Qianhe Condiment And Food Co.Ltd(603027)
Feasibility analysis report on the use of funds raised by non-public offering of A-Shares in 2022 I. use plan of funds raised this time
Qianhe Condiment And Food Co.Ltd(603027) (hereinafter referred to as “the company”) the total amount of funds raised in this non-public offering is not less than 500 million yuan (including this amount) and not more than 80 million yuan (including this amount). The net amount of funds raised after deducting relevant issuance expenses will be used for the following items:
No. total investment of the project (10000 yuan) proposed investment of raised funds (10000 yuan)
1. Intelligent seasoning manufacturing project with an annual output of 600000 tons 126007.60 80000.00
Total 126007.60 80000.00
On February 23, 2022, the fifth meeting of the Fourth Board of directors of the company deliberated and adopted the proposal on the company’s plan for non-public development and issuance of A-Shares in 2022. Before the meeting of the board of directors, 295.0522 million yuan has been invested in the “intelligent manufacturing project of seasoning with an annual output of 600000 tons”. The raised funds to be invested in this issuance do not include the funds invested in this project before the meeting of the board of directors.
If the actual raised funds after deducting the issuance expenses are less than the planned investment amount of the raised funds of the above projects, the insufficient part of the raised funds shall be raised by the company itself. Before the funds raised in this offering are in place, the company will invest in advance with self raised funds according to the actual progress of the investment projects with raised funds, and replace them after the raised funds are in place. Within the scope permitted by relevant laws and regulations and authorized by the resolution of the general meeting of shareholders, the board of directors has the right to adjust or determine the specific arrangements such as the investment projects of the raised funds and the required amount. 2、 Necessity and feasibility of using the raised funds
(I) necessity of raising funds
1. It is beneficial for the company to break through the production capacity limit, fully meet the rapid growth market demand and improve the market competitiveness
With the improvement of living standards and the change of consumption concept, condiment has become a necessity for residents’ daily life and a necessary raw material for food industry and catering industry. Benefiting from the upgrading of product quality, the improvement of marketing network and the improvement of brand strength, the company’s business has grown rapidly. In recent years, the operating income of condiments has maintained a high growth rate. Soy sauce, as the company’s main product, accounts for a high proportion of the main business income. The company’s soy sauce products are positioned as high-quality, adopting high salt dilute process and new brewing with ancient method. The fermentation time is no less than 180 days (some high-end products exceed 400 days). The soy sauce produced has strong flavor, rich amino acid content and excellent taste. However, the long project construction time and product fermentation cycle affect the release of production capacity. The contradiction between the strong market demand for high-quality, healthy and delicious products and the insufficient production and supply capacity of enterprises will restrict the further development and growth of enterprises. Therefore, the company must plan the layout in advance and implement capacity expansion to provide strong support for the company’s sustained and rapid growth and ensure the realization of strategic objectives.
Through the construction of the project invested by the raised funds, the company will expand its production plant, equip it with intelligent production equipment, improve the company’s condiment production level and strengthen its quality control ability. After the completion of the project, the company’s product supply capacity will be greatly improved, which is conducive to further improving the company’s market competitiveness.
2. Optimize the company’s product structure and cultivate new value growth points
Cooking wine can increase freshness and remove fishiness. With people’s continuous pursuit of quality life, cooking wine is more and more widely used in cooking, and the market demand is growing rapidly. The company’s cooking wine has good effect of removing fishiness and freshness, is favored by the majority of consumers, and the product growth rate is obvious. However, at present, the company’s cooking wine production capacity is small, which is difficult to meet the fast-growing cooking wine market demand. In order to enrich the company’s product categories, meet, create and lead the needs of consumers, and give full play to the company’s advantages in product R & D, process and technology of cooking wine, the company urgently needs to expand the production capacity of cooking wine, comply with the development trend of cooking wine market, improve the comprehensive competitiveness of condiments, and bring new value growth points to the company.
3. Realize economies of scale and enhance comprehensive competitiveness
After the expansion of the project, the company’s condiment production capacity will be greatly increased. The expansion of the scale can enhance the company’s voice and bargaining power in the purchase of raw materials, and stabilize the supply and cost of raw materials; At the same time, the advanced equipment equipped for the project will further improve the utilization rate of raw materials and promote synergy. Large scale production will also reduce the R & D and production costs of unit products, strengthen resource integration and improve the overall operation and profitability.
(II) feasibility of the raised funds
1. Comply with industry development trends and policy requirements
With the upgrading of consumption, people’s eating habits have gradually changed from the pursuit of “full” to the pursuit of “good eating” and “healthy eating”. The requirements for dietary taste and food safety have also been continuously improved, which drives the increasingly professional division of labor in the condiment industry, the more refined market positioning of products and the continuous improvement of product quality. The company focuses on brewing high-quality healthy condiments to meet, create and lead the healthy and delicious needs of consumers. While improving the brewing scale of the company, the project pays attention to improving the brewing process, so that more healthy and delicious high-quality products can be put into the market, which meets the market demand, industry development trend and policy requirements.
2. In line with the company’s market development strategy
The company is in the rapid development stage of continuously exploring the national market. The product reputation and popularity are continuously improved, which has won the recognition of the majority of consumers. The company will further strengthen market development, enhance brand tension and promote leapfrog development. The project will provide capacity support for the company’s market development and ensure the realization of the company’s strategic objectives.
3. The company has the technical strength of project construction
Through more than 20 years of accumulation and technological innovation, the company has mastered a number of core technologies and obtained a number of patents. The company has established a R & D center with perfect organizational structure, rigorous technical management, accurate R & D direction and high-end instrument and facility configuration, with profound brewing R & D technology. While adhering to independent innovation, the company also attaches great importance to technical cooperation with external scientific research institutions to continuously improve the technical level. The company will apply the technology accumulated for a long time to the construction of this raised investment project to further improve product quality and enrich product varieties. The company’s strong technical strength will provide technical support for the implementation of the project.
In addition, the company has successively carried out the investment and construction of “100000 tons per year brewing soy sauce and vinegar production line project” and “250000 tons per year brewing soy sauce and vinegar production line expansion project”, which has not only accumulated rich construction experience, but also gathered a group of project implementation talents who understand technology and dare to create, which is conducive to ensuring the smooth progress of the project. 3、 Overview of the project invested by the raised funds
(I) basic information of the project
In order to better meet the growing market demand, solve the bottleneck of insufficient production capacity and optimize the company’s product structure, the company invested in the “600000 ton annual condiment intelligent manufacturing project” in minjiadu, Chengnan, Dongpo District, Meishan City, Sichuan Province. After the completion of the project, the annual production capacity of 500000 tons of brewing soy sauce and 100000 tons of cooking wine will be added.
(II) project construction investment
The total investment of the project is 1260.076 million yuan, and it is planned to use the raised funds to invest 80 million yuan.
(III) project site selection
The construction site of the project is minjiadu, south of the city, Dongpo District, Meishan City, Sichuan Province.
(IV) project implementation subject
The project is implemented by the parent company Qianhe Condiment And Food Co.Ltd(603027) .
(V) project filing, land use and environmental protection
1. Project filing and environmental impact assessment
The project has been filed with the economic and Information Bureau of Dongpo District, Meishan City, Sichuan Province on December 2, 2020, and has obtained the filing form of Sichuan technological transformation investment project (Chuan Zi tou Bei [2020-511402-14-03-522569] jxqb-0184).
On December 30, 2020, the project has obtained the reply on the environmental impact report form of Qianhe Condiment And Food Co.Ltd(603027) 600000 T / a condiment intelligent manufacturing project issued by Dongpo Ecological Environment Bureau of Meishan City, Sichuan Province (medh [2020] No. 78).
2. Project land
The project is implemented in Meishan City, Sichuan Province. The company has obtained the state-owned construction land use right certificate of the project land (real property right certificate No.: 2020 Dongpo District real property right No. 0003695, 2020 Dongpo District real property right No. 0003696 and 2021 Meishan City real property right No. 0012829).
(VI) economic benefits of the project
When the project is completed and fully completed, it can realize an annual operating income of 3313.444 million yuan and an annual net profit of 633.5489 million yuan. 4、 The impact of this issuance on the company’s operation, management and financial status
(I) impact of this issuance on the company’s operation and management
After deducting the issuance expenses, the funds raised by the company’s non-public offering are intended to be used for the “intelligent manufacturing project of seasoning with an annual output of 600000 tons”. The investment project of the raised funds focuses on the company’s main business, conforms to the company’s overall strategic development direction and relevant national industrial policies in the future, and plays a positive role in the company’s future development strategy. The construction of raised investment projects is conducive to expanding the production capacity of the company’s main products, expanding the company’s business scale, enhancing the company’s market influence in major regions, consolidating and improving the company’s industry position, enhancing the market influence, and laying a solid foundation for the company’s sustainable development.
(II) impact of this issuance on the company’s financial position
The project invested by the raised funds has good market development prospects and economic benefits. After the project is completed and put into operation, the production capacity of the company’s main products will be greatly improved, so as to further improve the main business income and net profit and improve the profitability of the company. However, after the funds raised in this issuance are in place, as it will take a certain time for the completion and production of the raised investment project to produce benefits, the financial indicators such as earnings per share and weighted average return on net assets may be affected to a certain extent in the short term. In addition, after this issuance, the company’s total assets and net assets will increase, and the financial structure will be more optimized, which is conducive to enhancing the stability of the company’s asset structure and anti risk ability. 5、 Conclusion on the feasibility of using the raised funds from this non-public offering
In conclusion, the board of Directors believes that the use plan of the funds raised by the company’s non-public offering is in line with the company’s business development plan in the future, as well as relevant policies, laws and regulations, and is necessary and feasible. The availability and use of the raised funds will help to improve the supply capacity of the company’s products, enhance the company’s overall strength and profitability, and enhance the company’s sustainable development ability, which is in line with the interests of the company and all shareholders.
Qianhe Condiment And Food Co.Ltd(603027) board of directors February 23, 2022
