Stock abbreviation: Juneyao Airlines Co.Ltd(603885) Stock Code: 603885 Juneyao Airlines Co.Ltd(603885)
Guotai Junan Securities Co.Ltd(601211)
Please do a good job in the Juneyao Airlines Co.Ltd(603885) non-public stock issuance and examination committee meeting
Reply to the letter of preparation
Sponsor (lead underwriter)
February, 2002
Please attend the Juneyao Airlines Co.Ltd(603885) non-public offering application issuance and examination committee meeting
Reply to the letter of preparation
China Securities Regulatory Commission:
According to the requirements of the letter of request to make preparations for Juneyao Airlines Co.Ltd(603885) non-public Development Bank‘s application for issuance and examination committee meeting (hereinafter referred to as the “notification letter”) issued by your Association recently, Juneyao Airlines Co.Ltd(603885) (hereinafter referred to as ” Juneyao Airlines Co.Ltd(603885) “, “issuer” or “company”) together with Guotai Junan Securities Co.Ltd(601211) (hereinafter referred to as ” Guotai Junan Securities Co.Ltd(601211) ” or “sponsor”) Dahua Certified Public Accountants (special general partnership) (hereinafter referred to as “accountant”) and other relevant intermediaries have carefully studied and discussed the notification letter, checked, analyzed and explained the problems raised in the notification letter one by one, and provided written replies according to the requirements of the notification letter of your association. The specific contents are as follows.
explain:
1. Unless otherwise specified, the abbreviations or terms used in this reply are consistent with the due diligence report;
2. In this reply, if the mantissa of the total is inconsistent with the mantissa of the total of the listed values, it is caused by rounding.
1、 About business risks
The issuer’s main business is air passenger and cargo transportation and transportation in China (including Hong Kong, Macao and Taiwan) and internationally
Close the air service business. As of the end of September 2021, the issuer has prepaid the cost of aircraft construction in the construction in progress
The amount is 5.119 billion yuan, of which, among the prepayments aged more than three years, Boeing 737max series aircraft
Accounts payable accounted for 44.08%, and the corresponding amount of Boeing 787 series aircraft accounted for 23.48%. Boeing 737max
The Boeing 787 series aircraft has been grounded by the Civil Aviation Administration of China since 2019 and has not been delivered so far. Boeing 787 series aircraft also exist
Delayed delivery.
The issuer is requested to: (1) explain the epidemic situation respectively in combination with the proportion of international and Chinese air passenger revenue
Impact on international and Chinese passenger transport business; (2) As a result, Boeing 737max and Boeing 787 series aircraft have no
Whether the factors of legal or delayed delivery are eliminated and whether the existing estimated delivery time is realized; According to relevant articles of the contract
How to bear the losses caused by failure or delay in delivery, and whether it will have a significant adverse impact on the performance of the issuer
influence; (3) Reasons and rationality of no provision for impairment of construction in progress. (4) Are the delivery risks involved
Full disclosure; Whether the measures to deal with the epidemic are effective, whether there are further measures, and whether the risks related to the epidemic are
Full disclosure.
The recommendation institution and the reporting accountant shall explain the verification basis and process, and express clear verification opinions.
reply:
(I) in combination with the proportion of international and Chinese air passenger revenue, explain the impact of the epidemic on international and
Impact of China’s passenger transport business
1. Proportion of China’s aviation and international passenger transport revenue
During the reporting period, the issuer’s air passenger transport business was the main component of the issuer’s main business income
The main business income is as follows:
Unit: 10000 yuan
Business category January September 2021 2020 2019 2018
Amount proportion amount proportion amount proportion amount proportion amount proportion (%) (%) (%) (%)
Passenger transport 885207.62 98.06 937538.53 93.80 1627656.74 98.19 1398187.20 98.48
Freight 17549.31 1.94 61971.07 6.20 29925.65 1.81 21583.59 1.52
Others 0.00 0.00 0.00 0.00 82.08 0.00 0.21 0.00
Total 902756.92 100.00 999509.60 100.00 1657664.47 100.00 1419771.00 100.00
During the reporting period, the issuer’s passenger transport business income was mainly concentrated in China, and the income of international and Hong Kong, Macao and Taiwan accounted for
Relatively small. The details of the issuer’s passenger transport business income by region are as follows:
Unit: 10000 yuan,%
Regional situation January September 2021 year 2020
Proportion of amount proportion of amount
China (excluding Hong Kong, Macao and Taiwan) 829570.18 93.71 811716.24 86.58
International 50624.05 5.72 119941.80 12.79
Hong Kong, Macao and Taiwan 5013.38 0.57 5880.48 0.63
Total 885207.62 100.00 937538.53 100.00
Regional situation 2019 2018
Proportion of amount proportion of amount
China (excluding Hong Kong, Macao and Taiwan) 1311544.52 80.58 1170520.85 83.72
International 284777.00 17.50 199813.52 14.29
Hong Kong, Macao and Taiwan 31335.22 1.93 27852.83 1.99
Total 1627656.74 100.00 1398187.20 100.00
2. Impact of the epidemic on China’s passenger transport business
After the covid-19 outbreak in 2020, China took strong prevention and control measures to curb the spread of the epidemic,
China’s epidemic prevention and control situation is good, social production and living order have recovered steadily, and civil aviation of China has shown a recovery trend
The demand for air travel has gradually picked up.
Although sporadic sporadic cases and local cases still occurred in many parts of China this year
The aggregated epidemic has had a certain impact on the company’s passenger transportation business in China, but the overall epidemic situation in China has been eliminated
The epidemic has been basically controlled, the epidemic prevention and control has maintained a global leading level, and the prevention and control measures are more scientific and accurate
The overall impact of the situation on China’s passenger transport business also shows a downward trend, and the company’s China passenger transport business has shown a trend of recovery
Potential.
In 2021, the company’s passenger turnover in China was 26767.16 million person kilometers, compared with that in 2020
The number of passengers transported in China was 18.3018 million, an increase of 19.30% over the same period in 2020
19.64%。 Especially from April to July in 2021, China’s passenger transport demand recovered strongly in the stage of normalization and epidemic prevention and control
The turnover of Chinese passengers of Su company is 10821.76 million person kilometers, and the number of Chinese passengers is 736.82
Million people, with a seating rate of 83.05%, which is not only significantly higher than the level in the same period in 2020, but also reached 2019 respectively
110.31%, 111.36% and 96.16% in the same period of the year.
Therefore, although the sporadic sporadic cases and local epidemic in China still have a certain impact, the company’s passenger transport business in China has shown a recovery trend.
3. Impact of the epidemic on international passenger transport business
Although the international passenger transport business is still greatly affected by the epidemic, the relevant demand is still strong, and the company’s international passenger transport business has also recovered. In the future, the impact of the epidemic on international passenger transport business will gradually decline, and international passenger transport business will recover and grow.
In the stage of normalized epidemic prevention and control, China’s civil aviation industry has actively implemented the epidemic prevention and control responsibility of “external defense input”, and the international passenger transport business is still greatly affected by the epidemic. In terms of international routes, China’s international routes still continue the “five ones” policy, that is, only one route from any airline company in China to any country can be reserved, and only one flight can be arranged a week. At the same time, the Civil Aviation Administration of China (CAAC) implements the policy of circuit breaker and reward for international flights. Therefore, the number of international flights of the company has been significantly reduced compared with that before the epidemic, resulting in a significant decrease in the proportion of the company’s international passenger transport business compared with that before the epidemic.
Although affected by the epidemic, the demand for international passenger transport is still strong, and the company’s international passenger transport business has also recovered. After the outbreak of the epidemic, with the gradual growth of transnational travel demand such as international study abroad, the demand for international passenger transport is still strong. The company’s international passenger transport business has also recovered. In 2021, the company’s International (including regional) passenger turnover was 405.74 million person kilometers, the number of International (including regional) passenger transportation was 141200, and the seating rate was 52.25%. At the same time, the high ticket prices of China’s international routes also reflect the current situation that China’s international passenger transport demand is in short supply.
The impact of the epidemic on international passenger transport business will gradually decline in the future. The Fifth Plenary Session of the 19th CPC Central Committee clearly proposed to speed up the construction of a new development pattern with China’s big cycle as the main body and China’s international double cycle promoting each other. According to the civil aviation development plan of the 14th five year plan, in order to consolidate and expand the achievements of epidemic prevention and control and civil aviation development, on the basis of the recovery period and savings period from 2021 to 2022, 2023-2025 is the growth period and release period of the civil aviation industry, and the recovery of the international market will be one of the development priorities. With the global promotion of covid-19 vaccine and the continuous research and development of covid-19 specific drugs, new progress has been made in epidemic prevention and control worldwide. China’s public health incident organization system is also constantly improving, and the impact of the epidemic on the company’s international passenger transport business will gradually decline.
To sum up, the company’s passenger transport business revenue is mainly in China, and China’s passenger transport business has reflected the recovery trend. Although the international passenger transport business is still greatly affected by the epidemic, the company’s international passenger transport business accounts for a relatively small proportion, and has recovered compared with 2020. In the future, the impact of the epidemic on the international passenger transport business will gradually decline, and the international passenger transport business will also recover and grow.
(II) whether the factors leading to the failure or delay of Boeing 737max and Boeing 787 series aircraft delivery are eliminated, and whether the existing estimated delivery time is realized; According to the relevant provisions of the contract, how to bear the losses caused by failure or delay in delivery, and whether it will have a significant adverse impact on the performance of the issuer;
1. There are no substantive obstacles to the expected delivery plan of Boeing 737max and Boeing 787 series aircraft. The failure of Boeing 737max series aircraft to deliver is due to the grounding of Boeing 737max series aircraft by Civil Aviation Administration of China in March 2019 due to continuous safety accidents, and the company suspended the introduction and delivery of this series of aircraft accordingly. After the grounding, Boeing corrected and adjusted the relevant problems of 737max series aircraft and continued to promote the go around work. In December 2021, the Airworthiness Certification Department of CAAC issued the airworthiness directive for Boeing 737-8 aircraft, confirming that relevant corrective measures can eliminate the unsafe state of the maneuverability enhancement system (MCAS) of the aircraft
