Securities code: 301040 securities abbreviation: Zhangjiagang Zhonghuan Hailu High-End Equipmentco.Ltd(301040) Zhangjiagang Zhonghuan Hailu High-End Equipmentco.Ltd(301040) demonstration and analysis report on the scheme of issuing convertible corporate bonds to unspecified objects
February, 2002
Zhangjiagang Zhonghuan Hailu High-End Equipmentco.Ltd(301040) (hereinafter referred to as " Zhangjiagang Zhonghuan Hailu High-End Equipmentco.Ltd(301040) " or "the company") in order to meet the capital needs of the company's business development, increase the company's capital strength and enhance its profitability, according to the company law of the people's Republic of China (hereinafter referred to as "the company law") The securities law of the people's Republic of China (hereinafter referred to as the "Securities Law") and the measures for the administration of securities issuance and registration of companies listed on the gem (for Trial Implementation) (hereinafter referred to as the "administrative measures") and other relevant laws, regulations and normative documents intend to issue convertible corporate bonds (hereinafter referred to as "convertible bonds") to unspecified objects, The demonstration and analysis report of Zhangjiagang Zhonghuan Hailu High-End Equipmentco.Ltd(301040) issuing convertible corporate bonds to unspecified objects is specially prepared. Section I necessity of securities issuance and variety selection
1、 Types of securities to be issued this time
The type of securities issued this time is convertible corporate bonds that can be converted into A-Shares of the company. These convertible corporate bonds and future converted A-share shares will be listed on the gem of Shenzhen Stock Exchange. 2、 Necessity of selection of securities issued this time
(I) this issuance is the need of the company's operation and development
The investment project of the raised funds focuses on the company's main business, conforms to the relevant national industrial policies and the company's future strategic development direction, is conducive to the further expansion of the company's business, consolidate and develop the company's competitive advantage in the industry, and has good market development prospects and economic benefits.
The investment project of the raised funds is in line with the future development direction of the ring forging industry, helps to solve the capacity gap of heat treatment, and meets the capital demand brought by the continuous growth of business scale. Therefore, the issuance of convertible corporate bonds to unspecified objects is of positive significance to the company's operation and management. The company's business will be further upgraded, the economies of scale will be enhanced, and the company's profitability will be improved, laying a solid foundation for the company's sustainable and healthy development in the future.
(II) there are limitations in debt financing methods such as bank loans
The financing cost of the company through bank loans and other debt financing methods is relatively high, and the financing amount is relatively limited. If the capital source of this raised investment project mainly relies on bank loans, it will affect the stable financial structure of the company and increase operational and financial risks.
(III) both equity and debt, so as to reduce the financing cost of the company
The convertible bonds issued this time can be converted into company shares when they meet the conditions, which is equivalent to adding an option on the basis of issuing corporate bonds, so they are both stock and debt. Convertible corporate bonds usually have a low coupon rate, which can significantly reduce corporate financing costs. Through this issuance, the company can appropriately improve the debt level, optimize the capital structure, make full use of debt leverage, improve the return on assets and improve the return on shareholders' profits. The use plan of the raised funds has been demonstrated in detail by the management, which is conducive to further improving the profitability and enhancing the core competitiveness of the company. After the completion of the investment project with raised funds in the future, it will be conducive to the stable growth of the company's net profit, digest the dilution impact of equity expansion on the immediate income, and protect the interests of the company's original shareholders.
Section II appropriateness of the selection scope, quantity and standard of the issuance object I. appropriateness of the selection scope of the issuance object
The specific issuance method of convertible corporate bonds shall be determined by the board of directors authorized by the general meeting of shareholders (or the person authorized by the board of directors) and the sponsor (lead underwriter).
The issuing objects of convertible corporate bonds this time are natural persons, legal persons, securities investment funds and other investors in compliance with the laws and regulations holding the securities account of Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. (except those prohibited by national laws and regulations).
The convertible corporate bonds issued this time are subject to priority placement to the existing shareholders of the company, and the existing shareholders have the right to waive the priority placement right. The specific proportion of preferential placement to existing shareholders shall be determined by the board of directors authorized by the general meeting of shareholders (or the person authorized by the board of directors) through consultation with the sponsor (lead underwriter) according to the market conditions before this issuance, and shall be disclosed in the issuance announcement of convertible corporate bonds.
The company's existing shareholders enjoy the balance beyond the preferential placement and the specific issuance method of the existing shareholders' abandonment of the preferential placement shall be determined by the board of directors (or the person authorized by the board of directors) and the sponsor (lead underwriter) through negotiation before the issuance.
The selection scope of this issuance object complies with the relevant provisions of the administrative measures and other relevant laws, regulations and normative documents, and the selection scope is appropriate. 2、 Appropriateness of the number of objects to be issued this time
The securities account of the legal person and the branch of the securities clearing company that are prohibited by the laws and regulations of the people's Republic of China to be held by the securities issuer and other natural liability companies (except those whose securities accounts are convertible securities and clearing companies that are prohibited by the laws and regulations of the people's Republic of China).
The number of objects to be issued this time complies with the relevant provisions of the administrative measures and other relevant laws, regulations and normative documents, and the number of objects to be issued is appropriate. 3、 Appropriateness of the standards for the object of this issuance
The issuing object should have certain risk identification ability and risk bearing ability, and have corresponding capital strength.
The standards of the objects of this issuance comply with the relevant provisions of the administrative measures and other relevant laws and regulations, and the standards of the objects of this issuance are appropriate.
Section III rationality of pricing principle, basis, method and procedure of this issuance I. pricing principle of this issuance
(I) pricing method of coupon rate
The determination method of the coupon rate of the convertible corporate bonds issued this time and the final interest rate level of each interest bearing year shall be determined by the board of directors (or the person authorized by the board of directors) authorized by the general meeting of shareholders of the company through consultation with the recommendation institution (lead underwriter) according to national policies, market conditions and specific conditions of the company before issuance.
Before the issuance of convertible corporate bonds, if the bank deposit interest rate is adjusted, the general meeting of shareholders authorizes the board of directors (or the person authorized by the board of directors) to adjust the coupon rate accordingly.
(II) determination of initial conversion price
The initial conversion price of the convertible corporate bonds issued this time shall not be lower than the average trading price of the company's shares on the 20 trading days before the announcement date of the prospectus (if there has been a stock price adjustment due to ex right and ex dividend within the 20 trading days, the trading price on the trading day before the adjustment shall be calculated according to the price after corresponding ex right and ex dividend adjustment) And the average trading price of the company's shares on the previous trading day, and the specific initial conversion price shall be submitted to the general meeting of shareholders of the company to authorize the board of directors of the company (or the person authorized by the board of directors) to negotiate and determine with the sponsor (lead underwriter) according to the market and the specific situation of the company before the issuance.
Average trading price of the company's shares in the first 20 trading days = total trading volume of the company's shares in the first 20 trading days / total trading volume of the company's shares in the last 20 trading days; The average trading price of the company's shares on the previous trading day = the total trading volume of the company's shares on the previous trading day / the total trading volume of the company's shares on that day.
(III) adjustment and calculation method of share conversion price
After this issuance, when the company changes its shares due to share allotment, additional issuance, share distribution, dividend distribution, division and other reasons (excluding the increased share capital due to the conversion of convertible bonds into shares issued this time), the conversion price will be adjusted according to the following formula (the last two digits will be retained and the last one will be rounded):
Distribution of stock dividends or conversion to share capital: P1 = P0 / (1 + n);
Additional shares or allotment: P1 = (P0 + a) × k）/（1+k）；
The above two items shall be carried out simultaneously: P1 = (P0 + a) × k）/（1+n+k）；
Cash dividend: P1 = p0-d;
The above three items shall be carried out simultaneously: P1 = (p0-d + a) × k）/（1+n+k）
Where: P0 refers to the transfer price before adjustment, n refers to the share dividend or share capital conversion rate, K refers to the new share price or allotment rate, a refers to the new share price or allotment price, D refers to the cash dividend per share, and P1 refers to the transfer price after adjustment.
When the company changes the above shares and / or shareholders' equity, the conversion price will be adjusted in turn and posted on the website of Shenzhen Stock Exchange（ http://www.szse.cn./ ）Or publish the announcement of the resolution of the board of directors on the media qualified for information disclosure in the securities market, and specify the adjustment date, adjustment method and suspension period of share conversion price in the announcement (if necessary); When the adjustment date of the conversion price is on or after the application date for conversion of convertible corporate bonds issued this time and before the registration date of conversion shares, the application of the holder for conversion of shares shall be executed according to the adjusted conversion price of the company.
When the company may have share repurchase, merger, division or any other circumstances, which may change the class, quantity and / or shareholder's equity of the company's shares, which may affect the creditor's rights and interests of the holders of convertible corporate bonds issued this time or the derivative rights and interests converted into shares, the company will, according to the specific circumstances, follow the principles of fairness, impartiality The conversion price shall be adjusted in accordance with the principle of fairness and the principle of fully protecting the rights and interests of the holders of convertible corporate bonds issued this time. The adjustment contents and operation methods of the conversion price will be formulated in accordance with the relevant national laws and regulations, the relevant provisions of the securities regulatory authorities and the Shenzhen Stock Exchange. 2、 Rationality of pricing basis for this offering
The initial conversion price of the convertible corporate bonds issued this time shall not be lower than the average trading price of the company's shares on the 20 trading days before the announcement date of the prospectus (if there has been a stock price adjustment due to ex right and ex dividend within the 20 trading days, the trading price on the trading day before the adjustment shall be calculated according to the price after corresponding ex right and ex dividend adjustment) And the average trading price of the company's shares on the previous trading day, and the specific initial conversion price shall be submitted to the general meeting of shareholders of the company to authorize the board of directors of the company (or the person authorized by the board of directors) to negotiate and determine with the sponsor (lead underwriter) according to the market and the specific situation of the company before the issuance.
Average trading price of the company's shares in the first 20 trading days = total trading volume of the company's shares in the first 20 trading days / total trading volume of the company's shares in the last 20 trading days; The average trading price of the company's shares on the previous trading day = the total trading volume of the company's shares on the previous trading day / the total trading volume of the company's shares on that day.
The pricing basis of this offering complies with the relevant provisions of the administrative measures and other relevant laws, regulations and normative documents, and the pricing basis of the offering is reasonable. 3、 Rationality of pricing methods and procedures for this offering
The pricing methods and procedures for the issuance of convertible corporate bonds to unspecified objects are all in accordance with the relevant provisions of the administrative measures and other laws and regulations. The board of directors is convened and the relevant announcements are disclosed on the website of Shenzhen Stock Exchange and the information disclosure media meeting the requirements of the CSRC, and will be submitted to the general meeting of shareholders of the company for deliberation.
The pricing methods and procedures of this offering comply with the relevant provisions of the administrative measures and other laws and regulations, and the pricing methods and procedures of this offering are reasonable.
To sum up, the pricing principles, basis, methods and procedures of this offering comply with the requirements of relevant laws and regulations, and the compliance is reasonable.
Section IV feasibility of this issuance method
The company raised funds by issuing convertible corporate bonds to unspecified objects, which meets the relevant issuance conditions stipulated in the securities law, the administrative measures and so on. 1、 This offering complies with the relevant provisions of the securities law
(I) the company has a sound and well functioning organization
The company has established a sound organizational structure in strict accordance with the requirements of the company law, the securities law and other relevant laws, regulations and normative documents. The organizational structure of the company is clear, the responsibilities of each department and post are clear, and the work responsibilities of special departments have been defined.
The company has established the general meeting of shareholders, the board of directors, the board of supervisors and other necessary internal institutions for carrying out daily business according to law, hired senior managers such as the general manager, deputy general manager, chief financial officer and Secretary of the board of directors, and established and improved internal organizations and corresponding internal management systems such as R & D, procurement, production, sales, management and finance according to law, The company has a sound and well functioning organization and corresponding management system, and relevant institutions and personnel can perform their duties according to law.
The company complies with the provisions of "having a sound and well functioning organization" in Item (I) of paragraph 1 of Article 15 of the securities law.
(II) the average distributable profits of the company in the last three years are sufficient to pay one year's interest on corporate bonds
In 2018, 2019 and 2020, the net profit attributable to shareholders of listed companies was 32.9588 million yuan, 72.8753 million yuan and 133.905 million yuan respectively, and the average distributable profit in the last three years was 79.913 million yuan. The total amount of funds to be raised by this convertible bond shall not exceed RMB 360 million (inclusive). With reference to the recent issuance interest rate level of the bond market and through reasonable estimation, the average distributable profit of the company in the last three years is sufficient to pay the interest of corporate bonds for one year.
The company complies with the provisions of item (II) of paragraph 1 of Article 15 of the securities law that "the average distributable profits in the last three years are sufficient to pay one-year interest on corporate bonds".
The funds raised by the company are used for "expansion project of high-end ring forging production line", "intelligent production line project of heat treatment of key parts of Superalloy" and "supplementary working capital". The purpose of the funds raised is in line with the provisions of national industrial policies, laws and administrative regulations. The funds raised by the company by issuing convertible bonds to unspecified objects will be used in accordance with the purposes of funds listed in the prospectus; Changing the use of funds shall be subject to the resolution of the bondholders' meeting; The funds raised by issuing convertible bonds to unspecified objects shall not be used to cover losses and unproductive expenses. The use of the funds raised by the company's issuance of convertible bonds this time complies with paragraph 2 of Article 15 of the securities law, "the funds raised by the public issuance of corporate bonds must be used in accordance with the purposes of the funds listed in the measures for the raising of corporate bonds; the change of the purpose of the funds must be decided by the bondholders' meeting. The funds raised by the public issuance of corporate bonds shall not be used to make up for losses and non productive expenses" Provisions of the.
(IV) there is no circumstance in which corporate bonds may not be issued to the public again
As of the announcement date of this report, the company has not violated the securities law
