On July 15, the information disclosed by the Shanghai Stock Exchange showed that because Dingmei New Material Technology Co., Ltd. (hereinafter referred to as "Dingmei Technology") failed to pass the review, the Shanghai Stock Exchange terminated its issuance and listing review. This means that the listing trip of Dingmei Technology has completely failed.
According to Bedo Finance, Dingmei Technology will pre-disclose the prospectus at the China Securities Regulatory Commission on July 1, 2022, preparing for listing on the main board of the Shanghai Stock Exchange. On February 27, 2023, Dingmei Technology submitted a prospectus to the main board of the Shanghai Stock Exchange, which was rejected on July 6, 2023.
Tianyancha information shows that Dingmei Technology was established in June 2013, formerly known as Dingmei (Kunshan) New Material Technology Co., Ltd., located in Suzhou City, Jiangsu Province. At present, the registered capital of the company is 360 million yuan, the legal representative is THO KEE PING (Tu Jibing), and the main shareholders include Daikin Holdings, Zhongyu Co., Ltd., etc.
It is worth mentioning that the IPO of Dingmei Technology belongs to the spin-off subsidiary of a listed company listed on the Taiwan Stock Exchange and listed on the A shares. According to the prospectus, the company’s direct controlling shareholder is Daikin Holdings, and the sole shareholder of Daikin Holdings is Juju Machinery (9921.TW), which is a listed company on the Taiwan Stock Exchange.
According to the relevant regulations in Taiwan, Juju Machinery does not need to submit the matter to the Taiwan Stock Exchange or other Taiwan regulatory agencies for review regarding the company's application for A-share listing, but it must perform the company's internal resolution procedures and make an announcement as required.
According to reports, Juju Machinery has held an audit committee meeting and board of directors meeting on March 26, 2021, and a general meeting of shareholders on July 8, 2021, to review and pass the relevant resolutions on the A-share listing of Dingmei Technology and make an announcement on the Taiwan Stock Exchange. Juju Machinery has completed the relevant procedures for the spin-off of Dingmei Technology A-share listing.
According to the previous prospectus, Dingmei Technology originally planned to raise 1.286 billion yuan, of which 884 million yuan will be used for lightweight new material production, R&D and construction projects, 253 million yuan will be used for aluminum alloy lightweight new material production line technical transformation projects, and 150 million yuan will be used to supplement working capital projects. Guotai Junan Securities is its sponsor.
According to the prospectus, Dingmei Technology is a domestic enterprise specializing in the R&D, production and sales of high-performance industrial aluminum materials and related products. Its main products include industrial aluminum materials, bicycle and motorcycle parts, and its products are used in downstream industries such as bicycles, motorcycles, automobiles, medical equipment, rail transit, and civil aviation.
According to reports, Dingmei Technology's customers include: Giant, Trek, ZPG, Merida Group and other bicycle brands, DTSWISS, Campagnolo, FSA, FOX and other bicycle parts manufacturers, and BMW, Ducati, KTM, Piaggio, Triumph and other motorcycle brands.
In 2020, 2021 and 2022, the revenue of Dingmei Technology will be 1.276 billion yuan, 1.812 billion yuan and 1.873 billion yuan respectively; the net profit will be 129 million yuan, 210 million yuan and 197 million yuan respectively, and the net profit after deducting non-profits will be 59.5182 million yuan, 198 million yuan and 205 million yuan respectively.
Dingmei Technology stated in the prospectus that the company has the risk that related party transactions account for a relatively large proportion. During the reporting period, the company's related sales amounted to 293 million yuan, 402 million yuan and 437 million yuan respectively, accounting for 22.96%, 22.20% and 23.35% of the operating income.
According to the prospectus, Dingmei Technology’s affiliated transactions are all Huge Group, and the trading products involve bicycle hubs, bicycle rims, and entrusted processing of seamless pipes. Among them, the indirect controlling shareholder of Dingmei Technology is Juju Machinery, a listed company in Taiwan, China, which is mainly engaged in the R&D, production and manufacturing of bicycles.
In each period of the reporting period, Dingmei Technology’s hub and accessories business revenue ratios were 8.80%, 9.99% and 11.42%, of which related sales ratios were 91.94%, 79.54% and 85.02%; bicycle ring business ratios were 13.51%, 13.69% and 13.75%, of which related sales ratios were 55.63%, 53.89% and 54.45%.
Regarding the large-amount related transactions of Dingmei Technology, the Listing Committee also asked questions on the spot, asking it to explain the pricing basis of products related to related transactions with Huge Group, the reasons and rationality of the differences in average unit prices and gross profit margins between related transactions and non-related transactions, whether it constitutes a major dependence on Huge Group, and whether there is any situation in which benefits are transferred to Juju Group.
In addition, the Listing Committee also asked the representative of Dingmei Technology to explain the rationality of Tu Jibing's large salary, whether it is in line with the salary level of the company's industry and region, whether the basis for the distribution of salary between R&D expenses and management expenses is sufficient, and the pre-tax deduction of corresponding R&D expenses.
According to the prospectus, the total remuneration of directors, supervisors, senior managers and core technicians of Dingmei Technology will be 27.899 million yuan, 32.7045 million yuan and 30.6212 million yuan in 2020, 2021 and 2022, respectively. Among them, Tu Jibing, the chairman and R&D director of Dingmei Technology, will receive a salary of 20.9291 million yuan in 2022.
In contrast, Zhou Zongyan, director and general manager of Dingmei Technology, will receive 4.3446 million yuan in salary from the company in 2022, which is about one-fifth of Tu Jibing's salary. According to the previous prospectus, Tu Jibing's salary from Dingmei Technology in 2021 is 21.9744 million yuan, and Zhou Zongyan's salary is 4.5649 million yuan.
In 2020, Tu Jibing received a salary of 18.5798 million yuan at Dingmei Technology, a total of about 61.48 million yuan in three years. Dingmei Technology explained that it mainly focused on Tu Jibing's important contribution to its business development as the company's chairman, and his important role in the company's strategic development direction, market development, process technology development guidance and adjustment.