On January 6, Bofang environmental protection (837879, NQ) submitted an application for withdrawal of listing to the North stock exchange. Today (January 12), the North Stock Exchange announced that it would terminate the examination of Bofang environmental protection’s public offering of shares and listing on the North stock exchange. Bofang environmental protection has also become the eighth company to be terminated from listing audit since the opening of the Beijing stock exchange.
The reporter noted that as the largest customer of Bofang environmental protection, Guangzhou water purification Co., Ltd. (hereinafter referred to as Guangzhou water purification) contributed 15.04%, 44.79% and 50.21% of the revenue from 2018 to 2020 respectively. Before the audit was terminated, Bofang environmental protection received the first round of inquiry from the Beijing stock exchange on July 23, 2021, and “whether it has a significant dependence on the customer” was focused on.
in 2020, the revenue of the first largest customer accounted for more than half
Bofang environmental protection is a comprehensive service provider for water environment treatment, mainly engaged in the R & D, production and sales of water treatment agents, the R & D, integration and sales of intelligent sewage treatment equipment, sewage treatment engineering services and sewage treatment facility operation services. The company’s business covers urban and rural domestic sewage, black and smelly river sewage, medical wastewater, resource utilization of hazardous waste and other ecological environment fields.
Bofang environmental protection was listed on the new third board in November 2016 and applied for listing on the selected layer of the new third board in June 2021. According to Bofang environmental protection’s public offering prospectus (application draft), the company’s revenue in 2018, 2019 and 2020 was 64.2109 million yuan, 113 million yuan and 163 million yuan respectively, and the three-year net profit was 12.8977 million yuan, 30.1723 million yuan and 42.6625 million yuan respectively.
Among them, from 2018 to 2020, the operating service revenue of Bofang environmental protection sewage treatment facilities was 15.5664 million yuan, 67.4274 million yuan and 116.3 million yuan respectively, and the main business revenue accounted for 24.25%, 59.52% and 71.28% respectively.
However, as a core business, Bofang Environmental Protection said that with the successive expiration of the company’s investment and operation projects, if it is unable to renew or continuously develop new operation projects, there is a risk of decline in the revenue of the company’s sewage treatment facility operation service business, which will have an adverse impact on the company’s profitability.
In addition, from 2018 to 2020, the sales proportion of the top five customers of Bofang environmental protection was 52.58%, 72.05% and 81.35% respectively. The customer concentration was high and showed an increasing trend year by year. Moreover, Guangzhou water purification, as the largest customer, contributed 15.04%, 44.79% and 50.21% of the revenue in the three years.
Bofang environmental protection also said that if the company can not timely meet the business needs of the above customers through technology and product innovation, or the above customers have a significant decline in the demand for the company’s water treatment agent or sewage treatment facility operation services due to policy changes and changes in their own business conditions; Or if the company cannot continuously expand new customers and markets, the company will face certain business risks caused by high customer concentration.
customer dependency issues are highlighted
In July 2021, the Beijing stock exchange issued the first round of inquiry to Bofang environmental protection. In December 2021, the company issued the first round of inquiry reply. On January 6, 2022, the company submitted the withdrawal of listing application to the Beijing stock exchange. On January 12, the Beijing Stock Exchange announced the termination of the listing audit of Bofang environmental protection.
The reporter noted that in the first round of inquiry of the Beijing stock exchange, it focused on the dependence of Bofang environmental protection on major customers. The Beijing stock exchange asked the company to reply and explain the stability and sustainability of cooperation with major customers, including supplementary disclosure of the sales content, amount and proportion of the top ten customers in each period of the reporting period according to the classification of sales goods, operation services (investment and entrustment) and construction services Gross profit margin, credit policy, cooperation background, cooperation years, orders in hand, etc.
At the same time, it is also required to explain the impact of customer concentration on the company’s operation, supplement and disclose the types, amount and proportion, gross profit and subsequent payment collection of products and services purchased from the issuer by Guangzhou water purification and Guangzhou Water Supply Co., Ltd. in each period of the reporting period, and explain the technical level, pricing method, cost, price Whether the gross profit margin is quite different from other customers, and whether there is cross period adjustment of income.
In addition, the Beijing stock exchange requires the company to disclose the reason and rationality that the operation service business mainly comes from Guangzhou water purification and whether there is a long-term cooperation agreement or other binding cooperation agreement in combination with product competitiveness, transportation radius, market supply and demand, regional barriers, shareholder background, comparable companies in the same industry, etc, Whether there is a risk of being replaced or terminated, and whether it constitutes a significant dependence on the customer.
According to the official website of the Beijing stock exchange, in addition to Bofang environmental protection, since the opening of the market, another 7 enterprises to be listed have withdrawn their listing applications during the review period, namely Zhongrui medicine, Weizhi shares, Siyuan shares, qiangshan agriculture and animal husbandry, Shandong Gold Phoenix Co.Ltd(603586) , Hengtai technology and Tianwei information.
