Zhejiang HENGWEI Battery Co., Ltd
Initial public offering and listing on GEM
Special announcement on investment risk
Sponsor (lead underwriter): China Merchants Securities Co.Ltd(600999)
The application of Zhejiang HENGWEI Battery Co., Ltd. (hereinafter referred to as “Zhejiang HENGWEI”, “issuer” or “company”) for initial public offering of no more than 25333400 ordinary shares (A shares) and listing on the gem (hereinafter referred to as “this offering”) has been examined and approved by the GEM Listing Committee of Shenzhen Stock Exchange (hereinafter referred to as “Shenzhen Stock Exchange”), It has been registered by China Securities Regulatory Commission (zjxk [2022] No. 52). After negotiation between the issuer and the sponsor (lead underwriter) China Merchants Securities Co.Ltd(600999) (hereinafter referred to as ” China Merchants Securities Co.Ltd(600999) ” or “sponsor (lead underwriter)”), the number of shares issued this time is 25333400, all of which are new shares issued to the public. The issuer’s shareholders shall not transfer their old shares. The issuance will be implemented through the trading system of Shenzhen Stock Exchange (hereinafter referred to as “Shenzhen Stock Exchange”) and the offline issuance electronic platform on February 28, 2022 (t day). The shares issued this time are planned to be listed on the gem of Shenzhen Stock Exchange.
The issuer and the recommendation institution (lead underwriter) specially draw investors’ attention to the following contents:
1. This issuance is finally carried out by a combination of offline inquiry and placement to qualified investors (hereinafter referred to as “offline issuance”) and online pricing issuance to social public investors holding non restricted A-share shares in Shenzhen market and the market value of non restricted Depositary Receipts (hereinafter referred to as “online issuance”).
This offline issuance is conducted through the offline issuance electronic platform of Shenzhen Stock Exchange; The online issuance is carried out through the trading system of Shenzhen Stock Exchange by means of subscription and pricing according to market value.
2. After the preliminary inquiry, the issuer and the sponsor (lead underwriter) shall, in accordance with the exclusion rules agreed in the announcement on preliminary inquiry and promotion of initial public offering of shares by Zhejiang HENGWEI Battery Co., Ltd. and listing on the gem (hereinafter referred to as the “announcement on preliminary inquiry and promotion”), after excluding the preliminary inquiry results of investors who do not meet the requirements, By consensus, all placing objects whose proposed purchase price is higher than 44.41 yuan / share (excluding) will be eliminated; The proposed subscription price is 44.41 yuan / share, and all placing objects with the proposed subscription quantity less than 8.5 million shares (excluding) are eliminated; The proposed subscription price is 44.41 yuan / share. Among the placing objects with the proposed subscription quantity of 8.5 million shares and the subscription time is 14:38:39:894 on February 23, 2022, 76 placing objects are eliminated from the back to the front according to the entrustment serial number automatically generated by the offline issuance electronic platform. A total of 89 placing objects were excluded in the above process, and the total number of shares to be purchased was 709.2 million, accounting for 1.0076% of the total number of 70383 million shares to be purchased after excluding invalid quotations in this preliminary inquiry. The excluded part shall not participate in offline and online subscription.
3. Based on the preliminary inquiry results, the issuer and the recommendation institution (lead underwriter) negotiated and determined the offering price of 33.98 yuan / share by comprehensively considering the fundamentals of the issuer, the number of shares in this public offering, the industry of the issuer, the valuation level of comparable listed companies, market conditions, the demand for raised funds and underwriting risks, Offline issuance will no longer conduct cumulative bidding inquiry.
Investors are requested to make online and offline subscription at this price on February 28, 2022 (t day), and there is no need to pay the subscription fund at the time of subscription. The offline issuance and Subscription Date and online subscription date are the same as February 28, 2022 (t day). Among them, the offline subscription time is 9:30-15:00, and the online subscription time is 9:15-11:30 and 13:00-15:00.
4. The issuing price of this offering shall not exceed the median and weighted average of the quotations of offline investors after excluding the highest quotation, as well as the Securities Investment Fund (hereinafter referred to as “public fund”), the National Social Security Fund (hereinafter referred to as “social security fund”), the basic old-age insurance fund (hereinafter referred to as “pension”) established through public offering after excluding the highest quotation The enterprise annuity fund (hereinafter referred to as “enterprise annuity fund”) established in accordance with the measures for the administration of 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, whichever is lower, so the relevant subsidiaries of the sponsor need not participate in this strategic placement.
This offering does not arrange the strategic placement to the senior management and core employees of the issuer, asset management plans and other external investors. The initial strategic allotment of this issuance was 1266670 shares, accounting for 5.00% of this issuance. Finally, this issuance will not be targeted to strategic investors. The difference between the initial strategic placement and the final strategic placement of 1266670 shares will be transferred back to offline issuance.
This issuance is finally carried out by a combination of offline inquiry and placement to qualified investors (hereinafter referred to as “offline issuance”) and online pricing issuance to social public investors holding non restricted A-share shares or non restricted depositary receipts in Shenzhen market (hereinafter referred to as “online issuance”).
5. The issue price is 33.98 yuan / share, and the price earnings ratio corresponding to this price is:
(1) 26.94 times (earnings per share is calculated by dividing the net profit attributable to shareholders of the parent company before deducting non recurring profits and losses audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital before this issuance);
(2) 28.65 times (earnings per share is calculated by dividing the net profit attributable to shareholders of the parent company after deducting non recurring profits and losses audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital before the issuance);
(3) 35.93 times (earnings per share is calculated by dividing the net profit attributable to shareholders of the parent company before deducting non recurring profits and losses audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital after this issuance);
(4) 38.20 times (earnings per share is calculated by dividing the net profit attributable to shareholders of the parent company after deducting non recurring profits and losses audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital after this issuance).
6. The issue price is 33.98 yuan / share. Investors are requested to judge the rationality of the issue price according to the following conditions.
(1) According to the industry classification guidelines for listed companies (revised in 2012) issued by the CSRC, the industry of the company is electrical machinery and equipment manufacturing (C38). As of February 23, 2022 (T-3), the average static P / E ratio of electrical machinery and equipment manufacturing (C38) released by China Securities Index Co., Ltd. in the latest month is 44.47 times.
(2) Zhejiang HENGWEI Battery Co., Ltd. disclosed the valuation level of comparable listed companies in the letter of intent for initial public offering and listing on the gem (hereinafter referred to as the “letter of intent”) as follows:
The static City Securities corresponding to the static City corresponding to the T-3 day shares deducted in 2020 are referred to as EPS before the securities code (yuan / non post EPS ticket closing price earnings ratio – non pre earnings ratio – non post shares deducted) (yuan / share) (yuan / share) (2020) (2020)
Zhejiang Mustang Battery Co.Ltd(605378) 605378. SH 0.8869 0.7634 26.14 29.47 34.24
Changhong energy 836239 BJ 1.9919 1.9447 101.68 51.05 52.29
Liwang shares 831627 NQ 0.7578 0.7741 15.93 21.02 20.58
Yajin technology 830806 NQ 0.1167 0.1074 1.52 13.02 14.15
Arithmetic mean 40.26 43.27
Data source: wind, as of February 23, 2022 (T-3).
Note 1: there may be mantissa difference in the calculation of P / E ratio, which 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-3 day.
Note 3: among the comparable companies disclosed in the prospectus, Yajin Technology (830806. NQ) and liwang shares (831627. NQ) are listed on the new third board. As the new third board is quite different from the gem in terms of liquidity and valuation system, it is not included in the comparison of valuation levels of comparable companies.
The issuance price of 33.98 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 38.20 times, lower than the average static P / E ratio of the industry in the latest month released by China Securities Index Co., Ltd. on February 23, 2022 (T-3), and lower than the average static P / E ratio of comparable companies in the same industry in 2020, There is still a risk that the decline of the issuer’s share price will bring losses to investors in the future. The issuer and the recommendation institution (lead underwriter) remind investors to pay attention to investment risks, carefully study and judge the rationality of issuance pricing, and make investment decisions rationally.
(3) After the price of this offering is determined, 336 investors have submitted valid quotations for this offline offering, and the number of placement objects managed is 6894, accounting for 72.38% of the total number of all placement objects after excluding invalid quotations; The total number of valid proposed subscriptions is 48791.3 million shares, accounting for 69.32% of the total number of subscriptions after excluding invalid quotations, which is 2693.66 times of the initial offline issuance scale after strategic placement callback and before online and offline callback.
(4) Investors are reminded to pay attention to the difference between the offering price and the quotation of offline investors. For the quotation of offline investors, please refer to the same day published in Shanghai Securities News, China Securities News, securities times, securities daily and http://www.cn.info.com.cn Zhejiang HENGWEI Battery Co., Ltd. initial public offering and listing on the gem (hereinafter referred to as the “issuance announcement”).
(5) The fund-raising demand amount disclosed in the letter of intent of Zhejiang HENGWEI Battery Co., Ltd. for initial public offering and listing on the gem (hereinafter referred to as the “letter of intent”) is 433.4296 million yuan, the offering price is 33.98 yuan / share, and the corresponding financing scale is 860.8289 million yuan, which is higher than the above-mentioned fund-raising demand amount.
(6) This offering follows the principle of market-oriented pricing. In the preliminary inquiry stage, offline institutional investors quote based on the real subscription intention. The issuer and the sponsor (lead underwriter) comprehensively consider the effective subscription multiple, the issuer’s fundamentals and its industry, market conditions, the valuation level of Listed Companies in the same industry Determine the issue price through negotiation based on the demand for raised funds, underwriting risk and other factors. The offering price does not exceed the lower of the median and weighted average of the offline investors’ quotation after excluding the highest quotation, and the median and weighted average of the quotation of public funds, social security funds, pensions, enterprise annuity funds and insurance funds after excluding the highest quotation. If any investor participates in the subscription, it shall be deemed that it has accepted the issue price. If there is any objection to the issue pricing method and issue price, it is suggested not to participate in this issue.
(7) Investors should pay full attention to the risk factors contained in the marketization of pricing, know that the stock may fall below the issue price after listing, effectively improve risk awareness, strengthen the concept of value investment and avoid blind speculation. Regulators, issuers and sponsors (lead underwriters) cannot guarantee that the shares will not fall below the issue price after listing. 7. Based on the issuance price of 33.98 yuan / share and the number of new shares issued of 25333400 shares, the total amount of funds raised by the issuer is expected to be 860828900 yuan. After deducting the estimated issuance cost of about 104.6835 million yuan (excluding value-added tax), the net amount of funds raised is expected to be about 756145400 yuan. If there is a difference in the mantissa, it is caused by rounding. 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.
8. Among the stocks issued this time, the stocks issued online have no circulation restrictions and limited sales period. They can be circulated from the date when the stocks issued this time are listed on the gem of Shenzhen Stock Exchange.
The offline issuance part adopts the proportional sales restriction method, and the offline investors shall promise that the sales restriction period of 10% (rounded up) of the number of shares allocated to them is 6 months from the date of the issuer’s initial public offering and listing. That is, among the shares allocated to each placing object, 90% of the shares are sold indefinitely and can be circulated from the date when the issued shares are listed and traded on the Shenzhen Stock Exchange; The sales restriction period of 10% of the shares is 6 months, and the sales restriction period starts from the date when the issued shares are listed and traded on the Shenzhen Stock Exchange.
When offline investors participate in the preliminary inquiry and quotation and offline purchase, they do not need to fill in the arrangement of the restricted sale period for the placing objects under their management. Once the quotation is made, it is deemed to accept the arrangement of the online restricted sale period disclosed in this announcement.
9. Online investors shall independently express their purchase intention and shall not fully entrust securities companies to purchase new shares on their behalf.
10. Offline investors shall, in accordance with the announcement on the results of initial public offering of shares by Zhejiang HENGWEI Battery Co., Ltd. and initial placement of offline issuance listed on the gem, compare the final issue price with the initial placement before 16:00 on March 2 (T + 2) 2022
