Wanrun Xinneng is expected to have a total production capacity of 196100 tons by 2022 and January 2023.

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