IPO Observation: Wu Wenting Biological Engineering's IPO Faced Obstacles, and the Company's Financial Risks Are on the Rise
Recently, due to various factors such as the pandemic, the IVD (In Vitro Diagnostic) industry has experienced a surge in listings. In 2019, three IVD companies went public, and in 2020 and 2021, nine and 17 companies listed respectively. However, by mid-2023, only one company, Edikon, had successfully gone public on the Hong Kong Stock Exchange.
In the A-share market, several IVD companies have terminated their IPOs this year, including Shouhua Life Sciences, Yaree Biotech, and Jingshen Biotechnology. However, unlike these companies that gave up on their IPOs, some IVD companies are still determined to go public.
Sichuan Wu Wenting Biological Engineering Co., Ltd. (hereinafter referred to as Wu Wenting) is one such company. In July 2022, Wu Wenting successfully passed the review meeting and then submitted its IPO application in October 2022. However, after a year, Wu Wenting has yet to obtain approval for its listing.
As of now, there is no information available on Wu Wenting's response to the feedback opinions from relevant departments. The last door before going public is still difficult to break through.
I. Poor Start: An Assessment Agency under Investigation!
According to reports, Wu Wenting primarily engages in the research and development, production, and sales of IVD products. Its main clients are major hospitals in Sichuan Province, with whom it has long-term cooperative relationships.
II. Unknown Outcome: High Risk of Accounts Receivable and Sunshine Procurement Environment
In the first half of 2022, Wu Wenting's accounts receivable stood at CNY17.003 billion, accounting for 44.88% of its total revenue. In the second half of 2022, the company's accounts receivable increased to CNY24.750 billion, accounting for 42.48% of its total revenue.
Wu Wenting has a low accounts receivable turnover rate compared to industry standards. The company's main clients are major hospitals in Sichuan Province, and it is difficult for Wu Wenting to recover its accounts receivable from these clients.