Citic Securities Company Limited(600030)
About Jiangsu Yahong Pharmaceutical Technology Co., Ltd
Strategic investors in IPO
of
Special verification report
Sponsor (lead underwriter)
North block, excellence Times Plaza (phase II), No. 8, Zhongxin Third Road, Futian District, Shenzhen, Guangdong
Citic Securities Company Limited(600030) (hereinafter referred to as ” Citic Securities Company Limited(600030) “, “sponsor” or “sponsor (lead underwriter)”) as the lead underwriter of Jiangsu Yahong Pharmaceutical Technology Co., Ltd. (hereinafter referred to as “Yahong pharmaceutical” or “company” or “issuer”) for initial public offering of shares and listing on the science and Innovation Board (hereinafter referred to as “lead underwriter”), according to The company law of the people’s Republic of China, the securities law of the people’s Republic of China, the measures for the administration of the registration of initial public offerings on the science and Innovation Board (for Trial Implementation), the measures for the administration of securities issuance by listed companies, and the underwriting specifications for initial public offerings under the registration system (hereinafter referred to as the “initial underwriting specifications”) Guidelines for the application of the issuance and underwriting rules of the science and Innovation Board of Shanghai Stock Exchange No. 1 – initial public offering of shares (revised in 2021) (hereinafter referred to as the “underwriting guidelines”), measures for the implementation of the issuance and underwriting of shares on the science and Innovation Board of Shanghai Stock Exchange (revised in 2021) (hereinafter referred to as the “implementation measures”) ）According to the provisions of relevant laws, regulations and other relevant documents, this verification report is issued to verify the qualification of strategic placement of initial public offering shares of Jiangsu Yahong Pharmaceutical Technology Co., Ltd.
1、 Approval and authorization of this issuance and listing on the science and Innovation Board
(i) Approval of the board of directors of the Issuer on this issuance and listing
On January 7, 2021, the issuer held the second meeting of the first board of directors, deliberated and approved the proposal on the company’s application for initial public offering and listing on the science and innovation board, the proposal on the investment projects raised by the company’s initial public offering and their feasibility analysis, and other proposals related to this offering and listing, And agreed to submit relevant proposals to the general meeting of shareholders for deliberation.
（2） Approval and authorization of the general meeting of shareholders of the Issuer on this issuance and listing
On January 22, 2021, the issuer held the first extraordinary general meeting of shareholders in 2021, A total of 49 shareholders (or shareholder representatives) actually attended the meeting, representing 460 million voting shares of the issuer, accounting for 100% of the total share capital of the issuer. The proposal on the company’s application for initial public offering and listing on the science and innovation board and the proposal on the company’s investment projects raised by initial public offering and their feasibility analysis were deliberated and adopted And other proposals related to this issuance and listing.
（3） Examination and approval of Shanghai Stock Exchange and CSRC on this issuance and listing
On September 23, 2021, the stock listing committee of Shanghai Stock Exchange (hereinafter referred to as “Shanghai Stock Exchange”) issued the announcement on the results of the 72nd review meeting of the Municipal Committee of science and innovation board in 2021. According to the contents of the announcement, the stock listing committee of Shanghai Stock Exchange has considered and agreed to the issuance and listing (IPO) of Yahong medicine.
On December 1, 2021, China Securities Regulatory Commission issued the reply on Approving the registration of initial public offering of shares of Jiangsu Yahong Pharmaceutical Technology Co., Ltd. (zjxk [2021] No. 3797), agreeing to the issuer’s application for registration of initial public offering of shares.
2、 About the determination of the strategic placement object and the number of shares placed in this issuance
The relevant plans for the strategic placement of the issuer’s shares are as follows:
(i) Determination of strategic placement object
The objects of this issuance and placement must be the following circumstances in accordance with Article 8 of the underwriting guidelines:
(i) Large enterprises or their subordinate enterprises with strategic cooperative relationship or long-term cooperative vision in business with the issuer;
（2） Large insurance companies or their subordinate enterprises, national large investment funds or their subordinate enterprises with long-term investment intention;
（3） A securities investment fund established by public offering, whose main investment strategies include investment strategy, placement of shares and closed operation;
（4） Relevant subsidiaries of the sponsor participating in the follow-up investment;
（5） The senior management and core employees of the issuer participate in the special asset management plan established by this strategic placement;
（6） Other strategic investors who comply with laws, regulations and business rules.
The issuer and the lead underwriter determine that Citic Securities Company Limited(600030) Investment Co., Ltd. (hereinafter referred to as “CSI investment”) is the object participating in the strategic placement according to the number of IPO shares, share restriction arrangements and actual needs, and in accordance with the provisions of relevant laws and regulations. See Part III of this verification report for the compliance of the strategic placement object.
The placement of this offering to one strategic investor complies with the provisions on the number of strategic investors in Article 6 of the underwriting guidelines.
（2） Number of shares strategically placed
According to the contents of the issuance and underwriting plan formulated by the issuer and the lead underwriter, the size of the shares to be issued by the issuer this time is 110 million shares, and the initial placement of 5.5 million shares to CSI investment, the sole strategic investor participating in this placement and the wholly-owned subsidiary of the sponsor Citic Securities Company Limited(600030) , accounts for 5% of the number of shares issued this time, which does not exceed the upper limit of 20%, Comply with the provisions of Article 17 of the implementation measures. According to the underwriting guidelines, the expected subscription proportion of CSI investment shall not exceed 5% of the number of public offerings, i.e. 5.5 million shares. The specific proportion and amount will be determined after the issuance price is determined on T-2:
1) If the issuance scale is less than 1 billion yuan, the follow-up investment ratio is 5%, but not more than 40 million yuan; 2) If the issuance scale is more than 1 billion yuan and less than 2 billion yuan, the follow-up investment ratio is 4%, but not more than 60 million yuan;
3) If the issuance scale is more than 2 billion yuan but less than 5 billion yuan, the follow-up investment ratio is 3%, but not more than 100 million yuan;
4) If the issuance scale is more than 5 billion yuan, the follow-up investment ratio is 2%, but not more than 1 billion yuan. Since the final subscription quantity of CSI is related to the final issuance scale, the lead underwriter has the right to adjust the final subscription quantity of CSI after determining the issuance price.
A total of one investor participated in the strategic placement, and the initial number of strategic placement was 5.5 million shares, accounting for 5.00% of the total issuance. It meets the requirements in the implementation measures and underwriting guidelines that the number of strategic investors in this offering shall not exceed 10, and the total number of shares placed by strategic investors shall not exceed 20% of the number of shares in this public offering.
3、 Compliance of strategic placement objects participating in this offering
(i) Selection criteria of strategic investors
The strategic placement investors are selected in accordance with the underwriting guidelines and other relevant provisions. The specific standards are as follows:
1. Relevant subsidiaries of the sponsor participating in the follow-up investment.
（2） Subject qualification of participants in this strategic placement
The only object participating in the strategic placement of this issuance is CSI, which is a wholly-owned subsidiary of the sponsor Citic Securities Company Limited(600030) .
1. Citic Securities Company Limited(600030) Investment Co., Ltd
(1) Basic information
Enterprise name Citic Securities Company Limited(600030) Investment Co., Ltd. unified social code 91370212591286847j
/Registration number
Type: limited liability company (natural person investment) legal representative: Fang Hao
(wholly owned by legal person or holding company)
The registered capital is RMB 140 million, and the date of establishment is April 1, 2012
Address: room 2001, building 1, International Finance Plaza, No. 222, Shenzhen road, Laoshan District, Qingdao
The business term is from April 1, 2012 to no fixed term
Investment in financial products, securities investment and equity investment (the above scope shall be registered with the China securities investment fund industry business scope Association, and shall not engage in financial services such as deposit absorption from the public, financing guarantee and customer financing without the approval of the financial regulatory department according to law). (projects that must be approved according to law can only be carried out with the approval of relevant departments)
Shareholder Citic Securities Company Limited(600030)
Directors: Zhang Youjun (Chairman), Zhang Dongjun, Fang Hao
Key Personnel Supervisor: Niu Xuekun
General manager: Fang Hao
CSI does not have any circumstances that should be terminated in accordance with national laws, administrative regulations, normative documents and the articles of association, such as the expiration of its business term, the decision of shareholders to dissolve, the dissolution due to merger or division, the revocation of its business license according to law due to violation of laws, regulations or other normative documents, the order to close down or be revoked, or the declaration of bankruptcy due to failure to pay off its due debts. CSI is a legally existing limited company.
As of the signing date of this verification report, CIC has gone through the publicity procedures of 2020 annual report, and the national enterprise credit information publicity system shows that the operation status is “survival”.
(2) Controlling shareholder and actual controller
After verification, CSI is a wholly-owned subsidiary established by the sponsor (lead underwriter) Citic Securities Company Limited(600030) , Citic Securities Company Limited(600030) holds 100% of its equity, Citic Securities Company Limited(600030) is the controlling shareholder and actual controller of CSI. (3) strategic placement qualification
According to the provisions of Chapter III of the underwriting guidelines on “follow-up investment by relevant subsidiaries of the sponsor”, as an alternative investment subsidiary legally established by the sponsor Citic Securities Company Limited(600030) , CSI is qualified to participate in the strategic placement of the issuer’s initial public offering, which is in line with the provisions of Article 8 (4) of the underwriting guidelines.
According to the relevant provisions of the code for the management of alternative investment subsidiaries of securities companies, Citic Securities Company Limited(600030) has fully undertaken the alternative investment business other than the list of self operated investment varieties by CSI since 2017, and the compliance and risk management of CSI have been incorporated into the parent company’s Citic Securities Company Limited(600030) unified system. In addition, upon verification, on January 17, 2018, the China Securities Association issued the publicity of members of private investment fund subsidiaries and alternative investment subsidiaries of securities companies (the Seventh Batch). CSI has joined the China Securities Association as a member and accepted the self-discipline management of the association. (4) relationship
Upon verification, CSI is a wholly-owned subsidiary of Citic Securities Company Limited(600030) . Before this issuance, CSI did not directly hold shares of the company.
Citic Securities Company Limited(600030) through its own The issuer’s shares are indirectly held by asset management or raised funds in the form of relevant financial products filed with China Securities Investment Fund Industry Association (the proportion of holding the issuer’s shares after penetration does not exceed 0.3%). Such indirect investment behavior is an independent investment decision made by the relevant investment subject, and the above subject does not actively invest in the issuer.
In addition, CSI or its controlling shareholders, actual controllers and important related parties do not hold shares of the issuer or its controlling shareholders and important related parties; Citic Securities Company Limited(600030) . There is no other related relationship between CSI and the issuer.
(5) Sources of subscription funds participating in strategic placement
The lead underwriter has verified the audited financial report of the latest year provided by CSI, and the working capital of CSI is sufficient to cover the subscription capital of the subscription agreement signed between CSI and the issuer; Meanwhile, according to the commitment issued by CSI, the funds used by CSI to pay this strategic placement are its own funds.
(6) Sales restriction arrangements and related commitments
CSI promises to obtain the restricted sale period of the shares allocated this time is 24 months from the date of the issuer’s initial public offering and listing. After the expiration of the restricted sale period, the reduction of the allocated shares by CSI shall be subject to the relevant provisions of the CSRC and the Shanghai Stock Exchange on share reduction.
CSI promises not to use the shareholder status obtained by the allocated shares to affect the normal production and operation of the issuer, and not to seek the issuance control right during the restricted sale period of the allocated shares.
（3） Subscription agreement
The issuer has entered into a subscription agreement with the allocated object determined above to participate in the strategic placement, which stipulates the subscription quantity, subscription price and subscription payment; Rights and obligations of Party A; Rights and obligations of Party B; Confidentiality clause; Liability for breach of contract; Assignment and waiver; Notice and delivery.
The content of the subscription agreement signed between the issuer and the issuing object does not violate the provisions of the contract law of the people’s Republic of China and other laws, regulations and normative documents, and the content is legal and effective.
（4） Compliance comments
The lead underwriter has verified the selection criteria and placement qualification of strategic investors.
CSI currently exists legally. As an alternative investment subsidiary legally established by the sponsor Citic Securities Company Limited(600030) , it meets the criteria for the issuer to select strategic investors, At the same time, it also complies with item (4) of Article 8 of the underwriting guidelines and other relevant laws and regulations, and is qualified to participate in the strategic placement of the issuer’s initial public offering. After verification by the lead underwriter, CSI investment does not have any prohibited circumstances specified in Article 9 of the underwriting guidelines, and the issuer has issued a letter of commitment on the verification matters.
The prohibited circumstances specified in Article 9 of the underwriting guidelines are:
1. The issuer and the lead underwriter promise the strategic investors that the share price will rise after listing, or if the share price does not rise, the issuer will buy back the shares or give any form of economic compensation;
2. The lead underwriter introduces strategic investors on the condition of promising to share the underwriting expenses, introducing and participating in the strategic placement of other issuers, and returning the brokerage commission for the placement of new shares;
3. The issuer subscribes to the securities investment fund managed by the issuer’s strategic investors after listing;
4. The issuer promises to appoint personnel associated with the strategic investor as directors, supervisors and senior managers of the issuer during the restricted sale period of shares allocated to the strategic investor, but the senior managers and core employees of the issuer
