Gem investment risk tips
After this stock issue, it is planned to be listed on the gem, which has high investment risk. GEM companies have the characteristics of large investment in innovation, uncertainty about the success of the integration of new and old industries, still in the growth stage, high operation risk, unstable performance and high delisting risk. Investors are facing greater market risk. Investors should fully understand the investment risks of the gem and the risk factors disclosed by the company, and make investment decisions prudently.
Hangzhou Baicheng Pharmaceutical Technology Co., Ltd
Hangzhou Bio-Sincerity Pharma-Tech Co.,Ltd.
(No. 802, 8th floor, building 1, No. 502, Linping Avenue, Yuhang Economic and Technological Development Zone, Yuhang District, Hangzhou City, Zhejiang Province) IPO and listing on GEM
Prospectus
Sponsor (lead underwriter)
(No. 95, dongchenggenshang street, Qingyang District, Chengdu)
Important statement
Any decision or opinion made by the CSRC and the exchange on this issuance does not indicate that they guarantee the authenticity, accuracy and integrity of the registration 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 shares 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 the stock price after the shares are issued according to law. The issuer 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.
The controlling shareholder and actual controller of the issuer promise that there are no false records, misleading statements or major omissions in this prospectus, and bear corresponding legal liabilities.
The person in charge of the company, the person in charge of accounting and the person in charge of the accounting agency shall ensure that the financial and accounting materials in the prospectus are true and complete.
The issuer and all directors, supervisors, senior managers, controlling shareholders, actual controllers, sponsors and underwriting securities companies promise to compensate investors for losses in securities issuance and trading due to false records, misleading statements or major omissions in the issuer's prospectus and other information disclosure materials.
The sponsor and the securities service institution promise to compensate the investors for the losses caused to the investors due to the false records, misleading statements or major omissions in the documents prepared and issued for the issuer's public offering.
Overview of this offering
Stock type: RMB ordinary shares (A shares)
The number of shares to be publicly issued this time is 27041667, accounting for no less than 25% of the total issued shares of the issued share capital. This issuance is a public offering of new shares, and the original shareholders of the issuer do not offer shares to the public in this issuance.
The par value of each share is RMB 1.00
The issue price per share is 79.60 yuan / share
Issue date: December 9, 2021
Stock exchange and gem of Shenzhen Stock Exchange to be listed
Total share capital after issuance 108166667 shares
Sponsor (lead underwriter) Sinolink Securities Co.Ltd(600109)
Signing date of prospectus: December 15, 2021
Tips on major events
The company specially reminds investors to carefully read the full text of the prospectus and pay special attention to the following important matters: I. commitments related to this offering
The issuer, controlling shareholders, actual controllers, other shareholders holding more than 5%, directors, supervisors, senior managers and other core personnel of the issuer, as well as the sponsors and securities service institutions of this offering, have made corresponding commitments in accordance with the relevant provisions of the CSRC and the Shenzhen Stock Exchange. See "section XIII Annex 1 commitments related to investor protection" for details of these commitments. 2、 The issuer's profit distribution policy after the issuance and the shareholders' dividend return plan for three years after the listing
The accumulated undistributed profits formed by the company before this issuance shall be jointly enjoyed by the new and old shareholders after this issuance according to their proportion of shares. The company has formulated the profit distribution policy and the shareholder dividend return plan for three years after listing. For details, see "II. Dividend distribution policy" in "section 10 investor protection" of this prospectus. 3、 In particular, investors are reminded to pay attention to the following risks in the "risk factors"
The company specially reminds investors that before making investment decisions, please carefully read all the contents of the section "section IV Risk Factors" of the prospectus to fully understand the main risks of the company.
The company specially reminds investors to pay attention to the following risk factors: (I) the risk of technology upgrading and equipment renewal brought by the development of drug R & D technology
Pharmaceutical R & D industry is a knowledge intensive industry with the characteristics of rapid technology renewal. Drug R & D technology will be updated and iterated with the emergence of new technologies, new methods and new equipment. At present, with the increasing investment in technology R & D and the upgrading of detection and analysis technologies, pharmaceutical technology R & D enterprises may face the challenge of backward technology. If the company cannot maintain the investment in the renewal and maintenance of experimental equipment in pharmaceutical research, clinical trials and other fields, and cannot continuously strengthen the construction of technical R & D and technical talent team, the company's future profitability and sustainable development ability will be affected.
（2） Risk of drug development failure
The company is a comprehensive pharmaceutical technology R & D enterprise with pharmaceutical research as the core, including generic drug development, consistency evaluation and innovative drug development. Since its establishment, the company has been focusing on drug R & D business and has accumulated rich experience in drug development. At present, the company usually has sufficient research and judgment on the difficulty of the project and the matching with the company's R & D technology. Although the company signs formal business contracts with customers only when it is sure that the project can be completed, drug R & D is a systematic project, which needs to undergo repeated experiments and generally has high risks. Due to the comprehensive influence of the company's technical level, laboratory conditions, raw material supply, production conditions of customers or entrusted production enterprises, changes in regulatory policies and other factors, there is a possibility of R & D failure. Although the contract signed between the company and the customer stipulates the responsibility division and payment settlement terms for drug R & D failure, the company still has the risk of termination of the contract and refund to the customer due to its own reasons. （3） Risk that the future business cannot grow rapidly for a long time and may fluctuate
From January to June 2018 to 2021, the company's operating revenue was 82.1221 million yuan, 156.4156 million yuan, 207.2478 million yuan and 141.263 million yuan respectively, with an annual compound growth rate of 58.86% from 2018 to 2020 and an increase of 74.11% from January to June 2021 over the same period of the previous year; The net profits were 11.4747 million yuan, 45.0219 million yuan, 57.1935 million yuan and 40.8939 million yuan respectively, with rapid performance growth.
During the reporting period, the company's business is in a period of rapid growth, but the overall business scale is relatively small and its ability to resist market risks is limited. In the course of operation, changes in industrial policies, market competition pattern, customer demand and the company's competitive advantage will all have an impact on the company's performance. If the changes in the above factors are unfavorable to the company, the amount of newly signed business contracts of the company will not maintain growth in the future, and the future business will not grow rapidly for a long time Risk of possible fluctuations. （4） Risk of long execution cycle of project contract
The pharmaceutical R & D industry has obvious characteristics of high risk, high investment and long cycle. The contract execution cycle span of the company is generally long.
Although the company has agreed to usually charge a certain proportion of advance collection when signing the contract with the customer and charge corresponding service fees according to different research stages, due to the long execution cycle of the contract, changes in national policies, changes in reference preparations or delisting, changes in customer product planning and capital status may occur during the period, As a result, the actual performance progress of individual projects is inconsistent with the expected progress, the payment is not timely, and the project effect is not as expected. The extension or termination of the contract will affect the company's future business, financial status and reputation. Therefore, the company has the risk of increasing the complexity and uncertainty of project management due to the long project implementation cycle. （5） Cro companies such as comprehensive and specialized companies may enter the field of generic drug consistency evaluation and generic drug development in the future, which will increase the risk of market competition
From 2018 to January to June 2021, the company's operating revenue was 82.1221 million yuan, 156.4156 million yuan, 207.2478 million yuan and 141.263 million yuan respectively, with an annual compound growth rate of 58.86% from 2018 to 2020 and an increase of 74.11% from January to June 2021 over the same period of the previous year; The net profits were 11.4747 million yuan, 45.0219 million yuan, 57.1935 million yuan and 40.8939 million yuan respectively, with rapid performance growth. The issuer's income mainly came from the field of generic drug consistency evaluation and generic drug development.
Although the company currently has rich successful project experience, mature R & D technology platform and professional R & D personnel in generic drug consistency evaluation and generic drug development, and has an in-depth layout in the field of high-end preparations such as inhalation preparations, transdermal preparations, sustained and controlled release preparations and fine particles, it has a strong competitive advantage; However, cro companies such as comprehensive and specialized companies may enter the field of generic drug consistency evaluation and generic drug development in the future, which will increase the market competition pressure of the company. If the company cannot continuously improve its technical level and service ability and effectively maintain its competitive advantage, the company's operating revenue and profit level will be adversely affected by the increase of market competition. （6） Risk of slowdown or reduction in growth of generic drug consistency evaluation business
In each period of the reporting period, the income of the company's generic drug conformity evaluation business was 25.761 million yuan, 48.8843 million yuan, 50.6446 million yuan and 19.0922 million yuan respectively, accounting for 31.37%, 31.25%, 24.44% and 13.52% of the current main business income respectively. The income proportion in the latest period decreased. As of June 30, 2021, the amount of orders in hand of the company was 598.7243 million yuan, and the order reserve was sufficient, of which the proportion of generic drug consistency evaluation business was 20.65%.
At present, the consistency evaluation policy for oral solid preparations has been implemented for more than 4 years, and the relevant R & D investment has passed the period of rapid growth. The consistency evaluation of injection products will usher in a good development opportunity. The injection consistency evaluation policy was officially released in May 2020. With the continuous improvement and refinement of the injection consistency evaluation policy and the changes of the national centralized procurement policy, the consistency evaluation work continues to deepen. It is expected that the relevant R & D investment will increase at a rapid rate in the next 2-3 years.
On the whole, for cro companies including the company, generic drug conformance evaluation has entered a stable development period from rapid development. The growth rate of generic drug conformance evaluation business is expected to slow down or decrease, and the company may face the risk of slowing down or decreasing the growth rate of conformance evaluation business. （7） Risk that the national centralized procurement policy reduces the source of business orders of the company
In 2018, some varieties have passed the consistency evaluation. On the basis of passing the consistency evaluation, Medicare launched "4 + 7" urban volume procurement. At present, five rounds of volume procurement have been completed. With the increase of the number of varieties through consistency evaluation, the range of varieties purchased with quantity is also expanding. In terms of time rhythm, the medical insurance bureau will promote centralized procurement once a year. As of the date of signing this prospectus, China has implemented five rounds of national centralized drug procurement, with 218 selected varieties, all of which have been reduced in varying degrees, and some varieties have been reduced by more than 50%.
The national centralized procurement policy may reduce the source of business orders of the company. On the one hand, affected by the sharp decline in the sales price of the selected varieties in the national centralized procurement, some pharmaceutical manufacturing enterprises' enthusiasm for R & D investment in the selected varieties in the national centralized procurement decreased, and the orders or potential orders of the company's related varieties decreased; On the other hand, affected by the national centralized procurement policy, some enterprises with single product pipeline and weak strength fail to expand the product layout in time, which will accelerate the elimination by the market and reduce the company's customer group or potential customer group. （8） Gross margin fluctuation risk
During the reporting period, the gross profit margin of the company's main business was 54.04%, 62.20%, 65.81% and 66.65% respectively. The drug R & D services provided by the company are customized services. Some services have a long cycle, high drug R & D risk, and the R & D cost is uncontrollable, resulting in certain differences in the gross profit margin of different projects of the company, and certain fluctuations in the gross profit margin of the company in different years. In addition, the gross profit margin is comprehensively affected by market supply and demand, the company's bargaining power, industry competition, specific business conditions and other factors. Therefore, the company faces the risk of gross profit margin fluctuation. （9） Risk of dependence on R & D investment in the pharmaceutical industry
In recent years, the state has continuously increased its support for the R & D of clinically necessary generic drugs and new drugs, and issued a series of industrial policies to encourage pharmaceutical enterprises to strengthen R & D, China Meheco Group Co.Ltd(600056) industrial R & D investment has been increasing. Benefiting from this, the company's business has continued to grow rapidly in recent years. At the same time, since 2016, the state has successively issued relevant policies to promote the consistency evaluation and volume procurement of generic drugs, resulting in the decline of the price of some drugs and the abandonment of the development of some generic drugs by pharmaceutical enterprises. The above related policies may affect the enthusiasm of R & D investment of some pharmaceutical enterprises. The issuer has the risk that the scale of research services undertaken by the company, the transformation scale of independent R & D projects and operating performance will decline due to the slowdown or reduction of drug R & D investment of downstream customers. （10） Risk of issuance failure
The company intends to apply for the first public offering on the gem of Shenzhen Stock Exchange
