Shanghai Liangxin Electrical Co.Ltd(002706)
And
Soochow Securities Co.Ltd(601555)
Reply to the letter on making preparations for the Shanghai Liangxin Electrical Co.Ltd(002706) non-public development bank stock issuance and examination committee meeting: sponsor (lead underwriter)
(registered address: No. 5, Xingyang street, Suzhou Industrial Park)
February, 2002
Shanghai Liangxin Electrical Co.Ltd(002706) and Soochow Securities Co.Ltd(601555)
Reply to the letter on making preparations for the meeting of Shanghai Liangxin Electrical Co.Ltd(002706) non public development bank stock issuance and examination committee
China Securities Regulatory Commission:
According to the letter on preparing for the meeting of Shanghai Liangxin Electrical Co.Ltd(002706) non-public development bank stock issuance and Examination Committee (hereinafter referred to as the “notification letter”) issued by your association on January 25, 2022, Shanghai Liangxin Electrical Co.Ltd(002706) (hereinafter referred to as ” Shanghai Liangxin Electrical Co.Ltd(002706) “, “company”, “issuer” or “applicant”) and the recommendation institution Soochow Securities Co.Ltd(601555) (hereinafter referred to as the “recommendation institution”) Guohao law firm (Shanghai) (hereinafter referred to as the “issuer’s lawyer”), Lixin Certified Public Accountants (special general partnership) (hereinafter referred to as the “accountant”) and other intermediaries have checked and implemented the issues involved in the notification letter one by one. Now the replies to the relevant opinions are reported as follows one by one for review. explain:
1. Unless otherwise specified, the abbreviation or interpretation involved in this reply is the same as that in the due diligence report; 2. In this reply, if the total is inconsistent with the listed value and, it is caused by rounding.
catalogue
Question 1 4 question 2 28 question 3 37 question 4 46 question 5 fifty-two
About margin. During the reporting period, the applicant paid at the beginning of the year, recovered before the end of the year and paid a large amount of deposit again at the beginning of the next year when cooperating with the real estate developer. At the end of September 2021, the balance of the deposit receivable of the company was 210.4077 million yuan, a significant increase year-on-year, mainly the deposit for real estate developers. The total amount of deposit with a single amount of more than 10 million yuan was 200 million yuan, including 100 million yuan for Qicai LianJian and 50 million yuan for Xuhui group. Since 2019, the cooperation between the applicant and the real estate developer paying the deposit has not reached the agreed cooperation scale. The comparable company Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) in the same industry listed by the applicant requires the other party to pay interest at an annual interest rate of 10% on the unrecoverable deposit.
Please further explain: (1) the annual details of the deposit provided by the applicant to the cooperative real estate developer during the reporting period, including specific real estate developer customers, corresponding sales, amount of deposit, proportion of deposit to sales, gross profit margin of sales and interest on deposit; (2) Whether the commercial rationality of the applicant’s provision of a high proportion of margin to real estate developers exceeds the normal purpose of ensuring commercial performance, and whether it is in line with the relevant macro-control policies of real estate enterprise financing; (3) In combination with the signing of the cooperation agreement with the real estate developer and the matching between the amount of the deposit and the scale of business cooperation, explain the agreement on the safety of the large amount of deposit paid, and whether the relevant deposit actually constitutes a loan to the real estate developer; (4) For similar products, whether there is a big difference between the gross profit margin of the applicant’s sales to real estate business customers and that of non real estate business customers, whether there is a situation of obtaining a higher gross profit margin from real estate business customers through margin, and whether it is a disguised financial investment; (5) Whether the standard for determining the amount of deposit paid to real estate developers is consistent with that of comparable companies in the same industry; (6) Whether the deposit of Qicai LianJian and Xuhui group will be returned as scheduled before December 25, 2021; (7) Combined with the real estate policy and the operation of the real estate developer who pays the deposit, explain whether the provision for bad debts according to the aging is cautious and whether the provision for bad debts is sufficient; Explain whether there is a situation of artificially evading the provision of bad debt reserves and the obligation of information disclosure in combination with the time of deposit revenue and expenditure and the credit of the counterparty; (8) Combined with the sales revenue of the customers who pay the deposit in the reporting period, this paper analyzes the rationality of paying the deposit to the real estate developer when the monetary capital is not sufficient, and whether the failure to collect the fund occupation fee damages the interests of the applicant and investors.
The recommendation institution and the applicant’s accountant shall explain the verification process and basis, and express clear verification opinions. reply:
(I) annual details of the deposit provided by the applicant to the cooperative real estate developer during the reporting period, including specific real estate developer customers, corresponding sales volume, amount of deposit, proportion of deposit to sales volume, gross profit margin of sales and interest on deposit
By the end of September 2021, Shanghai Liangxin Electrical Co.Ltd(002706) had a deposit balance of 205.258 million yuan to cooperative real estate developers, of which 200 million yuan was more than 10 million yuan, accounting for 97.44% of the ending balance, and the rest were mainly sporadic bid bonds and quality deposits.
During the reporting period, Shanghai Liangxin Electrical Co.Ltd(002706) provided the cooperative real estate developers with a deposit of more than 10 million yuan in the current year as follows:
Unit: 10000 yuan
2018
Customer Name: agreed annual sales of margin, actual sales of agreed cooperation amount / actual sales amount / gross sales margin amount, sales amount, margin amount, margin amount, interest rate
Qi Cai Lian Jian 2000.00 3000.00 4561.82 1.50 2.28 45.32%-
2019
Customer Name: guarantee deposit agreed annual sales actual sales agreed cooperation amount / actual sales volume / gross sales guarantee amount sales amount sales amount margin amount margin amount interest rate
Qi Cai Lian Jian 2000.00 3000.00 4418.73 1.50 2.21 46.42%-
2020
Customer Name: guarantee deposit agreed annual sales actual sales agreed cooperation amount / actual sales volume / gross sales guarantee amount sales amount sales amount margin amount margin amount interest rate
Qi Cai Lian Jian 5000.00 4783.59 1.00 0.96 45.16%-
Xuhui group 5000.00 8500.00 517.00 67 1.70 0.10 43.08% –
January September 2021
Customer Name: guarantee deposit agreed annual sales actual sales agreed cooperation amount / actual sales volume / gross sales guarantee amount sales amount sales amount margin amount margin amount interest rate
Qi Cai Lian Jian 10000.00 12857.16 2877.02 1.29 0.29 45.20%-
Xuhui group 5000.00 8500.00 830.00 21 1.70 0.17 38.87% –
Rongchuang real estate 3000.00 not agreed 180.00 05 not applicable 0.06 35.28%-
LAN guanghejun 1000.00 2000.00 100.00 61 2.00 0.10 27.93% –
Zhongliang real estate 1000.00 not agreed 128.00 43 not applicable 0.13 51.06%-
Note 1: the above sales are tax inclusive;
Note 2: the full name of “Qicai LianJian” is Ningbo Qicai LianJian building materials Co., Ltd., a subsidiary of A-share listed company Greenland Holdings Corporation Limited(600606) (600606. SH); Note 3: the full name of “Xuhui group” is Xuhui Group Co., Ltd., a subsidiary of Xuhui holding group (0884. HK), a Hong Kong listed company; Note 4: the full name of “rongchuang real estate” is rongchuang Real Estate Group Co., Ltd., a subsidiary of rongchuang China (1918. HK), a Hong Kong listed company; Note 5: the full name of “Lan Guang He Jun” is Sichuan LAN Guang He Jun Industrial Co., Ltd., a subsidiary of A-share listed company Sichuan Languang Development Co.Ltd(600466) (600466. SH); Note 6: the full name of “Zhongliang real estate” is Shanghai Zhongliang Real Estate Group Co., Ltd., which is a subsidiary of Zhongliang Holdings (2772. HK), a Hong Kong listed company.
In 2018, the company began to cooperate with Greenland Holdings Corporation Limited(600606) (600606. SH) subsidiary Qicai LianJian for the first time, and began to adopt the mode of deposit. In 2018, 2019 and 2020, the company basically or exceeded the predetermined objectives, and the cooperation mode has been verified.
In 2021, affected by the changing business environment of the real estate industry on the cooperation mode of upstream suppliers and the company’s successful experience in cooperation in the past, the company signed margin agreements with a number of real estate companies in order to deepen and expand the cooperation scale and category scope. However, affected by the macro-control of real estate and the three red lines and other policies, In 2021, the real estate industry as a whole was less than expected, resulting in lower cooperation amount than expected.
At the end of 2021, the company has recovered the due deposits of Qicai LianJian, Xuhui group and Zhongliang real estate. Based on the cooperation with the real estate developers paying the deposit in 2021 and the changes in the market situation of the real estate industry, the company plans to no longer cooperate with the real estate developers in the form of paying the deposit, and the company is discussing the follow-up cooperation scheme with the above real estate customers.
During the negotiation between the company and Qicai joint construction, the two sides did not reach an agreement on modifying the corresponding cooperation terms. On February 18, 2022, the company received a summons from the people’s Court of Pudong New Area of Shanghai, and Qi Cailian Jian filed a lawsuit to the court, requiring the company to pay liquidated damages of 7.7 million yuan and bear the litigation costs, preservation costs and guarantee costs of the case.
(II) the relevant information about the margin provided by the applicant to non real estate business customers and the proportion of margin provided by companies in the same industry to real estate business customers. Whether the commercial rationality of the high proportion of margin provided by the applicant to real estate business exceeds the normal purpose of ensuring commercial performance, and whether it is in line with the relevant macro-control policies of real estate enterprise financing
1. Shanghai Liangxin Electrical Co.Ltd(002706) provision of margin to non real estate business customers during the reporting period
During the reporting period 1, Shanghai Liangxin Electrical Co.Ltd(002706) provided security deposits to non real estate clients, mainly including bid security, performance security, etc. During the reporting period, except for the bidding deposits of 1.6 million yuan and 1.08 million yuan paid to Chongqing Electric Power Company of State Grid and Beijing Electric Power Company of State Grid, the single amount of other deposits was less than 1 million yuan. At the end of each reporting period, the company’s margin balance for non real estate customers was 2.02 million yuan, 1.59 million yuan, 2.35 million yuan and 3.09 million yuan respectively, with a small amount.
2. Proportion of margin provided by companies in the same industry to real estate developers’ customers
Comparable companies in the same industry of the company are Zhejiang Chint Electrics Co.Ltd(601877) (601877. SH) and Zhejiang Tengen Electrics Co.Ltd(605066) (605066. SH). Other receivables and other receivables – deposit of comparable companies at the end of 2018, 2019, 2020 and June 2021 are as follows:
Unit: 10000 yuan
End of June 2021 end of 2020 end of 2019 end of 2018
Chint other receivables 196261.59 173277.09 128922.68
