Lingwang elevator, the target of Midea’s acquisition, is controversial: the latter failed in its IPO in its early years, and the actual controller was exposed to bribery

After the acquisition of KUKA robot in the early years, Midea Group, which likes to “buy”, has made a move again. On December 11, Midea Group’s HVAC and building business division had reached a strategic cooperation with Lingwang elevator and formally entered into the elevator business. Midea’s HVAC and building business division and Lingwang elevator held a ceremony of M & a delivery and strategic cooperation in Foshan. < / P > < p > it is understood that the so-called Midea heating, ventilation and building division is actually the former Midea central air conditioning division. After changing its name and acquiring Lingwang elevator, Midea will enter the elevator industry. Guan Jinwei, President of Midea Group’s HVAC and building business division, said that this time, the two sides are complementary to each other’s businesses, hoping to create a new opportunity to reshape the industry competition format for smart buildings with the brand influence of Midea’s HVAC and building deep cultivation project format for many years. < / P > < p > it is worth noting that the specific amount of the acquisition is not clear, which may also indicate that the total assets involved in the transaction account for less than 10% of the latest audited total assets of Midea, so there is no need to disclose. However, Lingwang elevator, acquired by Midea’s HVAC and building division, is a controversial company, and it has not been a good life these years. Headquartered in Foshan, Lingwang elevator is a large enterprise integrating R & D, design, manufacturing and sales of elevator. At that time, Lingwang elevator was high spirited, aiming to become the first domestic elevator brand to log into the capital market in South China. However, according to the prospectus of Lingwang elevator at that time, the company did not seem to be of high quality. According to the prospectus, in 2014- In the first half of 2017, the book value of Lingwang elevator inventory was 140.6142 million yuan, 17.2404 million yuan, 182.1315 million yuan and 197.3093 million yuan respectively, accounting for 38.37%, 38.83%, 36.10% and 37.48% of current assets respectively. During the reporting period, the inventory turnover rate of Lingwang elevator declined year by year, which was significantly lower than the industry average at the same time. Among them, in the first half of 2017, the company’s inventory turnover rate was only 0.95, while the industry average was 2.13. In addition, during the reporting period, the accounts receivable of Lingwang elevator also continued to rise. From 2014 to the first half of 2017, the book value of accounts receivable was 65.375 million yuan, 73.6743 million yuan, 94.4507 million yuan and 87.2822 million yuan respectively. Both groups of data show to a certain extent that the sales of Lingwang elevator at that time were not very good, and its revenue scale at that time was only about 1 / 5 of that of leading Kangli elevator (002367). < p > < p > what deserves more attention than performance is Lingwang elevator’s impact on IPO failure. Lingwang elevator submitted IPO application materials on May 30, 2016, updated application materials with feedback on October 27, 2017, and was terminated by CSRC on December 29, 2017. At that time, there was no specific reason, but in the updated application materials, Lingwang elevator added and disclosed that Zou yongran, the issuer and one of the actual controllers, had bribed and was not prosecuted by the procuratorial organ. The termination of the examination of Lingwang elevator may be related to the bribery of one of the actual controllers. < p > < p > according to the data, in 2010, Li, the former executive deputy director of the administration of work safety of Luocun social management zone, Shishan town, Foshan City, launched Lingwang elevator to declare two government subsidy projects to the government through Nanhai Economic Promotion Bureau. Later, another local official, Mr. Liu, took advantage of his position to help Lingwang apply for success. The two projects received a total of 1.5 million yuan from the government. In order to thank Mr. Li and Mr. Liu for their help, Zou yongran, director of Lingwang elevator, successively gave Mr. Li and Mr. Liu 100000 yuan and 170000 yuan in benefits, totaling 270000 yuan. According to the judgment, in 2013, Li was sentenced to five years for bribery, while Zou yongran was dealt with separately. < / P > < p > according to the disclosure of the prospectus, Nanhai District Procuratorate of Foshan City issued the “decision on non prosecution” on July 4, 2014, deciding not to prosecute Lingwang elevator and Zou yongran; it also failed to comply with the “Criminal Procedure Law” and the “criminal procedure rules of the people’s Procuratorate (Trial)” And so on to any administrative department for Lingwang elevator or Zou yongran to make administrative punishment, administrative punishment or confiscation of illegal income prosecution opinions. < / P > < p > why does Midea “look right” at such an enterprise with ordinary revenue? It seems far fetched to explain that Midea and Lingwang elevators are local enterprises in Foshan. The real reason may be that Midea wants to transform. Although it has become the two leading companies in the domestic air conditioning market, and Midea’s product line is obviously richer, the current domestic market is almost full, whether it’s air conditioning, water heater or kitchen electricity. Judging from the market growth in recent years, traditional home appliance enterprises are getting closer to the ceiling In particular, head companies like Gree and Midea have higher market share and more obvious feelings. Therefore, Midea’s transformation from the central air conditioning business unit to the HVAC and building business unit is an epitome of Midea’s transformation, and the acquisition of Lingwang elevator is one of the steps in this transformation. Only in view of the bad past of Lingwang elevator, can Midea’s acquisition help it successfully realize its new business We need to make a big question mark about the expansion of our business. < / P > < p > Disclaimer: the purpose of this article reprinted by CNFC is to convey more information, and it does not represent the opinions and positions of CNFC. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk. < p > < p > Chinanet is a state key news website under the leadership of the Information Office of the State Council and the management of China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website publishes information 24 hours a day. It is an important window for China to carry out international communication and information exchange.