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.
Jiangsu Yike Food Group Co., Ltd
(address: No. 1, Taihangshan Road, Suyu Economic Development Zone, Suqian City)
Initial public offering and listing on GEM
Letter of intent
Sponsor (lead underwriter)
(address: North block of excellence Times Plaza (phase II), No. 8, Zhongxin Third Road, Futian District, Shenzhen, Guangdong Province)
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 the prospectus and other information disclosure materials are free from false records, misleading statements or major omissions, 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 accounting institutions 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
Type of shares issued: RMB ordinary shares (A shares)
No more than 44897960 shares, accounting for no less than 10% of the total share capital of the company after this issuance (the final issued number shall be subject to the number registered by the CSRC). This issuance does not involve the public offering of shares by shareholders
The par value of each share is RMB 1.00
The issue price per share is RMB []
Expected issue date: January 6, 2022
Stock exchange to be listed and Shenzhen Stock Exchange gem
The total share capital after issuance shall not exceed 448979593 shares
Sponsor (lead underwriter) Citic Securities Company Limited(600030)
Signing date of the prospectus: December 27, 2021
Tips on major events
1、 Relevant commitments
Important commitments made by the issuer and its controlling shareholders, actual controllers, directors, supervisors and senior managers of the issuer, as well as the securities service institutions for this offering, and binding measures for failure to fulfill commitments, See "(VI) commitments made by the issuer and other responsible subjects related to the issuer's current offering and listing" in "I. documents for future reference" of "annex to section 13" of this prospectus.
2、 Special risk factors
The company reminds investors to pay special attention to the risk factors listed below, and reminds investors to carefully read all the contents of "risk factors" in the prospectus.
(i) Animal epidemic and other natural disaster risks
The company's main business scope covers many links of the meat and poultry industry chain. The epidemic situation of poultry is one of the main risks faced by the company in its production and operation. The impact of animal epidemics such as avian influenza on the company is mainly reflected in: (1) if a more serious animal epidemic occurs around the company or nationwide in the future, the poultry in the epidemic area will be destroyed, the supply of raw materials will be insufficient or the quality of raw materials will be damaged, and the price of raw materials will fluctuate greatly; (2) The emergence of a large-scale epidemic will reduce the desire of end consumers to buy poultry meat and reduce the market demand for the company's products; (3) In case of animal epidemic in the company's own subordinate farms, the company's own breeding birds will be destroyed and the company will suffer asset losses. In addition, in case of major natural disasters such as severe climate change and insect disaster, resulting in a large reduction in agricultural production, the cost of feed production and poultry breeding will rise sharply, and the company's procurement cost will increase; rainstorm, Blizzard, hail and other bad days Gas will bring inconvenience to road transportation and increase the transportation cost of materials and products.
（2） Food safety risk
Food safety has always been the top priority of meat processing enterprises. In recent years, the state has promulgated a series of laws and regulations such as the food safety law, the food safety implementation regulations and the Shenzhen Agricultural Products Group Co.Ltd(000061) quality safety law, so as to further strengthen the social responsibility, risk control and restraint measures of food producers and strengthen the punishment of violators. Although the company has established strict quality control systems and standards, if food safety accidents or quality problems occur due to poor quality control and management, it may have an adverse impact on the company's reputation and operation.
（3） Environmental protection risk
The pollutants produced in the production of the company mainly include wastewater, waste gas, feces, sludge and other small amounts of solid wastes produced in the production process. In addition to the company's own production and operation activities, the company's daily business relies on farmers as the main source of raw material supply for the slaughtering sector. If the environmental protection policies of the national and local governments are adjusted and the environmental protection requirements for the breeding and slaughtering industries are further improved, the production costs of the company and farmers in the purchase and construction of environmental protection facilities, payment of sewage charges and other operating expenses will be increased, which will have an impact on the profitability of the company.
In 2013, the State Council promulgated the regulations on pollution prevention and control of large-scale livestock and poultry breeding, which clearly defined the prohibited breeding areas, and the farms in the prohibited breeding areas were relocated or closed within a time limit. If the local government further adjusts the land planning and redefines the no breeding area in the future, the company's farmers' farms will face the risk of relocation or closure within a time limit, which may have an adverse impact on the company's production and operation.
（4） Risk of price fluctuation of products and raw materials
The company's main products are duck products, chicken products, feed, duck seedlings, chicken seedlings, cooked food and conditioning products. The main raw materials include hairy duck, hairy chicken, etc. the company's products and raw materials cover multiple links of the poultry breeding industry chain, and its market price changes with the supply and demand of each link of the industrial chain, showing a certain volatility.
The degree of large-scale breeding in China's poultry breeding industry is relatively low. Under the background of the market structure in which small-scale farmers account for the main part of the breeding group and the degree of large-scale breeding still needs to be improved, it is easy to cause large fluctuations in the market supply level. Therefore, the prices of duck products, chicken products, duck seedlings, chicken seedlings and other products may change greatly in a certain period of time. At the same time, due to different links in the industrial chain, the prices of the company's main raw materials wool duck and wool chicken also change with the relationship between supply and demand. Although the prices of the company's products and raw materials have a certain linkage effect, there are certain uncertainties in the price transmission time and change range, which will have a certain impact on the company's profitability.
（5） Risk of fluctuations in operating performance
Affected by the change of supply and demand, feed price, epidemic situation and other factors, the prosperity of the poultry industry presents certain fluctuation characteristics. In recent years, although the company's business scale has been expanding, the company's business performance has also fluctuated due to the impact of industry fluctuations. Especially in the process of industry rotation from rising cycle to falling cycle, the company's business performance will decline significantly and be at a low level during the relatively low period. Taking 2018-2020 as an example, 2018 and 2019 are upward cycles. Especially in 2019, there is a large demand in the industry. The high gross profit has mobilized the enthusiasm of farmers and stimulated the increase of industrial production capacity in the short term. In 2020, due to the rotation of the industry cycle, the net profit attributable to the shareholders of the parent company after deducting non recurring profits and losses decreased by 65.59% compared with 2019.
In each period of the reporting period, the company's operating revenue was RMB 9.905 billion, RMB 15.554 billion, RMB 14.392 billion and RMB 7.724 billion respectively, and the net profits attributable to the parent company after deducting non recurring profits and losses were RMB 143 million, RMB 363 million, RMB 125 million and RMB 23 million respectively; From the perspective of periodic changes in the industry cycle, 2019 is an upward cycle. The overall business performance of the industry is good. The high gross profit mobilized the enthusiasm of farmers and stimulated the increase of industry capacity in the short term. Due to the rotation of the industry cycle, the net profit attributable to the shareholders of the parent company after deducting non recurring profits and losses in 2020 decreased by 65.59% compared with 2019, From January to June 2021, the net profit attributable to shareholders of the parent company decreased by 67.08% year-on-year after deducting non recurring profits and losses. As the supply-demand relationship of the company's industry changes periodically, the company's performance decreases greatly in the downward cycle.
（6） Risk of not paying social insurance for all employees
As of the signing date of this offering intention, the company has paid basic social insurance, new rural insurance and new rural cooperative medical insurance for most employees, but some employees with rural accounts have not paid new rural cooperative medical insurance or new rural insurance, and some employees with urban accounts have not paid social insurance. The staff structure of the company is mainly registered residence workers in rural areas. The registered residence workers in rural areas are mainly front-line workers, who are highly mobile and sensitive to current income, so they have little willingness to participate in social insurance. The company has the risk that employees may trace the failure to fulfill the company's legal obligations in the later stage.
（7） Impact of "covid-19 pneumonia" epidemic on the company's production and operation
Since 2020, "covid-19 pneumonia" epidemic has led to limited transportation and closure of catering and other centralized places, which has had a certain impact on the company's raw material supply, operating rate, sales scale and product market price. However, with the introduction and implementation of a number of policies to ensure people's livelihood and supply and support enterprise resumption of work, the company's procurement and production have basically returned to the normal level by the end of the first quarter of 2020. Although the prevention and control situation of "covid-19 pneumonia" epidemic in China continues to improve, if the epidemic continues to spread in some regions or other countries and the epidemic can not be effectively controlled globally, it will still have an adverse impact on the macroeconomic situation and consumer demand, resulting in some uncertainty on the company's business performance in the next few years.
（8） Performance decline risk
In 2020, due to the impact of the epidemic of "covid-19 pneumonia" on Residents' daily consumption and market prices in all links of the poultry industry chain, and the cyclical fluctuation of the poultry seedling market, the company's operating performance in 2020 decreased compared with that in 2019, After deducting non recurring profits and losses, the net profit attributable to shareholders of the parent company decreased from 363 million yuan in 2019 to 125 million yuan in 2020, a decrease of 65.59%. From January to June 2021, affected by the decline of profitability of chicken products, the net profit attributable to shareholders of the parent company after deducting non recurring profits and losses decreased by 67.08% compared with the same period in 2020.
Affected by the change of supply-demand relationship in various links, the market prices in different links of the poultry industry chain still fluctuate periodically. The company's products and raw materials cover many links of the industrial chain of poultry breeding industry. The change of market price still poses the risk of fluctuation or decline in the company's performance.
（9） Profit forecast risk
The company has prepared the 2021 annual profit forecast report, and Grant Thornton issued the "Grant Thornton special Zi (2021) No. 371a017021" audit report on the 2021 annual profit forecast of Jiangsu Yike Food Group Co., Ltd. The company predicts that the operating revenue will reach 15946237000 yuan in 2021, an increase of 10.80% over 2020, and the net profit attributable to the company's common shareholders is 105.8562 million yuan, a decrease of 26.58% over 2020. Although the preparation of the company's profit forecast for 2021 follows the principle of prudence, However, due to: (1) various assumptions on which the profit forecast is based are uncertain; (2) national macroeconomic, industry situation and market situation are uncertain; (3) national relevant industries and industrial policies are uncertain; (4) other force majeure factors, the actual operating results of the company in 2021 may be different from the profit forecast.
The company reminds investors that the profit forecast report is prepared by the management on the basis of the best estimation assumptions, but the assumptions based on are uncertain, so investors should use it carefully when making investment decisions.
3、 Main financial information and operation after the audit deadline of financial report
The deadline for the audit of the company's financial report is June 30, 2021. From the audit deadline of the financial report to the signing date of this offering intention, the company's business model, the composition of major customers and suppliers and tax policies have not changed significantly. At the same time, the company has no other major events that may affect the normal operation of the company or the judgment of investors.
(i) Review of financial data from January to September 2021
Grant Thornton reviewed the company's consolidated and company's balance sheet on September 30, 2021, consolidated and company's income statement, consolidated and company's cash flow statement and notes to financial statements from January to September 2021, and issued a "Grant Thornton"
