Two patents of tengjing technology do not meet the requirements of the science and Technology Innovation Board

The stock listing committee of the Shanghai Stock Exchange’s Kechuang board is scheduled to hold the 87th listing committee review meeting in 2020 on October 14 to examine the initial listing application of tengjing Technology Co., Ltd. < p > < p > according to the public information, the Shanghai stock exchange accepted the application for listing on the science and Technology Innovation Board of tengjing technology on April 29, 2020. At present, it has conducted three rounds of inquiries, and industrial securities serves as the company’s sponsor. Tengjing technology is a high-tech enterprise engaged in the R & D, production and sales of various kinds of precision optical components and optical fiber devices. Its products are mainly used in optical communication, fiber laser, quantum information research and other fields. Other application fields include biomedicine, machine vision, 3D transmission, consumer optics, etc. As of September 28, 2020, Yu Hongrui directly held 24.39% of the company’s shares, controlled 10.05% of the company’s shares through Ningbo Guangyuan, and 2.27% of the company’s shares through Ningbo Qili, controlling 36.71% of the company’s shares in total. In addition, Wang Qiping directly holds 12.27% of the company’s shares, and Yu Hongrui and Wang Qiping jointly control 48.98% of the company’s shares. Therefore, Yu Hongrui and Wang Qiping are the actual controllers of the company. Yu Hongrui and Wang Qiping are both Chinese nationals and have no right of permanent residence abroad. < / P > < p > from 2017 to 2019, the company received 61.1568 million yuan of cash from sales of goods and provision of services, and 146.5319 million yuan of net cash flow from operating activities, respectively, of 11.312 million yuan, 31.9099 million yuan and 28.1515 million yuan. From January to June 2020, the company’s operating income is 123.7314 million yuan, the net profit is 38.3452 million yuan, the cash received from selling goods and providing labor services is 80.58 million yuan, and the net cash flow from operating activities is 18.635 million yuan. < p > < p > compared with the listed companies Fujing Technology (002222. SZ), guangku Technology (300620. SZ) and Bochuang Technology (300548. SZ) selected in the company’s prospectus, according to the annual reports of the three companies, the business income of Fujing technology in 2019 was 501 million yuan, with a year-on-year increase of 2%, and the net profit was 135 million yuan, a year-on-year decrease of 10.57%; the operating income of guangku technology was 391 million yuan, with a year-on-year increase of 35.09%, and the net profit was 391 million yuan It was 57.4842 million yuan, a year-on-year decrease of 28.07%; the business income of Bochuang technology was 407 million yuan, with a year-on-year increase of 48.00%; the net profit was 7.7836 million yuan, with a year-on-year increase of 233.91%. < / P > < p > from the perspective of peer performance, comparable companies in the industry are basically in a state of increasing operating revenue but declining net profit in 2019. Only the net profit of Borgen technology has increased significantly, which is obviously different from that of peers. < p > < p > from 2017 to 2019 and the first half of 2020, the R & D expenses of tengjing technology were 6.4929 million yuan, 7.2625 million yuan, 11.6699 million yuan and 7.8566 million yuan respectively, and the proportion of R & D expenses in the operating revenue in the same period was 7.82%, 5.75%, 6.52% and 6.35%, respectively. The average R & D expense rates of comparable listed companies in the same industry were 7.67%, 8.66%, 9.89% and 7.70%, respectively, which were higher than that of tengjing technology and increased year by year. < / P > < p > in addition to the decline in the R & D cost rate, the number of R & D personnel of tengjing technology is up and down. According to the prospectus disclosed by the company on April 29, 2020, there are 74 R & D personnel, 40 management personnel and 14 sales personnel in 2019. However, according to the reply to the inquiry on July 8, 2020, the company has 59 R & D personnel, 37 management personnel and 12 sales personnel in 2019. < / P > < p > in addition, in the first round of inquiry and reply opinions disclosed on September 25, 2020, the number of R & D personnel of tengjing technology in the first half of 2020 is 76, but in the latest prospectus disclosed on September 28, 2020, the number of R & D personnel of tengjing technology in the first half of 2020 has become 91. < p > < p > according to the report of securities market weekly, tengjing technology controlled the cost recognition amount of sold products by taking part of the cost into inventory, which led to the increase of the book value of the company’s inventory, and then led to the decrease of net cash flow of operating activities in 2019. Moreover, the company’s sales increased significantly year-on-year, but the manufacturing costs decreased year-on-year. < / P > < p > according to the prospectus, the sales expenses of tengjing technology in 2019 will be 4.1441 million yuan, with a year-on-year increase of 12.64%. Among them, the company’s personnel salary increased by 170700 yuan, a year-on-year increase of 8.65%. In 2019, the operating income of tengjing technology increased by 52.6977 million yuan, a year-on-year increase of 41.71%, which greatly exceeded the growth rate of sales expenses, especially personnel compensation. < p > < p > in response to the first round of inquiry, tengjing technology said that in 2019, the company added 57 new customers. With only one more sales staff and less than 500000 yuan of new sales expenses in 2019 compared with that in 2018, tengjing technology has greatly expanded its customer base and achieved revenue growth of more than 40%, which is not a small performance “miracle”. < / P > < p > what is most noteworthy is that tengjing technology currently has two authorized invention patents, which temporarily does not meet the requirements of Article 4 (2) of the Interim Provisions of Shanghai Stock Exchange on the application and recommendation of the issuance and listing of enterprises on the science and Technology Innovation Board of Shanghai stock exchange, that is, the main business income of the issuer (including national defense patents) is greater than or equal to 5, except for software enterprises. Therefore, in the second and third rounds of inquiry, the SSE focused on the reasons for the low number of authorized invention patents of tengjing technology, whether it has sufficient technical support and continuous innovation ability, and the expected time for the invention patents in the substantive examination stage to be granted. < / P > < p > according to the reply of tengjing technology, as of September 11, 2020, the company has 14 invention patents in the substantive examination stage, but 12 of the 14 invention patents to be examined will not be authorized until the end of 2021. In the critical period of the rush to market, tengjing technology has only two authorized invention patents, far from reaching the standard. < p > < p > the gross profit margin of tengjing technology’s main business continued to decline. From 2017 to the first half of 2020, the gross profit margin of tengjing technology’s main business was 47.71%, 45.62%, 42.42% and 44.09% respectively. During the same period, the average comprehensive gross profit margin of main business of comparable companies in the same industry were 47.17%, 45.48%, 38.60% and 38.95%, respectively, which was not significantly different from tengjing technology. According to tengjing technology, the overdue ratio of the company has increased year by year, and up to now, there is still the situation that overdue accounts receivable in 2019 have not been recovered. If the accounts receivable customers have large-scale overdue payment, and the future customers have financial difficulties, the company will face the risk of overdue accounts receivable and bad debt. < p > < p > at the end of each period from 2017 to 2019 and the end of June 2020, tengjing technology received 33.0155 million yuan, 49.2206 million yuan, 65.19 28 million yuan and 44.0549 million yuan respectively, and the balance of bad debt reserves for accounts receivable of the company was 1.6884 million yuan, 2.5371 million yuan, 3.4524 million yuan and 4.8067 million yuan respectively, which had a significant impact on the financial statements. < p > < p > from 2017 to 2019 and the end of June 2020, tengjing technology’s accounts receivable turnover rates were 3.22, 3.04, 3.05 and 1.56 respectively, and the average accounts receivable turnover rates of comparable companies in the same industry were 4.88, 3.92, 4.06 and 2.05, respectively. Tengjing technology’s accounts receivable turnover rate was relatively low. < p > < p > tengjing technology has the situation that the sales of single customers increase greatly and a large proportion of accounts receivable are on account. In 2019, the balance of accounts receivable of tengjing technology to Shenzhen amestone Co., Ltd. (hereinafter referred to as “amestone”) is RMB 8.9434 million, ranking first among the credit customers. In 2018, the company’s sales revenue to amestone was only 494700 yuan. In 2019, the sales amount increased by 27.43 times to 14.0658 million yuan, becoming the fourth largest customer of tengjing technology. According to the proportion of credit sales, 63.58% of the company’s sales to amestone in 2019 were in the form of accounts receivable, and by the end of 2019, 7.3404 million yuan was overdue, accounting for 82.08% of the amount of accounts receivable. The current liabilities of tengjing technology are mainly composed of accounts payable, employee compensation payable and notes payable. Among them, the accounts payable of the company from 2017 to 2019 and June 2020 were 6.5317 million yuan, 1.0249 million yuan, 44.2216 million yuan and 43.4558 million yuan respectively, accounting for 22.25%, 26.51%, 67.96% and 58.20% of current liabilities respectively. The non current liabilities of the company mainly consist of long-term loans. As of June 30, 2020, the company’s long-term loan was RMB 43.61 million, which was the mortgage loan from Bank of China Fuzhou Taijiang sub branch. < p > < p > at the end of 2017, 2018, 2019 and June 2020, the book balance of tengjing technology inventory was 11.594 million yuan, 2002.97 million yuan, 30.361 million yuan and 33.5109 million yuan respectively, mainly including raw materials, products in process, semi-finished products, goods in stock and issued goods. < / P > < p > in the same period, tengjing technology’s inventory falling price reserves were 363400 yuan, 549400 yuan, 3600 yuan and 48700 yuan respectively, accounting for 3.13%, 2.74%, 0.01% and 0.15% of the inventory book balance, respectively, and the overall falling price reserve is small. < p > < p > from 2017 to 2019 and the end of June 2020, the inventory turnover rates of tengjing technology were 4.31, 4.34, 4.09 and 2.23, respectively, and the average inventory turnover rates of comparable companies in the same industry were 2.60, 2.05, 2.43 and 1.27, respectively. According to the prospectus, tengjing technology’s industrial land use right at No.2 Pearl Road, Mawei District, Fuzhou has been mortgaged. On May 23, 2019, the company signed the fixed assets loan contract (No.: fj9992019007) with Fuzhou Taijiang sub branch of Bank of China Limited (the lender). According to the contract, the lender will provide the company with a loan of 125 million yuan for key and core components and module construction projects of optoelectronic, and the company will provide mortgage guarantee for the loan with the above land use right. < / P > < p > the collateral is the only land use right owned by the company, and it is the land for the “optoelectronic key and core components construction project” of this issue, which is a key asset of the company’s sustainable operation. < p > < p > < p > tengjing technology also “went to battle with illness”, and there were cases that institutions suddenly took shares and signed gambling agreements. In August 2019, tengjing Co., Ltd., the predecessor of tengjing Technology Co., Ltd., agreed to increase the capital of Huaxing venture capital and Huaqiao yuanfuhai. Among them, Huaxing venture capital subscribed 5 million yuan of new registered capital of tengjing technology with monetary capital of 56.732876 million yuan, and the capital increase price was 11.35 yuan / amount of capital contribution; Huaqiao yuanfuhai contributed 22.6931.50 million yuan of currency capital to tengjing technology, with an additional registered capital of 2 million yuan, with the price of 11.11 35 yuan / capital contribution. On August 27, 2019, Yu Hongrui, Wang Qiping, Wu Youqin, Lin Jinlin, Yan Yichong and Liu Yi, shareholders of tengjing technology, signed the supplementary agreement on investment in Fuzhou tengjing Photoelectric Technology Co., Ltd. with Huaxing venture capital and huaqiaoyuan Fuhai. It is stipulated in the agreement that if tengjing technology fails to be listed and traded before December 31, 2022, the management shareholders of tengjing technology shall resume the implementation of the supplementary agreement and buy back tengjing technology shares held by Huaxing venture capital and huaqiaoyuanfuhai at a premium. < p > < p > in view of the counter gambling agreement, tengjing technology explained that the supplementary agreement did not involve the provisions on the company’s share repurchase obligation, nor was the supplementary agreement linked to the company’s profitability, performance and other conditions related to operation. The supplementary agreement agreed that the subjects responsible for the equity repurchase obligation were Yu Hongrui, Wang Qiping, Wu Youqin, Lin Jinlin, Yan Yichong and Liu Yi