Beijing Tongtech Co.Ltd(300379)
On the scheme of issuing shares to specific objects
Demonstration analysis report
Beijing Tongtech Co.Ltd(300379) (hereinafter referred to as ” Beijing Tongtech Co.Ltd(300379) ,” the company “or” the company “) is a company listed on the gem of Shenzhen Stock Exchange. In order to meet the capital needs of the company’s business development and increase the company’s capital strength, according to the company law of the people’s Republic of China (hereinafter referred to as the “company law”) In accordance with the provisions of the securities law of the people’s Republic of China (hereinafter referred to as the “Securities Law”) and the measures for the administration of securities issuance registration of companies listed on the gem (for Trial Implementation) (hereinafter referred to as the “measures for the administration of registration”) and other relevant laws, regulations and normative documents, the company has prepared a demonstration and analysis report on the scheme of issuing shares to specific objects.
1、 Background and purpose of this issuance of shares to specific objects
(I) background of this issuance of shares to specific objects
1. At the national policy level, vigorously promote the development of independent and controllable network security and innovative application of information technology Shenzhen New Industries Biomedical Engineering Co.Ltd(300832)
Since the 18th CPC National Congress, the state has attached great importance to the autonomy and controllability of network security. After the Third Plenary Session of the 18th CPC Central Committee, the central network security and Informatization Leading Group was established. Since then, the national level has continuously strengthened top-level design and increased policy support to speed up the implementation progress of network security and self-control Xi Jinping General Secretary proposed at the National Conference on network security and informatization held in 2018: “core technology is an important tool of the country. We should make up our mind, maintain perseverance, identify the focus, and accelerate the breakthrough of core technology in the information field.”
With the intensification of Sino US trade frictions and the inclusion of several other Chinese enterprises in the “entity list” by the United States, the process of independent innovation in China’s information industry has been further accelerated, and scientific and technological independence is imperative. In this context, China vigorously promotes the application and innovation of information technology, is committed to promoting the localization of key technology fields in the information industry, and constructs an autonomous and controllable ecosystem of IT systems.
Beijing Tongtech Co.Ltd(300379) is a leading solution provider in the field of big security in China. It is mainly engaged in basic software middleware and information security related businesses. It plays an important role in promoting the development of national network security and information technology application innovation. Benefiting from the support of national strategy and industrial policies, the company has ushered in a good development opportunity.
2. Information technology application innovation Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) brings broad development space for domestic basic software middleware
In the context of the national promotion of network security self-control and information technology application innovation, the IT industry will gradually realize self-control from basic hardware, basic software, industry application software and other levels, and is expected to gradually expand from the government industry to finance, petroleum, electric power, telecommunications, transportation, aerospace, education and other industries. As a basic software product with better development in China, middleware has a good development space.
According to the statistics of Jishi information, the overall scale of China’s Middleware Market in 2019 was 7.24 billion yuan, a year-on-year increase of 11.4%. With the popularization of new generation IT technologies such as cloud computing, big data and the Internet of things, as well as the promotion of digital hot projects in industries such as government big data and smart city, the concept of basic middleware will change significantly and give birth to a large number of new market demands. According to the forecast of Jishi information, the scale of China’s middleware market will exceed 13 billion yuan in 2023, and the compound annual growth rate from 2019 to 2023 will be about 15.8%. The market space is large and the growth rate is significant.
Beijing Tongtech Co.Ltd(300379) as the pioneer and leader of China’s domestic middleware, middleware products cover mainstream products and solutions of application support, data integration and data platform, and have been in a leading position in the domestic Middleware Market for many years. Under the background of promoting independent and controllable security and innovative development of information technology application at the national policy level, the company’s products and services are facing broad development space.
3. The new infrastructure, especially the 5g business process, has brought broad development space for the information security industry
The outline of national informatization development strategy points out that 5g should make breakthrough progress in 2020. In the 2020 government work report, it is clearly proposed to strengthen the construction of new infrastructure, develop a new generation of information network, expand 5g applications, build data centers and help industrial upgrading. Digital and intelligent industrial applications represented by 5g infrastructure, data center, artificial intelligence and industrial Internet are important contents of new infrastructure, which will greatly promote the development of IT industry. With the continuous popularization of 5g, cloud computing, big data, Internet of things, mobile Internet, industrial Internet and other new technologies, the diversification of terminals and applications will not only double the growth of data traffic, but also highlight the security risks due to its open attributes and flexible architecture. As the cornerstone and guarantee of 5g and related technology development, information and network security will play a more important role in the blowout stage of 5g application, throughout the cycle and become a long-term trend. Therefore, the security industry will usher in a new development stage Beijing Tongtech Co.Ltd(300379) complies with the good development opportunities of national 5g, industrial Internet and other “new infrastructure” industries, focuses on the “Security +” market upgrading strategy, integrates security into emerging fields such as industrial Internet, smart government, social governance and emergency management, and extends information security solutions from operator information security to multiple industries. Under the background of industrial development of new infrastructure, The company’s products and services are facing new and broad development space.
(II) purpose of issuing shares to specific objects
1. Grasp the opportunities of information technology application innovation and new infrastructure policies, and promote the process of domestic independent innovation
With the core concept of “independent innovation, security and intelligence”, based on domestic basic software, information security, 5g and other leading technologies, the company precipitates two product systems of “data +” and “Security +”, and is committed to becoming a first-class leader in the intelligent security industry. Under the background of vigorously promoting the independent and controllable network security and the innovative Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) development of information technology application at the national policy level, this issuance will help to further enhance the company’s main business, provide domestic basic software and information security products for Chinese customers, and contribute to the breakthrough of key technologies of China’s it underlying basic software and the construction of independent IT industry ecology, Promote the process of domestic independent innovation.
2. Further enhance the company’s financial strength and consolidate the company’s high-quality development foundation
The company is a technology driven enterprise. Its software and information technology service industry is a technology innovation industry, with the characteristics of rapid technological development and rapid product upgrading and iteration. Since its establishment, the company has taken technological innovation as the core development driving force. On the basis of existing products and according to market feedback and customer needs, the company has iteratively upgraded existing products or launched new products. At the same time, it has actively carried out layout in cloud computing, big data, artificial intelligence, industrial Internet and other fields, and insisted on upgrading products and services with “Ai security”, The development strategy of using “Safety +” to escort all walks of life.
The iterative upgrading of the company’s products or the launch of new products require sufficient preliminary preparation and a large amount of manpower and funds. The company will further enhance the company’s financial strength through this fund-raising, further strengthen the financial support for the company’s own scientific research and technology level and operation service ability, and help to improve the company’s anti risk ability, Help the company to ensure that customer needs are met in a timely manner; It will help the company to grasp the opportunity and further improve its overall competitiveness, so as to further enhance its core competitiveness.
3. Optimize the company’s financial structure and supplement the company’s development funds
In recent years, on the basis of maintaining the steady growth of business in traditional advantageous industries, the company has actively promoted the platform and cloud development of business, so as to promote the sustained and stable growth of business. In the process of rapid development, the company raises funds through various financing channels to meet the needs of business development. At the same time, facing the industry development trend and the broad market demand brought by national policies such as new infrastructure and information technology application innovation, the company is still promoting technological innovation, continuously expanding business scale and deepening business layout. In this context, the company urgently needs to further enhance the company’s capital strength through direct financing, optimize the asset liability structure, reduce financial risks, improve sustainable profitability, and meet the working capital needs of the company’s rapid, healthy and sustainable development. Through this issuance to specific objects, the company’s capital structure will be significantly improved, and the asset liability ratio and financial risk will be reduced. After the raised funds are in place, the working capital of the company will be greatly enriched, which will contribute to the sustainable and stable development of the company. 2、 The necessity of this issuance of securities and its variety selection
(I) types of securities issued this time
The type of shares issued to specific objects this time is domestic listed RMB ordinary shares (A shares), with a par value of RMB 1.00 per share.
(II) necessity of selection of securities issued this time
1. Meet the company’s strategic development requirements
The technology upgrading and product upgrading of software and information technology service industry are rapid. Enterprises must grasp the innovation direction according to the market development, continuously increase R & D investment, promote technological innovation and new product development, and transform the innovation achievements into mature products to the market, so as to meet the growing market demand. In addition, the company’s government customers generally adopt the budget system, and the funds mainly come from financial appropriations. Fluctuations in the macroeconomic environment, such as the impact of covid-19 epidemic in 2020, may have a certain impact on the company’s business.
The company needs to enhance its financial strength through equity financing, which can effectively promote the company’s development strategy, consolidate and consolidate the company’s R & D advantages, improve the company’s core competitiveness and anti risk ability, and enhance the company’s comprehensive strength, which is in line with the interests of the company and all shareholders.
2. High debt financing costs
Single debt financing will increase the asset liability ratio of the company, make the enterprise bear additional financial costs, and there is a certain pressure to repay the principal and interest. Specifically, short-term debt financing usually needs to be repaid within one year, which is mainly used to supplement short-term working capital. The company will continue to face the pressure of debt repayment in the short term; The cost of long-term debt financing is generally high, and the debt financing cost of private enterprises is higher and more difficult in the current market environment. Therefore, in the current market and business environment, the company is more suitable to raise funds through equity financing to support the development of the company.
3. Issuing shares to specific objects is a financing method suitable for the company at this stage
Equity financing is conducive to optimizing the company’s capital structure, reducing the company’s future debt repayment pressure and capital outflow, and promoting the realization of the company’s long-term development strategy. The investment project of the raised funds has been demonstrated in detail by the management, which is conducive to further improve the profitability of the company and enhance its core competitiveness. In the future, after the benefits of the investment projects with raised funds are released, the company’s net profit will achieve stable growth, gradually digest the impact of dilution of immediate return caused by equity expansion, and provide better investment return for all shareholders.
3、 Appropriateness of the selection scope, quantity and standard of the issuing object
(I) appropriateness of the selection scope of the issuing object
The objects of this issuance of shares to specific objects are no more than 35 specific investors who meet the requirements of the CSRC, including securities investment fund management companies, securities companies, trust companies, finance companies, insurance institutional investors, qualified overseas institutional investors, and other legal persons Natural persons or other qualified investors. Among them, securities investment fund management companies, securities companies, qualified foreign institutional investors and RMB qualified foreign institutional investors who subscribe for more than two products under their management shall be regarded as one issuance object; As the issuing object, trust companies can only subscribe with their own funds.
The subscription object of this issuance of shares to specific objects has not been determined. The final issuance object shall be authorized by the general meeting of shareholders. After the company’s issuance is approved and registered by the CSRC, the board of directors shall negotiate with the sponsor (lead underwriter) of the issuance according to the inquiry results in accordance with the relevant provisions of the CSRC and Shenzhen Stock Exchange and the conditions specified in the plan. All issuers subscribe for the shares issued to specific objects at the same price and subscribe in cash. If the national laws and regulations have new provisions on the issuing object of issuing shares to specific objects, the company will adjust according to the new provisions.
To sum up, the selection scope of this issuance object complies with the provisions of relevant laws, regulations and normative documents such as registration management measures, implementation rules and so on.
(II) appropriateness of the number of objects of this issuance
The final issuing objects of this issuance are no more than 35 specific objects that comply with the provisions of relevant laws, regulations and normative documents, and the provisions of relevant laws, regulations and normative documents such as registration management measures, implementation rules, and the number of issuing objects is appropriate.
(III) appropriateness of the selection criteria for the issuing object
The issuing object should have certain risk identification ability and risk bearing ability, and have corresponding capital strength.
The standards of the objects of this offering comply with the relevant provisions of laws and regulations such as the measures for the administration of securities issuance and registration of companies listed on the gem (for Trial Implementation), and the standards of the objects of this offering are appropriate.
4、 Rationality of the pricing principles, basis, methods and procedures of this offering
(I) pricing principle and basis of this offering
The issue price shall not be lower than 80% of the average price of the company’s shares on the 20 trading days before the pricing benchmark date. Average stock trading price in the 20 trading days before the pricing benchmark date = total stock trading volume in the 20 trading days before the pricing benchmark date / total stock trading volume in the 20 trading days before the pricing benchmark date.
The final issue price will be determined by the board of directors of the company through consultation with the sponsor (lead underwriter) according to the inquiry results and the authorization of the general meeting of shareholders of the company in accordance with relevant regulations after the company’s issuance is approved and registered by the CSRC.
If the company’s shares have ex right and ex interest matters such as dividend distribution, share distribution and conversion of capital reserve into share capital from the pricing base date to the issuance date, the issuance price of this issuance will be adjusted accordingly. The adjustment method is as follows: assuming that the issue price before adjustment is P0, the number of shares given or converted into share capital per share is n, the dividend / cash dividend per share is D, and the issue price after adjustment is P1, then:
Dividend / Cash Dividend: P1 = p0-d
Share offering or conversion to share capital: P1 = P0 / (1 + n)
Two items are carried out simultaneously: P1 = (p0-d) / (1 + n)
(II) pricing method and procedure of this offering
The pricing methods and procedures of this offering are in accordance with the relevant provisions of laws and regulations such as the measures for the administration of securities issuance and registration of companies listed on the gem (for Trial Implementation), the board of directors shall be convened and the relevant announcements shall be disclosed on the designated information disclosure media, which shall be deliberated and approved by the company’s extraordinary general meeting of shareholders.
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