Industrial Internet platform provider Langkun Wisdom Technology board IPO ended.

On November 9, the review status of the IPO of Lankun Smart Technology Co., LTD. (referred to as “Lankun Smart”) on the Shanghai Stock Exchange Science and Technology Innovation Board was changed to “termination”. Due to the withdrawal of the issuance and listing application by Langkun Wisdom and the sponsor, the Shanghai Stock Exchange terminated its issuance and listing review in accordance with relevant regulations.

Photo: Shanghai Stock Exchange

According to the prospectus, Langkun Wisdom is a domestic professional industrial software products and industrial Internet platform provider, mainly engaged in the production control and business management of industrial software and industrial Internet platform R & D and operation for the process industry.

In the field of industrial Internet, Langkun Wisdom has been laying out since 2016, independently developing and operating the Suchang Industrial Internet platform. The platform was selected into the list of “cross-industry and cross-field” industrial Internet platforms of the Ministry of Industry and Information Technology in May 2022.

In terms of technology industrialization, Langkun Wisdom has provided industrial software and industrial Internet platform for thousands of large enterprises, widely used in power generation, building materials, chemical industry, metallurgy, coal and other industries.

Since its establishment, Langkun Wisdom has served the top ten power generation groups including State Power Investment, National Energy Group, Huaneng Group, CNNC Group, Datang Group, and other leading enterprises in the asset-heavy process industry such as China Building Materials Group, Conch Group, Sinopec Group, CNOOC Group, China Baowu, Shandong Energy Group, Shaanxi Coal Group.

In the field of industrial software, based on the latest ranking released by Internet Weekly in 2020, Langkun Wisdom ranked 18th in the “TOP50 Industrial Software Companies in China in 2020”; According to “Internet Week” eNet Research Institute and Deben Consulting jointly released the “2021 China Industrial Software Annual Enterprise Ranking 100” list, the company ranked 11th.

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In terms of performance, from 2019 to 2021, Langkun Wisdom achieved operating income of about 302 million yuan, 338 million yuan and 405 million yuan; The net profit of the same period was 30.796,500 yuan, 45.927,200 yuan and 69.633,900 yuan.

It is worth noting that Langkun wisdom has the risk of accounts receivable recovery and bad debts. According to the prospectus, from 2019 to 2021, the balance of Langkun Wisdom receivables was 153 million yuan, 194 million yuan and 309 million yuan, accounting for 50.57%, 57.39% and 76.32% of the operating income of each period, respectively. The expected credit loss amounts are 9.791 million yuan, 13.7602 million yuan and 24.3707 million yuan respectively.

Langkun Wisdom said that with the continuous expansion of business scale and the increase in sales revenue, the company’s accounts receivable balance and expected credit loss amount are increasing, and some accounts receivable recovery may deteriorate, which will affect the company’s capital turnover speed and cash flow of operating activities, and have an adverse impact on the company’s overall operation.

In addition, the operating cash flow of Lankun Wisdom also has risks. From 2019 to 2021, the net cash flow of Lankun’s smart operating activities was -15.576 million yuan, 14.0171 million yuan and 3000.03 million yuan, respectively. In 2019, the net cash flow generated by Lankun’s operating activities was negative, mainly because the company’s main business was in the rapid growth stage and the company’s sales revenue was concentrated in the fourth quarter. Affected by the company’s settlement policy with upstream and downstream, the cash outflow generated by costs was earlier than the cash inflow generated by income, thus making the net cash flow generated by operating activities in this stage negative.

Looking back at the IPO process of Langkun Wisdom, the IPO of the Science and Technology innovation board was accepted in June last year, and the exchange asked questions in July of the same year, and Langkun Wisdom disclosed the reply content of the inquiry in January this year, until the IPO finally broke down in November. In this IPO, Langkun Wisdom originally planned to raise 689 million yuan, which was used for a new generation of industrial Internet platform and industrial software upgrade projects, cutting-edge technology research and development projects, marketing and operation system construction projects, and supplementary working capital.