Gem investment risk tip: after this stock issuance, it is planned to be listed on the GEM market, 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. Jiangyin Biao Auto Parts Co., Ltd. (No. 1, Mona Road, Huaxi nine village, Huashi Town, Jiangyin City)
Prospectus for initial public offering and listing on GEM
Sponsor (co lead underwriter)
(Building 4, No. 66 Anli Road, Chaoyang District, Beijing)
Co lead underwriter
(room 618, No. 2, Tengfei 1st Street, Zhongxin Guangzhou Knowledge City, Huangpu District, Guangzhou, Guangdong)
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)
Number of shares to be issued and number of shares to be offered by shareholders: 22.5 million shares to be issued to the public this time, which does not involve shares to be offered by shareholders, and the number of shares to be issued accounts for 25.00% of the total share capital after this issuance
Par value per share: RMB 1.00
Issue price per share: 40.25 yuan
Expected issue date: February 9, 2022
Stock exchanges and sectors to be listed: Shenzhen Stock Exchange gem
Total share capital after issuance: 90 million shares
Sponsor (co lead underwriter): China Securities Co.Ltd(601066)
Co lead underwriter Gf Securities Co.Ltd(000776)
Signing date of prospectus: February 15, 2022
Tips on major issues
The company faces many risks in its operation and development. 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 and corporate risks: I. special risk tips (I) risks with high customer concentration
During the reporting period, the company’s sales revenue to the top five customers accounted for 80.56%, 88.85%, 91.84% and 88.04% respectively. The customers are relatively stable and highly concentrated. The main reasons include: first, the development path of China’s automobile industry has resulted in a high concentration of automobile manufacturers, and the company has formed a stable business cooperation relationship with FAW Volkswagen and SAIC Volkswagen, These customers have a high share in China’s auto market, resulting in a high concentration of customers. Second, vehicle manufacturers often need to carry out a strict certification process for parts suppliers. After the suppliers pass the certification, both parties often maintain a very stable cooperative relationship, and vehicle manufacturers generally only purchase specific parts from certified suppliers in order to ensure supply quality and timeliness.
In the future, if the company’s main customers reduce the production plan and procurement scale due to the fluctuation of macroeconomic cycle or the decline of their own market competitiveness, or the company’s products cannot meet the needs of customers, it may lead to adverse changes in the cooperative relationship between the company and main customers, and the company’s operating performance will be negatively affected. Specifically, from the sales side, the company has certain business dependence on “Volkswagen” customers during the reporting period. If the design scheme of “Volkswagen” engine is changed in the future or other competitors successfully participate in new product cooperation, the company’s business share may be reduced and the sales scale may decline to a certain extent; From the capital side, the higher customer concentration makes the higher customer concentration of the company’s accounts receivable at the end of the period. If the operation of major customers deteriorates in the future, the company will have a large amount of bad debts of accounts receivable, which will have an adverse impact on the company’s operating capital flow. (II) raw material supply and price fluctuation risk
In the automotive industry, vehicle manufacturers, auto parts suppliers and raw material enterprises form an integrated supply chain system. In order to ensure the product quality delivered to end users, vehicle manufacturers will control the source of procurement to ensure that the purchased products meet the specified requirements. The company’s main raw materials include valve pump and other functional parts, plastic parts, rubber parts, plastic particles, etc. if the supply of main raw materials is not timely or the quality is unstable, the stable cooperation between the company and vehicle manufacturers will be affected. As the cost of raw materials accounts for a high proportion of the operating cost of products, if the price of raw materials fluctuates sharply due to the influence of external factors such as macroeconomic, political environment, exchange rate fluctuation and international oil price, it may have a negative impact on the operating performance of the company.
Among the main raw materials, the purchase unit price of valve pump and other functional parts, plastic parts and rubber parts is basically stable, except that the price of imported parts is affected by exchange rate fluctuations and some suppliers reduce the purchase price according to the annual reduction requirements. The purchase price of valve pump and other functional parts, plastic parts and rubber parts of mass-produced products can not be adjusted at will, The purchase price of such raw materials does not fluctuate periodically.
The specific properties, specification parameters and production uses of the company’s main raw materials plastic particles are different, and the purchase prices vary greatly. The purchase prices follow the market. The purchase prices of modified plastic particles are subject to the price fluctuations of upstream basic materials, showing the characteristics of periodic fluctuations of varying degrees.
During the reporting period, the company’s consumption cost of plastic particles accounted for 15.23%, 11.11%, 11.10% and 14.90% of the cost of main business respectively. Assuming that other conditions remain unchanged, the unit price of plastic particles increases by 10%, and the company’s comprehensive gross profit margin during the reporting period will decrease by 1.12%, 0.79%, 0.77% and 1.00% respectively. In the process of new product development and quotation, the company will fully consider the price changes of raw materials and make quotations to customers, so that the sales price of new products can cover the impact of raw material price rise as far as possible, and transmit the risk of raw material price rise to the downstream. However, for the products that have obtained the fixed-point letter, when the cost increases due to the sharp rise of plastic particle raw materials, although the company will fully negotiate with customers to increase the product sales price or reduce the reduction range, the risk of price increase is difficult to be transmitted to downstream customers in a timely and effective manner. Although the consumption cost of plastic particles accounts for a relatively small proportion, and the company will take measures such as goods preparation and technical improvement to improve the yield, if the price of plastic particles rises sharply, it will still have an adverse impact on the company’s operating results, resulting in the risk of decline in the company’s gross profit margin and operating performance, and then affect the company’s sustainable operation ability. (III) fluctuation risk of downstream industries
There is a close linkage between the auto parts industry and the whole vehicle industry. The whole vehicle industry is closely related to the development cycle of the national economy. Therefore, the auto parts industry has a certain periodicity due to the fluctuation of the downstream whole vehicle industry and the national economic cycle. The automobile industry usually develops rapidly in the upward stage of macro-economy, and drives the growth of production and sales of automobile parts industry. In recent years, the global economy is still in the post crisis adjustment period, and the economic growth of the developed and emerging economies is still relatively weak. Affected by the Sino US trade friction, covid-19 epidemic and other factors, the growth rate of China’s economic development has also slowed down, and the development of the automobile industry has ushered in new challenges. Therefore, if the macro-economy and automobile industry continue to decline in the future, it may lead to a decline in the procurement demand of downstream customers such as automobile manufacturers, and ultimately affect the performance level of the company. (IV) industry policy risk
Auto industry is one of the pillar industries in China. Auto parts manufacturing industry is an important part of auto industry. The development of auto parts industry is closely related to the rapid development of China’s auto industry. In recent years, China’s auto parts industry has issued a number of plans and policies to promote the rapid growth of China’s auto parts industry. With the vigorous development of China’s automobile industry, China’s automobile production, sales and ownership have been increasing, and related problems such as traffic congestion and environmental pollution have also become prominent. At present, some mega cities have introduced some regulation measures for automobile consumption; If the national or local governments introduce more automobile consumption control measures in the future, it will have an adverse impact on the business performance of automobile industry enterprises, including the company. (V) market development risk
During the reporting period, the number of new customers of the company was 22, 20, 23 and 12 respectively, and the sales revenue to new customers was 8.867 million yuan, 3.1008 million yuan, 9.823 million yuan and 1.098 million yuan respectively, accounting for 2.77%, 0.55%, 1.55% and 0.46% of the current operating revenue respectively. During the reporting period, the company’s new customer sales accounted for a relatively low proportion, mainly due to the fact that the company’s existing main customer orders accounted for most of the company’s production capacity. At the same time, automobile manufacturers and their primary suppliers have strict supplier access standards and systems, and the early certification process for automobile parts enterprises is long, It also takes some time for auto parts enterprises to realize large-scale mass production from fixed-point letter. The company’s products are core auto parts. When selecting suppliers, vehicle manufacturers and engine manufacturers generally adopt a strict procurement certification system. Once the suppliers pass the procurement certification, they can usually establish a long-term and stable cooperative relationship with customers. With the continuous upgrading of China’s automobile industry, vehicle manufacturers have higher and higher requirements for the technical performance of parts and components. If the company fails to meet the requirements of vehicle manufacturers in terms of synchronous R & D, process technology, product quality and timeliness of supply, it may be that the company’s new products cannot successfully pass the customer procurement certification, and the development effect of new customers is poor The risk of not being able to successfully explore new markets, which will have a certain degree of adverse impact on the company’s operation. (VI) risk of epidemic impact
Since January 2020, the epidemic of New Coronavirus has spread, and affected by China’s epidemic situation, according to the China Automotive Industry Association’s 2020 economic performance of the automobile industry, China’s passenger vehicle sales volume in 2020 was 19 million 994 thousand and 20 million 178 thousand respectively, down 6.5% and 6% compared with the same period last year. Although the epidemic in China has been effectively controlled, the international epidemic continues, and the demand of the automobile market has decreased significantly due to the adverse impact of the global economy. At present, China’s auto parts enterprises have basically resumed normal production, but overseas raw material supply, export sales, international logistics and transportation are still limited to varying degrees, and the demand of downstream vehicle manufacturers has decreased. If the global epidemic continues to spread and cannot be fully controlled, it will have an adverse impact on the overall automobile industry and auto parts enterprises including the company.
(VII) unfavorable cooperation with German aft, the main supplier, and the risk of competition with its domestic joint ventures. From 2018 to 2020 and from January to June 2021, the purchase amount of the company from German aft was 67.1493 million yuan, 152.2318 million yuan, 150.5726 million yuan and 54.7878 million yuan respectively, accounting for 28.07%, 37.01%, 36.81% and 34.39% of the total purchase amount of each year, Aft in Germany is the company’s largest supplier of raw materials. In July 2017, German aft set up a joint venture Alfred auto parts (Suzhou) Co., Ltd. in China to develop its business in China. At present, Alfred auto parts (Suzhou) Co., Ltd. has not directly supplied bulk products to “Volkswagen” customers, but is promoting products such as fuel pipe assemblies. If its products can pass relevant tests in the future, It is recognized by “Dazhong Department” and has the ability of batch supply, which will form direct competition with the company. During the reporting period, German aft had a contract dispute with the company, and sent a lawyer’s letter to the company in August 2020, requesting the company to bear the loss of dead inventory and early investment totaling 765400 euros. The company confirmed that the loss of German aft was 148100 euros and had accrued the corresponding estimated liabilities, For details, please refer to “4. The company’s procurement and major suppliers” in “section VI business and technology” in this prospectus “(III) the company’s top five major suppliers of raw materials in the reporting period” and “3. (2) the contract dispute between the company and German aft”. The amount involved in the above-mentioned contract disputes is small, and since 2020, the company has gradually realized the localization and self-made substitution of relevant parts. Since the establishment of domestic joint venture and contract dispute between German aft, the business between the company and German aft has been carried out normally, and the ordering and delivery of products have been normal.
Considering the dominance of the vehicle manufacturer and commercial interests, the cooperation between the company and German aft remains stable, but if there are adverse changes in the cooperation between the company and German aft in the future and the company fails to develop it in time
