Shanghai Stock Exchange document szkss (refinancing) [2021] No. 121
— Inquiry letters Kbc Corporation Ltd(688598) , Haitong Securities Company Limited(600837) on the examination of Kbc Corporation Ltd(688598) application documents for issuing shares to specific objects:
In accordance with relevant laws and regulations such as the securities law, the measures for the administration of securities issuance and registration of companies listed on the science and Innovation Board (for Trial Implementation), the rules for the examination and approval of securities issuance and listing of companies listed on the science and Innovation Board of Shanghai Stock Exchange, and the relevant provisions of the exchange, the examination and approval authority of the exchange is responsible for Kbc Corporation Ltd(688598) (hereinafter referred to as the issuer or company) reviewed the application documents for issuing shares to specific objects and formed the first round of questions.
1. Capacity expansion project of high-purity large-size advanced carbon matrix composites
According to the declaration documents, (1) The project plans to invest 180.25646 million yuan to build an annual capacity expansion of 1500 tons of high-purity large-scale advanced carbon matrix composites, so as to meet the increasing demand for carbon matrix composites in the photovoltaic market; (2) There is no difference in production technology, functional positioning and market field between the proposed products of the project and the previous first advanced carbon matrix composite capacity expansion project and convertible bond hot field composite capacity construction project; (3) From 2018 to the end of September 2021, the issuer’s production capacity was 187.87 tons, 202.05 tons, 481.61 tons and 1143.67 tons; in addition, the first advanced carbon matrix composite production capacity expansion project is expected to have a production capacity of 200 tons / year, and the convertible bond hot field composite production capacity construction project is expected to have a production capacity of 600 tons / year; (4) the project has not yet obtained the EIA approval.
Please explain to the issuer: (1) the specific impact on the issuer’s R & D and product performance caused by the transformation of the downstream industry to large-size silicon wafer, n-type battery and other technical directions, and whether there is a risk that the products raised and invested this time can not meet the needs of technological change in the downstream industry; (2) The difference between the estimated installed capacity and the actual installed capacity of photovoltaic power stations in China in 2021, and whether there is the risk of overcapacity in photovoltaic related industries; (3) the market space and market share of the company, the sales and production expansion of comparable companies in the same industry, the matching relationship between the capacity expansion plan of key customers and the consumption of carbon matrix composites; (4) The reasons for the significant increase of production capacity during the reporting period, and further explain whether the current capacity utilization is saturated; (5) analyze the rationality of the new production capacity invested by the raised capital and the corresponding capacity digestion measures in combination with the above problems, as well as the orders on hand and other cooperation agreements; (6) Whether the specific implementation subject of the project has corresponding qualification requirements; the follow-up arrangement of the EIA of the raised investment construction project is expected to be approved by the EIA.
2. About the construction project of Jinbo Research Institute
The company plans to invest 800.3517 million yuan for the construction project of Jinbo Research Institute. The project plans to improve the R & D and innovation ability to ensure the company’s market expansion ability in the fields of photovoltaic, semiconductor, fuel cell, high temperature heat treatment, friction braking and so on.
The issuer is requested to explain: (1) the issuer’s research projects, personnel and technical reserves, main products and sales revenue in the above fields during the reporting period; (2) The difference and connection between this project and the construction project of the first advanced carbon matrix composite R & D center; whether the expected R & D achievements and products to be developed in the above fields are carried out in the way of simultaneous R & D or phased R & D; (3) Changes in the number of R & D personnel and R & D expenditure during the reporting period, the R & D site and area currently used by the company, the specific contents and main functions of the existing R & D equipment, the specific types and main functions of the equipment purchased in the raised investment project, and the recruitment plan of R & D personnel in the future; combined with the above situation, analyze the rationality and necessity of building a new research institute, and whether it is necessary or not Whether there are repeated construction of research sites and whether there are relevant funds flowing into real estate.
3. On financing scale
The company plans to use 180.25646 million yuan of the raised funds for the construction of the production capacity expansion project of 1500 tons of high-purity large-size advanced carbon matrix composites (project 1) and 800.3517 million yuan for the construction project of Jinbo Research Institute (project 2).
The issuer is requested to explain: (1) the investment details of the above two projects, including the specific contents and capital investment direction of engineering cost, construction cost, engineering construction cost, equipment purchase and installation cost, reserve fund and initial working capital, and the basis and fairness of relevant amount calculation; (2) The specific functions of new projects 1 and 2 financed by large amount, whether there is a significant difference between the relevant product technology and the issuer’s existing technology, whether the main purpose of the issuer’s financed construction project is only to expand production capacity, and further explain the necessity and rationality of the issuer’s large amount financing in combination with the above situation; (3) Calculate the impact of relevant depreciation and amortization on the company’s financial situation after the above two projects reach the expected serviceable state; (4) the impact on unit production cost and gross profit margin after the completion of project 1; (4) the process, basis and results of benefit calculation of project 1.
The sponsor is requested to express clear opinions on the rationality of the calculation basis, process and results of the investment amount of each raised investment project, whether the benefit calculation results of the raised investment project are cautious and reasonable, and whether the amount of each raised investment project of the company exceeds the actual demand for raised funds.
The reporting accountant is requested to check and express opinions.
4. Supplementary working capital
The company plans to use 500 million yuan of the raised funds to supplement working capital projects.
The issuer is requested to explain: (1) the calculation process and basis of the scale of supplementary working capital; (2) demonstrate the rationality and necessity of the scale of supplementary working capital in combination with the company’s monetary capital balance, use arrangement, asset liability ratio and other financial indicators and the comparison of the same industry. The application accountant is requested to check and express opinions.
5. About operation
5.1 according to the application materials, the company’s main production mode is customized development and production according to customer needs; The company focuses on order production, supplemented by a small amount of goods preparation. At the end of each reporting period, the book value of inventory was 32.1212 million yuan, 25.3223 million yuan, 47.3088 million yuan and 24.12968 million yuan respectively. The inventory in the latest period increased rapidly. The issuer is requested to explain: (1) the composition of order products and goods preparation in the company’s finished products, and the rationality of the goods preparation amount; (2) In combination with the changes in market demand and horizontal competition of the issuer’s main products, the product’s own R & D cycle, production cycle, delivery cycle, stock age and post period carry over of various inventories, explain the reasons and rationality for the significant increase in the amount of various inventories at the end of the reporting period, whether there is a slowdown in product sales due to changes in downstream demand, and the falling price standard of relevant inventories Whether the provision is sufficient; (3) The market price trend of carbon fiber, whether the purchase price of the company is fair, whether hoarding is in line with the general practice of the industry, and whether the impact of its price rise on the company’s gross profit margin has a significant adverse impact on the raised investment project.
Please report to the accountant for verification and comment.
5.2 according to the application materials, in the second half of 2018, the company reduced the price of some products, and the comprehensive price decreased by 10% to 30%. In the prospectus, the company gave a risk warning on the decline of product price.
Please explain to the issuer whether there is any price reduction in the latest product of the company, and the possibility and range of price reduction in the short term in the future.
Please report to the accountant for verification and comment.
5.3 the issuer is requested to explain: (1) the reason and rationality for the substantial increase in accounts receivable at the end of the reporting period; (2) the reason and rationality for the large difference between net profit and net cash flow from operating activities; (3) the corresponding relationship between the amount of construction in progress and each raised investment project. The reporting accountant is requested to check and express opinions.
6. On financial investment
The issuer is requested to explain: (1) the specific circumstances of the financial investment (including financial investment) implemented or proposed to be implemented by the company from six months before the date of the resolution of the board of directors related to the issuance to the issuance; whether the relevant financial investment amount has been deducted from the total amount of the raised funds; (2) Whether the company meets the requirement that there is no financial investment with large amount in the latest period.
Please report to the accountant for verification and comment.
The issuer is requested to distinguish between “disclosure” and “explanation”. In addition to applying for exemption, the disclosure content shall be added to the prospectus. The explanation content is the content of inquiry reply and does not need to be added to the prospectus; Where the amendment of the prospectus and other application documents is involved, the updated place shall be indicated in bold in regular script, and the amendment description and difference comparison table shall be submitted together; The recommendation institution is requested to carefully check and check the issuer’s reply item by item, and write the general opinion that “the institution has checked the company’s reply in this reply material, confirmed and guaranteed its authenticity, completeness and accuracy” after the issuer’s reply.
Shanghai Stock Exchange
Subject words: inquiry letter on refinancing of science and technology innovation board on December 22, 2001
Issued by the listing examination center of Shanghai Stock Exchange on December 22, 2021
