Advertised shares: listing announcement of initial public offering and listing on the gem

Jiangyin Biao Auto Parts Co., Ltd. (No. 1, Mona Road, Huaxi nine village, Huashi Town, Jiangyin City)

Initial public offering and listing on GEM

Listing announcement

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)

hot tip

The shares of Jiangyin Biao Auto Parts Co., Ltd. (hereinafter referred to as “company”, “issuer” or “Biao share”) will be listed on Shenzhen Stock Exchange on February 21, 2022.

GEM companies have the characteristics of unstable performance, high operation risk and high delisting risk, and investors are facing greater market risk. Investors should fully understand the investment risks of the gem and the risk factors disclosed by the company, and make investment decisions prudently.

The company reminds investors to fully understand the risks of the stock market and the risk factors disclosed by the company, avoid blindly following the trend of “speculation” in the initial stage of IPO, and make prudent decision and rational investment.

Unless otherwise specified, the abbreviations or terms in this listing announcement have the same meanings as those in the prospectus of Jiangyin advertised Auto Parts Co., Ltd. for initial public offering and listing on the gem (hereinafter referred to as the “prospectus”).

Section I important statements and tips

1、 Important statement

The company and all directors, supervisors and senior managers guarantee the authenticity, accuracy and completeness of the listing announcement, promise that there are no false records, misleading statements or major omissions in the listing announcement, and bear legal liabilities according to law. The opinions of Shenzhen Stock Exchange and relevant government authorities on the listing of the company’s shares and related matters do not indicate any guarantee to the company.

The company reminds investors to carefully read the information published on cninfo (website: www.cn. Info. Com. CN.) The contents of the “risk factors” section of the company’s prospectus on the website should pay attention to risks, make prudent decisions and make rational investment. The company reminds the majority of investors to pay attention to the relevant contents not involved in this listing announcement. Please refer to the full text of the company’s prospectus. 2、 Special tips on investment risk at the initial stage of gem IPO

The offering price is 40.25 yuan / share, which does not exceed the median and weighted average of offline investors’ quotations after excluding the highest quotation, as well as the Securities Investment Fund (hereinafter referred to as “public fund”) and the National Social Security Fund (hereinafter referred to as “social security fund”) established through public offering after excluding the highest quotation The lower of the median and weighted average of the quoted prices of the basic endowment insurance fund (hereinafter referred to as “pension”), the enterprise annuity fund established in accordance with the measures for the administration of enterprise annuity fund (hereinafter referred to as “enterprise annuity fund”) and the insurance fund (hereinafter referred to as “insurance fund”) in accordance with the measures for the administration of the use of insurance funds.

According to the industry classification guidelines for listed companies (revised in 2012) issued by the CSRC, the industry to which the shares belong is automobile manufacturing industry, and the industry code is “C36”. As of January 27, 2022 (T-4), the average static P / E ratio of the industry in the latest month released by China Securities Index Co., Ltd. was 33.07 times.

As of January 27, 2022 (T-4), the valuation levels of comparable listed companies are as follows:

Non-static closing price of shares before 2020 (eps-2020) / non-static price deduction ratio of shares after 2020 (eps-2020) (pre-2020 closing price of shares before 2020-4 yuan) / non-static price deduction ratio of shares after 2020)

Sichuan Chuanhuan Technology Co.Ltd(300547) 300547. SZ 0.52 0.48 13.90 26.73 29.19

Deduction in 2020 deduction in 2020 T-4 day stock corresponding static market corresponding static

Securities abbreviation securities code non former EPS non post EPS closing price (yuan earnings ratio – ex earnings ratio – ex earnings ratio – ex earnings ratio)

(yuan / share) (yuan / share) / share) (2020)

Tianjin Pengling Group Co.Ltd(300375) 300375. SZ -0.10 -0.36 3.85 -39.83 -10.60

Changzhou Tenglong Auto Parts Co.Ltd(603158) 603158. SH 0.44 0.40 14.50 32.62 36.11

Anhui Zhongding Sealing Parts Co.Ltd(000887) 000887. SZ 0.41 0.24 21.01 51.67 86.37

Ningbo Tip Rubber Technology Co.Ltd(605255) 605255. SH 0.47 0.42 14.76 31.58 35.48

Average 35.65 46.79

Data source: wind information, data as of January 27, 2022 (T-4).

Note 1: if there is mantissa difference in the calculation of P / E ratio, it is caused by rounding;

Note 2: EPS before / after deduction of non recurring profit and loss in 2020 = net profit attributable to the parent before / after deduction of non recurring profit and loss in 2020 / total share capital on T-4 day;

Note 3: negative value is excluded when calculating the average value of P / E ratio;

Note 4: among the comparable companies disclosed in the prospectus, tracelink shares have not been listed, so they are not included in the valuation comparison of comparable companies. The issuance price of 40.25 yuan / share corresponds to the lower diluted P / E ratio of the issuer before and after deducting non recurring profits and losses in 2020, which is 29.99 times lower than the average static P / E ratio of the industry in the latest month published by China Securities Index Co., Ltd. and lower than the average static P / E ratio of comparable companies after deducting non recurring profits and losses in 2020, However, there is still a risk that the decline of the issuer’s share price will bring losses to investors in the future.

There is a risk that the net asset scale will increase significantly due to the acquisition of raised funds, which will have an important impact on the issuer’s production and operation mode, operation management and risk control ability, financial status, profitability and long-term interests of shareholders. The issuer and the co lead underwriter remind investors to pay attention to investment risks, carefully study and judge the rationality of issuance pricing, and make investment decisions rationally.

The company reminds investors to pay attention to the investment risks in the initial stage of IPO (hereinafter referred to as “new shares”), and investors should fully understand the risks and rationally participate in the trading of new shares.

Specifically, the risks at the initial stage of IPO of the company include but are not limited to the following:

(I) relaxation of price limit

The competitive trading of GEM stocks is subject to a wide range of rise and fall limits. For stocks that are IPO and listed on the gem, there is no rise and fall limit in the first five trading days after listing, and then the rise and fall limit is 20%. On the first day of the listing of new shares on the main board of Shenzhen Stock Exchange, the increase limit was 44%, the decrease limit ratio was 36%, and the increase and decrease limit was 10% from the next trading day. The gem further relaxed the limit on the rise and fall range at the initial stage of stock listing, improving the trading risk.

(II) a small number of tradable shares

After this issuance, the total share capital of the company is 90000000 shares, of which 21337494 shares are tradable without restrictions, accounting for 23.71% of the total share capital after issuance. At the initial stage of listing, the number of circulating shares is small, and there is a risk of insufficient liquidity.

(III) the shares can be used as the subject matter of margin trading on the first day of listing

The stock can be used as the subject matter of margin trading on the first day of listing, which may produce certain price fluctuation risk, market risk, margin increase risk and liquidity risk. Price fluctuation risk refers to that margin trading will aggravate the price fluctuation of the underlying stock; Market risk refers to that when investors use stocks as collateral for financing, they need to bear not only the risks caused by the change of the original stock price, but also the risks caused by the change of the stock price of new investment, and pay the corresponding interest; Margin call risk means that investors need to monitor the level of guarantee ratio in the whole process of trading to ensure that it is not lower than the maintenance margin ratio required by margin trading; Liquidity risk refers to that when the price of the underlying stock fluctuates violently, the financed purchase of securities or the repayment of securities, the sale of securities or the repayment of securities may be blocked, resulting in greater liquidity risk. 3、 Special risk tips

The company reminds investors to carefully read the chapter of “section IV Risk Factors” in the prospectus of the company, and especially reminds investors to pay attention to the following risks in the “risk factors”: (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, for example, the price of raw materials fluctuates greatly due to the influence of external factors such as macroeconomic, political environment, exchange rate fluctuation and international oil price, which may have a negative impact on the company’s operating performance.

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

Automobile industry is one of the pillar industries in China, including auto parts

- Advertisment -