STAR Market bid unsuccessful, DeJu Technology seeks to restart IPO

After failing to go public in June 2024, Guangdong Deju Technology Co., Ltd. (hereinafter referred to as “Deju Technology”) is once again seeking an IPO. Recently, the official website of the China Securities Regulatory Commission (CSRC) showed that Deju Technology has initiated listing guidance, with CITIC Securities Co., Ltd. remaining as the guidance institution. Looking back at the previous IPO process, Deju Technology’s acquisition of major distributors at the end of 2020 drew regulatory attention.

According to the listing guidance filing report, Deju Technology was established on May 5, 2016, with a registered capital of 73.407 million yuan. Deju Technology’s official website states that the company relies on its technological advantages in customized electronic-grade functional materials, continuously expanding high-performance material applications in semiconductor, consumer electronics, new energy (automotive, photovoltaic) fields, and is a high-tech enterprise integrating R&D, production, application support, and sales.

Before starting the listing guidance, Deju Technology had attempted an IPO on the STAR Market. On December 29, 2023, Deju Technology’s application for listing on the STAR Market was accepted by the Shanghai Stock Exchange. However, due to strategic considerations, the company withdrew its previous listing application and received a decision to terminate review from the Shanghai Stock Exchange on June 24, 2024.

Yuan Shuai, Deputy Secretary-General of the Zhongguancun IoT Industry Alliance, stated that the company’s restart of the IPO may indicate a strategic adjustment after the withdrawal, with a re-planning of the listing path and development direction. The company likely aims to raise more funds through listing to further expand production scale, enhance technological innovation, and increase market share.

A review of the IPO prospectus by Beijing Business Daily found that Deju Technology had undergone a non-controlling equity merger, constituting a major asset restructuring, which involved the acquisition of a major distributor, Shenzhen Meiketai Technology Co., Ltd. (hereinafter “Shenzhen Meiketai”). Specifically, at the end of 2020, Wang Yankun subscribed to approximately 15.382 million yuan of newly registered capital in Deju Limited (the predecessor of Deju Technology), using his 100% equity in Shenzhen Meiketai, which was valued at 101 million yuan after evaluation. Financial data shows that in the year prior to the restructuring, Deju Technology’s revenue and total profit were approximately 50.6547 million yuan and 15.7608 million yuan in 2019; during the same period, Shenzhen Meiketai’s revenue and total profit were approximately 203 million yuan and 26.4671 million yuan.

At that time, Deju Technology stated that this restructuring would help the company expand sales channels, deepen customer loyalty, integrate business resources, and further enhance its competitiveness and sustainable operation ability in the electronic adhesive field.

However, it is worth noting that after this acquisition, Deju Technology’s gross profit margin of its main business significantly declined in 2021. During the reporting period, the gross profit margins of Deju Technology’s main business were 81.32%, 65.02%, 67.84%, and 64.55%. Regarding the decline in gross profit margin in 2021, Deju Technology explained that it was mainly due to the increased proportion of trading business after acquiring Shenzhen Meiketai, which lowered the overall gross profit margin.

Additionally, during the previous IPO attempt, Deju Technology planned to raise about 875 million yuan, with net proceeds to be invested in the high-end composite functional materials production project, the Deju North Headquarters R&D integration project, the Phase II of the Deju North Headquarters R&D integration project, and to supplement working capital.

In response to related questions, Beijing Business Daily contacted Deju Technology and sent interview requests. The company stated that they are “not convenient to accept interviews.”

Beijing Business Daily reporters Ma Huanchuan and Li Jiaxue