Another Medical Device Company Withdraws IPO Application!

On September 4, the Shanghai Stock Exchange (SSE) disclosed that, due to the withdrawal of the issuance and listing application by Shandong Branden Medical Devices Co., Ltd. and its sponsor, the SSE has terminated the review of its issuance and listing in accordance with the relevant provisions of Article 63 of the Rules for the Review of Stock Issuance and Listing on the Shanghai Stock Exchange.

The sponsor, accounting firm, and law firm for Branden’s IPO are Guojin Securities Co., Ltd., Yongtuo Certified Public Accountants (Special General Partnership), and Jiayuan Law Firm, respectively, while the appraisal agency is Beijing Zhongheyi Asset Appraisal Co., Ltd.

Founded in 2003, Branden is a national high-tech enterprise dedicated to applying medical material modification technologies to implantable and interventional medical devices. Its main product portfolio currently comprises three categories: vascular access products, neurosurgical products, and other polymer-based products.

From 2021 to 2023, the Company’s main business revenue amounted to RMB 208.2556 million, RMB 208.9831 million, and RMB 200.2493 million, respectively; during the same period, the total profits were RMB 48.1566 million, RMB 48.8754 million, and RMB 36.2326 million, respectively.The issuer distributed cash dividends of RMB 30 million, RMB 45.39 million, and RMB 20.3148 million in 2019, 2021, and January–June 2022, respectively; the net profits for the same periods were RMB 31.3172 million, RMB 42.8973 million, and RMB 18.4578 million, respectively.

As disclosed in the draft prospectus filed by the Company, Qihe Branden Technology Co., Ltd. holds 58.13% of the shares of the Issuer and serves as the controlling shareholder of the Issuer. The actual controllers of the Company are Mr. Zhang Haijun and Ms. Guo Haihong, a married couple, who collectively hold 70.00% of the equity interest in the controlling shareholder, Qihe Branden. Qihe Branden, Zhang Haijun, and Guo Haihong directly hold 58.13%, 3.28%, and 0.08% of the shares of the Issuer, respectively. Zhang Haijun and Guo Haihong directly and indirectly control 61.49% of the shares of the Company through Qihe Branden.

Chairman Zhang Haijun serves as a limited partner of Qihe Hengyi and Qihe Tengbo, holding 65.03% of the equity interests in Qihe Hengyi and 78.15% of the equity interests in Qihe Tengbo. Deputy General Manager Guo Haihong serves as a limited partner of Qihe Hengyi, holding 1.33% of the equity interests in Qihe Hengyi. Qihe Hengyi and Qihe Tengbo are both employee stock ownership platforms of the Company, holding 4.62% and 2.45% of the shares of the Issuer, respectively. Zhang Haijun and Guo Haihong collectively hold 49.03% of the shares of the Issuer, directly and indirectly.

Branden Plans to Raise RMB 760 Million on the STAR Market for “Industrial Upgrading of Medical Catheters,” “R&D Center Construction,” “Marketing Service Network and Informatization Construction,” and “Supplementing Working Capital”

Of which, RMB 200 million will be used to supplement working capital, accounting for 26.32% of the total funds raised.

In its inquiry letter, the Shanghai Stock Exchange required the issuer to explain the reasons and primary considerations for the three cash dividend distributions made during the reporting period, as well as the necessity of such dividends. Meanwhile, the Exchange also required the sponsor institution and the reporting accountant to conduct a special verification on the main fund flows or uses of the cash dividends received by the controlling shareholder, actual controller, directors, supervisors, senior management, and key personnel, and to issue clear verification opinions.

The response indicates that the controlling shareholder, Qihe Branden, and the actual controllers, the couple Zhang Haijun and Guo Haihong, received a total dividend amount of RMB 19.2915 million from the first dividend distribution in 2021, of which RMB 10.7872 million was used for property purchases.

Upon verification, the sponsor and the reporting accountant are of the opinion that:

1. During the reporting period, the issuer distributed dividends in accordance with the relevant provisions of its Articles of Association, comprehensively considering factors such as the capital requirements for daily production and operations and shareholder returns, which was necessary and reasonable.

2. During the reporting period, the fund flows and final uses of cash dividends received by the controlling shareholder, actual controller, directors, supervisors, senior management, and personnel in key management positions were clear, with no abnormalities identified.