On January 11th, the Shenzhen Stock Exchange's issuance and listing review information platform was updated, showing that the IPO status of Zhuhai Saiwei Electronic Materials Co., Ltd. (Zhuhai Saiwei) was changed to "Terminated (Withdrawn)." This indicates that this lithium battery material company, underwritten by China Merchants Securities (CMSC) and on an IPO journey lasting over three years, ultimately chose to voluntarily withdraw its application materials, halting its path to a ChiNext listing.
Reviewing its history, Zhuhai Saiwei's listing application was accepted on September 29, 2022, and subsequently entered the inquiry phase in November of that year. After multiple rounds of review, the company successfully passed the listing committee meeting on September 15, 2023. However, following this approval, the company waited for more than two years without receiving the final registration approval, ultimately ending in withdrawal.
According to the prospectus previously disclosed by the company, Zhuhai Saiwei primarily engages in the research, development, production, and sales of lithium-ion battery electrolytes and is a supplier to leading battery manufacturers such as CATL, EVE Energy Co., Ltd., Farasis Energy, and SVOLT. The company originally planned to issue no more than 23,090,278 shares to raise 1 billion yuan, intended for funding the Huainan electrolyte and supporting raw materials project, the Hefei R&D center project, and supplementing working capital.
Despite successfully passing the listing committee meeting, two key issues raised during the on-site inquiry may have foreshadowed its subsequent fate. The first concerned the company's core competitiveness. The committee noted that nearly half of the company's revenue during the reporting period came from a "customer-supplied formula" model, where clients like CATL and EVE Energy provided the electrolyte formula themselves, and the company handled production. Regulators required the company to specify the application of its core technology under this model, the stability and sustainability of its partnerships with major clients, and the risk of being replaced. This directly touched upon the company's technological independence and bargaining power relative to powerful downstream customers in the industry chain.
The second issue was the closely watched volatility in performance. According to the application materials, the company's operating performance saw a significant decline in the first half of 2023, with operating revenue of 593 million yuan, down 46.00% year-on-year, and net profit after non-recurring items attributable to owners of the parent of 54.7544 million yuan, down 56.90% year-on-year. The company also forecasted a full-year performance decline for 2023. The listing committee requested the company to explain the reasons in light of market conditions, pricing, and peer comparisons, questioning the prudence of its profit forecasts and the risk of continued performance decline.
The prospectus indicated that the performance volatility was mainly due to a sharp decline in the prices of upstream raw materials in the lithium battery industry chain since 2023, leading to a significant year-on-year drop in electrolyte selling prices. Although the company's sales volume increased by 42.18% year-on-year in the first half of 2023, the average selling price plummeted from 85,400 yuan per ton in the same period last year to 32,300 yuan per ton, severely eroding profit margins. Peer companies such as Guangzhou Tinci Materials Technology Co., Ltd., Shenzhen Capchem Technology Co., Ltd., and Reignwood Renewable Energy Co., Ltd. also experienced substantial performance declines in the first half of 2023, indicating the widespread impact of cyclical industry fluctuations.
Beyond these core concerns, other risks revealed in the prospectus also posed challenges. The company had a high customer concentration, with the sales proportion from its top five customers increasing from 56.21% to 66.14% during the reporting period, indicating deepening reliance on single major clients. Simultaneously, the company faced the disruptive risk posed by potential changes in lithium battery technology routes (such as solid-state batteries and sodium-ion batteries), as well as the impact of severe fluctuations in the prices of key raw materials on operational stability. From 2021 to 2022, the company's net cash flow from operating activities dropped sharply from 31.7943 million yuan to -82.3142 million yuan, showing significant volatility.
This termination of the IPO also represents a setback for the underwriter, China Merchants Securities (CMSC). Public information shows that the designated sponsors for this project were Lei Congming and Liang Zhanguo. It is noteworthy that the issuer's shareholder list included a small indirect stake held by a wholly-owned subsidiary of CMSC through related investment funds. Although the prospectus claimed this low shareholding percentage did not affect the sponsor's independence, such an affiliation remained a point of focus.
Furthermore, the accounting firm for Zhuhai Saiwei's IPO process was Tianjian Certified Public Accountants (Special General Partnership), with signing accountants Ye Weimin and Yan Zhiyong; the law firm was Zhong Lun Law Firm, with signing lawyers Nian Fubing and Song Kun; and the appraisal agency was Beijing Huaya Zhengxin Asset Appraisal Co., Ltd., with signing appraisers Qiu Xudong and Wang Ying.
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