Gem risk tips
After this stock issue, it is planned to be listed on the gem, which has high investment risk. GEM companies have the characteristics of large investment in innovation, uncertainty about the success of the integration of new and old industries, still in the growth stage, high operation 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.
Jiangsu newtage Technology Co., Ltd
（Jiang Su New Technology CO.，LTD.）
(No. 161, Songjiang Road, Huaiyin Economic Development Zone, Huai’an City, Jiangsu Province)
Prospectus for initial public offering and listing on GEM
Sponsor (lead underwriter)
(401, building B7, Qianhai Shenzhen Hong Kong fund Town, 128 guiwan fifth road, Nanshan street, Qianhai Shenzhen Hong Kong cooperation zone, Shenzhen)
Statement
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 number of shares issued this time is 20 million, accounting for 25% of the total share capital after issuance. If the offering of new shares involves all shareholders, it is not a public offering.
The par value of each share is RMB 1.00
The issue price per share is 20.28 yuan
Expected issue date: February 11, 2022
The stock exchange to be listed and the gem of Shenzhen Stock Exchange
The total share capital after issuance is 80 million shares
Sponsor (lead underwriter) Huatai United Securities Co., Ltd
Signing date of prospectus: February 9, 2022
Tips on major issues
The company specially reminds investors that before making investment decisions, they must carefully read the text of this prospectus and pay special attention to the following important matters. 1、 Special risk tips
The company reminds investors to carefully read the “section IV Risk Factors” of this prospectus and pay special attention to the following matters: (I) the risk of concentration of main customers and significant dependence on a single customer
The company’s main customers include BASF, Tennessee, Wandu, Yanfeng Piou and other well-known auto parts manufacturers at home and abroad. During the reporting period, the company’s sales to the top five customers accounted for 97.11%, 91.16%, 84.53% and 82.96%, with high customer concentration. During the reporting period, the company’s sales to BASF, the largest customer of the company, accounted for 66.25%, 57.05%, 45.19% and 46.98%. The company has a significant dependence on BASF. However, the issuer has a long cooperation time with BASF, a wide range of cooperation, stable and sustainable business, and the dependence of the customer has no significant adverse impact on the issuer’s continuous operation. If the long-term cooperative relationship between the company and BASF and other important customers changes or terminates in the future, or the main customers reduce the purchase of the company’s products due to their own business reasons or major adverse changes in the macroeconomic environment, or due to the company’s product quality, technological innovation and product development Production and delivery cannot meet the needs of customers, resulting in adverse changes in the cooperative relationship with customers, and the company cannot expand other new customers in time, which will have an adverse impact on the company’s operating performance. (II) the development of the company’s suspension damping support business depends on BASF’s risk of developing end customers
During the reporting period, the suspension and damping support business provided by the company to BASF achieved revenue of 133.4618 million yuan, 202.3275 million yuan, 195.7652 million yuan and 109.1782 million yuan respectively, accounting for 46.85%, 49.38%, 40.46% and 42.41% of the main business revenue in the same period. BASF sells polyurethane suspension damping support, but at present, the elastomer for suspension damping support is still mainly rubber material. Polyurethane material is in the process of gradually replacing rubber material. The selection of elastic material for suspension damping support by vehicle manufacturers depends on their performance requirements for the product Cost budget and technical team’s approval of polyurethane suspension damping support. At present, BASF is the main customer of the company’s suspension damping support business, with a large amount of revenue and a high proportion in the main business revenue. The development of suspension damping support business mainly depends on BASF’s development of end customers. If BASF’s Polyurethane suspension damping support business is not developed well, The development of the suspension shock absorption support business provided by the company to BASF will be adversely affected. (III) risks of expanding customers other than BASF that are less than expected
In order to reduce the company’s dependence on BASF, the company has continued to develop new customers in recent years. During the reporting period, the company has begun to supply a series of well-known auto parts suppliers at home and abroad, such as Yanfeng Piou, Toyo rubber and plastic, Huayu vision, Shanghai Carthane Co.Ltd(603037) , Anhui Zhongding and other new customers, as well as Geely Automobile, Mazda and other vehicle manufacturers.
By the end of June 2021, the company has obtained the project fixed points of Yingzhi automobile, Schaeffler, Ningjiang Shanchuan and Wanxiang, but has not yet delivered in batch, and has passed the new supplier admission audit of new customers such as Borg Warner, Magna, Saic Motor Corporation Limited(600104) passenger car branch, Great Wall Motor Company Limited(601633) and Volvo cars.
The project development cycle of the automotive industry is long, so the time interval between the company obtaining the fixed point of the project and the realization of mass production of products is relatively long. Moreover, when the project is fixed, the customer’s predicted mass production time and scale will usually be different from the actual situation in the future due to the influence of project development progress, market environment and other factors. In addition, customers generally select suppliers of specific products from their qualified suppliers by means of bidding. Therefore, the company’s passing the new supplier access audit of the above new customers does not mean that the company has obtained or will immediately obtain project fixed points or orders. If the company’s development of the above new customers and new projects is less than expected, the company will still rely on BASF, and there is a risk that the company’s growth is lower than expected. (IV) price fluctuation risk of raw materials
The main raw materials used by the company for production are aluminum ingots and plastic particles. During the reporting period, the proportion of the company’s direct materials in the current production cost was more than 50%, accounting for a relatively high proportion. Since 2021, due to the large-scale stimulus plan issued by the governments of major economies and the ultra loose monetary policy implemented by the central banks of major economies, the global liquidity environment has remained extremely loose. In addition, the overseas epidemic has rebounded significantly, there are still constraints on the supply side, and the global commodity prices have shown an upward trend. In the first half of 2021, the price of plastic particles purchased by the company increased slightly compared with the average purchase price in 2020, and the purchase price of aluminum ingots increased significantly compared with the average purchase price in 2020. If the price of the company’s main raw materials rises sharply, and it is difficult for the company to absorb the above effects through cost control measures and product price adjustment, the gross profit margin of the company’s products will decline, which will have an adverse impact on the company’s operating performance. (V) risk of production capacity decline in the automotive industry due to chip supply interruption
Affected by the global chip shortage, major automobile manufacturers outside China have successively announced plans to stop production or reduce production. Affected by the reduction of automobile production of downstream customers, except chip suppliers, the auto parts industry is facing the pressure of downstream customers to reduce orders. The overall sales of the company in the first half of 2021 are less affected by the chip shortage, However, the order scale in July and August has been significantly reduced compared with the forecast scale at the end of last year. Due to the repeated global covid-19 epidemic, there is still great uncertainty about the time when the chip shortage problem will be completely alleviated. If the chip shortage continues, the company may face the cancellation or significant reduction of orders caused by downstream production reduction, This will adversely affect the company’s short-term operating performance and draw investors’ attention to relevant risks. (VI) business risks caused by “covid-19 epidemic”
The company adopts the production mode of setting production according to sales. The impact of covid-19 epidemic on the company is mainly reflected in the delay of resumption of work and the reduction of orders during the epidemic period. From February to may 2020, the operating rates of various businesses of the issuer were at a low level. With the control of the epidemic and the recovery of the automobile consumption market, the production and sales of the company have gradually returned to the normal level since June 2020. At present, China’s “covid-19 epidemic” has been effectively controlled, and the company’s procurement, production and sales have basically returned to normal. However, if the epidemic in China repeats in the future, it may have a significant adverse impact on the company’s performance. (VII) risks of cyclical fluctuations in macro economy and automobile industry
The company’s main products are used in the automotive industry, so the company’s production and operation status is closely related to the macro-economy and the development status and development trend of the automotive industry. When the macro economy is in the boom cycle, the automobile consumption is active and the demand for automobile parts increases; On the contrary, when the macro economy is in recession, the automobile consumption is depressed and the demand for automobile parts is reduced. The company’s main customers are well-known auto parts manufacturers outside China. If the operation of customers is adversely affected by the macroeconomic downturn, the company’s orders may be reduced and the payment collection cycle may be longer. (VIII) innovation risk
The company is mainly engaged in the R & D, production and sales of aluminum cast parts and plastic parts in the fields of automobile suspension system, automobile interior and exterior decoration, etc. For a long time, the company has attached importance to the development and improvement of its own innovation ability, and continuously innovated and improved its production process and product R & D. It is one of the few enterprises in the industry that master the production process of aluminum die casting and blow injection molding at the same time, and can provide customers with one-stop solutions from mold development to product manufacturing. However, there are certain uncertainties in innovation and creation. If the company fails to meet expectations in its own innovation and improvement and new product development, it will have a significant adverse impact on the company’s business performance, core competitiveness and future development. (IX) risk of uncollectible accounts receivable
At the end of each reporting period, the book value of accounts receivable was 81.0628 million yuan, 111.2582 million yuan, 166.388 million yuan and 141.4289 million yuan respectively, accounting for 22.37%, 22.39%, 29.22% and 24.91% of the total assets of the company respectively. The company’s cooperation with major customers was good, and there was no case that large accounts receivable could not be recovered during the reporting period. However, if the company lacks effective management of accounts receivable in the future, or major adverse changes have taken place in the operation of the company’s customers, the company may face the risk of untimely or even unrecoverable collection of accounts receivable. (x) risk of inventory impairment
At the end of each reporting period, the book value of the company’s inventory was 31.5323 million yuan, 59.5784 million yuan, 82.8744 million yuan and 91.5667 million yuan respectively, accounting for 8.70%, 11.99%, 14.55% and 16.13% of the total assets respectively. With the increase of new auto parts projects undertaken by the company in recent years, the amount of mold inventory of the company increased year by year at the end of each reporting period. As of June 30, 2021, the book value of the company’s mold inventory was 25.1926 million yuan, accounting for 27.51% of the book value of the inventory at the end of the same period. If the sales price of the company’s products falls sharply, the products are unsalable or the development of new projects fails, it may lead to the impairment risk of inventories, which will have an adverse impact on the company’s profitability. 2、 Profit distribution policy of the company after this issuance
The company reminds investors to pay attention to the profit distribution policy and long-term return plan after the company’s issuance and listing. For details, see “II. Dividend distribution policy of the issuer” in “section 10 investor protection” of this prospectus. 3、 Business conditions after the deadline for audit of the company’s financial report
The deadline for the audit of the company’s financial report is June 30, 2021. The company reviewed the financial statements of the third quarter (No. 20257) and the fourth quarter (No. 2021) issued by Tianjian certified public accountants, and reviewed the notes of the third quarter (No. 20257) issued by Tianjian certified public accountants. For specific financial data, please refer to “XV. Operation after the audit deadline of the company’s financial report” in “Section VIII Financial Accounting Information and management analysis”.
After the audit deadline of the financial report (June 30, 2021), the company’s operation is in good condition. Affected by the shortage of chips and other factors, the reviewed operating revenue of the company from July to December 2021 was 285634900 yuan, a decrease of 10.49% over the same period of the previous year. Due to the decline in the gross profit margin of the main business due to the rise in the prices of aluminum ingots and some specifications of plastic particles, the net profit attributable to the common shareholders of the company from July to December 2021 was 23154400 yuan, Compared with the same period of the previous year, it decreased by 50.94%, which belongs to the company after deducting non recurring profits and losses
