Analysis of the Impact of Large Dividends Before Peicheng Technology's IPO on Fundraising Project Funds

Based on search results, I found relevant information about the IPO of Shenzhen Peicheng Electronic Technology Co., Ltd. The company is applying for a public issuance of stocks on the Beijing Stock Exchange and did distribute dividends before its IPO [1].

Shenzhen Peicheng Electronic Technology Co., Ltd. has submitted an IPO application to the Beijing Stock Exchange, intending to publicly issue stocks to specific qualified investors [1]. According to public information, the company distributed profits on October 25, 2022, and April 25, 2023, respectively [1].

When a company distributes large dividends before its IPO but still needs to raise a large amount of funds through the capital market for fundraising projects, this usually raises doubts from regulators and the market about the company’s real capital needs. Investors need to pay attention to:

• The proportional relationship between the dividend amount and the funds required for fundraising projects
• Whether the company’s book monetary funds are sufficient to cover the fundraising projects
• Whether the dividend will lead to tight liquidity for the company

From the perspective of IPO review, raising funds after large dividends may reflect the following issues:

• Doubts About the Necessity of Fundraising
  : If a company has the ability to distribute large cash dividends, it indicates that its capital situation is good and it may not urgently need IPO financing
• Feasibility of Fundraising Projects
  : It is necessary to verify whether the fundraising project really needs the capital investment or is just set up for money-grabbing
• Interest Transfer to Old Shareholders
  : Large dividends may be regarded as an act of “early cash-out” by old shareholders before the IPO

Exchange inquiries usually focus on:

• Source and compliance of dividend funds
• Whether the dividend decision-making process is sound
• The logical relationship between dividends and fundraising projects
• Whether there are situations that harm the interests of listed companies and minority shareholders

For investors, when encountering such IPO cases, they should focus on:

1. Carefully Read the Reply to the Inquiry Letter
   : The company’s explanation of the large dividends
2. Verify Financial Data
   : Compare the changes in the company’s financial situation before and after the dividend
3. Evaluate the Quality of Fundraising Projects
   : Core indicators such as project return rate and market prospects
4. Pay Attention to Regulatory Attitudes
   : The exchange’s subsequent review opinions on this issue

Overall, whether the large dividends distributed by Peicheng Technology before its IPO affect the fundraising project funds needs to be comprehensively judged based on specific financial data and the company’s business situation. It is recommended that investors closely follow the company’s reply to the inquiry letter and subsequent review progress.

[1] Beijing Stock Exchange - Relevant documents of Shenzhen Peicheng Electronic Technology Co., Ltd.'s IPO application and inquiry letter (https://www.bse.org.cn)