Tips on investment risk of science and Innovation Board
Statement: after this stock issuance, it is planned to be listed on the science and innovation board market, which has high investment risk. Kechuang board company has the characteristics of large R & D investment, high operation risk, unstable performance and high delisting risk. Investors are facing greater market risk. Investors should fully understand the investment risks of the science and innovation board market and the risk factors disclosed by the company, and make investment decisions prudently. Shanghai serum Bio Technology Co., Ltd
No. 1288, Huaqing Road, Qingpu District, Shanghai
Initial public offering and listing on the science and Innovation Board
Letter of intent
Sponsor (lead underwriter)
15 / F, block a, Zhaotai International Center, 10 Chaoyangmen South Street, Chaoyang District, Beijing
Issuer 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 the prospectus and other information disclosure materials are free from false records, misleading statements or major omissions, and bear individual and joint legal liabilities for their authenticity, accuracy and completeness.
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 individual and joint legal liabilities for its authenticity, accuracy and completeness. The person in charge of the company, the person in charge of accounting and the person in charge of the accounting institution 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.
Overview of this offering
Type of shares issued: domestic listed RMB common shares (A shares)
The number of shares in this public offering is 27.06 million. The number of shares in this public offering of the company accounts for 25% of the total share capital after issuance. This issuance is A-share and does not involve the public offering of shares by shareholders.
The par value of each share is RMB 1.00
The issue price per share is RMB [] yuan / share
Expected issue date: February 28, 2022
Stock exchanges and sectors to be listed Shanghai Stock Exchange Kechuang board
The total share capital after issuance is 108.22 million shares
Recommendation Agency (lead underwriter) Founder Securities Co.Ltd(601901) underwriting recommendation Co., Ltd
Signing date of the prospectus: February 18, 2022
Tips on major issues
The company reminds investors to carefully read the full text of this prospectus and pay special attention to the following important matters. In addition to important matters, the company specially reminds investors to carefully read all the contents of the “risk factors” section of this prospectus. 1、 The antivenom market is a highly segmented market with low recognition, and the issuer’s products do not form a dominant position in the field of snake injury treatment
As a neglected disease, snakebite has caused a significant health burden all over the world. If snakebite is not treated in time with Antivenom serum, the death and disability rate will increase significantly. In June 2017, the World Health Organization officially listed snake bite as a neglected tropical disease with the highest priority. Before the 2018 consensus on snakebite was issued, China had not yet formed a consensus or common practice on the treatment of snakebite, and there were still deficiencies in the knowledge publicity of the necessity of using antivenom serum for first aid of snakebite. There were still insufficient understanding of the importance of using antivenom serum for first aid of snakebite in many regions, resulting in differences in the treatment methods adopted by doctors in different regions, In areas where the promotion of the company is insufficient and the product coverage is insufficient, patients with snake injury are still treated by traditional Chinese medicine. In addition, some medical institutions actually use traditional Chinese medicine to treat snake bite in clinical practice. At present, the awareness of antivenom serum is still low in some areas, which has a certain adverse impact on the sales of the company’s products.
Therefore, although the World Health Organization and the snake injury consensus point out that antivenom is the only drug with special effects for the treatment of snake bite poisoning, and the issuer’s antivenom is also an exclusive product in China, antivenom is not the only drug in the field of snake injury treatment in China at this stage, and the issuer’s antivenom products have not formed a dominant market position at present. 2、 The market share of horse broken immunoglobulin series products is low
Tetanus passive immune preparations include tetanus antitoxin (TAT), equine tetanus immunoglobulin (f (ab ‘) 2) and tetanus human immunoglobulin (htig), which compete with each other.
Compared with tetanus antitoxin (TAT) and tetanus human immunoglobulin (htig), the company’s horse tetanus immunoglobulin products have a late listing time and a short market cultivation time. At present, the market recognition is relatively low, and the company’s horse tetanus immunoglobulin series products have a low share in China’s tetanus passive immune agent market at this stage. 3、 The company’s income scale is small at this stage
In each period of the reporting period, the company’s operating revenue was 144.3309 million yuan, 188.0971 million yuan, 185.5628 million yuan and 95.9197 million yuan respectively. The revenue in 2019 increased by 30.32% compared with that in 2018. In 2020, due to the impact of covid-19 pneumonia epidemic, the company’s revenue of equine tetanus immunoglobulin products focusing on the prevention and treatment of tetanus in traumatic patients decreased compared with that in 2019, The revenue of antivenom series products increased slightly, and the operating revenue decreased slightly in 2020.
Compared with the listed Biopharmaceutical Enterprises in the same industry, the company’s income scale is small at this stage. The rapid development of the company is restricted by the existing scale and is at a disadvantage in R & D investment, capacity expansion and financing channels. 4、 The founder investment of the issuer’s shareholder is related to the sponsor
Founder investment is a wholly-owned subsidiary of Founder Securities Co.Ltd(601901) (601901. Sh, securities abbreviation: Founder Securities Co.Ltd(601901) ), holding 2.7107% of the shares of the issuer before this issuance; Founder underwriting sponsor is also a wholly-owned subsidiary of Founder Securities Co.Ltd(601901) . The founder investment of the issuer’s shareholder is related to the sponsor. Although both founder investment and founder underwriting sponsor are wholly-owned subsidiaries of Founder Securities Co.Ltd(601901) , they are independent legal persons and are strictly supervised by the securities regulatory authority. They are independent and effectively isolated from each other in terms of personnel, institutions, assets, operation and management, business operation, office space, etc. Five, the impact of New Coronavirus pneumonia epidemic on the company’s operation
In early 2020, the outbreak of New Coronavirus pneumonia broke out outside China. Traffic control, reduction of staff aggregation and delay in resumption were introduced in various places, which had some adverse effects on production and operation activities of raw materials, such as purchasing, R & D and production, product transportation and sales, and clinical trials. Meanwhile, during the period of covid-19 pneumonia epidemic prevention and control, the main socio-economic activities and construction projects once stagnated, resulting in the reduction of residents’ outdoor activities and the significant reduction of hospital visits, which had a great impact on the company’s horse broken immunoglobulin products focusing on the prevention and treatment of trauma. In 2020, the company’s sales revenue of horse broken immunoglobulin products decreased by 3.4289 million yuan compared with 2019; Meanwhile, affected by the reduction of residents’ outdoor activities caused by covid-19 pneumonia, the sales revenue of the company’s antivenom serum in 2020 increased by only 0.94% compared with 2019.
As the market of the company’s products is greatly affected by the factors of personnel going out, and the company’s products are one-time emergency rescue drugs, although the epidemic situation in China is gradually controlled in the second half of 2020 and the demand of the terminal market is basically restored, the decline in the clinical use of the company’s products caused by the epidemic situation in the early stage cannot be made up in the future. Therefore, the covid-19 pneumonia epidemic has led to a slight decrease in the company’s operating revenue in 2020 and failed to achieve the expected growth target. 6、 The company specially reminds investors to pay attention to the following risks in the “risk factors”
The company specially reminds investors to fully understand the investment risks of the science and innovation board market and the risk factors disclosed in Section IV of this prospectus, and make investment decisions prudently. The issuer specially reminds investors to pay attention to the following risk factors:
(I) risk of relatively single product structure of the company
At present, the company’s main income and profit come from the production and sales of anti snake venom serum series products and horse tetanus immunoglobulin. The company’s product structure is relatively single. In each period of the reporting period, the company’s operating revenue was 144.3309 million yuan, 188.0971 million yuan, 185.5628 million yuan and 95.9197 million yuan respectively. The revenue mainly came from “anti snake venom serum series products” and “horse broken immunoglobulin”, which accounted for more than 98% of the operating revenue.
The company’s existing product categories are relatively small. In the future, if the sales scale of antivenom serum products and horse break immunoglobulin changes significantly or the market price decreases, and the company’s new products cannot be successfully launched, it will have an adverse impact on the company’s operation.
(II) price reduction risk caused by product price control or competitive product competition
In May 2015, the national development and Reform Commission, together with the national health and Family Planning Commission, the Ministry of human resources and social security and other departments, issued the notice on printing and distributing opinions on promoting drug price reform, which has abolished the price control measures of most drugs since June 1, 2015. Before that, the price of the company’s antivenom serum products had not been adjusted for many years. From 2016 to 2018, the company adjusted the price of antivenom serum products, with a large increase.
From 2017 to January to June 2021, taking the anti Agkistrodon halys venom serum products with the highest sales proportion as an example, the average sales prices were 574.68 yuan / piece, 945.17 yuan / piece, 993.08 yuan / piece, 988.62 yuan / piece and 988.55 yuan / piece respectively. The increase of sales price of antivenom serum products is one of the important factors for the growth of the company’s performance.
In the future, if the national or local authorities issue the price limit policy for the company’s antivenom products, resulting in the reduction of the sales price of the products, or the competitive price reduction due to the emergence of competitive products of new participants, the company will face the risk of slowing down the performance growth or declining the profitability.
(III) risk of the impact of the provision for inventory falling price on the issuer’s future performance
At the end of each reporting period, the net book value of the company’s inventory was 53.7442 million yuan, 53.8951 million yuan, 49.7202 million yuan and 51.2749 million yuan respectively, accounting for 18.47%, 14.76%, 15.93% and 13.99% of the total assets at the end of the reporting period, respectively. The amount of inventory was large. At the end of each reporting period, the amount of the company’s inventory falling price reserves was 13.9203 million yuan, 14.0587 million yuan, 11.605 million yuan and 12.6242 million yuan respectively, accounting for 20.57%, 20.69%, 18.92% and 19.76% of the inventory book balance respectively.
The company’s inventory is mainly composed of self-made semi-finished products, namely horse plasma. In order to maintain the normal supply of qualified plasma and meet the production and operation guarantee needs, the company has a large reserve of horse plasma during the reporting period. The net book value at the end of each reporting period is 32.2091 million yuan, 31.0882 million yuan, 26.944 million yuan and 25.383 million yuan, accounting for 59.93%, 57.68% and 57.68% of the net inventory respectively 54.19% and 49.50%. According to the characteristics of different self-made semi-finished products, the company has formulated a reasonable inventory depreciation provision policy during the reporting period.
The company will continue to implement the accounting policies in the reporting period in the future. If the company’s inventory balance continues to grow, especially the self-made semi-finished products, if the stock age is prolonged due to the decline of the company’s use efficiency and other reasons, there may be inventory backlog, damage and increase in impairment, which will have an adverse impact on the company’s operating performance.
(IV) impairment risk of long-term equity investment
In April 2017, Shanghai Tasly Pharmaceutical Group Co.Ltd(600535) acquired 60% of the equity of Saiyuan biology through equity transfer and capital increase from the company, and the company’s shareholding in Saiyuan biology decreased to 40%. As of April 30, 2017, the company has lost its control over Saiyuan biology, and will no longer include it in the scope of consolidation since May 2017, and calculate the investment in Saiyuan biology through the equity method. As of June 30, 2021, the company holds 22% equity of Saiyuan biology, and the book value of long-term equity investment is RMB 21.4216 million.
The main business of Saiyuan biology is the development of biological drugs in the field of tumor immunity. The main products are still in the stage of clinical trial, and have not yet carried out commercial production and sales business, which is in a state of continuous loss. From 2018 to January to June 2021, the company’s investment income of Saiyuan biology calculated according to the equity method was -8544600 yuan, – 5985400 yuan, – 9200400 yuan and -1091800 yuan, which had a great impact on the company’s profits. If Saiyuan biology continued to invest in R & D and failed to realize the commercialization of products under research,
