Orient Securities Company Limited(600958) underwriting sponsor Co., Ltd
Inquiry letter on information disclosure of Chongqing Wanli New Energy Co.Ltd(600847) major asset replacement and issuance of shares to purchase assets and raise supporting funds and related party transactions plan of Shanghai Stock Exchange
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Verification opinions of independent financial advisor
Independent financial advisor
March, 2002
Shanghai Stock Exchange:
Chongqing Wanli New Energy Co.Ltd(600847) (hereinafter referred to as " Chongqing Wanli New Energy Co.Ltd(600847) ," listed company "and" company ") received your inquiry letter on information disclosure of the plan for Chongqing Wanli New Energy Co.Ltd(600847) major asset replacement and issuance of shares to purchase assets and raise supporting funds and related party transactions (szgh [2022] No. 0073) (hereinafter referred to as" inquiry letter ") on January 27, 2022 Orient Securities Company Limited(600958) underwriting and recommendation Co., Ltd. (hereinafter referred to as "financial consultant" and "independent financial consultant") as the independent financial consultant of the listed company for this transaction, has actively and seriously verified, analyzed and studied the relevant issues. Now, the review and reply to the relevant issues in the inquiry letter are as follows, please review.
Unless otherwise specified, the words or abbreviations mentioned in this verification opinion have the same meaning as those defined in the plan for Chongqing Wanli New Energy Co.Ltd(600847) major asset replacement and issuance of shares to purchase assets and raise supporting funds and connected transactions.
In this verification opinion, if there are differences in the mantissa between the sum of some total numbers and each detailed number, these differences are caused by rounding.
catalogue
Question 1. The plan disclosed that the company plans to take 100% equity of Wanli power as the assets to be purchased, and replace the equivalent part of 48.95% equity of Teri battery jointly held with the counterparty, and the balance part will be purchased from the counterparty by issuing shares. At the same time, the company shall start the acquisition of all the remaining equity of Teri battery after the cumulative realization of the transaction performance commitments and the completion of the compensation obligations, and the acquisition valuation shall not be less than 11.75 times of the subject matter's net profit deducted in 2024. The company is requested to make supplementary disclosure: (1) clarify the detailed calculation process and basis of valuation multiple, and whether it is prudent; (2) Whether the subsequent acquisition of the remaining equity of Teri battery will lead to the change of the company's control, and whether there are agreements or specific arrangements for the ownership of the control of the subsequent company; (3) The specific consideration and necessity of the phased acquisition of the target equity, and whether there is a situation of avoiding reorganization and listing. Please give your opinion to the financial advisor 5 question 2. The announcement disclosed that in May 2017, the company subscribed for 2.15 million new shares of Teri battery and undertook 3.65 million underlying shares held by Nanfang Tongzheng, with a total transaction price of 255 million yuan and a total evaluation value of 1.34 billion yuan by the income from equity method; In December 2018, the company transferred the above 5.8 million shares of Teri battery to Tongzheng industry, a wholly-owned subsidiary of Nanfang Tongzheng, with a transfer price of 128 million yuan and a total equity market method evaluation value of 821 million yuan; The company acquired 48.95% equity of Teri battery, with an estimated value of 1.15 billion yuan and an estimated value of 2.35 billion yuan of all equity. The company is requested to make supplementary disclosure: (1) specific reasons for different evaluation methods and great differences in evaluation results of Teri battery in the early stage; (2) The specific process and method of this assessment, as well as the determination and basis of main parameters and indicators; (3) In the case of high premium acquisition of Teri battery in the early stage and investment loss, the main consideration in planning the acquisition again is whether there is benefit transmission. Please give your opinion to the financial advisor 9 question 3. The plan disclosed that the company acquired 48.95% shares of Teri battery held by 21 companies or natural persons such as Tongzheng industry, Qiu Xiaowei and Qiu Xiaolan by issuing shares and implemented capital increase. After the transaction is completed, Teri battery will become a holding subsidiary of the company. In the future, Teri battery will continue to maintain its business entity and operate under the management of its original management team. Subsequently, Nanfang Tongzheng and Tongzheng industries plan to entrust the voting rights of the company's shares to Mo Tianquan. The company is requested to: (1) clarify whether there is a concerted action relationship between the counterparties of this transaction and whether it is possible to make Mo Tianquan and his persons acting in concert touch the situation of tender offer after the entrustment of voting rights; (2) Verify the time when the counterparty obtains the underlying equity and whether it has paid in its capital contribution; (3) In combination with the underlying equity structure, the relationship between shareholders, the composition of the board of directors and the assignment of the management team, explain whether the company can obtain the control right of Teri battery and the specific basis, and whether the underlying business management and major decisions are still controlled by Nantong and related parties. Please give your opinion to the financial advisor 16 question 4. The plan disclosed that the company plans to issue shares to no more than 35 specific investors in a non-public manner, raising no more than 150 million yuan to increase the capital of Teri battery. After completion, the company's shareholding in Teri battery will not be less than 51%. The company is requested to disclose whether other shareholders of Teri battery provide the same proportion of capital increase, clarify the main terms such as capital increase price, and explain whether there is any situation damaging the interests of the company. Please give your opinion to the financial advisor 25 question 5. The announcement disclosed that on August 9, 2021, the former controlling shareholder Nanfang Tongzheng and its controller Liu Xicheng extended their commitment to purchase the company's lead-acid battery business and assets for six months, and synchronously extended their commitment to compensate the company's losses, which will expire on February 9, 2022. The company replied to the inquiry in the early stage that if the above assets are not completed at the expiration, the recovery procedure will be started and Nanfang Tongzheng and Liu fully undertake to perform the compensation obligation. The company is requested to make supplementary disclosure: (1) the specific methods and basis for realizing loss compensation in this transaction; (2) Whether Nanfang Tongzheng and Liu Xicheng can complete their commitments before the expiration of the time limit. If they cannot, please clarify the recovery measures taken by the company, the specific impact on the restructuring transaction, and prompt major risks. Please give your opinion to the financial advisor 26 question 6. The plan discloses that Teri battery is mainly engaged in the R & D, production and sales of lithium iron phosphate, the cathode material of lithium battery, and the products are applied to the field of power battery and energy storage battery of new energy vehicles. The company is requested to make supplementary disclosure: (1) the competition pattern, industry position, advantages and disadvantages compared with main competitors and core competitiveness of the subdivided industry to which Teri battery belongs; (2) The main business models and application fields of Teri battery, including procurement, production, sales, profit, settlement mode, upstream and downstream conditions of various fields, etc; (3) Is there a big difference between the technical route selected by Teri battery and its main competitors in terms of R & D investment in recent three years. Please give your opinion to the financial advisor 31 question 7. According to the disclosure of the plan, in 20192020 and January November 2021, the operating revenue of Teri battery was 225 million yuan, 231 million yuan and 466 million yuan respectively, and the net profit was 236493 million yuan, 1.078 million yuan and 502243 million yuan respectively.
According to the previous announcement, the net profit of Teri battery in 20152017 and January August 2018 was 250788 million yuan, 660911 million yuan, 181142 million yuan and - 148 million yuan respectively. The counterparty promises that the net profit attributable to the parent company of Teri battery in 20222024 will not be less than 150 million yuan, 200 million yuan and 250 million yuan respectively. The company is requested to make supplementary disclosure: (1) explain the reasons for the changes in operating conditions, income and net profit since 2015 in combination with the trend of the industry, the changes in the subject business areas, the price fluctuations of raw materials and products, etc; (2) Combined with the difference between current performance and commitment, on-hand orders and profit forecast basis, evaluate the feasibility of realizing performance commitment and fully prompt risks. Please give your opinion to the financial advisor 39 question 8. The plan disclosed that 15.54% of the equity of Teri battery held by Tongzheng industry has been pledged to Chongqing Wanli New Energy Co.Ltd(600847) . The company replied in the early stage that 38.76% of the shares of Teri battery held by Nanfang Tong have been pledged to Xinxing Jihua pharmaceutical Holding Co., Ltd. The company is requested to: (1) verify the specific reasons, transaction background and capital purpose of the above equity pledge; (2) Whether the subject matter and relevant shareholders are involved in major litigation or other rights restrictions; (3) Whether this transaction is conducive to the listed company to reduce related party transactions and enhance independence; (4) Whether there are capital transactions and guarantees between the subject and its main shareholders and related parties, if so, please list them one by one, and clarify whether there is non operating capital occupation or illegal guarantee, as well as the settlement measures and estimated time. Please give your opinion to the financial advisor 47 question 9. The stock price fluctuated before the suspension of the company's planning for major asset restructuring. Two months before the suspension, the company's share price rose 130.62%; On the trading day before the suspension, the share price rose by 4.62%. After the resumption of trading and the disclosure of the reorganization plan, the share price rose by the limit for two consecutive trading days. The company is requested to make supplementary disclosure: (1) the specific planning process, important time nodes and relevant personnel involved in the transaction; (2) Explain whether the directors, supervisors and senior managers of the company, major shareholders holding more than 5% and their directors, supervisors and senior managers have bought and sold the company's shares six months before the suspension of trading and since the resumption of trading; (3) Whether there is any disclosure of inside information in this restructuring transaction. Please give your opinion to the financial advisor The equivalent part of 48.95% equity of tere battery held by 61 parties shall be replaced, and the difference part shall be purchased from the counterparty by the company issuing shares. At the same time, the company shall start the acquisition of all the remaining equity of Teri battery after the cumulative realization of the transaction performance commitments and the completion of the compensation obligations, and the acquisition valuation shall not be less than 11.75 times of the subject matter's net profit deducted in 2024. The company is requested to make supplementary disclosure: (1) clarify the detailed calculation process and basis of valuation multiple, and whether it is prudent; (2) Whether the subsequent acquisition of the remaining equity of Teri battery will lead to the change of the company's control, and whether there are agreements or specific arrangements for the ownership of the control of the subsequent company; (3) The specific consideration and necessity of the phased acquisition of the target equity, and whether there is a situation of avoiding reorganization and listing. The financial advisor is invited to comment.
reply:
1、 Clarify the detailed calculation process and basis of valuation multiple, and whether it is prudent
According to the agreement on major asset replacement and issuance of shares to purchase assets, the counterparty promises that the net profit attributable to the shareholders of the parent company from 2022 to 2024 after deducting non recurring profits and losses will not be less than 150 million yuan, 200 million yuan and 250 million yuan respectively, and the average net profit during the commitment period is 200 million yuan. In this transaction, the estimated value of 100% equity of Teri battery is RMB 235 million, and the PE multiple of the average net profit in the corresponding commitment period is 11.75. The valuation multiple of the subsequent acquisition of the minority equity of Teri battery is the intended valuation level determined by both parties with reference to the estimated value of this transaction.
In addition, the parties to the transaction agree that the final valuation of the subsequent company's acquisition of the minority equity of Teri battery shall be subject to the asset appraisal report issued by the asset appraisal institution in accordance with the provisions of the securities law. The subsequent listed companies will urge the evaluation institutions to determine the final valuation of the minority equity of Teri battery in strict accordance with the evaluation criteria and the operation of Teri battery at that time, so as to protect the interests of the listed company.
Since it is impossible to predict the specific operation of Teri battery in the subsequent acquisition of minority interests, in order to reach the preliminary intention of subsequent acquisition, it is reasonable to refer to the valuation level of this transaction, and the final valuation of minority interests of Teri battery is subject to the evaluation report, which can better protect the interests of listed companies. Therefore, the valuation arrangement for the acquisition of minority equity of Teri battery in this transaction is more reasonable and cautious.
2、 Whether the subsequent acquisition of the remaining equity of Teri battery will lead to the change of the company's control, and whether there are agreements or specific arrangements for the ownership of the control of the subsequent company
After the completion of this transaction, the minority shareholders of Teri battery are Nanfang Tongzheng and Xingzhong investment. As of the issuance date of this reply, in addition to the contents disclosed in the reorganization plan, the company has not reached any agreement and arrangement with Nanfang Tongzheng and Xingzhong investment on the acquisition of minority equity of Teri battery.
According to the agreement of this transaction, the conditions to be met for the company to start the acquisition of minority equity of Teri battery are as follows: "the accumulated net profit of Teri battery during the performance commitment period is not less than the accumulated committed net profit, i.e. RMB 600 million, and the performance compensation obligation has been completed (for example, performance compensation is involved in 2022 and 2023)". If the relevant acquisition conditions are not met, the company can choose whether to acquire a minority stake in Teri battery according to the market conditions at that time. If the above acquisition conditions are met, the company can start the transaction of acquiring the minority equity of Teri battery by issuing shares or paying cash in accordance with the requirements of the agreement. The specific acquisition plan will be determined by the company and Nanfang Tongzheng and Xingzhong investment according to the operation of Teri battery and other market conditions at that time.
To sum up, as of the date of issuance of this reply, there is uncertainty about whether the listed company will acquire the equity of Teri battery in the future and the specific acquisition method adopted by the company if the acquisition is started. Therefore, it is uncertain whether the subsequent acquisition of minority equity of Teri battery will lead to the change of control of the company.
In addition, Liu Xicheng, the actual controller of Teri battery, has issued a letter of commitment, which is as follows:
"1. Within 36 months after the completion of this transaction, Chongqing Wanli New Energy Co.Ltd(600847) the actual controller is Mr. Mo Tianquan. The promisor fully recognizes and respects these situations and will not raise any objection in any form.
2. Within 36 months after the completion of this transaction, the promisor and its persons acting in concert will not seek the status of Chongqing Wanli New Energy Co.Ltd(600847) largest shareholder or controlling shareholder and actual control in any other way by entrustment, solicitation of voting rights, signing of agreement on concerted action, or jointly with other shareholders, And will not assist or cause other shares Beijing Tongtech Co.Ltd(300379) to seek the status of controlling shareholder and actual controller of Chongqing Wanli New Energy Co.Ltd(600847) in any way. "
In addition to the above commitments, as of the issuance date of this reply, there is no agreement or specific arrangement between the trading parties on the ownership of the control right of the subsequent company.
3、 The specific consideration and necessity of the phased acquisition of the target equity, and whether there is a situation of avoiding reorganization and listing
(I) the reasonableness of the trading company's failure to acquire the equity of Teri battery held by Nanfang Tongzheng and Xingzhong investment
Up to now, 43.2 million shares of Teri battery (corresponding to 38.57% equity of Teri battery) held by Nantong have been pledged to Xinxing Jihua pharmaceutical Holding Co., Ltd. (equity pledge registration No.: 500104001113025), and the amount of guaranteed debt is 953687600 yuan, which is deposited by Nantong
