Stock abbreviation: Jiangsu Jingyuan Environmental Protection Co.Ltd(688096) Stock Code: 688096 Jiangsu Jingyuan Environmental Protection Co.Ltd(688096)
(Jiangsu Jingyuan environmental protection Co., Ltd.) (domicile: No. 109, Tongxin Road, Chongchuan District, Nantong City)
Prospectus for issuing convertible corporate bonds to unspecified objects
(last draft)
Sponsor (lead underwriter)
(address: floor 22-25, block B, Ping An financial center, No. 5023, Yitian Road, Futian street, Futian District, Shenzhen) December 2021
statement
The company and all directors, supervisors and senior managers promise that there are no false records, misleading statements or major omissions in the prospectus and other information disclosure materials, and bear corresponding legal liabilities for their authenticity, accuracy and completeness.
The person in charge of the company, the person in charge of accounting and the person in charge of accounting institutions shall ensure that the financial and accounting data in the prospectus are true and complete.
Any decision or opinion made by the CSRC and the exchange on this issuance does not indicate that they guarantee the authenticity, accuracy and completeness of the application documents and the information disclosed, nor do they indicate that they make substantive judgment or guarantee on the profitability, investment value of the issuer or the income of investors. Any statement to the contrary is a false statement.
According to the provisions of the securities law, the issuer shall be responsible for the changes in the operation and income of the issuer after the securities are issued according to law. Investors independently judge the investment value of the issuer, make investment decisions independently, and bear the investment risks caused by changes in the operation and income of the issuer or changes in securities prices after securities are issued according to law.
Tips on major events
The company specially reminds investors that before making investment decisions, they must carefully read the text of this prospectus and pay special attention to the following important matters. 1、 The risk that the convertible bonds held by investors who do not meet the suitability requirements of stock investors on the science and innovation board cannot be converted into shares
The company is a listed company on the science and innovation board. The investors who issue convertible corporate bonds to unspecified objects this time and participate in the conversion of convertible bonds into shares shall meet the suitability management requirements of stock investors on the science and innovation board. If the convertible bond holder fails to meet the requirements for the appropriateness management of stock investors on the science and innovation board, the convertible bond holder will not be able to convert its convertible bonds into company shares.
The company has set redemption terms for this issuance of convertible bonds, including maturity redemption terms and conditional redemption terms, The board of directors (or the person authorized by the board of directors) is authorized by the general meeting of shareholders to negotiate with the sponsor according to the market conditions at the time of issuance (the lead underwriter) determines through negotiation that the conditional redemption price is the par value plus the interest accrued in the current period. If the holders of the company’s convertible bonds do not meet the appropriateness requirements of the stock investors of the science and innovation board, when the convertible bonds they hold are facing redemption, considering that the convertible bonds they hold can not be converted into the company’s shares, if the redemption price determined by the company according to the redemption terms agreed in advance is lower than that taken by the investors As for the price (or cost) of the convertible bonds, the investors have the risk of loss due to the low redemption price. 2. The credit rating of the convertible corporate bonds issued by the company this time
The company issues convertible bonds to unspecified objects. The corporate bonds are rated by CSI PENGYUAN. According to the credit rating report of Jiangsu Jingyuan Environmental Protection Co.Ltd(688096) issuing convertible corporate bonds to unspecified objects in 2021 issued by CSI PENGYUAN, the credit rating of Jiangsu Jingyuan Environmental Protection Co.Ltd(688096) subject is a, the credit rating of this convertible corporate bond is a, and the rating outlook is stable.
During the duration of this convertible bond, the rating agency shall conduct tracking rating at least once a year. If the credit rating of this convertible bond is reduced due to factors such as external business environment, the company’s own situation or changes in rating standards, it will increase the investment risk of investors and have a certain impact on the interests of investors. 3、 Guarantees for the issuance of convertible corporate bonds by the company
There is no guarantee for the issuance of convertible bonds to unspecified objects. Please note that the convertible corporate bonds may have cashing risk due to the absence of guarantee. 4、 On the scale of convertible corporate bonds issued by the company
According to the plan for issuing convertible corporate bonds to unspecified objects announced by the company on April 30, 2021, the total amount of funds raised in the convertible bond plan of the company shall not exceed RMB 350 million (including this amount), and the specific amount of funds raised shall be determined by the board of directors (or persons authorized by the board of directors) authorized by the general meeting of shareholders within the above limit.
On October 14, 2021, the issuer held the 11th meeting of the third board of directors, deliberated and adopted the proposal on adjusting the company’s plan to issue convertible corporate bonds to unspecified objects and other relevant proposals, The total amount of the raised funds will be adjusted from no more than 350 million yuan (inclusive) to no more than 332.5 million yuan (inclusive). According to the authorization of the second extraordinary general meeting of shareholders in 2021, the above proposal does not need to be submitted to the general meeting of shareholders for deliberation.
Before the issuance of convertible bonds, the company will finally determine the total amount of funds raised for the issuance of convertible bonds according to the index status of net assets attributable to the shareholders of the listed company at the end of the most recent period, so as to ensure that it does not exceed the upper limit of 50% of the net assets attributable to the shareholders of the listed company at the end of the most recent period. 5、 Special risk tips
The company urges investors to carefully read the full text of “risk factors” in this prospectus and pay special attention to the following risks: (I) there is no risk of independent production in the company’s business operation
The construction project of intelligent system integration center of the company’s raised investment project is in progress. At present, there is no production link, and the production and services rely on outsourcing and outsourcing. The general equipment and materials required for the complete set of water treatment system are directly purchased by the company; The non-standard equipment is produced and provided by the cooperative integration manufacturer. The cooperative integration manufacturer carries out customized production and cooperative integration of the non-standard equipment according to the design drawings provided by the company and under the technical guidance and supervision of the personnel appointed by the company. After the construction of the intelligent system integration center is completed, the company will change from the current mode of “customized procurement and collaborative integration of non-standard equipment” to the mode of “independent production and independent assembly integration of core components”. Although the company has established a relatively stable cooperative relationship with the main cooperative integration manufacturers, before the completion of the construction project of the intelligent system integration center, if the main cooperative integration manufacturers cannot continue to provide customized procurement and cooperative integration services for the company, the company will need to temporarily replace the cooperative integration manufacturers, which may affect the timeliness of production and supply The stability of product quality has an adverse impact on product production and procurement. （2） The downstream industries are concentrated in the power industry with high customer concentration, which is the risk of business development in the non power industry
At this stage, the company’s revenue mainly comes from the thermal power industry with high customer concentration. From 2018 to 2020, the company’s revenue from the power industry accounted for 59.34%, 87.03% and 72.62% of its main business revenue respectively. At the same time, the adjustment of on grid electricity price and coal price of thermal power plant will affect the operating performance and construction and transformation needs of thermal power plant, and then affect the business development of the company and the collection speed of accounts receivable. As the adjustment is affected by industry policies, macroeconomic situation and other factors, if the above factors change adversely, it will have an adverse impact on the company’s business development and the speed of collection of accounts receivable.
In addition to the thermal power industry, the company is actively expanding customers in iron and steel, chemical, municipal, metal products and other industries, but the customer concentration in the thermal power industry is still high. For example, the company cannot effectively expand other market shares in the field of water treatment and diversify its sources of income in the future. Due to the high correlation between the company’s products and the downstream thermal power industry, once the procurement of the thermal power industry is reduced, the fluctuation and concentrated risk of the downstream thermal power industry may affect the company’s sustainable profitability. （3） Risk of fierce competition and low market share in thermal power water treatment industry
There are many participants in the thermal power water treatment market and the competition is fierce. At the same time, the water treatment service content of the power plant is relatively broad. Due to the limitations of technical reserves or their own professional positioning, most enterprises in the industry focus on one or several system equipment, resulting in a low market share of the company’s products. In the future, under the environment of continuous upgrading of environmental protection and increasing investment in environmental protection, high-quality enterprises with technology and R & D advantages, professional service advantages and brand advantages will further stand out, and large enterprises will have more market opportunities. If the company cannot continue to maintain its competitive advantages in technology and R & D, seize the development opportunities of the industry and further improve its market share, it may have an adverse impact on the company’s performance. （4） Risk of seasonal fluctuations in income
The company’s projects are mainly obtained through bidding. The number and scale of projects obtained in each quarter are different, and the implementation cycle of projects of different sizes and types is also different, so that the number and scale of projects completed in each quarter are different. During the reporting period, the company’s main revenue came from the power industry. The procurement of power enterprises has a certain seasonality. Affected by the winter construction in the north and the Spring Festival holiday, many projects were concentrated in the fourth quarter, resulting in a high proportion of the company’s revenue in the fourth quarter. In addition, affected by the Spring Festival holiday in the first half of the year, the company completed fewer projects in January and February, mainly focusing on delivery or construction after March. Therefore, the company’s operating income fluctuates seasonally.
At the same time, as the company’s main business models are equipment and system integration and project contracting, the revenue recognized in each quarter is mainly affected by the number and scale of projects completed in the current period, and generally will not be evenly distributed in each quarter. Therefore, the company’s relatively single business model may also lead to a certain risk of fluctuation in the company’s quarterly revenue and performance. （5） Rising collection risk of accounts receivable
The company adopts the settlement method of collection by contract for downstream customers. At the end of each reporting period, the net book value of accounts receivable accounts for 64.66%, 57.96%, 51.60% and 59.91% of the company’s current assets respectively, accounting for 61.76%, 53.44%, 39.14% and 44.60% of the total assets respectively. The turnover rate of accounts receivable of the company was 1.09, 1.05, 0.91 and 0.54 respectively, lower than that of comparable companies in the same industry, which was mainly affected by the seasonal fluctuation of the company’s income and the high proportion of income in the fourth quarter of the reporting period. The accounts receivable aged within one year at the end of each reporting period of the company accounted for 63.09%, 58.66%, 57.64% and 54.89% respectively. With the expansion of the company’s operating revenue, the aging structure of accounts receivable showed a growing trend.
During the reporting period, the company’s operating revenue and accounts receivable are mainly from the power industry. The company’s customers in the power industry are mainly wholly-owned or holding companies subordinate to major power generation groups. If it is a new power plant, it is still in the preparation period, and its project investment, capital budget and expenditure are usually determined and allocated by the superior level; If it is a stock power plant, it operates independently and is responsible for its own profits and losses. Its project investment, capital budget and expenditure are usually self raised. The credit status and payment capacity of major power generation groups do not represent the credit and payment capacity of a single power plant. With the expansion of the company’s business scale and the continuous growth of accounts receivable during the reporting period, if the company’s accounts receivable collection measures are not effective, the economic situation of downstream customers changes adversely or the financial situation of individual customers deteriorates, the company may not be able to recover the payment in time, which will have an adverse impact on the company’s asset quality and operating performance. （6） Risk of the company’s assets being mortgaged on its ability to continue as a going concern
As of the signing date of this prospectus, the company has mortgaged all house property rights for bank loans, and the maximum principal balance guaranteed is 121.8228 million yuan. The assets mortgaged by the company are mainly real estate, which is an essential asset for the production and operation of the company. If the company fails to repay the corresponding bank loans in time and in full, it will face the risk of the mortgagee’s restriction or disposal of assets according to law, or the risk of insufficient liquidity of the company due to the repayment of the above debts, which will have an adverse impact on the company’s sustainable operation ability.
（7） If the EP business of the company fails to pass the performance acceptance, it shall bear the corresponding responsibility according to the contract
During the reporting period, the equipment and system integration business (EP) of the company’s power industry was affected by the overall construction progress of the power plant project, and the time from arrival acceptance to performance acceptance was long, usually more than 1 year.
According to the EP business contract or technical agreement, after the customer’s first performance acceptance, if all index parameters have reached the technical agreement, the company’s contract equipment has passed the performance acceptance; If some indicators and parameters fail to meet the technical agreement due to the company’s reasons, the company shall take measures to eliminate them, including necessary repair, improvement or replacement of problematic parts in the contract equipment. The expenses incurred due to repair, improvement or replacement of problematic parts shall be borne by the company. At the same time, the customer will agree with the company to conduct the second performance acceptance.
After the customer’s second performance acceptance, if all index parameters have reached the technical agreement, the company’s contract equipment has passed the performance acceptance; If a small number of indicators and parameters still fail to meet the technical agreement due to the company’s reasons, the company shall repair, improve or replace the problematic parts until the problems are eliminated, and the expenses incurred by repairing, improving or replacing the problematic parts shall be borne by the company; At the same time, the customer collects liquidated damages from the company according to the contract agreement and performance acceptance. For example, if a certain index parameter fails to meet the technical agreement, the amount of liquidated damages is usually about 0.5% – 1% of the contract amount. If there are multiple index parameters that fail to meet the technical agreement, the cumulative amount of liquidated damages is usually no more than 10% of the contract amount.
Therefore, if the company fails to pass the performance acceptance, it shall bear corresponding responsibilities according to the contract. During the after-sales service period of the company’s EP project, if relevant expenses are incurred due to repair, improvement or replacement of defective parts, the accrued after-sales service fee shall be offset when it actually occurs; If the performance test index parameters fail to meet the technical agreement, the liquidated damages paid according to the contract shall be included in the non operating expenses when it actually occurs. During the reporting period, the company’s EP project did not fail the first performance acceptance, and there was no compensation for breach of contract. （8） Risks of investment projects with raised funds
1. At present, the company’s production of core components of intelligent superconducting magnetic coagulation equipment mainly depends on the risk of outsourcing processing
The company has no production links, and the production mode includes collaborative integration and outsourcing processing. In the early stage of the construction of the raised investment project, in order to make effective use of resources, the company mainly chooses to organize production in the way of collaborative integration. In the collaborative integrated production mode, the company is mainly responsible for product development and design and system scheme design, which is the key element to determine the product structure and performance, while the collaborative integration manufacturer is mainly responsible for the work
