When Marco Polo obtained its IPO approval amid skepticism after a two-and-a-half-year journey, New Pearl Group, another ceramic giant, remains stalled due to information disclosure defects, massive dividend distributions, and bad debt issues.

Recently, surprising news emerged from China's building ceramics industry - Marco Polo Holding Co., Ltd. finally received IPO approval from the China Securities Regulatory Commission on August 15, ending its lengthy two-and-a-half-year listing marathon.

Meanwhile, another ceramic giant, New Pearl Group Co., Ltd. (hereinafter referred to as "New Pearl"), has not received an opportunity for regulatory review since its inquiry response in March 2023.

**Different Fates for Industry Peers: Marco Polo Achieves Success Amid Skepticism**

Marco Polo's listing journey has been turbulent. The Dongguan-headquartered ceramic giant first submitted its IPO application to the Shenzhen Stock Exchange on March 2, 2023. After facing a suspension during its first review on May 16, 2024, the company successfully passed its second review on January 14, 2025, and received approval in August 2025.

**New Pearl Entangled with Evergrande, Trapped in Bad Debt Crisis**

In contrast, New Pearl faces a more severe situation. New Pearl has deep connections with Evergrande, which serves as both its largest customer and shareholder.

According to the prospectus, from 2019 to 2021, Evergrande was consistently New Pearl's largest customer. Even in 2022, after Evergrande's liquidity crisis emerged, it remained New Pearl's top customer, though sales amounts dropped from 10.15 billion yuan in 2019 to 3.05 billion yuan in 2022.

Affected by Evergrande's liquidity crisis, New Pearl made bad debt provisions exceeding 1 billion yuan. In 2021 and 2022, New Pearl's provision ratio for Evergrande receivables reached 90%, with bad debt provisions exceeding 1 billion yuan in both years.

As of the end of 2022, the company's accounts receivable balance from Evergrande was 12.03 billion yuan, accounting for 43.93% of the company's total accounts receivable balance. This means over 40% of the company's receivables came from Evergrande.

**Significant Performance Decline with Three Consecutive Years of Falling Gross Margins**

New Pearl's performance is concerning. Data shows that from 2020 to 2022, New Pearl achieved operating revenues of 78.35 billion yuan, 84.93 billion yuan, and 74.24 billion yuan respectively, with net profits attributable to shareholders of 15.17 billion yuan, 6.11 billion yuan, and 6.12 billion yuan respectively.

Net profit plummeted nearly 60% year-over-year in 2021, while 2022 net profit remained essentially flat compared to the previous year.

More worryingly, New Pearl's main business gross margin declined consecutively: 34.82%, 29.73%, and 22.88% from 2020 to 2022, dropping 11.94 percentage points over three years.

The declining gross margin was mainly affected by falling sales prices of ceramic tiles and panels, as well as continuously rising energy procurement costs.

**Massive Dividend Distributions: A Questionable Strategy**

Despite poor performance, New Pearl conducted substantial dividend distributions before its IPO. The prospectus shows that in 2020 and 2021, New Pearl distributed dividends of 304 million yuan and 570 million yuan respectively, totaling 874 million yuan.

Since New Pearl is a typical "husband-and-wife" company - as of the end of 2022, Ye Delin and Li Yao jointly held 86.67% of New Pearl's equity directly - this means over 757 million yuan of the 874 million yuan in dividends went into the pockets of the couple.

Ironically, after these large dividend distributions, New Pearl planned to use 460 million yuan from IPO proceeds to supplement working capital, accounting for 22.90%. This practice of distributing dividends first and then raising funds for liquidity raises questions about the true purpose of the listing.

**Questionable Information Disclosure with Clear Signs of Falsification**

More seriously, New Pearl has significant issues with information disclosure. In the "Reply to Audit Inquiry Letter," New Pearl disclosed the existence of distributors established by former employees and close relatives of directors and supervisors.

Among them, "Guangzhou Hengde Building Materials Co., Ltd. and 8 other distributors are controlled by former employee Tang Xiaomei," explicitly stating cooperation "from 2008 to present."

However, investigation reveals: - Guangzhou Hengde Building Materials Co., Ltd. was registered in July 2017 - Foshan Dingde Building Materials Co., Ltd. was registered in September 2011 - Guangdong Juxian Building Materials Co., Ltd. was registered in December 2020 - Guangzhou Tangguan Building Materials Co., Ltd. was registered in July 2014 - Guangzhou Huadu Huacheng Yingchuang Ceramics Management Department was registered in July 2017 - Guangdong Bajiu Decoration Materials Co., Ltd. was registered in March 2019 - Guangzhou Hengtang Building Materials Co., Ltd. was registered in April 2019 - Guangdong Pearl Hengde International Trade Co., Ltd. was registered in October 2017 - Guangdong Tangjiahua Building Materials Co., Ltd. was registered in September 2018

Among the 9 distributors controlled by Tang Xiaomei, the earliest establishment date was September 2011. How could New Pearl have established cooperation relationships as early as 2008? This time-travel scenario appeared in IPO documents.

Even more absurd, in 2016, Tang Xiaomei participated in social activities as "Chairman of Guangdong New Pearl Ceramics Group (Guangfo) Co., Ltd.," which significantly contradicts the information disclosed in the "Reply to Audit Inquiry Letter" stating she "left to start her own business in 2004."

**Insufficient Social Insurance Coverage, Employee Rights Compromised**

Beyond financial issues, New Pearl also has serious deficiencies in employee welfare protection. As of December 31, 2022, New Pearl had 7,492 employees, of whom 6,760 were fully covered by five social insurance schemes, representing a coverage rate of 90.23%, with 732 employees not covered.

According to relevant provisions of the Social Insurance Law, employers and workers should participate in social insurance and pay social insurance premiums according to law. New Pearl's failure to provide "five insurances and one fund" for hundreds of employees appears to violate laws and regulations.

Simultaneously, New Pearl initiated a layoff mode. At the end of 2020, 2021, and 2022, New Pearl's total workforce was 10,036, 9,368, and 7,492 respectively, representing year-over-year decreases of 841, 668, and 1,876 employees.

**Dim Listing Prospects**

Facing so many issues, New Pearl's IPO prospects are indeed unfavorable. Although Marco Polo obtained approval, skepticism continues.

New Pearl not only faces significant performance decline but also has numerous problems including information disclosure falsification, massive dividend distributions that hollow out the company, and violations in employee social insurance coverage.

New Pearl's so-called "capital-starved listing" appears more like a "blood-sucking game" - first draining company cash through massive dividends, then supplementing liquidity through IPO fundraising, ultimately benefiting the controlling couple once again.