Chongqing Wanli New Energy Co.Ltd(600847)
Reply to the 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
Chongqing Wanli New Energy Co.Ltd(600847) (hereinafter referred to as " Chongqing Wanli New Energy Co.Ltd(600847) ," listed company "and" company ") received the information disclosure inquiry letter on 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 from Shanghai Stock Exchange on January 27, 2022 (hereinafter referred to as" inquiry letter "). According to the relevant requirements of the inquiry letter, the company and relevant intermediaries have actively and seriously verified, analyzed and studied relevant issues. Now, the following reply is made on the relevant contents of the inquiry letter.
The audit and evaluation of the target company of this transaction have not been completed, so the financial data of the target company involved in this reply are unaudited data. The final audited financial data and evaluation results will be subject to the audit report and evaluation report issued by the audit institution and evaluation institution in accordance with the relevant provisions of the securities law.
Unless otherwise specified, the words or abbreviations mentioned in this reply 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.
1、 About this transaction plan
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. The asset appraisers and financial advisers are invited to express their opinions.
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 held by Nantong (corresponding to 38.57% equity of Teri battery) have been pledged to Xinxing Jihua pharmaceutical Holding Co., Ltd. (equity pledge registration No.: 500104001113025), and the amount of guaranteed debt is 953687600 yuan. Nantong is under great financial pressure, so it is difficult to raise funds to solve the above equity pledge problem.
Therefore, there are delivery obstacles to the equity of Teri battery held by Nantong, which does not meet the requirements of Article 4 of the provisions on Several Issues concerning the regulation of major asset restructuring of listed companies.
In addition, in view of the transaction plan, all counterparties need to undertake the lead-acid battery business assets purchased by Chongqing Wanli New Energy Co.Ltd(600847) as part of the transaction consideration, and need to undertake performance commitment and compensation obligations, 12.16% equity of Teri battery held by Xingzhong investment will not participate in the transaction.
Therefore, it is reasonable that the assets won in this transaction do not include all the equity of Teri battery held by Nanfang Tongzheng and Xingzhong investment.
(II) rationality of the company's subsequent acquisition of minority equity of Teri battery
On the one hand, after the completion of this transaction, Teri battery will become the holding subsidiary of the listed company. As the minority shareholders of the holding subsidiaries of the listed company, Nanfang Tongzheng and Xingzhong investment are difficult to improve their liquidity through IPO or third-party M & A. Therefore, Nanfang Tongzheng and Xingzhong investment have the realistic demand to sell minority equity to listed companies.
On the other hand, after the completion of this transaction, although the listed company holds the control right of Teri battery, the shareholding ratio is relatively low (no less than 51%), which has the demand to improve the shareholding ratio of Teri battery, so as to better promote the rapid development of Teri battery through output management and capital, and further improve the profitability of the listed company. Based on the above reasons, the company and the counterparty reached a preliminary intention to acquire a minority stake in Teri battery.
In addition, the listed company's acquisition of the controlling interest of Teri battery through this transaction is conducive to reducing the integration risk of the transaction, reducing the amount of goodwill recognized in this transaction and controlling the risk of goodwill impairment. Lithium iron phosphate industry is an emerging business field for listed companies. Through step-by-step acquisition, the company can bind interests with Nanfang Tongzheng, the main shareholder of Teri battery, and Xingzhong investment, a state-owned shareholder, so as to improve the performance of transaction integration and reduce the risk of M & A.
To sum up, the phased acquisition of tere battery equity by listed companies is related to its equity pledge status and the trading needs of minority shareholders. It is a comprehensive plan to meet the reasonable requirements of all parties to the transaction. There is no situation to avoid restructuring and listing, and it meets the requirements of restructuring laws and regulations. In addition, the above acquisition plan can effectively reduce the integration risk and goodwill impairment risk of this transaction, and is conducive to safeguarding the interests of the company and shareholders, which is reasonable.
4、 Verification opinions of intermediary institutions
After verification, the independent financial adviser believes that: the valuation multiple of the acquisition of the minority equity of Teri battery agreed in this transaction is determined by referring to the valuation of this transaction, and the final valuation of the minority equity of Teri battery should be subject to the evaluation report. The above valuation arrangement is reasonable and prudent; Up to now, in addition to the agreements and commitments signed and disclosed in the plan stage, the listed company has not reached any agreement and arrangement with Nanfang Tongzheng and Xingzhong investment on the acquisition of minority equity of Teri battery, nor has there been any specific agreement and arrangement on the ownership of control of subsequent listed companies; The phased acquisition of shares of Teri battery by a listed company is related to its equity pledge status and the transaction needs of minority shareholders. It is a comprehensive plan to meet the reasonable requirements of all parties to the transaction. There is no situation to avoid restructuring and listing, and it meets the requirements of restructuring laws and regulations. In addition, the above acquisition plan can effectively reduce the integration risk and goodwill impairment risk of this transaction, and is conducive to safeguarding the interests of the company and shareholders, which is reasonable.
The asset appraisal institution believes that the valuation multiple of the acquisition of minority equity of Teri battery agreed in this transaction is determined with reference to the estimated value of this transaction. The listed company has analyzed the valuation multiple of the acquisition of minority equity of Teri battery in combination with the P / E ratio multiple of current listed companies in the same industry. The valuation report issued by the appraisal institution of minority equity shall prevail. 5、 Supplementary disclosure
The above contents are supplemented and disclosed in "III. situation of this transaction plan" (II) issuance of shares to purchase assets "and" 11. Acquisition arrangements for the remaining equity of Teri battery "in" section I overview of this transaction "of the reorganization plan.
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 an estimated value of 1.34 billion yuan by the total equity income 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. The asset appraisers and financial advisers are invited to express their opinions. reply:
1、 Specific reasons for different evaluation methods and different evaluation results of Teri battery in the early stage
(I) evaluation method and results of Teri battery in the early stage
On April 18, 2017, Chongqing Huakang asset appraisal Land Real Estate Appraisal Co., Ltd. issued the asset appraisal report of the asset appraisal project involving all the shareholders' rights and interests involved in the proposed capital increase of Chongqing Teri battery materials Co., Ltd, The market value of all shareholders' equity of Teri battery as of December 31, 2016 was evaluated (hereinafter referred to as "2017 evaluation"). This appraisal adopts two methods: asset-based method and income method, and finally determines the appraisal value based on the results of income method. According to the appraisal, as of December 31, 2016, the appraisal value of all shareholders' equity of Teri battery was 134006600 yuan.
On December 10, 2018, Kaiyuan Asset Appraisal Co., Ltd. issued the valuation report on the value of 15.61% equity of Chongqing Teri battery materials Co., Ltd. involved in Chongqing Wanli New Energy Co.Ltd(600847) proposed equity transfer, which evaluated the market value of 15.61% equity of Teri battery as of August 31, 2018 (hereinafter referred to as "2018 valuation"). This appraisal adopts two methods: asset-based method and market method, and finally determines the appraisal value based on the results of market method. After evaluation, as of August 31, 2018, the evaluation value of 15.61% of the shareholders' equity of Teri battery was 128.09 million yuan, and the evaluation value of all shareholders' equity of Teri battery was 8205856 million yuan.
(II) reasons for adopting different evaluation methods and different evaluation results in the previous evaluation
The final income of the battery industry assessed by different methods of shareholders' assessment in 2017 is RMB 13.405 million and RMB 8.266 million respectively, which is mainly due to the different market conditions of the battery industry assessed by different methods of shareholders' assessment in 2018.
1. Evaluation by income method in 2017
The benchmark date of 2017 evaluation of Teri battery is December 31, 2016. At the assessment time point, with China listed the new energy vehicle industry as a strategic emerging industry in October 2010, relevant national departments and governments at all levels have successively introduced new energy vehicle quantity promotion, technical specifications, government subsidies, tax incentives and other aspects
