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(Original title: IPO Radar | Jianyuan shares rush to the Beijing Stock Exchange: most of the properties used for debt repayment are pre-sale properties, and the land for fundraising has not yet been approved)

Jiangsu Jianyuan Construction Co., Ltd. (hereinafter referred to as Jianyuan Co., Ltd.), which has just been accepted, knocked on the door with an annual operating income of 1.416 billion yuan and a net profit of 64.8613 million yuan.Beijing Stock ExchangeThe company also distributed dividends continuously from 2021 to 2023, with the amounts being 50.8 million yuan, 50.8 million yuan and 71.12 million yuan respectively.

It should be pointed out that with the development, the scale of Jianyuan Co., Ltd.'s contract assets and accounts receivable has been increasing. Some customers have overdue payments, used houses as collateral, or even failed to repay, which undoubtedly has an adverse impact on the company's operating performance and liquidity.

Xu Zhongmin and his wife Sun Yang together control 74.7253% of the shares and are the actual controllers of Jianyuan Shares.

Strong regional presence, with nearly 90% of business in Suzhou

The prospectus shows that Jianyuan Co., Ltd. was established on March 31, 1997, with a registered capital of 109.95 million yuan. On January 4, 2017, Jianyuan Co., Ltd. was listed on the National Equities Exchange and Quotations for Small and Medium Enterprises, and is currently in the innovation layer, with Soochow Securities as the sponsoring underwriter.

Jianyuan Co., Ltd. focuses on the field of geotechnical engineering, mainly focusing on foundation and foundation engineering, providing professional engineering services covering survey, design and construction. It has formed an integrated geotechnical engineering service model and has accumulated rich engineering experience in deep and large foundation pit projects under complex geological conditions. At the same time, the company expands its business with geotechnical engineering as the core, and deploys general contracting and urban renewal business.

The main qualifications currently obtained by Jianyuan Co., Ltd. include: Class A geotechnical engineering survey, design, geophysical testing, inspection and monitoring, Class I professional contracting for foundation engineering, Class I general contracting for construction engineering, special engineering (structural reinforcement) professional contracting without grade distinction, and Class II professional contracting for building decoration and decoration engineering.

In the field of foundation and basic engineering, the representative projects undertaken by Jianyuan Co., Ltd. include: Suzhou Jinglong Technology Factory Pile Foundation and Foundation Pit Support Project, Suzhou Industrial Park Junao Hospital Foundation Pit Support Project, Suzhou Tongli Optoelectronics Co., Ltd. Pile Foundation and Foundation Pit Support Project, Suzhou Zhonghai Super Tower Foundation Pit Support, Earthwork and Foundation Pit Dewatering Project, Suzhou Industrial Park Central Plaza Foundation Pit Support Project, etc.

In terms of geotechnical engineering survey and design, the representative projects that have been undertaken include: Suzhou Zhonghuan Plaza survey and foundation pit support design project, Suzhou Sinovation Pharmaceutical Technology Co., Ltd. survey and foundation pit design project, Xinglian Pharmaceutical (Suzhou) Co., Ltd. survey project, Siliconware Precision Industries (Suzhou) Co., Ltd. survey and foundation pit support design project, Nanjing University Suzhou Campus project foundation pit support design project, etc.

As for general contracting projects, Jianyuan has undertaken investment and new construction projects of technology-based enterprises such as Jinglong Technology (Suzhou) Co., Ltd., SEW-Transmission Equipment Company of Germany, Suzhou Xingnuoqi Precision Manufacturing Co., Ltd., Lingjun Advanced Materials (Suzhou) Co., Ltd., Suzhou Tongli Optoelectronics Co., Ltd., Xinglian Pharmaceutical (Suzhou) Co., Ltd., and Suzhou Sinovi Pharmaceutical Technology Co., Ltd. In terms of urban renewal business, it has undertaken the reinforcement project of the big data industrial park of Century Internet Technology Development (Suzhou) Co., Ltd., the building structure reinforcement project of SEW-Transmission Equipment Company of Germany, the office building renovation and reinforcement project of Jiangsu Karen Building Materials Co., Ltd., the new equipment foundation project of Changshu Nanomicrobiology Technology Co., Ltd., and the renovation and upgrading project of Suzhou Niujiaxiang.

However, Jiemian News noted that most of the projects undertaken by Jianyuan are located in Suzhou. Data shows that during the reporting period, the company's business revenue from Suzhou accounted for 76.02%, 66.88% and 89.46% respectively, which is a high proportion.

Jianyuan shares explained that the geological conditions of different regions vary greatly and have different characteristics, which poses a great challenge to the technical level of geotechnical engineering companies; the company's technical strength needs to be recognized by customers in other regions and to establish brand awareness. Jianyuan shares also stated that the company's business is mainly concentrated in the East China region, which may still exist in the short term.

Most of the mortgages are pre-sale properties.

At present, Jianyuan Co., Ltd.'s contract assets and accounts receivable are large in scale. At the end of each period of the reporting period, the two together accounted for 77.87%, 81.20% and 78.61% of the total assets in the same period, and accounted for 82.44%, 87.72% and 84.65% of the current assets in the same period.

Jianyuan Co., Ltd. explained that the company's foundation and base engineering projects generally take 1-2 years from completion to acceptance and final settlement, and the general contracting projects take longer. Affected by project changes and time-consuming approval procedures, there are situations where acceptance cannot be carried out as agreed in the contract, final settlement is delayed, and the settlement cycle is delayed, thus forming large-scale contract assets and accounts receivable.

Jianyuan shares said that the company has formulated a sound bad debt provision policy in accordance with the requirements of accounting standards, and established corresponding systems to strengthen contract management and project payment recovery management. During the reporting period, the company's main customers' credit and payment collection were good, butSome customers still have overdue payments, mortgage loans, or are unable to repay.If the company's accounts receivable are not properly managed in the future or the financial and operating conditions of its customers deteriorate, resulting in failure to collect or being unable to collect the accounts receivable in a timely manner, it will have an adverse impact on the company's operating performance and liquidity.

Among these, it is worth mentioning the use of housing as collateral for debt.

It is reported that Jianyuan shares has customers who use real estate to offset project payments, with a total amount of 65.049 million yuan in the reporting period. Although the company will actively handle online signing and filing or related real estate registration procedures for the real estate used as collateral, due toMost of the properties for mortgage are pre-sale propertiesAt the end of the reporting period, there were still 41.9083 million yuan of real estate that had not been signed online.

In view of this, Jianyuan shares also issued a risk warning in the prospectus, stating that if the relevant real estate is left unfinished due to the developer's financial constraints or debt problems, is listed as the developer's bankruptcy property, or is seized by other creditors with priority rights, the company's property rights expectation will not be realized. If the above situation occurs, although the company can continue to appeal or sue the court, there is still a risk of not being fully compensated. At the same time, for the real estate that the company has signed online or obtained the property certificate, if it is not sold in time due to factors such as sales restrictions, the company will bearreal estateRisk of asset impairment caused by industry price fluctuations.

Data shows that in 2023, the scale of accounts receivable of Jianyuan Co., Ltd. was 482 million yuan, and the accounts receivable turnover rate was 1.14 times. According to the collection of debtors, the largest accounts receivable party in 2023 was China Construction (including its subsidiaries), with an amount of 49.494 million yuan.

FundraisingLand use still pending approval

This time, Jianyuan Co., Ltd. plans to raise 268 million yuan, of which 80 million yuan will be invested in the "headquarters operation center construction project", 63.825 million yuan will be invested in the "equipment service capability upgrade project", and 64.5712 million yuan will be invested in the "R&D center construction project". In addition, 30 million yuan will be invested in "repaying bank loans" and "supplementing working capital". The latter two totaling 60 million yuan is less than the dividend in 2023.

According to Jianyuan, the "Headquarters Operation Center Construction Project" plans to build a new headquarters building and purchase advanced design and office software and hardware; the "R&D Center Construction Project" is to purchase advanced R&D, testing equipment and software systems based on R&D needs. Jianyuan plans to build the two projects in 24 months.

However, it is worth mentioning that the proposed implementation sites of the "Headquarters Operation Center Construction Project" and "R&D Center Construction Project" are the company's newly purchased land. At present, the land has obtained the "Online Listing and Transfer Transaction Confirmation of State-owned Construction Land Use Rights" (Su Land and Resources No. 2024-WG-4), and further project construction approval and filing, environmental impact assessment and other processes are still required. In other words,FundraisingThe approval of land use for the project has not yet been finalized. Jianyuan shares said that if the relevant filing and environmental assessment processes of the company's fundraising and investment projects cannot be completed in a timely and smooth manner, it will affect the smooth implementation of the company's fundraising and investment projects.