After this stock issue, it is planned to be listed on the gem, which has high investment risk. GEM companies have the characteristics of large investment in innovation, uncertainty about the success of the integration of new and old industries, still in the growth stage, high operation risk, unstable performance and high delisting risk. Investors are facing greater market risks. Investors should fully understand the investment risks of the gem and the risk factors disclosed by the company, and make investment decisions prudently.
Saiwei times Technology Co., Ltd
(1001, No. 6, Kangli City, shanglilang community, Nanwan street, Longgang District, Shenzhen)
Initial public offering and listing on GEM
Prospectus
(declaration draft)
The issuance application of the company still needs to go through the corresponding procedures of Shenzhen Stock Exchange and China Securities Regulatory Commission. This prospectus (declaration draft) has no legal effect on the issuance of shares and is only for pre disclosure. Investors shall take the officially announced prospectus as the basis for investment decisions.
Sponsor (lead underwriter)
Orient Securities Company Limited(600958) underwriting sponsor Co., Ltd
(24 / F, building 2, Oriental International Financial Plaza, 318 Zhongshan South Road, Shanghai)
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 of the issuer’s operation and income or the fluctuation of stock price after the issuance of shares according to law. The issuer and all directors, supervisors and senior managers promise that there are no false records, misleading statements or major omissions in the prospectus and other information disclosure materials, and bear corresponding legal liabilities.
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 corresponding legal liabilities.
The person in charge of the company, the person in charge of accounting and the person in charge of the accounting agency 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: RMB ordinary shares (A shares)
The number of shares issued shall not exceed 40.1 million, which does not involve the number of shares publicly offered by the original shareholders, and shall not be less than 10% of the total share capital of the company after this issuance.
The par value of each share is RMB 1.00
Issue price per share []
Expected issue date: mm / DD / yyyy
Stock exchange and gem of Shenzhen Stock Exchange to be listed
The total share capital after issuance shall not exceed 400.1 million shares
Sponsor (lead underwriter) Orient Securities Company Limited(600958) underwriting sponsor Co., Ltd
Signing date of prospectus: mm / DD / yyyy
Tips on major issues
The company specially reminds investors to carefully read the full text of this prospectus and pay special attention to the following major matters: I. special risk warning (I) the information system cannot timely respond to the risk of rapid changes in the cross-border e-commerce industry
The key for cross-border e-commerce enterprises to participate in market competition is to provide products close to fashion trends, speed up supply chain response and improve consumer purchase experience. Since its establishment, the company has always focused on the construction of the underlying it platform and the application of big data capabilities to achieve a comprehensive technology driven business model. The company has established a full link digital system running through product development and design, supply chain and sales operation to realize the comprehensive management of business information flow, real logistics and capital flow. At the same time, with strong technical R & D strength, the company also applies big data technologies such as genetic algorithm to product development and design, procurement, production, marketing and promotion. If there are significant changes in the reform trend of cross-border e-commerce industry in the future, and the company’s information system cannot be updated and iterated in time to meet the new industry development requirements, it may lead to the decline of the company’s core competitiveness. (II) risks of intensified Sino US trade frictions
During the reporting period, the company’s revenue mainly came from overseas markets, of which the United States was the main source of revenue, and the proportion of sales in the company’s main business revenue was 61.30%, 65.57%, 71.38% and 72.43% respectively. In recent years, the United States has a trend towards protectionism and domestic priority in terms of international trade strategy, import and export policies and market development measures, and has repeatedly announced the imposition of import tariffs on Chinese goods.
The United States has become an important sales destination for cross-border e-commerce enterprises because of its huge consumer market. Although the Sino US trade friction has not had a significant impact on the company’s performance during the reporting period, if the Sino US trade friction continues to escalate, it may lead to an increase in the import tariff cost of the company’s products in the United States, which will have an adverse impact on the company’s sales and gross profit. (III) risk of high concentration of Amazon platform
The company mainly relies on Amazon, wish, eBay, Walmart and other internationally renowned third-party e-commerce platforms for product sales. The sales revenue realized by the Issuer on Amazon platform is increasing year by year. In each period of the reporting period, the sales revenue realized by the Issuer on Amazon platform was 1355823000 yuan, 1967091700 yuan, 3681836200 yuan and 2447363700 yuan respectively, accounting for 60.50%, 68.33%, 70.12% and 84.23% of the main business revenue, respectively. In e-commerce B2C business, platform sellers such as issuers and third-party e-commerce platforms such as Amazon are interdependent and mutually beneficial to serve end consumers. Amazon is one of the world’s largest technology companies and one of the first companies to start e-commerce online.
Amazon is in the leading position in the cross-border e-commerce industry, with high popularity and market share. It is an ideal channel for cross-border sales of many sellers in China. The issuer carries out large-scale sales on Amazon platform and has a certain dependence on Amazon platform. Meanwhile, the issuer actively expands new sales channels through self operated websites and other means.
Amazon platform is the issuer’s largest third-party e-commerce platform and the main platform for the company’s “branding” operation. Since the company accounts for a relatively high proportion of sales on such third-party e-commerce platforms, if the platform party reduces its market share due to market competition, changes in business strategy or changes in the local national political and economic environment, and the company fails to adjust its sales channel strategy in time, it may have a negative impact on sales. In addition, if the issuer cannot maintain a good cooperative relationship with Amazon platform in the future, or there are significant adverse changes in the sales policy and charging standard of Amazon platform, or the issuer’s operation on Amazon platform is less than expected and fails to expand other effective sales channels in time, it will have an adverse impact on the company’s operating performance. (IV) risk of inventory management
At the end of each reporting period, the book value of the company’s inventory was 395.54 million yuan, 466.3681 million yuan, 851.3435 million yuan and 923.051 million yuan respectively. During the reporting period, the company’s inventory turnover rate was 1.72 times / year, 2.26 times / year, 2.65 times / year and 2.40 times / year respectively. Since 2018, the company’s inventory turnover rate has continued to grow. However, if the company’s products cannot keep up with the changes of market demand in the future, resulting in poor inventory turnover and decline in turnover rate, there may be a risk of inventory falling price.
In addition to the inventory stored in FBA warehouse, if the company’s inventory stored in overseas warehouse, China warehouse or other inventory in transit is mismanaged, loss or damage will result in direct loss of the company’s property, which will have an adverse impact on the operating performance. (V) tax supervision risk
During the reporting period, the company’s income mainly came from abroad, especially in North America and Europe, where it was obliged to declare and pay indirect taxes. Since 2018, the company’s main sales countries, the United States, Germany, the United Kingdom, as well as France and Canada, have successively introduced laws and regulations on indirect tax collection for cross-border e-commerce. Among them, states in the United States have successively required third-party e-commerce platforms to pay sales fees on behalf of platform sellers since 2018
In 2019, Germany explicitly required cross-border e-commerce to pay value-added tax. From January 2021 and July 2021, the UK, Germany, France and Canada further require third-party e-commerce platforms to pay indirect taxes on behalf of platform sellers.
As countries in North America and Europe successively require third-party e-commerce platforms to pay indirect tax on behalf of platform sellers, there will be no risk that the company will not pay indirect tax in time and in full in the future sales of third-party e-commerce platforms in these countries. However, the company still needs to declare and pay the overseas indirect tax related to the goods sold on its own website to the competent tax authority of the country of sale. As the company’s products are sold in a wide range, involving many countries, and the indirect tax policies of various countries for cross-border e-commerce are complex and in the process of continuous revision and improvement, the company may have a certain risk of indirect tax payment. In addition, due to various reasons, some of the company’s stores may fail to declare and pay indirect taxes to the overseas competent tax authorities in time and in full, resulting in the risk that the company may be recognized by the overseas competent tax authorities as having illegal tax payment and be required to pay relevant taxes.
If the company is determined by overseas competent tax authorities or other relevant institutions that it has failed to pay indirect tax in time and in full, the company may be required to pay high fines, suspend operation or even permanently close relevant online stores, resulting in the risk of decline in operating performance or even loss.
For the above tax risks, the controlling shareholder of the company, Junteng investment The actual controller Chen Wenping has issued a commitment: “If the company and its domestic and foreign holding subsidiaries and branches are punished in any form or bear any form of legal liability by the relevant tax authorities for violating the tax laws and regulations of the place of registration or other tax issues, I / our company is willing to jointly and severally bear the losses, losses and liabilities caused by the punishment or legal liability of the company and its domestic and foreign holding subsidiaries and branches And protect the company and its holding subsidiaries, branches and public shareholders after the company’s future listing from any losses, damages, claims, costs and expenses. “
Meanwhile, the issuer’s domestic subsidiaries mainly undertake the functions of procurement, production and store operation, but the product sales revenue is mainly realized through the sales of overseas subsidiaries, so the company has cross-border internal transactions. If the internal transfer pricing is considered by the tax department not to meet the principle of independent third party, there may be a risk of supplementary income tax. (VI) store closure risk
The company is a technology driven export cross-border brand e-commerce. Its main products cover four categories: clothing accessories, department stores and homes, sports and entertainment, digital motorcycles and motorcycles, and has many brands such as ekouaer, avidlove, homdox, coocher, ancheer and so on. Based on the strategic consideration of building a brand matrix and developing multi category business, the company adopts the multi account store business model common in the cross-border e-commerce industry, and operates multiple stores on third-party e-commerce platforms such as Amazon, wish, eBay and Walmart.
In the future, if Amazon, wish, eBay, Walmart and other third-party e-commerce platforms determine that the company’s multi account store business model does not have reasonable business reasons and violates the registration and operation policies of these platforms, or modify the registration and operation policies of their platform stores to restrict the multi account store business model, As a result, a large number of third-party e-commerce platform stores of the company are closed, the company may face the risk of sharp decline in operating revenue and profit scale, which will have a significant adverse impact on the overall operating performance of the company. (VII) foreign exchange risk
Based on the company’s business strategy of opening stores with multiple accounts and the registration and operation rules of some e-commerce platforms, the company has the need to set up overseas store companies. At present, the company and its subsidiaries are not punished by competent foreign exchange institutions at home and abroad for violating domestic and foreign exchange related laws and regulations in the process of establishment, cancellation and fund collection.
As the company’s business involves many countries or regions, and the company does not rule out the possibility that overseas subsidiaries may need to be established and cancelled according to the needs of business development in the future. If the foreign exchange regulatory policies of relevant countries or regions are greatly adjusted, the company may face the risk of administrative punishment by the competent foreign exchange authorities of relevant countries or regions for violating relevant foreign exchange laws and regulations in the process of establishment, cancellation and fund collection of overseas subsidiaries due to failure to timely and correctly understand the changes of relevant policies. (VIII) sustainability risk of rapid growth of future operating revenue
In 2021, although the trade friction between China and the United States continued, and other companies in the industry had operational difficulties affected by Amazon’s title, the performance of the company maintained a continuous growth in the first half of 2021, realizing a main business income of 2905738100 yuan, an increase of 26.80% over the same period last year.
Although the company’s performance maintained sustained and rapid growth during the reporting period, investors were reminded to pay attention to the sustainability risk of rapid growth of future operating revenue due to various factors such as external uncertainty. (IX) risk of continuous rise in international freight rates
International cargo transportation is an important link in the chain of cross-border export e-commerce export business. The links involving international cargo transportation in the company’s cross-border export business include the direct mail mode of head logistics and tail logistics. In the first process of logistics, the company sends goods through international logistics companies
