CaiKe Technology IPO Under Inquiry: Authenticity of Sales to Largest Customer, and Adequacy of Zhongtai Securities' Verification

Cai Finance Yanminghui Recently, Hebei Caike New Material Technology Co., Ltd. (hereinafter referred to as: Caike Technology) disclosed the response to the second round of inquiry from the Beijing Stock Exchange IPO review. The sponsor institution is Zhongtai Securities, with sponsors Chen Fenghua and Meng Weipeng.

Caike Technology was established in 2005 with a registered capital of 63.57 million yuan. It is a controlling subsidiary of Hong Kong-listed Caike New Energy, engaged in the research, production, and sales of fine chemical products.

The actual controller of Caike Technology, Ge Yi, holds no specific position within Caike Technology but controls 67.9923% of the voting rights through Caike Hong Kong Holding Company, enabling control over the company’s shareholder meetings and the nomination and appointment of directors, supervisors, and senior management.

Born in 1981, Ge Yi is a Chinese national with permanent residency in Singapore and holds a master’s degree. From February 2007 to December 2011, Ge Yi served as General Manager and Vice President of Huage Holdings; from August 2012 to October 2014, he was President of Huage Holdings; from December 2011 to July 2012, he was Vice President of Caike New Energy; since August 2012, he has been CEO of Caike New Energy; and since April 2015, he has served as Executive Director, Chairman of the Board, and Chairman of the Nomination Committee of Caike New Energy.

In this inquiry, the Beijing Stock Exchange focused on the authenticity and sufficiency of Caike Technology’s sales verification.

According to the application documents and inquiry responses, during the reporting period, Caike Technology’s operating income was 362 million yuan, 377 million yuan, 454 million yuan, and 283 million yuan; net profit attributable to the parent company after deducting non-recurring gains and losses was 75.54 million yuan, 78.70 million yuan, 113 million yuan, and 85.24 million yuan.

Caike Technology’s sales to its largest customer during the reporting period, Wenzhou Jinyuan, were 117 million yuan, 118 million yuan, 132 million yuan, and 81.44 million yuan, accounting for 32.52%, 31.35%, 29.05%, and 28.77%, respectively.

At the beginning of the reporting period, Caike Technology’s cooperation with Wenzhou Jinyuan involved shipment first, then settlement, with a signed settlement contract. Starting from May 2025, the cooperation mode changed to signing annual framework agreements and monthly settlement sheets, with confirmation of the accepted products’ quantities and prices before the 20th of each month.

During the reporting period, the company’s gross profit margin trend was opposite to that of comparable industry company Qin Yan Technology, mainly due to differences in raw materials, product application fields, scale effects, and sales regions. According to the sales quantities stipulated in the contracts and confirmed through communication with customers, shipments are made in batches at different times, leading to some discrepancies between order placement and revenue recognition.

The Beijing Stock Exchange requires an explanation of the amounts and proportions of revenue recognized upon shipment and contract signing with Wenzhou Jinyuan in each period, whether the internal control design and implementation related to revenue recognition are sound and effective, and whether the cooperation model with other customers significantly differs from that with Wenzhou Jinyuan. It also requests details on the rights and obligations stipulated in the framework agreement under the current cooperation mode, the basis and process for reconciliation of the monthly settlement sheets with Wenzhou Jinyuan, and the relevant internal control systems and operational status.

The Beijing Stock Exchange asks the sponsor institution and the reporting accountant to verify these matters and provide a clear opinion, including the verification methods, scope, process, and conclusions.

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