About Huarong Chemical Co., Ltd
Letter of recommendation for initial public offering and listing on GEM
Sponsor (lead underwriter)
(401, building B7, Qianhai Shenzhen Hong Kong fund Town, 128 guiwan fifth road, Nanshan street, Qianhai Shenzhen Hong Kong cooperation zone, Shenzhen)
catalogue
catalogue Section 1 basic information of this securities issuance three
1、 Introduction to the staff of the recommendation institution three
2、 Basic information of the issuer 4 III. description of the interests and main business transactions between the recommendation institution and its related parties and the issuer and its related parties
…… four
4、 Brief the kernel Section II commitment of the sponsor 8 section III recommendations for this securities offering nine
1、 Recommendation conclusion nine
2、 Description of relevant decision-making procedures for this securities issuance nine
3、 Explanation that this securities issuance meets the issuance conditions stipulated in the securities law IV. this securities issuance complies with the provisions of the measures for the administration of the registration of initial public offerings on the gem (for Trial Implementation)
Description of conditions V. explanation that the securities issuance meets the issuance conditions specified in the Shenzhen Stock Exchange GEM Listing Rules
…… VI. The securities issuance complies with the Interim Provisions of Shenzhen Stock Exchange on the application and recommendation of gem enterprises for issuance and listing
Special description 16 VII. Notice on special inspection of 2012 annual financial report of initial public offering companies
Special description of the verification of the following items seventeen
8、 Verification opinions on commitments twenty-three
9、 Verification opinions on the performance of filing procedures by shareholders of private investment funds 23 X. rationality of dilution of immediate return, measures to fill in immediate return and commitments of relevant commitment subjects
Verification opinions of 23 Xi. Verification on strengthening the risk prevention of securities companies engaging a third party in investment banking business
opinion…… twenty-four
12、 Verification conclusion on share locking twenty-seven
13、 Verification conclusion on the financial and operating conditions after the audit deadline of the financial report twenty-seven
14、 Verification conclusion on special voting shares twenty-seven
15、 Issuer’s main risk tips twenty-seven
16、 Evaluation on the development prospect of the issuer thirty-one
Huatai United Securities Co., Ltd
About Huarong Chemical Co., Ltd
Letter of recommendation for initial public offering and listing on GEM
Huarong Chemical Co., Ltd. (hereinafter referred to as the “issuer” and “Huarong chemical”) applies for initial public offering in China and listing on the gem in accordance with the company law, the securities law, the measures for the registration and administration of initial public offering on the gem (for Trial Implementation), the Listing Rules of gem shares of Shenzhen Stock Exchange and other relevant laws and regulations, Submit issuance application documents. Huatai United Securities Co., Ltd. (hereinafter referred to as “Huatai United Securities” and “sponsor”) is the sponsor of its application for initial public offering and listing on the gem. GUI Cheng and Yi guitao, as the sponsor representatives specifically responsible for recommendation, hereby issue the recommendation letter for it.
The sponsor Huatai United Securities and the sponsor representatives GUI Cheng and Yi guitao promise that the sponsor and the sponsor representative are honest, trustworthy, diligent and responsible in accordance with the company law, the securities law and other relevant laws and regulations and the relevant provisions of the CSRC and Shenzhen Stock Exchange, and in strict accordance with the business rules formulated according to law The industry code of practice and code of ethics shall issue this issuance recommendation letter, and ensure the authenticity, accuracy and integrity of the documents issued.
Unless otherwise specified, the abbreviation and interpretation in this offering recommendation letter have the same meaning as those in the prospectus of Huarong Chemical Co., Ltd. for initial public offering and listing on the gem (Registration draft). There may be differences in mantissa between the sum of partial totals and each addend, which are caused by the rounding of the data.
Section 1 basic information of this securities issuance
1、 Introduction to the staff of the recommendation institution
1. Sponsor representative
The sponsor representatives responsible for the recommendation are GUI Cheng and Yi guitao. The practice of its recommendation business is as follows:
GUI Cheng: now the vice president of Huatai United Securities, with 5 years of relevant business experience in investment banking, has participated in the IPO projects of Earth-Panda Advanced Magnetic Material Co.Ltd(688077) , Matt automobile, degan film, mousse bedding, Xuanwu technology, as well as the refinancing and restructuring projects of Lantai industry, Hunan Gold Corporation Limited(002155) , Hunan Haili Chemical Industry Co.Ltd(600731) , Linhai Co.Ltd(600099) . During the practice of recommendation and related businesses, Guicheng strictly abides by the measures for the administration of securities issuance and listing recommendation business and other relevant provisions, and has a good practice record.
Yi guitao: Yi guitao: now is the chief securities officer of Huatai. Yi guitao: Yi guitao is the current chief inspector of Huatai. He has 12 years of experience in investment banking, 12 years of experience in investment banking, and participated in Danfu shares, 3 Zhongyan Technology Co.Ltd(003001) 00 \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Nanning Department Store Co.Ltd(600712) , China Western Power Industrial Co.Ltd(002630) , yingfangwei, longmang Baili Xinjiang Xintai Natural Gas Co.Ltd(603393) and other refinancing and M & A projects. Yi guitao strictly abides by the measures for the administration of securities issuance and listing recommendation business and other relevant provisions in the practice of recommendation and related business, and has a good practice record. 2. Project Co sponsor
The co sponsor of the initial public offering of Huarong chemical is Wu Hao, and the practice of its recommendation business is as follows:
Wu Hao: now the vice president of Huatai United Securities, with 4 years of relevant business experience in investment banking, has participated in China Yangtze Power Co.Ltd(600900) GDR issuance, Three Gorges new energy initial public offering, Inner Mongolia Yili Industrial Group Co.Ltd(600887) non-public offering, Xiamen Kingdomway Group Company(002626) non-public offering and other financing projects, as well as China Yangtze Power Co.Ltd(600900) , China Mobile, Inner Mongolia Yili Industrial Group Co.Ltd(600887) , Hualian mining and other M & A projects. Wu Hao strictly abides by the measures for the administration of securities issuance and listing recommendation business and other relevant provisions in the practice of recommendation and related business, and has a good practice record.
3. Other project team members
Other members of the project team participating in the recommendation of Huarong chemical’s initial public offering of shares also include: Zhang zhanpei.
Zhang zhanpei: currently vice president of Huatai United Securities, with 4 years of relevant business experience in investment banking, has participated in or been responsible for Hangzhou Hopechart Iot Technology Co.Ltd(688288) , Jiang Su Wujin Stainless Steel Pipe Group Co.Ltd(603878) and other IPO projects, as well as Changzhou Almaden Co.Ltd(002623) non-public offering, Bgrimm Technology Co.Ltd(600980) non-public offering and other refinancing projects. Zhang zhanpei strictly abides by the measures for the administration of securities issuance and listing recommendation business and other relevant provisions in the practice of recommendation and related business, and has a good practice record. 2、 Basic information of the issuer
1. Company name: Huarong Chemical Co., Ltd
2. Registered address: No. 166, Linyang Road, Jiuchi Town, Pengzhou, Chengdu, Sichuan
3. Date of establishment: September 7, 2000
4. Registered capital: 360 million yuan
5. Legal representative: Tang Chong
6. Contact: 02886238215
7. Business scope: General Project: manufacturing of daily chemical products; Production of chemical products (excluding licensed chemical products); Sales of chemical products (excluding licensed chemical products); Natural science research and experimental development; Technical services, technical development, technical consultation, technical exchange, technology transfer and technology promotion; business management; Import and export of goods; Technology import and export (except for projects subject to approval according to law, carry out business activities independently according to law with business license). License project: fertilizer production; Food additive production; Production of hazardous chemicals; Disinfectant production (excluding hazardous chemicals); Road transport of dangerous goods; Road cargo transportation (excluding dangerous goods) (for projects that must be approved according to law, business activities can be carried out only after being approved by relevant departments, and the specific business projects shall be subject to the approval documents or permits of relevant departments)
8. Type of securities issuance: initial public offering (A-share) and listing on GEM III. description of interests and main business transactions between the sponsor and its related parties and the issuer and its related parties
Huatai United Securities confirmed after self inspection that as of the issuance date of this recommendation:
(I) if the issuer or this offering meets the following investment requirements of the sponsor, the sponsor will arrange the alternative investment subsidiary established according to law or the alternative investment subsidiary established according to law by the securities company that actually controls the sponsor (hereinafter referred to as “relevant subsidiary”) to participate in the strategic placement of this offering, which shall be implemented in accordance with the relevant provisions of Shenzhen Stock Exchange. If the relevant subsidiaries participate in the strategic placement of this offering, the relevant subsidiaries do not participate in the inquiry process and accept the final result of the inquiry. Therefore, the above matters have no impact on the fair performance of the recommendation responsibilities of the recommendation institution and the recommendation representative.
In addition, the sponsor or its controlling shareholders, actual controllers and important related parties do not hold shares of the issuer or its controlling shareholders, actual controllers and important related parties.
(II) the issuer or its controlling shareholders, actual controllers and important related parties do not hold shares of the sponsor or its controlling shareholders, actual controllers and important related parties.
(III) the recommendation representative and his / her spouse, directors, supervisors and senior managers of the recommendation institution do not hold shares of the issuer or its controlling shareholders, actual controllers and important related parties, or hold positions in the issuer or its controlling shareholders, actual controllers and important related parties;
(IV) the controlling shareholders, actual controllers and important related parties of the recommendation institution and the controlling shareholders, actual controllers and important related parties of the issuer do not provide guarantees or financing to each other;
(V) there is no other related relationship between the recommendation institution and the issuer. 4、 Brief description of kernel (I) description of internal audit procedure
1. The project team applies for the kernel
On October 25, 2020, after the application documents for this securities issuance were basically complete, the project team submitted a kernel application to the quality control department and submitted the kernel application documents.
2. Pre qualification of quality control department
After receiving the kernel application, the quality control department will send personnel to the project site for on-site kernel pre-trial on October 26, 2020. After the on-site nuclear pre-trial work, a written nuclear pre-trial opinion was issued on November 7, 2020.
According to the written opinions of the nuclear prequalification personnel, the project team shall check the relevant issues, modify, supplement and improve the application documents, and submit the special reply to the nuclear prequalification opinions to the quality control department after the verification and modification are completed. After the reviewers of the quality control department review the reply to the preliminary review comments and complete the acceptance of the project working paper, the reviewers of the quality control department issue the quality control report.
3. Verification by compliance and risk management department
The compliance and risk management department checks the project before the nuclear meeting in the form of a meeting. The audit committee is organized by the compliance and risk management department, and the participants include the person in charge of the recommendation business of Huatai United Securities (the person in charge of the recommendation business department), the personnel of the compliance and risk management department, the auditors of the quality control department, and the project signature recommendation representative. The examiner inquired about the important matters listed in the checklist on due diligence of important matters of sponsor projects one by one, and the sponsor representative explained the verification process, verification means and verification conclusion of relevant matters one by one.
The examiner pointed out the problems and deficiencies of the project team in the process of due diligence on important matters according to the examination of the examination and working papers, and asked the project team to make rectification. The project team shall conduct supplementary due diligence on relevant matters according to the requirements of the audit team, and supplement and improve the corresponding working papers.
4. Review of kernel team meeting
After completing the audit of the quality control department and performing the audit procedures, the compliance and risk management department considered that the Huarong chemical IPO project met the conditions for submission to the company’s investment bank equity financing business core group meeting for review, that is, it was arranged to hold the company’s investment bank equity financing business core group meeting for review on December 2, 2020.
The notice of the meeting, the core application documents, the reply to the pre-trial opinions and other documents were sent to the members of the core team in the form of electronic documents 3 working days (including) before the meeting.
On December 2, 2020, Huatai United Securities held the 140th core group meeting of equity financing business of investment bank in 2020 in the form of teleconference in the conference room where the offices of various departments of investment bank in Beijing, Shanghai, Shenzhen and Nanjing. A total of 7 members of the kernel team participated in the meeting, and the review results were valid. All the members of the kernel team attending the meeting reviewed the kernel application documents submitted by the project team and the special replies to the pre-trial opinions of the kernel before the meeting. During the meeting, the members of each core group spoke one by one to explain the issues they thought might constitute obstacles to the issuance and listing. For the contents not clearly stated in the application documents, the project team is required to make further explanation. After full communication with the project team, propose further solutions to be taken.
The core review meeting adopts closed, open and independent voting. The voting results are divided into three cases: pass, veto and suspension of voting. Members of the review team shall vote independently according to the review and send their voting opinions to the mailbox designated by the compliance and risk management department.
If the application for approval is approved by more than 2 / 3 of the votes of the members participating in the meeting, the approval result is passed; If the “no” vote is more than 1 / 3, the result is veto; The kernel result corresponding to other voting conditions is “suspension of voting”. Members of the review team can agree unconditionally or conditionally that the project passes the nuclear review. If they agree conditionally, specific opinions shall be indicated. The core meeting reviewed the IPO project of Huarong chemical through full discussion, and the voting result was passed.
5. Implementation of the opinions of the core group
After the core group meeting, the compliance and risk management department shall summarize the contents of the audit opinion form, form the final core group opinion, and send it to the project team in the form of notification of internal audit results. In the notice of core results, it clearly states whether the application for securities issuance has passed the internal audit procedures, and lists the problems that need further verification and the requirements for revision of the application documents. The project team shall take solutions according to the opinions of the kernel team and conduct supplementary verification or information disclosure. The quality control department and the compliance and Risk Management Department formally agreed to issue a formal recommendation document for the issuer to recommend its initial public offering after confirming that the contents mentioned in the opinions of the core group have been implemented
