Stock Code: 300680 stock abbreviation: Wuxi Longsheng Technology Co.Ltd(300680) Wuxi Longsheng Technology Co.Ltd(300680)
Demonstration and analysis report on the scheme of issuing A-Shares to specific objects in 2021
(Revised Version)
February, 2002
Wuxi Longsheng Technology Co.Ltd(300680) (hereinafter referred to as " Wuxi Longsheng Technology Co.Ltd(300680) " or "company") is a company listed on the gem of Shenzhen Stock Exchange. In order to meet the needs of the company's business development, expand the company's business scale and further enhance the company's capital strength and profitability, according to the company law of the people's Republic of China (hereinafter referred to as the "company law") and the securities law of the people's Republic of China (hereinafter referred to as the "Securities Law") According to the provisions of relevant laws, regulations and normative documents such as the measures for the administration of securities issuance and registration of companies listed on the gem (for Trial Implementation) (hereinafter referred to as the "measures for the administration of registration"), the company plans to issue A-share shares to specific objects, and the raised funds shall not exceed 716211000 yuan (including this amount). After deducting the issuance expenses, The net funds raised will be fully used for the "R & D and manufacturing project of core parts of new energy efficient and high-density drive motor system (phase I)" and supplementary working capital. 1、 Background and purpose of this issuance of shares to specific objects (I) background of this issuance of shares to specific objects
1. The development of new energy vehicles has accelerated, and the drive motor iron core industry has ushered in new development opportunities
At present, a new round of global scientific and technological revolution and industrial reform are booming. The integration of automobile and energy, transportation, information and communication and other fields is accelerating. Countries have successively issued policy objectives for the withdrawal of traditional fuel vehicles from the market and incentive policies for new energy vehicles. International mainstream automobile enterprises have also put forward the goal of electric transformation, and the new energy automobile industry has ushered in unprecedented development opportunities. In October 2020, the general office of the State Council issued the new energy vehicle industry development plan (2021-2035), which pointed out that by 2025, the sales of new energy vehicles will reach about 20% of the total sales of new vehicles; Pure electric vehicles will become the mainstream by 2035.
Drive motor is an essential core component of new energy vehicles. The rapid development of new energy vehicles has brought great development opportunities to the drive motor and its core parts market. As the core component of drive motor, with the rapid development of new energy vehicles, the demand for high-efficiency, high-density and high-performance drive motor iron core will increase sharply.
2. The existing production line cannot meet the market demand, so it is necessary to increase the iron core production line
Due to the performance requirements and design differences of new energy vehicles, different customers have different requirements for the design and model of drive motor iron core. By issuing shares to specific objects in 2020 to raise funds for the implementation of the "new energy vehicle drive motor iron core project", the company has mass produced motor iron core products. With the gradual increase of market demand, the company needs to build more production lines to meet the needs of customers. At the same time, the production of different types of iron cores requires the replacement of molds and commissioning equipment. The conversion process of different types of iron cores will consume a lot of time and affect the production efficiency of the company. In order to better meet the needs of the downstream market and improve production efficiency, the company needs to increase the production line of iron core products.
3. The company has a good reserve of relevant technologies and customer resources
The company has rich manufacturing experience in precision molds and precision auto parts. It has long been engaged in the R & D, manufacturing and sales of precision stamping parts and other core parts, and is positioned at the localization of high-end auto precision parts. After years of technological R & D and accumulation, the company has formed a relatively mature design and development ability of high-precision parts. Since 2017, the company has started to research and develop the iron core of driving motor of new energy vehicles; In May 2019, the company received the reply of part submission guarantee (PSW) issued by liandian: the motor core products provided by the company for the second generation drive motor platform project of liandian new energy vehicles were reviewed and approved by its production part approval procedure (PPAP). Through the implementation of the previous raised investment project, the company has mastered the R & D and production technology of high-efficiency, high-density and high-performance drive motor iron core. The company's motor iron core products have been mass produced and certified by liandian, Weilai automobile and a foreign electric vehicle and energy company. The product performance, energy efficiency and stability have been recognized by customers. After the issuance to specific objects, the company will further deepen and expand its main business to meet the demand of new energy vehicles for medium and high-end drive motor iron core. (II) purpose of issuing shares to specific objects
1. Seize the development opportunity of new energy vehicles and meet the market demand
According to the data in the annual report on the development of China's automobile industry (2021), the global new energy vehicle market has entered a period of rapid growth, and the market scale has increased year by year. It exceeded 1 million vehicles for the first time in 2017 and 2 million vehicles in 2018. In 2020, against the background of the sharp decline in the global automobile market, the new energy vehicle market has a strong development momentum, with sales increasing by 41.6% year-on-year to 3.07 million vehicles. China is the largest market for new energy vehicles, ranking first in new energy vehicle sales for six consecutive years. In 2020, the sales volume of Shanxi Guoxin Energy Corporation Limited(600617) vehicles was 1.367 million, a year-on-year increase of 10.9% and the penetration rate increased to 5.4%.
With the rapid development of new energy vehicles, the demand for drive motor iron core will increase significantly. In order to meet the needs of the industry, the company will accelerate the implementation of the strategic layout, make use of the existing technical advantages, improve the production scale of drive motor iron core, seize the market development opportunity, explore more markets and better serve customers.
2. Increase the production capacity of drive motor iron core products and enhance the company's core competitiveness
In May 2019, the company's new energy vehicle drive motor iron core products obtained liandian certification, and relevant products and technologies were recognized by customers. With the gradual implementation of "new energy vehicle drive motor iron core project", one of the previous raised investment projects, the company has mass produced motor iron core products. With the gradual increase of market demand, the company needs to build more production lines to meet the needs of customers. The company needs to expand the production line of iron core products, increase the production capacity of iron core and meet the requirements of customers and the market, so as to enhance the competitiveness of the company in relevant business fields and provide guarantee for the growth of the company's performance.
3. Supplement the company's working capital and improve the company's ability to resist risks
With the increasing demand for drive motor iron core in downstream application industry, the company also has a large demand for capital. Therefore, the company plans to further enhance the company's capital strength by issuing shares to specific objects, effectively meet the capital needs brought by the rapid expansion of the company's business scale, and enhance the company's market competitiveness. In addition, the use of the funds raised by issuing shares to specific objects can reduce the company's financing cost to a certain extent and improve the company's short-term solvency.
Therefore, some of the raised funds issued to specific objects are used to supplement working capital, and the company's capital strength will be further enhanced, which can effectively alleviate the capital pressure caused by the company's rapid development, improve the company's solvency, reduce the company's financial risk and improve the company's overall anti risk ability.
2、 The necessity of this issuance of securities and its variety selection (I) the variety of securities issued this time
The type of shares issued to specific objects this time is domestic listed RMB ordinary shares (A shares), with a par value of RMB 1.00 per share.
(II) necessity of selection of securities issued this time
1. Meet the capital needs of the investment project with the raised funds
The company plans to build the "R & D and manufacturing project of core parts of new energy efficient and high-density drive motor system (phase I)" and supplement working capital, of which the total investment of "R & D and manufacturing project of core parts of new energy efficient and high-density drive motor system (phase I)" is 708389600 yuan. The investment project of the company's raised funds conforms to the company's development strategy, and the investment amount is large. In recent years, the company has been in the stage of rapid development. With the expansion of business scale, the capital expenditure is large and the capital demand continues to grow. In order to meet the increasing demand for funds, the company needs external financing to support the construction of the investment project with raised funds and the development of the company in the future.
2. There are limitations in corporate bank loan financing
The amount of debt financing such as bank loans is relatively limited, and the financing cost is high. If the investment project of the raised funds is fully financed by debt, on the one hand, it will lead to a significant increase in the company's asset liability ratio, affect the company's financial structure and increase financial risks. On the other hand, higher financial expenses will reduce the company's overall profit level, affect the flexibility of the company's fund use, and is not conducive to the company's strategic goal of stable operation.
3. Issuing shares to specific objects is a financing method suitable for the company at this stage
Equity financing is conducive to optimizing the company's capital structure, reducing the company's future debt repayment pressure and capital outflow, and promoting the realization of the company's long-term development strategy. The investment project of the raised funds has been demonstrated in detail by the management, which is conducive to further improve the profitability of the company and enhance its core competitiveness. In the future, after the benefits of the investment projects with raised funds are released, the company's net profit will achieve stable growth, gradually digest the impact of dilution of immediate return caused by equity expansion, and provide better investment return for all shareholders. 3、 Appropriateness of the selection scope, quantity and standard of this issuance object (I) appropriateness of the selection scope of this issuance object
There are no more than 35 Issuers (including) of A-share shares issued to specific objects, including Ni Ming, one of the actual controllers of the company, as well as securities investment fund management companies, securities companies, trust companies, finance companies, insurance institutional investors, qualified overseas institutional investors and other legal persons in accordance with the provisions of the CSRC Natural persons or other qualified investors. Securities investment fund management companies, securities companies, qualified foreign institutional investors and RMB qualified foreign institutional investors who subscribe for more than two products under their management shall be regarded as one issuance object; If a trust company is the issuing object, it can only subscribe with its own funds.
Ni Ming plans to subscribe for the A shares issued to specific objects in cash, with a subscription amount of no less than 20 million yuan (including the number) and no more than 50 million yuan (including the number). The final offering object shall be determined by the board of directors through consultation with the sponsor (lead underwriter) of the offering according to the inquiry results in accordance with the relevant provisions of the CSRC and the Shenzhen Stock Exchange after the offering has been reviewed by the Shenzhen Stock Exchange and approved by the CSRC for registration in accordance with the authorization of the general meeting of shareholders. If the national laws and regulations have new provisions on the issuing object of issuing A-Shares to specific objects, the company will adjust according to the new provisions.
All issuers of A-Shares issued to specific objects this time subscribe for the shares issued this time in cash and at the same price.
The selection scope of this issuance object complies with the relevant provisions of laws, regulations and normative documents such as the registration management measures, and the selection scope is appropriate. (II) appropriateness of the number of objects of this issuance
The issuing objects of A-Shares to specific objects this time are no more than 35 specific objects in line with relevant laws and regulations. The number of objects to be issued this time complies with the relevant provisions of laws, regulations and normative documents such as the measures for the administration of registration, and the number of objects to be issued is appropriate. (III) appropriateness of standards for the objects 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 laws, regulations and normative documents such as the measures for the administration of registration, and the standards of the objects of this issuance are appropriate.
4、 Rationality of pricing principle, basis, method and procedure of this offering (I) rationality of pricing principle and basis of this offering
The pricing benchmark date of this issuance of A-Shares to specific objects is the first day of the issuance period, The issue price shall not be less than 80% of the average trading price of the company's shares on the 20 trading days before the pricing benchmark date (average trading price of shares on the 20 trading days before the pricing benchmark date = total trading volume of shares on the 20 trading days before the pricing benchmark date / total trading volume of shares on the 20 trading days before the pricing benchmark date).
In case of ex right and ex interest matters such as dividend distribution, share distribution and conversion of capital reserve into share capital from the pricing base date to the issuance date, the issuance base price will be adjusted accordingly.
Assuming that the issue price before adjustment is P0, the number of shares given or converted into share capital per share is n, the dividend / cash dividend per share is D, and the issue price after adjustment is P1, then:
(1) Dividend / Cash Dividend: P1 ＝ P0 － D
(2) Share offering or conversion to share capital: P1 = P0 / (1 + n)
(3) Two items are carried out simultaneously: P1 = (p0-d) / (1 + n)
The final offering price shall be determined by the board of directors through consultation with the sponsor (lead underwriter) of the offering according to the actual inquiry results in accordance with the relevant provisions of the CSRC and the Shenzhen Stock Exchange after the offering has been reviewed by the Shenzhen Stock Exchange and approved by the CSRC for registration in accordance with the authorization of the general meeting of shareholders.
Ni Ming does not participate in the market bidding process of this issuance of a shares, but accepts the market bidding results and subscribes for the A shares issued to specific objects at the same price as other specific investors. If the issuance price of A-Shares to specific objects fails to be generated through bidding, Ni Ming agrees to participate in this subscription with the issuance reserve price (80% of the average trading price of the company's shares 20 trading days before the pricing benchmark date) as the subscription price. The pricing principle and basis of this offering comply with the relevant provisions of laws, regulations and normative documents such as the registration management measures, and the pricing principle and basis of this offering are reasonable. (II) rationality of pricing methods and procedures for this offering
The pricing methods and procedures of this offering are in accordance with the relevant provisions of the registration management measures and other laws, regulations and normative documents. The board of directors will convene and disclose the relevant announcements on the website of the exchange and the designated information disclosure media, and will be submitted to the general meeting of shareholders of the company for review, and shall be reported to Shenzhen stock exchange for review and China Securities Regulatory Commission for registration. The pricing methods and procedures of this offering comply with the relevant provisions of laws, regulations and normative documents such as the registration management measures, and the pricing methods and procedures of this offering are reasonable.
To sum up, the principles, basis, methods and procedures for pricing this offering are in line with the requirements of relevant laws and regulations, and the compliance is reasonable. 5、 Feasibility of this issuance method (I) legal compliance of this issuance method
1. This issuance meets the issuance conditions stipulated in the securities law
(1) This offering complies with the securities law
