Gem risk tips
After this stock issue, it is planned to be listed on the gem, which has high investment risk. GEM companies
It has large investment in innovation, uncertainty about the success of the integration of new and old industries, and is still in the growth stage
With the characteristics of high risk, unstable performance and high delisting risk, investors are facing greater market risks. Investors should
Fully understand the investment risks of the gem and the risk factors disclosed by the company, and make investment decisions prudently. Shenzhen feilingkesi Communication Technology Co., Ltd
Shenzhen Phoenix Telecom Technology Co.,LTD.
Runheng industrial plant 3# plant, Fuyong street, Bao'an District, Shenzhen (West of Fuyuan 1st Road)
Initial public offering and listing on GEM
Prospectus
(Registration draft)
Statement: the issuance application of the company still needs to go through the corresponding procedures of Shenzhen Stock Exchange and China Securities Regulatory Commission. This Prospectus has no legal effect on the issuance of shares and is only for pre disclosure. Investors shall take the officially announced prospectus as the basis for investment decisions.
Sponsor (lead underwriter)
(16th to 26th floors of Guosen Securities Co.Ltd(002736) building, 1012 Hongling Middle Road, Luohu District, Shenzhen)
Statement and commitment
Any decision or opinion made by the CSRC and the exchange on this issuance does not indicate that they guarantee the authenticity, accuracy and completeness of the registration application documents and the information disclosed, nor do they indicate that they make substantive judgment or guarantee on the profitability, investment value of the issuer or the income of investors. Any statement to the contrary is a false statement.
According to the provisions of the securities law, the issuer shall be responsible for the changes in the operation and income of the issuer after the shares are issued according to law; Investors independently judge the investment value of the issuer, make investment decisions independently, and bear the investment risks caused by the changes in the operation and income of the issuer or the changes in the stock price after the shares are issued according to law. The issuer and all directors, supervisors and senior managers promise that there are no false records, misleading statements or major omissions in the prospectus and other information disclosure materials, and bear corresponding legal liabilities.
The controlling shareholder and actual controller of the issuer promise that there are no false records, misleading statements or major omissions in this prospectus, and bear corresponding legal liabilities.
The person in charge of the company, the person in charge of accounting and the person in charge of the accounting agency shall ensure that the financial and accounting materials in the prospectus are true and complete.
The issuer and all directors, supervisors, senior managers, controlling shareholders, actual controllers, sponsors and underwriting securities companies promise to compensate investors for losses in securities issuance and trading due to false records, misleading statements or major omissions in the issuer's prospectus and other information disclosure materials.
The sponsor and the securities service institution promise to compensate the investors for the losses caused to the investors due to the false records, misleading statements or major omissions in the documents prepared and issued for the issuer's public offering.
Issue overview
Type of shares issued: RMB ordinary shares (A shares)
The proposed public offering will not exceed 13.34 million shares, not less than 25.01% of the total share capital of the company after the public offering. The final number of shares issued by the company in this public offering shall be jointly determined by the company and the sponsor (lead underwriter) through consultation. This offering does not involve the public offering of shares by the original shareholders.
The par value of each share is RMB 1.00
The issue price per share is RMB []
Expected issue date: mm / DD / yyyy
Stock exchanges to be listed and Shenzhen Stock Exchange gem
The total share capital after issuance shall not exceed 53.34 million shares
Sponsor (lead underwriter) Guosen Securities Co.Ltd(002736)
Signing date of prospectus: mm / DD / yyyy
Tips on major issues
The company reminds investors to carefully read the full text of this prospectus and pay special attention to the following important matters. In addition to the tips on major matters, the company specially reminds investors to carefully read all the contents of "section IV Risk Factors" in this prospectus.
1、 Important commitments related to this offering
The company reminds investors to carefully read the important commitments made by the company, shareholders, actual controllers, directors, supervisors, senior managers, core technicians, sponsors and securities service institutions of this issuance, For specific commitments, see "VI. important commitments made by the issuer, shareholders, actual controllers, directors, supervisors, senior managers, core technicians of the issuer, sponsors and securities service institutions of this offering" in "section 10 investor protection" of this prospectus.
2、 Dividend distribution policy after issuance and listing
After the issuance and listing, the specific dividend distribution policies of the company are shown in "(II) dividend distribution policies and decision-making procedures after the issuance and listing" of "II. Dividend distribution policies" in "section 10 investor protection" of this prospectus.
3、 Distribution arrangement of accumulated profits before the completion of this offering
According to the proposal on the distribution plan of the company's accumulated profits before the initial public offering of shares deliberated and approved by the company's first extraordinary general meeting of shareholders in 2021 held on January 24, 2021, after the company's public offering of shares is approved, the accumulated undistributed profits generated by the company before the initial public offering of shares shall be shared by new and old shareholders according to the proportion of equity after the issuance.
4、 Special risk tips
(I) customer concentration risk
The market concentration of enterprise network equipment is high. A few brands such as Huawei, Xinhua III, Cisco and Fujian Star-Net Communication Co.Ltd(002396) occupy most of the market share in China, showing a market pattern of oligopoly competition. The company's main target customers are the above network equipment brands, so the customer concentration is high. In each period of the reporting period, the company's sales amount to the top five customers accounted for 93.63%, 97.59%, 99.45% and 99.32% of the company's operating revenue respectively, of which the sales amount to Xinhua 3 accounted for 84.79%, 87.55%, 80.00% and 75.43% of the company's operating revenue respectively.
Since the company cooperated with Xinhua III in 2010, the cooperative relationship has been stable and deepened, and the scale of cooperative business has also expanded year by year. During the reporting period, the company's sales revenue to Xinhua III was 766 million yuan, 911 million yuan, 1211 million yuan and 660 million yuan respectively, The company's investment project "Haining medium and high-end switch production line construction project" is a supporting project of Xinhua III, giving priority to the supply of medium and high-end switches for Xinhua III. After completion, the planned production capacity can be fully digested if it is supplied to one customer of Xinhua III, and all the production capacity will be matched to the downstream customer Xinhua III. after the project is completed, it is expected to increase the production capacity of medium and high-end switches by 600000 units per year, The annual new operating income was 1.62 billion yuan. The growth of the company's revenue scale and performance during the reporting period is closely related to the growth of sales to Xinhua's third major customers. If there are major adverse changes in the operating conditions of major customers, a significant decline in procurement demand or adjustment of procurement strategy, it may lead to a significant decline in the company's orders, which may have an adverse impact on the company's operating performance. With the future expansion of the company's production capacity and business scale, the number of customers and cooperation scale of the company will increase. If the transaction scale is further increased in the future, it may lead to a further increase in customer concentration, which will have a certain adverse impact on the stability of the company's revenue and profit. If the company cannot expand more new customers in the future, and the original customer development strategy changes significantly, the procurement of the company will be reduced, especially if the business suspension or contract termination occurs in the cooperation between the company's largest customer Xinhua III and the company, it will have a significant adverse impact on the company's operating performance.
(II) price rise and supply risk of main raw materials
The company's main raw materials include chips, power supplies, PCBs, network transformers, structural parts and passive components. During the reporting period, the above raw materials accounted for more than 80% of the company's total procurement. The above main raw materials are electronic components with sufficient supply, but the downstream terminal application field of electronic components is in a state of constant change. Therefore, market fluctuations may drive the price fluctuation and supply shortage of some electronic components within a certain period of time, thus directly affecting the cost and profitability of the company's main business. If the market price of the above main raw materials rises sharply, and the company fails to take effective measures to eliminate the adverse impact caused by the price rise of the above raw materials, it may have an adverse impact on the company's operating performance.
During the reporting period, the direct material cost of the company accounted for a relatively high proportion of the main business cost, and the price fluctuation of main raw materials will have a certain impact on the production cost of the company. Among the main raw materials, chips account for a relatively high proportion of direct materials, accounting for an average of about 40%. If the purchase price increases by 5% and 10% respectively, the average decline in the gross profit margin of main business from 2018 to January June 2021 is about 1.58% and 3.15% respectively; In addition to chips, other raw materials such as power supply, structural parts, PCB, network transformer and passive components account for a relatively low proportion, and the impact of price fluctuation on production cost and gross profit margin is relatively small. The above sensitivity analysis is based on the assumption that the sales price remains unchanged. In the actual cooperation with customers, the company forms a reasonable manufacturing price transfer mechanism. The company will negotiate and negotiate with customers regularly according to the price fluctuation of raw materials. When the market price of main chips fluctuates sharply, the company will negotiate and negotiate with customers, and the contract price can be adjusted accordingly, The company can also adjust the product price through negotiation with downstream customers to transfer the risk of raw material price fluctuation. However, due to the time lag between the company's raw material price and product price change, and there may be some differences in the range of change, the fluctuation of raw material price may have a certain impact on the stability of the company's performance.
With the changes in the market supply-demand relationship since the second quarter of 2021, the company's chip, PCB, structural parts and other raw material markets show an upward trend. The company's main raw material suppliers and the company gradually start business negotiations on price adjustment. The price adjustment will be completed from June to July 2021 and implemented in the second half of 2021, It is expected that the prices of the main raw materials purchased by the company will rise to varying degrees. In order to cope with the impact of the rise in the purchase price of raw materials, the company and its main customer Xinhua III have basically completed the corresponding adjustment of the sales price. Most products sold to s customers are adjusted or determined according to the latest purchase price of raw materials. Therefore, the impact of raw material price fluctuations on the company's operating performance in 2021 is relatively limited. However, if the price of subsequent raw materials continues to rise, and the company fails to take effective measures to reduce costs or increase product prices accordingly, the company's operating performance will be adversely affected.
Besides, the electronic components such as chips and capacitors needed for production of products are mainly produced in areas outside Chinese mainland, such as Taiwan, Singapore, Japan and the United States. The epidemic situation in these areas or countries has not been effectively controlled. If the factory shutdown causes the shortage of electronic components or even stop production in the future, it may affect the normal production and operation stability of the company. This will have an adverse impact on the company's performance.
(III) business risks caused by international trade frictions
Some semiconductor devices needed by the company mainly rely on imports. At present, China is actively promoting the localization of the semiconductor industry. In view of the current complex and changeable international situation, if the trade friction between China and the United States intensifies in the future, or the trade friction between China and the countries and regions where the company's customers or suppliers are located escalates, countries may set higher tariff barriers on China to restrict local enterprises from exporting some chips and other key semiconductor devices to China, Or restrict local enterprises from carrying out relevant business with Chinese enterprises, which may have an adverse impact on the company and its industry.
At the same time, the network equipment industry in which the company is located is highly concentrated. In the enterprise network equipment market, the main network equipment brands include Cisco, Huawei, Xinhua III, Maipu technology, etc; In the consumer network equipment market, Huawei, Xiaomi and other brands are also major participants. With the intensification of trade friction between China and the United States, the United States has included Huawei, Xiaomi and other enterprises in the "entity list", restricting American enterprises from selling relevant technologies and products, or restricting American investors from investing. The above matters may have a certain negative impact on network equipment brands, and then have an adverse impact on the industrial chain of network equipment industry. Customer s was listed in the list of Chinese "entity list" enterprises by the U.S. government in 2019, and its chip supply is limited. At present, it has little impact on the network equipment business cooperating with the company. However, if the U.S. government continues to implement more stringent restrictions on Chinese "entity list" enterprises or customers s, the development of customer s's network equipment business may be affected to some extent, Therefore, it will affect the operating performance of the company.
(IV) the default of Ziguang group and its related parties can not effectively solve the risk
Xinhua San, an important customer of the company, is a holding subsidiary of Unisplendour Corporation Limited(000938) (000938. SZ). As of the signing date of this prospectus, Ziguang group holds 46.45% of the shares of Unisplendour Corporation Limited(000938) through Tibet Ziguang communication Investment Co., Ltd., many bonds of Ziguang group and its related parties have defaulted, and the rating agency zhongchengxin has repeatedly lowered the credit rating of Ziguang group and related debts, The credit rating was lowered from AAA to C. At present, Ziguang group and its parent company are actively taking measures to deal with relevant debt defaults. The company's customer Xinhua III and its controlling shareholder Unisplendour Corporation Limited(000938) did not provide guarantee for the bonds of Ziguang group. The company's sales collection to Xinhua 3 is in good condition, and the debt default risk of Ziguang group and its related parties has not had a significant adverse impact on Xinhua 3's payment ability and credit, as well as the company's continuous operation and sales collection.
On December 10, 2021, the manager of Ziguang group determined that the consortium composed of Beijing Zhilu Asset Management Co., Ltd. and Beijing Jianguang Asset Management Co., Ltd. as the lead party is Ziguang group
