"Qiangbang New Materials Soars Over 2400% on Debut; Richest Wenzhou Tycoon's Wealth Jumps Over 10 Billion"

The printing plate material listed company, Qiangbang New Materials, made a sensational debut on the A-share market with a staggering 1739% surge, causing a stir among all parties involved. As the stock price soared, Guo Liangchun, a Wenzhou businessman who has been striving in the field of printing plates for over twenty years, has made a fortune. Currently, the value of the company's shares he holds has skyrocketed to 10.467 billion yuan.

Qiangbang New Materials, which saw an intraday increase of over 2400% on its first day of listing, has attracted the attention of the market.

On October 11th, Qiangbang New Materials, a printing plate material supplier newly listed on the A-share market, performed brilliantly, closing its first day with a whopping 1739% increase.

Looking back, Guo Liangchun, the actual controller of Qiangbang New Materials, invested in the printing plate material business as early as 2003. More than twenty years later, Qiangbang New Materials has finally "stood out," and Guo Liangchun has ultimately made a fortune.

According to the 36.7546% of shares directly and indirectly held by this Wenzhou businessman, the current value of the company's shares he holds is 10.467 billion yuan.

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After the stock price fluctuation, the market has gained a better understanding of the fundamentals of Qiangbang New Materials. It is understood that under Guo Liangchun, Qiangbang New Materials' business model heavily relies on distribution, and among the distributors, there are many related parties, many of whom have close connections with the actual controllers of the businesses and the Guo Liangchun family or senior executives of Qiangbang New Materials.

The new stock that rose by more than 2400% intraday has stolen the limelight from the market.

On October 11th, Qiangbang New Materials officially landed on the Shenzhen Stock Exchange, with the highest intraday increase exceeding 2400%, and its market value once approached 40 billion yuan. Even after a subsequent decline, the stock still closed at 178.01 yuan, with an astonishing increase of 1739%.

The dragon and tiger list shows that many well-known speculative capital seats have participated in the speculation of Qiangbang New Materials, among which, the Dongcai "Lhasa Team" occupies four seats on the net purchase list, with a total net purchase amount exceeding 136 million yuan. On the other side, the net selling amount of the institutional special seat has reached 24.07 million yuan.According to calculations, if the lottery-winning investors choose to sell at the highest stock price, then each lottery can make a profit of nearly 118,000 yuan; and as of the closing price on that day, the lottery-winning investors who failed to sell their stocks still have a floating profit of 84,000 yuan per lottery.

Of course, compared to the "new stock strikers," the major shareholders of Qiangbang New Materials have benefited more.

The prospectus shows that the actual controller of Qiangbang New Materials is the Guo Liangchun family, including Guo Liangchun and his wife Wang Yulan, as well as their two sons, Guo Juncheng and Guo Junyi.

After Qiangbang New Materials successfully went public and issued shares, the Guo Liangchun family held a total of 67.05% of the company's shares through direct and indirect means, equivalent to about 107.28 million shares; Guo Liangchun personally holds 36.7546% of the shares, equivalent to about 58.8 million shares.

According to the closing price on the first day of listing, the Guo Liangchun family collectively owns shares worth 26.284 billion yuan, while Guo Liangchun holds shares worth 10.467 billion yuan.

To this day, the surge in Qiangbang New Materials has made Guo Liangchun "make a fortune." Looking back, it can be found that Guo Liangchun spent more than twenty years cultivating this "money tree."

Data shows that Guo Liangchun was born in Wenzhou, Zhejiang, in 1956. In his early years, this Wenzhou businessman was long engaged in leather trade, but later he gradually had the idea of transformation.

In 2003, Guo Liangchun made up his mind to "start a second career" in the printing plate industry. At that time, he chose to avoid local competitors in Wenzhou and settled in Shanghai, which had good support policies, and officially established Shanghai Qiangbang in the same year.

In the following years, Guo Liangchun devoted himself to accumulating experience in the operation of printing plates, and then used CTP plates as a breakthrough to establish a certain reputation in the market.

With the expansion of the business scale, Guo Liangchun further established Qiangbang New Materials, which also operates printing plate business, in 2010. Ten years later, in order to resolve the competition in the same industry, Guo Liangchun chose to merge and reorganize Shanghai Qiangbang and Qiangbang New Materials.To date, Qiangbang New Materials has become the main entity responsible for Guo Liangchun's printing plate materials business. At the same time, Guo Liangchun also began to operate the company's listing matters; in May 2020, Qiangbang New Materials was listed on the Anhui Securities Exchange Center's Science and Technology Innovation Cultivation Layer.

Unlike many companies that have failed to make a sprint in the A-share market, from 2023 to now, Qiangbang New Materials has completed the process from IPO acceptance to listing in just over a year. What's more interesting is that when the company made its debut in the secondary market, it coincided with a hot market; by a stroke of luck, Guo Liangchun ultimately "returned with a full load".

Performance depends on related distributors

Since the establishment of Qiangbang New Materials, Guo Liangchun has long been in charge of the company's development matters. Since 2021, when the company was restructured into a joint-stock company, Guo Liangchun has also served as the chairman.

However, under Guo Liangchun's management, the situation of Qiangbang New Materials in the distribution level is somewhat "unusual".

The prospectus shows that from 2021 to 2023, the distribution model of Qiangbang New Materials accounted for 98.65%, 98.35%, and 98.18% of the main business income, reaching 1.455 billion yuan, 1.532 billion yuan, and 1.374 billion yuan, respectively.

It is worth mentioning that as comparable companies in the printing plate materials industry, three new three-board companies - Huidak Intone, Tiancheng Shares, and Xin Tu New Materials - are not so dependent on distributors.

Specifically, Huidak Intone completely adopts a direct sales method, Tiancheng Shares only seeks local agents for sales in markets where customers are not concentrated or newly developed, and Xin Tu New Materials adopts a sales model in China that is mainly direct sales and supplemented by distributors.

Qiangbang New Materials explained in the prospectus that the company uses a large proportion of distribution mainly because the company's end customers are widely distributed and relatively dispersed, which can fully utilize the local, professional, and proximity to end customers' channel advantages of distributors.

Since the end customers are scattered in many places, the distribution location of the company's main distributors should also be the same.However, looking at the past three years, the second to fifth largest customers of Qiangbang New Materials, namely a group of dealer companies, are mostly registered in Guangzhou, Shenzhen, Dongguan, and Foshan. These four cities are all located in the Pearl River Delta region and are relatively close to each other.

Furthermore, focusing on Qiangbang New Materials' overseas dealer customers—ABEZETA, S.A. and SPE. From 2021 to 2023, the company's combined sales to both accounted for 20.63%, 22.31%, and 20.05% of its revenue, respectively, making them significant sources of income.

Among them, SPE is an associated party of Qiangbang New Materials. As of December 31, 2021, the company paid 1.2 million euros to the Spanish ABE Group for a 20% stake in SPE.

ABEZETA, S.A. also has a close relationship with the company. It is understood that this enterprise is a subsidiary of the ABE Group, and the cooperation between the ABE Group and Guo Liangchun began as early as 2007 during the Shanghai Qiangbang period.

Of course, it is more noteworthy that the dealers of Qiangbang New Materials are also "inseparable" from the Guo Liangchun family and the company's senior executives.

Among them, Hong Kong Qiangbang is actually controlled by the Guo Liangchun family, while Longgang Qiangbang, Hangzhou Rongguang, and Yongkang Qiangbang are controlled by Guo Liangchun's sister, the son of Wang Yulan's sister, and Guo Liangchun's brother-in-law, respectively.

On the other side, Dongguan Caido is actually controlled by the spouse of the sister of the company's director Lin Wenfeng, Wuhan Gedebao is actually controlled by the brother of the company's senior executive He Jingsheng, and the actual controllers of Nanjing Jiangnan Yu, Dongguan Jincheng, Zhongshan Lianriwang, and Zhongshan Qiangbang are also family members or siblings of the company's senior executives and directors.

According to the prospectus, from 2021 to 2023, the sales generated by all the aforementioned associated party dealers accounted for 15.15%, 14.27%, and 15.51% of the company's revenue, respectively; and as of the end of 2023, the accumulated receivables generated by these associated parties were still 35.1236 million yuan.

Where will Qiangbang New Materials go?

Qiangbang New Materials' stock price soared on its first day of listing, but its performance is far from ideal.In recent years, Qiangbang New Materials has not seen remarkable performance growth. From 2021 to 2023, the company's total revenue fluctuated narrowly within the range of 1.425 billion yuan to 1.588 billion yuan, with net profit attributable to the company increasing from 67.88 million yuan to 88.29 million yuan. The gross margin remained between 11.48% and 13.17%, which is lower than the 15.26% in 2020.

According to Qiangbang New Materials' estimation, the company is expected to achieve revenue between 1.069 billion yuan and 1.208 billion yuan from January to September, with a year-on-year increase of 1.69% to 14.92%. The estimated net profit attributable to the company is expected to fluctuate between 1.57% and 14.29%, reaching a range of 67.1 million yuan to 75.5 million yuan.

As of October 11, Qiangbang New Materials' rolling price-to-earnings ratio is 293.4 times, and the dynamic price-to-earnings ratio is 308.7 times. Compared to the actual performance, the company's valuation data shows a significant contrast.

Focusing on the present, for Guo Liangchun, besides enjoying the "capital feast," considering how to lead the company to find new growth poles may be the top priority.

The challenges faced by Qiangbang New Materials are not small. In fact, the company needs to face "strong rivals" both domestically and internationally.

Looking abroad, Fujifilm, Agfa, Kodak, DuPont, and Flint Group are strong competitors for Qiangbang New Materials. However, the company seems to have no intention of surpassing these enterprises for the time being. The company only subtly stated in its prospectus: "Compared with internationally renowned enterprises, the company still has certain growth space in terms of the richness of high-end products, international brand awareness, and talent attraction."

In the domestic market, three peer companies listed on the New Third Board, Huida Yintong, Tiancheng Shares, and Xintuxin Materials, are not enough to completely shake Qiangbang New Materials. The biggest competitor is LK Hua Guang, backed by China Aerospace Science and Technology Corporation.

In terms of scale, LK Hua Guang achieved revenue of 3.671 billion yuan in 2021, which is 2.44 times that of Qiangbang New Materials for that year and 2.58 times that of the company in 2023.

In terms of offset printing plate product output, LK Hua Guang has 140 million square meters, while Qiangbang New Materials only has 70.464 million square meters, even下滑 by 8.1698 million square meters compared to 2021. In terms of flexible plate product output, the company has 411,700 square meters, while LK Hua Guang had 752,000 square meters in 2021 and has now exceeded one million square meters.

At the same time, LK Hua Guang has a team of more than 800 R&D and engineering technicians, while Qiangbang New Materials has only 73 R&D personnel, with only one core technical personnel.Upon comparing the two companies, it is observed that Qiangbang New Materials does not hold an advantage in terms of production capacity and technological research and development.

Apart from LK Huaguang, Jinrui Tai's offset printing plate product output also reaches 60 million square meters per year, with a production reserve that is not significantly different from Qiangbang New Materials, posing a threat.

According to Qiangbang New Materials' disclosure, the company plans to raise 668 million yuan in its initial public offering, with 528 million yuan, or 79% of the funds, allocated to expanding production, constructing a research and development center, and implementing intelligent technology upgrades.

However, due to Qiangbang New Materials' issue price of only 9.68 yuan per share, based on the public offering of 40 million shares, the actual funds raised would only amount to 387 million yuan.

Nevertheless, the effective utilization of these funds could still significantly impact the company's future.