Principal Century executives’ resumes are in doubt, suppliers become ＂lazy＂ and fight with customer data.

　　Source: Yi Caixin

　　Author: Tong Muyao

　　On December 11th, 2020, science and technology innovation board IPO of Beijing Principal Century Technology Co., Ltd. (hereinafter referred to as Principal Century) successfully passed the meeting. In this IPO, Xin ‘an Century, together with Western Securities (002673, Share Bar) and Rongcheng Certified Public Accountants, plans to issue no more than 23,281,900 new shares and raise 688 million yuan for four projects, including upgrading information security products.

　　During Principal Century’s entry into science and technology innovation board, outstanding patent litigation, premium acquisition of assets, and sudden large dividends before listing became the focus of media attention.

　　In addition, Yicaixin also found that the credit sales of Principal Century increased, the subsidiaries suffered losses, the resume information of senior executives was in doubt, suppliers became "lazy" and fought with customer sales data.

　　Increased credit sales and losses of subsidiaries

　　Founded in August 2001, Principal Century is mainly engaged in the research and development, production, sales and related technical services of information security products supported by cryptographic technology, and is committed to solving information security problems such as identity security, communication security and data security in the network environment.

　　According to the prospectus, while the revenue and net profit of Principal Century increased from 2017 to 2019, the proportion of corporate accounts receivable balance in operating income also increased year by year.

　　From 2017 to January-June, 2020, the balance of accounts receivable of Xin ‘an Century was 85.3654 million yuan, 143.5321 million yuan, 188.2638 million yuan and 160.1941 million yuan respectively, accounting for 38.72%, 53.29%, 59.23% and 160.1941 million yuan of operating income respectively.

　　In 2018 and 2019, the company’s operating income increased by 22.18% and 18.01% respectively compared with the previous year. In the same period, the balance of accounts receivable increased by 68.14% and 31.16% compared with the previous year, and its growth rate was also higher than that of revenue. At the same time, its accounts receivable turnover rate continued to decrease during the reporting period.

　　In addition to serious credit sales in Principal Century, in the first half of 2020, the salary of Dong Jiangao and core technicians actually exceeded the total profit of the current period.

　　From 2017 to January-June, 2020, the total remuneration of directors, supervisors, senior managers and core technicians of the company was 4,175,900 yuan, 4,535,700 yuan, 4,863,200 yuan and 2,297,900 yuan, respectively, accounting for 8.80%, 5.81%, 5.38% and 1,019.98% of the company’s total profits in each period.

　　The total profit of Principal Century from January to June 2020 was 2,253,200 yuan, which was 80.91% lower than the total profit of 11,802,000 yuan from January to June 2019. For the reasons for the sharp decline in performance data including total profit, Principal Century explained that the main reason was the change in the consolidation scope of the company’s financial statements.

　　At the same time, more than half of the subsidiaries of Principal Century suffered net profit losses in the last year and the first phase.

　　According to the prospectus, as of the signing date of the prospectus on December 1, 2020, Principal Century has 6 subsidiaries, including 5 wholly-owned subsidiaries and 1 indirectly controlled subsidiary.

　　In 2019, Wuhan Xin ‘an Luojia Technology Co., Ltd. (hereinafter referred to as Xin ‘an Luojia), Chengdu Xin ‘an Century Technology Co., Ltd. (hereinafter referred to as Chengdu Xin ‘an), Shenzhen Xin ‘an Century Technology Co., Ltd. (hereinafter referred to as Shenzhen Xin ‘an), Shanghai Xinxuan Information Technology Co., Ltd. (hereinafter referred to as Shanghai Xinxuan), Beijing Anrui Junheng Technology Co., Ltd. (hereinafter referred to as Anrui Junheng) and Beijing Huayao Technology Co., Ltd. -2,059,900 yuan,-1,636,200 yuan,-657,500 yuan,-0,400 yuan and 4,043,900 yuan. Except for the profits of Principal Luojia and Huayao Technology, the net profit of the other four companies totaled 4,354,000 yuan, accounting for 4.75% of the net profit of the current consolidated caliber.

　　In the first half of 2020, all the above six subsidiaries suffered losses, with losses of 2,026,600 yuan, 1,272,200 yuan, 1,423,400 yuan, 1,067,800 yuan, 4,700 yuan and 1,172,200 yuan respectively. The total net profit loss was 6,966,900 yuan, which was nearly twice the net profit of 3,589,300 yuan consolidated in the current period.

　　Suppliers become "lazy" and fight with customer data.

　　In addition to the losses of subsidiaries, the upstream and downstream suppliers and customers of Principal Century are also worthy of attention.

　　Looking at its upstream, suppliers are listed as untrustworthy executors, restricting consumption, and have been listed in the business exception list because of the falsification of public information.

　　Beijing Huayi Zhiyan Technology Co., Ltd. (hereinafter referred to as Huayi Zhiyan) was the second largest supplier of Principal Century in 2018 and 2019. Principal Century purchased servers and other products from it, and the amount incurred was 7,765,500 yuan and 12,785,400 yuan, accounting for 10.42% and 13.78% of the total purchase amount in the current period.

　　Huayi Zhiyan was established in August 2016. At present, the shareholders are Zhang Lihua, Mazidong and Yin Ruishan, with the shareholding ratio of 50%, 25% and 25%.

　　It is worth noting that Huayi Zhiyan was listed as an executor of dishonesty by Laishui County People’s Court in July 2020. According to document No.455 (2020) J.0623, Zhang Lihua, the major shareholder of Huayi Zhiyan, failed to fulfill Liu’s loan of 3.45 million yuan and its interest, and Huayi Zhiyan was listed as an executor of bad faith because of its joint liability for repayment.

　　(Screenshot from China Executive Information Open Network)

　　According to public information, in addition to being dragged down by shareholders and becoming an executor of dishonesty, Huayi Zhiyan also has eight messages restricting consumption in 2020.

　　Another supplier, Shandong Fisherman Information Technology Co., Ltd., was the fifth largest supplier of Principal Century in 2018, and the amount of products such as encryption cards purchased by Principal Century in that year was 2,732,200 yuan. In 2016, the company was listed in the list of business anomalies by Weihai Municipal Market Supervision Administration for concealing the real situation and practicing fraud, and was removed from the list five days later.

　　In addition to the supplier problem, there is a "fight" between Principal Century’s sales to customers and the data disclosed by the other party.

　　According to the prospectus, in 2019, Shandong Kyushu Xintai Information Technology Co., Ltd. (hereinafter referred to as Kyushu Xintai) was the fourth largest customer of Principal Century, and the sales amount to it in that year was 7,064,400 yuan, accounting for 2.23% of the main business income.

　　Kyushu Xintai was listed on the New Third Board on August 1, 2016. According to the 2019 financial report disclosed by the company in the New Third Board, in that year, Principal Century was the largest supplier of Kyushu Xintai, with a purchase amount of 5,662,800 yuan, and the data there was 1,401,600 yuan less than the corresponding data disclosed in the prospectus.

　　The resume of senior executives is doubtful.

　　In addition to the above problems, there are doubts about the resumes of directors, supervisors and other senior executives in Principal Century Prospectus.

　　As of the signing date of the prospectus, the board of directors of Xin ‘an Century consists of seven directors, namely, Li Wei, Wang Yixin, Ding Chun, Yuli, Jin Haiteng, Yuan Liansheng and Zhang Shiwei, among whom Jin Haiteng, Yuan Liansheng and Zhang Shiwei are independent directors. The board of supervisors of the company consists of three supervisors, namely, Wang Zongbin, Bei Shaofeng and Zhang Yangbao, among whom Wang Zongbin is the chairman of the board of supervisors.

　　Yu Li, the director and general manager of Xin ‘an Century Shareholder Caitong Innovation Investment Co., Ltd. (hereinafter referred to as Caitong Innovation), became a director in 2019. Before that, Yu Li worked as a technician in CRRC Qishuyan Locomotive Co., Ltd. (hereinafter referred to as CRRC Qishuyan) from August 1996 to August 2000, and served as Zhonghe Venture Capital Management Co., Ltd. from September 2006 to October 2017.

　　What is puzzling is that Qixin. com shows that CRRC Qishuyan was established on June 26th, 2007, and its legal representative is Yao Guosheng. It used to be named Changzhou Qishuyan South Locomotive and Rolling Stock Co., Ltd. and CSR Qishuyan Locomotive Co., Ltd., and there is no same name or previous name as CRRC Qishuyan. The company was established about 11 years later than the directors’ entry time disclosed in the prospectus, and the reason is unknown.

　　At the same time, Qixin. com showed that Zhonghe Venture was established in October 2006, which was about one month later than the entry time of director Yu Li.

　　In addition to the director’s entry time 11 years earlier than the establishment time of the enterprise, there is also a supervisor’s work resume in doubt.

　　Bei Shaofeng joined Principal Century as a supervisor in May 2020. Before that, he worked as a UNIX software development engineer in Beijing Beida Jade Bird Commercial Information System Co., Ltd. (hereinafter referred to as Jade Bird System) from May 1999 to April 2001.

　　What is puzzling is that Qixin. com shows that Beijing Beida Jade Bird Commercial Information System Co., Ltd. was revoked in January 2002. At the same time, according to public information, a company that used to be known as Jade Bird System and is now known as Boya Software Co., Ltd. (hereinafter referred to as Boya Software) was established in September 2002. Before June 18, 2009, Jade Bird System changed its name to Beijing Beida Jade Bird International Software Technology Co., Ltd., and then changed its name to Boya Software in December 2010. At present, it is not known which side of the envelope has problems, but if we look at the establishment time of Boya Software, the supervisor Bei Shaofeng’s entry time is much earlier than the establishment time of the enterprise.

　　To sum up, although Principal Century successfully held the meeting this time, there are still some doubts in its prospectus that need to be explained.

This article was first published on WeChat WeChat official account: Yicaixin. The content of the article belongs to the author’s personal opinion and does not represent Hexun.com’s position. Investors should operate accordingly, at their own risk.