Dongxing Securities Corporation Limited(601198) about the IPO of Hangzhou Heshun Technology Co., Ltd. and its listing on the gem
of
Issuance and recommendation work report
Sponsor (lead underwriter)
(floor 12 and 15, block B, Xinsheng building, No. 5, Financial Street, Xicheng District, Beijing)
Statement
Dongxing Securities Corporation Limited(601198) and Zhong Lang, the sponsor representative of the project According to the company law of the people’s Republic of China, the securities law of the people’s Republic of China, the measures for the administration of the registration of initial public offerings on the gem (for Trial Implementation), the measures for the administration of securities issuance and listing recommendation business, the standards for the content and format of information disclosure by companies issuing securities No. 27 – issuance recommendation letter and issuance recommendation work report, and The opinions on further improving the quality of financial information disclosure of initial public offering companies and other relevant laws and regulations, as well as the relevant provisions of the China Securities Regulatory Commission and Shenzhen Stock Exchange, are honest, trustworthy, diligent and responsible, and issue this issuance recommendation work report in strict accordance with the business rules, industry practice norms and ethical standards formulated according to law, And ensure the authenticity, accuracy and completeness of the issuance and recommendation work report.
Unless otherwise specified in this offering recommendation report, relevant terms or abbreviations have the same meaning as in the prospectus of Hangzhou Heshun Technology Co., Ltd. for initial public offering and listing on GEM (Registration draft). Relevant opinions are as of the date of issuance of this offering recommendation report.
catalogue
Declare that Section 1 project operation process five
1、 Internal project audit process of the sponsor five
2、 The approval process of this securities issuance project eight
3、 The main implementation process of this securities issuance project eight
4、 The main process of the internal verification department of the recommendation institution reviewing the securities issuance project sixteen
5、 The main process of the sponsor’s core team reviewing the securities issuance project Section II problems existing in the project and their solutions eighteen
1、 Project approval opinions and deliberations 18 II. Main problems found and concerned in the process of due diligence and research, analysis and treatment of main problems
…… eighteen
3、 The main issues concerned by the internal verification department and the specific implementation of the opinions of the internal verification department 27 IV. main issues discussed in the kernel group meeting, audit opinions and specific implementation of the opinions of the kernel group 37 section III special verification 44 I. The recommendation institution shall verify the professional opinions issued by the securities service institution and the judgment between such professional opinions and the recommendation institution
Description of whether there are significant differences 44 II. The verification required by the recommendation institution in accordance with the opinions on further improving the quality of financial information disclosure of initial public offering companies (announcement [2012] No. 14 of China Securities Regulatory Commission) 45 III. The recommendation institution shall, in accordance with the relevant provisions on profitability in the prospectus of initial public offering and listed companies
Information disclosure guidelines (CSRC announcement [2013] No. 46) require verification sixty-five
4、 Verification opinions of the recommendation institution on matters related to the issuer’s cash dividend V. the recommendation institution shall, in accordance with the Q & A on issuance supervision – questions on the filing of private investment funds related to issuance supervision
The verification of relevant investors in accordance with the provisions of the answer to Vi. verification opinions of the recommendation institution on the diluted immediate return of the issuer’s initial public offering and its filling measures seventy-five
7、 Verification of relevant behaviors such as paid employment of third-party institutions and individuals seventy-five
8、 Verification opinions on prospectus and other information disclosure materials seventy-six
9、 The performance of internal audit of the recommendation institution seventy-six
10、 Main financial information and verification of operating conditions after the audit deadline of the company’s financial report 77 Section IV key points of audit and verification eighty-two
1、 Has there ever been any defect in the establishment and overall change procedures of the issuer’s joint stock limited company eighty-two
2、 Has there ever been any defect or dispute in the previous equity change process since the establishment of the issuer 83 III. If the issuer is a company listed or delisted on the new third board or an H-share company, is there any new risk arising from transactions in the secondary market
The situation of increasing shareholders eighty-three
4、 Disclosure and identification of actual controller eighty-seven
5、 Whether the directors and senior managers of the issuer have changed in the last two years ninety-one
6、 Whether there are private equity fund shareholders when the issuer reports ninety-two
7、 Whether the issuer discloses the number of shareholders calculated by penetration ninety-four
8、 Whether the issuer has any new shareholders in the year before the declaration ninety-four
9、 Whether the issuer has any equity incentive that has been formulated or implemented before reporting ninety-eight
10、 Whether the issuer has any unpaid social insurance and housing accumulation fund during the reporting period 99 Xi. Verification on whether the issuer and its controlling shareholders and actual controllers have had safety accidents involving national security, public security, ecological security, production safety, public health safety and other fields or been subject to administrative punishment during the reporting period
…… one hundred and three
12、 Business qualification one hundred and three
13、 Impact of major laws, regulations and policies in the industry one hundred and five
14、 Verification of the selection of comparable companies in the same industry one hundred and five
15、 Verification of basic information of major customers one hundred and six
16、 Verification of new customers one hundred and seven
17、 Verification on the overlap between customers and suppliers, customers and competitors during the issuer’s reporting period one hundred and fourteen
18、 Verification of basic information of suppliers one hundred and seventeen
19、 Basic information of the top five new suppliers during the reporting period one hundred and eighteen
20、 Special circumstances of suppliers 121 21. Whether there are trademarks, invention patents, franchise rights and non-profit rights that have an important impact on the production and operation of the issuer
Patent technology and other intangible assets one hundred and twenty-two
22、 Accurate and targeted verification of the income recognition policy disclosed in the issuer’s prospectus one hundred and twenty-six
23、 Verification of changes in accounting policies and accounting estimates of the issuer during the reporting period one hundred and twenty-eight
24、 Verification on the correction of accounting errors in the reporting period of the issuer one hundred and thirty-one
25、 Verification on whether there are problems such as bank lending and capital dismantling 134 XXVI. Whether the proportion of the income of traders in the current operating income of the issuer in the most recent year is high or growing rapidly
Potential verification one hundred and thirty-nine
27、 Verification of large abnormal exchange one hundred and forty-four
28、 Verification of third-party payment collection one hundred and forty-five
29、 Verification of the issuer’s cash transactions during the reporting period one hundred and forty-six
30、 Entrusted processing one hundred and forty-seven
31、 Verification on the change of unit cost of the issuer’s main products in each period of the reporting period one hundred and forty-eight
32、 Verification of the issuer’s labor outsourcing one hundred and fifty-seven
33、 Verification of overdue accounts receivable of the issuer at the end of each reporting period one hundred and fifty-eight
34、 Verification of the issuer’s notes receivable one hundred and sixty-one
35、 Verification of significant changes in the issuer’s inventory balance or category at the end of each reporting period 162 36. Verification of raw materials or goods in stock of the issuer with a stock age of more than 1 year at the end of each reporting period one hundred and sixty-four
37、 Verification of fixed assets one hundred and sixty-five
38、 At the end of each reporting period, whether the issuer’s construction in progress has been suspended for a long time or the construction period is too long 166.39. The net cash flow from operating activities fluctuates greatly or is quite different from the current net profit
Verification of conditions one hundred and sixty-seven
40、 Verification of investment projects with raised funds one hundred and sixty-nine
41、 Whether there are contracts that have been performed and are being performed that have significant impact during the issuer’s reporting period 169 attachments one hundred and seventy-six
Application documents for initial public offering and listing on gem of Heshun Technology
Section I project operation process
1、 Internal project audit process of recommendation institution
The sponsor has established perfect internal control systems such as sponsor business initiation system, due diligence system, counseling system, quality control system, audit system, core system, feedback reporting system, risk event reporting system, compliance inspection system, emergency handling system, continuous supervision system, continuous training system and sponsor working paper system.
According to the requirements of the guidelines on internal control of investment banking business of securities companies issued by the CSRC, the recommendation business of the recommendation institution has established three internal control lines of defense, specifically: (I) the project team and business departments constitute the first line of defense; (II) the quality control department forms the second line of defense; (III) the core management department, compliance and legal department and other relevant departments constitute the third line of defense.
The internal project audit process of the sponsor mainly includes project approval review process, quality control audit process, core process and subsequent management process.
(I) project initiation review process
The investment banking business management committee of the recommendation institution sets up a recommendation underwriting and M & a business project approval team (hereinafter referred to as the “project approval team”) as the project approval agency of the recommendation underwriting and M & a business, and makes a decision on whether to approve the investment banking project. The specific process of the project is as follows:
1. Project initiation application and internal audit of business department
After preliminary due diligence, the project team believes that the project meets the project approval standards of the sponsor. On August 28, 2020, the project team submitted the self-examination form of conflict of interest and relevant supporting materials, project approval application report and other materials helpful to understand the quality and risks of the project.
The full-time compliance personnel of the business department reviewed the conflict of interest and expressed clear opinions on the review results on August 28, 2020. The person in charge of the project and the person in charge of the business department reviewed the full set of project initiation application documents and signed the review opinions on August 28, 2020.
Application documents for initial public offering and listing on gem of Heshun Technology
2. Reviewed by quality control department
The quality control department shall check and judge whether the project meets the project approval standards and conditions, and issue clear audit opinions on August 31, 2020.
3. Conflict of interest review of compliance legal department
The compliance legal department conducted a conflict of interest review and issued a clear opinion on August 31, 2020.
4. Review and voting of the project initiation group
The quality control department is responsible for arranging the project review. On the basis of adhering to the avoidance principle, select the project members from the list of project team members and send the project materials to the project members.
The project review and voting meet the following conditions: (I) the number of members participating in the project review shall not be less than 5; (II) the number of members from the internal control department shall not be less than 1 / 2 of the total number of members participating in the voting. The project initiation team performs its duties by means of on-site, communication and written voting, and makes a decision on whether the project can be approved by voting. The project approval committee shall complete the project approval within three working days after receiving the project approval materials. On September 8, 2020, the number of consent votes reached more than 2 / 3 (including) of the members participating in the voting, which was passed by vote.
The quality control department shall prepare the project initiation resolution in the form of written or electronic documents. After being confirmed by the voting members, the quality control department shall notify the project team, the voting members and the heads of relevant departments of the project initiation resolution.
5. Approved by the leader in charge of business
On September 9, 2020, the leader in charge of business approved and the project was approved.
(II) quality control audit process
After the project team completed due diligence, prepared working papers and prepared application documents, the project team and business department applied to the quality control department for quality control audit on October 15, 2020.
The quality control department assigned Du Qing, Li Peng and Pei Jie to conduct on-site inspection from October 19 to 23, 2020, including: asking relevant personnel of the project company and the project team; Observe the production and operation activities of the project company; Check the project working paper and other relevant documents and records; Consult the documents, materials and information related to the verification process. According to the on-site verification, the on-site inspectors analyze and judge the project risks and the practice of the project team, form a clear on-site verification conclusion, and form an on-site verification report on October 23, 2020
Application documents for initial public offering and listing on gem of Heshun Technology
Submit it to the person in charge of quality control department for review.
After completing the project audit, the quality control auditor will issue the quality control preliminary audit report on October 26, 2020 on the problems found in the preliminary audit of the project, application materials and working papers.
After receiving the preliminary review report of quality control, the project team shall timely and carefully reply to relevant questions, complete the acquisition and collection of working papers in the stage of on-site due diligence, and submit them to the quality control department for acceptance.
The quality control auditor issued the project quality control report on November 3, 2020, listing the doubts of the project
