Guangzhou Lushan New Material Co., Ltd
Guangzhou Lushan New Materials Co., Ltd.
(self compiled Building 1, self compiled Building 2, self compiled building 3 and self compiled building 4, No. 22, Pubei Road, YUNPU Industrial Zone, Huangpu District, Guangzhou) summary of letter of intent for IPO sponsor (lead underwriter)
(North block of excellence Times Square (phase II), No. 8, Zhongxin Third Road, Futian District, Shenzhen, Guangdong)
Issuer statement
The purpose of the summary of this prospectus is only to provide the public with a brief information about this offering, and does not include all parts of the full text of the prospectus. The full text of the prospectus is also published on the website of Shanghai Stock Exchange（ http://www.sse.com.cn. ）。 Before making the subscription decision, investors should carefully read the full text of the prospectus and take it as the basis for investment decision.
If investors have any questions about this prospectus and its abstract, they should consult their own stockbroker, lawyer, accountant or other professional consultants.
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 its abstract, and bear individual and joint legal liabilities for the authenticity, accuracy and completeness of the prospectus and its abstract.
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 and its abstract are true and complete. Any decision or opinion made by the CSRC and other government departments on this issuance does not indicate that it makes a substantive judgment or guarantee on the value of the issuer's shares or the income of investors. Any statement to the contrary is a false statement.
All contents of this prospectus summary constitute an irrevocable part of the prospectus and have the same legal effect as the prospectus.
Section I tips on major issues
1、 Special risk tips:
When evaluating and investing in the shares issued this time, investors should pay special attention to the following risk factors in addition to other information provided in the summary of this prospectus. The following risk factors are sorted according to the principle of importance or the degree that may affect the investment decision, which does not mean that the risk factors will occur in turn. (I) risk of large amount of accounts receivable and failure to recover
At the end of each reporting period, the book balance of the company's accounts receivable was 1720636 million yuan, 1335135 million yuan, 1333922 million yuan and 2231006 million yuan respectively, of which the balance of accounts receivable aged more than one year was 265829 million yuan, 174689 million yuan, 121490 million yuan and 130958 million yuan respectively, accounting for 15.45%, 13.08%, 9.11% and 5.87% of the book balance of accounts receivable. If the company's accounts receivable cannot be recovered, it will have an adverse impact on the company's future operating performance. (II) risk of large amount of notes receivable and failure to cash at maturity
At the end of each reporting period, the book balance of notes receivable of the company was 1352868 million yuan, 1407448 million yuan, 208685 million yuan and 1559116 million yuan respectively. Among them, the balance of bank acceptance bill was 1257161 million yuan, 1261072 million yuan, 2014431 million yuan and 15.056 million yuan respectively, and the balance of commercial acceptance bill was 9.5708 million yuan, 146376 million yuan, 7.2419 million yuan and 5.8556 million yuan respectively. If the above bills of the company, especially the commercial acceptance bill, fail to be cashed by the customer or the acceptance bank after maturity, it will have an adverse impact on the operating performance of the company. (III) risk of price fluctuation of raw materials
The raw materials required for the production of the company are mainly petrochemical resin products, including PE, PP, EVA, Poe, etc. the market price of these raw materials is affected by the price of basic raw materials such as oil and the relationship between market supply and demand, showing varying degrees of fluctuation. During the reporting period, the direct material cost accounted for more than 88% of the company's main business cost. The price fluctuation of main raw materials will have a certain impact on the company's gross profit margin and profitability. If the prices of the above raw materials continue to rise sharply in the future, and the company is unable to transfer the rise of raw material costs to downstream customers completely and in time, it may lead to the decline of the gross profit margin of the company's products, which may have an adverse impact on the company's operating performance.
In each period of the reporting period, the gross profit margin of the company's main business was 17.38%, 20.67%, 22.69% and 16.73% respectively. Under other conditions unchanged, the impact of the average price fluctuation of direct materials on the gross profit margin of the company's main business is as follows:
Impact of average price fluctuation of direct materials on gross profit margin of main business
Average price fluctuation range of direct materials - 10% - 5% - 10%
From January to June 2021, the gross profit margin of main business changed by 78.14 percentage points, 34.07 percentage points - 4.07 percentage points - 8.14 percentage points
In 2020, the gross profit margin of main business changed by 6.83 percentage points, 3.41 percentage points - 3.41 percentage points - 6.83 percentage points
In 2019, the gross profit margin of main business changed by 7.30 percentage points, 3.65 percentage points - 3.65 percentage points - 7.30 percentage points
In 2018, the gross profit margin of main business changed by 7.70%, 3.85% - 3.85% - 7.70%
Note: the above sensitivity analysis is based on the direct material cost of each year, assuming that other conditions remain unchanged, the average price of direct materials
The impact of cost changes caused by price changes on the gross profit margin of main business; For example, in 2020, the average price of direct materials increased by 5%, mainly
The gross profit margin of the business will change from 22.69% to 19.28%, down 3.41 percentage points.
(IV) industrial policy change and downstream industry fluctuation risk
Among the company's main products, composite building materials hot melt adhesive is mainly used in the field of downstream building materials, oil and gas pipeline anti-corrosion hot melt adhesive
It is mainly used in the field of oil and gas energy pipeline construction, and Cecep Solar Energy Co.Ltd(000591) battery packaging adhesive film products are mainly used in photovoltaic modules
Domain. The downstream application fields of the above main products are affected by industrial policies, industry cycles and other factors, and there are certain industrial risks
Volatility, especially the demand of downstream infrastructure construction and building decoration, oil and gas pipeline construction, photovoltaic installation and other industries
Policy changes, oil price trends and other factors may have certain cyclical fluctuations.
During the reporting period, composite building materials were hot-melt
The operating income of rubber was 261828500 yuan, 294543600 yuan, 393353200 yuan and 267411800 yuan respectively,
Accounting for 34.33%, 37.20%, 39.07% and 38.30% of the current main business income respectively; Anti corrosion heat of oil and gas pipeline
The operating income of melt adhesive was 1088723 million yuan, 1038211 million yuan, 895958 million yuan and 508481 million yuan respectively,
Accounting for 14.28%, 13.11%, 8.90% and 7.28% of the current main business income respectively Cecep Solar Energy Co.Ltd(000591) battery sealant
The operating income of membrane is 208963800 yuan, 200702700 yuan, 336765600 yuan and 229587900 yuan respectively,
Accounting for 27.40%, 25.35%, 33.45% and 32.88% of the current main business income respectively. The above products are mainly sold
Business income accounts for a relatively high proportion. In the future, if there are major inconsistencies in industrial policies in building materials, energy pipelines, photovoltaic and other fields outside China
Profit changes or cyclical fluctuations lead to a decline in the prosperity of the industry and a decrease in the demand of downstream industries. The company mainly produces
There will be a risk of decline in the operating income of products.
(V) risk of operating performance fluctuation
In the course of operation, the company is faced with various identified risks disclosed in "section IV Risk Factors" of the prospectus
Insurance, some risks have a great impact on the company's operating performance, such as fluctuations in the price of raw materials, failure to recover receivables when due, or
Risks of cashing, inventory falling price, etc. In addition, the company will also face the impact of other unpredictable or controllable internal and external factors
This may lead to the decline of the company's operating revenue and gross profit margin, and lead to the fluctuation of operating performance. If the future is affected by oil prices
The price of raw materials of the company has increased significantly, or the downstream of the company includes photovoltaic, composite building materials, energy pipelines, etc
With the decline of prosperity and shrinking demand, the company may have more than 50% decline in operating profit or even loss in the year of listing. (VI) inventory falling price risk
The company has developed rapidly in recent years, and the ending inventory balance is increasing. At the end of each reporting period, the book balance of the company's inventory is 885914 million yuan, 1141587 million yuan, 1331372 million yuan and 2079133 million yuan respectively, and the ending inventory falling price balance is 382500 yuan, 192.21 million yuan, 985100 yuan and 1135700 yuan respectively. The company's inventories are mainly raw materials and goods in stock, and the total proportion of the two items remains at about 80%. If the price of raw materials or goods in stock decreases significantly in the future, the company will face a certain risk of inventory falling price. At the same time, if the industry demand declines or the company's operation is poor, there may be large inventory backlog and inventory impairment risk, which will have an adverse impact on the company's operating performance. (VII) risk of changes in government subsidies
During the reporting period, the government subsidies included in other income of the company were 5368600 yuan, 9284500 yuan, 12239200 yuan and 3119600 yuan respectively, accounting for 9.67%, 11.28%, 8.84% and 5.36% of the total profit respectively. The issuer's government subsidies mainly come from settlement subsidies, capital construction subsidies, special funds for technological transformation awards and subsidies, special support funds for gazelle enterprises in Guangzhou Development Zone, laboratory construction project subsidies, etc. The above-mentioned government subsidy funds are the special funds given to enterprises by the national or local governments according to relevant policies for tapping the potential, upgrading and technological transformation of enterprises. The company's main business conforms to the encouraged direction of national industrial policies and continues to invest in scientific research. The company is expected to continue to apply for and obtain such subsidies in accordance with national policies in the future. However, as the government subsidy depends on the guidance of national industrial policy, if the national industrial policy is adjusted in the future, it will affect the sustainability of the company's obtaining government subsidy and have a certain impact on the operation of the issuer. (VIII) fluctuation risk of cash flow from operating activities
During the reporting period, the net cash flow from operating activities of the company was 267293 million yuan, 548175 million yuan, 177255 million yuan and -58032900 yuan respectively, with large fluctuations. Under the influence of market environment changes, industry periodicity and other factors, the company has the risk of increasing the fluctuation of cash flow from operating activities. If major adverse events occur in the process of production and operation of the company, resulting in a significant decline in the net cash flow from operating activities, there will be a certain liquidity risk, which will have an adverse impact on the operation of the company. (IX) iterative risk of product R & D and technology upgrading
Product formula and process technology are the core factors of the company's hot-melt adhesive products. As different customers have different requirements for the performance of hot-melt adhesive materials due to their product differences, mastering and continuously developing unique product formula and process technology is the key to improving the company's core competitiveness. If the company fails to grasp the change of customer demand or the new trend of industry development and maintain the continuous R & D and upgrading of products and technologies, it may lose its dominant position in the market competition and affect the profitability of the company. (x) risks of investment projects with raised funds and new production capacity digestion
After the completion of the Functional Polyolefin hot melt adhesive expansion project and tocf optical film expansion project to be invested by the company with the raised funds, the production capacity of Functional Polyolefin hot melt adhesive particles will be increased by 40000 tons / year and the production capacity of thermoplastic optical transparent adhesive film (tocf) will be increased by 1.5 million square meters / year, so as to ensure that the future production capacity can meet the increasing demand of downstream customers, Expand business scale. Although the company has strong competitive advantages in the subdivided industries, has a stable customer base and resources, as well as effective marketing and planning ability, and has fully studied and demonstrated the necessity and feasibility of such investment projects before determining them, if the company cannot effectively implement the relevant measures to digest the new production capacity, or the relevant measures cannot achieve the expected results, Or the market demand growth of the above products is lower than expected in the future, or the market promotion progress of the products deviates from the company's prediction, the company may face the risk that the new production capacity cannot be digested, and the risk that the investment project with raised funds cannot reach the expected income after it is put into operation, which will have an adverse impact on the operating performance.
In addition, after the implementation of the investment project with raised funds, the scale of the company's fixed assets will be greatly increased and the asset structure will also change greatly. Although according to the feasibility study report of the raised investment project, after the project is completed, the natural growth of the company's operation and the income and profit growth brought by the investment of raised funds can digest the impact of the depreciation of new fixed assets on the company's operating performance. However, if the downstream demand growth is less than expected or even declines, and the benefits of the raised capital investment project cannot be brought into play in a short time, the company's profits may be reduced due to the increase of depreciation of fixed assets, and the company has the risk of relative decline in profits due to the significant increase of fixed assets. 2、 Number and subject of issuance
This time, the company plans to publicly issue 23 Jinzai Food Group Co.Ltd(003000) RMB ordinary shares, accounting for 25% of the total share capital of the company after issuance. The shareholders of the company will not publicly offer shares.
All the funds raised by the company's public offering of shares are used for general purposes such as investment projects related to the company's main business and supplementary working capital. 3、 Distribution arrangement of accumulated profits before this offering
