Securities abbreviation: Shanghai Pharmaceuticals Holding Co.Ltd(601607) securities code: Shanghai Pharmaceuticals Holding Co.Ltd(601607) Shanghai Pharmaceuticals Holding Co.Ltd(601607)
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Anxin Securities Co., Ltd
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Reply to feedback on application documents for A-Shares of non-public development banks in Shanghai Pharmaceuticals Holding Co.Ltd(601607) 2021 (Revised Version)
Sponsor (lead underwriter)
March, 2002
China Securities Regulatory Commission:
On September 6, 2021, your commission issued the notice on the first feedback on the examination of administrative licensing projects of China Securities Regulatory Commission (No. 212201) (hereinafter referred to as the "feedback") on the non-public Development Bank shares of Shanghai Pharmaceuticals Holding Co.Ltd(601607) listed companies (A-share main board, small and medium-sized board and B-share). According to the feedback, Shanghai Pharmaceuticals Holding Co.Ltd(601607) (hereinafter referred to as " Shanghai Pharmaceuticals Holding Co.Ltd(601607) ", "issuer" or "company") has met with Anxin Securities Co., Ltd. (hereinafter referred to as "Anxin securities" or "sponsor"), Guohao law firm (Shanghai) (hereinafter referred to as "issuer lawyer" or "lawyer") PricewaterhouseCoopers Zhongtian Certified Public Accountants (special general partnership) (hereinafter referred to as "accountant") and other relevant intermediaries have carefully conducted supplementary investigation and verification on the questions raised in the feedback one by one. They have responded to the feedback one by one, issued clear opinions, and made an announcement on September 30, 2021. According to the further review opinions of the CSRC, Shanghai Pharmaceuticals Holding Co.Ltd(601607) together with relevant intermediaries, supplemented and revised the reply contents of the feedback opinions. The specific contents are as follows, please review.
The financial statements of the issuer from 2018 to 2020 have been audited by PricewaterhouseCoopers Zhongtian Certified Public Accountants (special general partnership), and the financial statements of the issuer from January to June 2021 have not been audited.
Unless otherwise specified, the terms, names and abbreviations used in this reply are the same as those in the due diligence report of Anxin Securities Co., Ltd. on Shanghai Pharmaceuticals Holding Co.Ltd(601607) 2021 non-public development of A-share shares (hereinafter referred to as the "due diligence report"), and the corresponding fonts are as follows:
The questions listed in the feedback are bold and bold
Reply to question
Supplementary disclosure contents in italics
In this reply, there are differences in the mantissa between the sum of some totals and the direct addition of each addend. These differences are caused by rounding.
catalogue
Question 1: the applicant is requested to follow the relevant regulatory Q & A requirements of strategic investors on "having strong important strategic resources in the same industry or related industries", "long-term common strategic interests coordinated and complementary by both parties" and "being able to bring international and Chinese leading markets, channels, brands and other strategic resources to listed companies", Explain item by item whether the introduced subscription object Yunnan Baiyao Group Co.Ltd(000538) meets the requirements. The sponsor and lawyer are requested to check the explanation and express their opinions clearly 4 question 2: please explain the source of funds for Shanghai Tandong's subscription of RMB 3.155 billion this time, and whether Shanghai Tandong will introduce other shareholders to increase capital in the future. The sponsor and lawyer are requested to check the explanation and express their opinions clearly Question 3: please explain whether the issuer and its holding and participating subsidiaries are engaged in real estate business. The sponsor and lawyer are requested to check and express their opinions Question 4: please explain whether the controlling shareholder and the actual controller promise that there is no reduction or reduction plan from six months before the pricing benchmark date to six months after the completion of the issuance Question 5: please check and explain the administrative punishment of the issuer's fine exceeding 10000 yuan in the reporting period, whether it constitutes a major illegal act, and whether it is a situation that seriously damages the legitimate rights and interests of investors and social and public interests 42 question 6: according to the application documents, the applicant's monetary capital at the end of the reporting period was 22.107 billion yuan, short-term loan 21.769 billion yuan and long-term loan 1.776 billion yuan. Please: (1) explain the reason and rationality of the large amount of monetary funds, the main composition, specific purpose and deposit management of monetary funds during the reporting period, and whether there are restrictions on use, co management with related parties, bank account collection, etc. (2) Explain the reason and rationality of the large amount of interest bearing liabilities. (3) Explain the details of interest expenditure and interest income in the composition of financial expenses in the last three years, and whether the interest income matches the balance of monetary funds. (4) Combined with the situation of comparable listed companies, explain the reason and rationality of "double high deposit and loan" 49 question 7: according to the application documents, the applicant's accounts receivable and inventory balance were high during the reporting period. The applicant is requested to add: (1) whether the reason for the high amount of accounts receivable matches the business scale of the issuer, and explain the rationality of the high scale of accounts receivable in combination with the business model, credit policy, turnover rate and the situation of comparable listed companies in the same industry; The provision for bad debt reserves, combined with the collection after the period and the situation of comparable companies, explains the adequacy of the provision for bad debt reserves of accounts receivable. (2) The reasons for the high inventory balance, the provision policy for inventory falling price reserves in the reporting period, and the adequacy of the provision for inventory falling price reserves are explained in combination with the inventory turnover rate, stock age distribution and proportion, price changes after the period, listed companies in the same industry, etc 58 question 8: according to the application documents, the applicant's goodwill balance at the end of 2020 was 11.342 billion yuan. Please add: (1) the formation of goodwill, the performance of the underlying assets and the realization of performance commitments during the reporting period. (2) At the time of acquisition, the comparison between the predicted income and profit of the acquired object and the actual situation shall be evaluated according to the income method. If there is any difference, explain the reason and rationality of the difference. (3) The specific situation of goodwill impairment during the reporting period, the specific methods and parameters of goodwill impairment test, whether the provision of goodwill impairment is sufficient and cautious, and the comparison with the main assumptions used in the acquisition evaluation. If there is any difference, explain the reason and rationality of the difference. (4) Comparison between the predicted performance of goodwill impairment test at the end of 2019 and the actual performance in 2020. If there is any difference, explain the reason and rationality of the difference, whether there is a significant impairment risk of goodwill, and whether the relevant risk tips are sufficient. The recommendation institutions and accountants are invited to give verification opinions.
...... Question 9: Please add: (1) since six months before the date of the resolution of the board of directors related to this offering, the financial investments (including similar financial investments, the same below) implemented or planned to be implemented by the company, whether there are trading financial assets and financial assets available for sale with large amount and long term held at the end of the latest period, loans to others The situation of financial investment such as entrusted financial management, and compare the total financial investment with the scale of the company's net assets to explain the necessity and rationality of the raised funds; List the financial institutions directly or indirectly controlled and participated by the applicant at the end of the most recent period. (2) Whether the business contents and service objects of the applicant's shareholding subsidiaries Shangshi commercial factoring Co., Ltd. and Shanghai Shangshi Group Finance Co., Ltd. are operated legally; Whether the related party transactions between the applicant and the two companies fulfill the review procedures in accordance with relevant rules; The deposit of the applicant's funds in the financial company, whether the use of funds is limited, and whether the deposit and loan interest rate is fair. (3) Whether the controlling shareholder and actual controller occupy the applicant's funds in disguised violation through the financial company. (4) Whether the development of the applicant's financial business complies with the relevant provisions on question and answer of refinancing business. The recommendation institution and accountant are invited to give verification opinions 93. Relevant requirements such as "strong important strategic resources", "long-term common strategic interests coordinated and complementary between the two sides" and "can bring international and Chinese leading strategic resources such as market, channel and brand to listed companies", and explain whether the introduction of subscription object Yunnan Baiyao Group Co.Ltd(000538) meets the regulations one by one. The recommendation institution and lawyer are requested to check the explanation and express their opinions clearly.
reply:
1、 Background and significance of this strategic cooperation
(I) promote the sustainable innovation and development of China's large pharmaceutical industry groups and actively participate in international competition
The State Council has issued a series of documents on "the Tenth Five-Year Plan for the reform of China's production system and the use of drugs" as the key driving force for the further improvement of China's strategic development, Improve the ability of drug innovation, quality and efficacy, promote the structural adjustment of the pharmaceutical industry, improve the industrial concentration, build multinational companies and internationally renowned Chinese brands with the ability of the whole industrial chain, and cultivate a number of large enterprise groups with international competitiveness.
Shanghai Pharmaceuticals Holding Co.Ltd(601607) as the top three industrial group in China Meheco Group Co.Ltd(600056) industry and the leading enterprise in Shanghai's biomedical industry, is accelerating to become a leading pharmaceutical enterprise in China with international competitiveness and influence. It has been selected into the Fortune 500 (437) in 2021, the top 50 global pharmaceutical enterprises (42) in 2021, and the SSE 180 index Sample stocks of Shanghai and Shenzhen 300 index and Morgan Stanley China Index (MSci). However, compared with the world's leading pharmaceutical industry giants, China's pharmaceutical industry groups still have a large gap. Under the competition pattern of the international pharmaceutical industry and facing new challenges and opportunities, Shanghai Pharmaceuticals Holding Co.Ltd(601607) has established a long-term development strategy of "building an international leading pharmaceutical enterprise driven by scientific and technological innovation". The company will actively grasp the policy opportunities and rapidly consolidate and enhance the international industry status and influence through its own sustainable innovation and development and strategic cooperation with leading pharmaceutical enterprises in the same industry Win considerable development.
Yunnan Baiyao Group Co.Ltd(000538) is a century old brand in China, and also a representative of Chinese national medicine innovation enterprises. It has been deeply engaged in the field of traditional Chinese medicine for decades. It has been committed to actively promoting the industrialization, modernization and internationalization of traditional Chinese medicine for a long time, and has formed an industrial chain layout integrating scientific research, planting of traditional Chinese medicine, drug production, commercial circulation and health services Yunnan Baiyao Group Co.Ltd(000538) has a leading industry position and strong market influence in the field of traditional Chinese medicine and great health. It has been selected as the top 50 global pharmaceutical enterprises in 2021 (No. 34), and has been in the leading position in the China Meheco Group Co.Ltd(600056) brand value list for many years.
The strategic cooperation between Shanghai Pharmaceuticals Holding Co.Ltd(601607) and Yunnan Baiyao Group Co.Ltd(000538) is conducive to improving the innovative R & D and sustainable development capabilities of both sides, building a pharmaceutical industry group with the ability of the whole industry chain, further shaping the internationally famous China Meheco Group Co.Ltd(600056) brand, leading the China Meheco Group Co.Ltd(600056) industry group to actively participate in international market competition and enhance its international influence.
(II) promote the inheritance, innovation and development of traditional Chinese medicine and promote traditional Chinese medicine to the international market
Traditional Chinese medicine is a medical science gradually formed and continuously developed in the process of thousands of years of production and life practice of the Chinese nation and fighting against diseases. It has made important contributions to the prosperity of the Chinese nation and had a positive impact on the progress of world civilization. In recent years, China has attached great importance to the development of traditional Chinese medicine industry and issued a series of policies and measures. On October 26, 2019, the CPC Central Committee and the State Council issued the opinions on promoting the inheritance, innovation and development of traditional Chinese medicine, which established policy guidelines and top-level support for the innovative development of traditional Chinese medicine. In order to thoroughly implement the central decision-making and deployment, the State Food and Drug Administration issued the implementation opinions on promoting the inheritance, innovation and development of traditional Chinese medicine on December 25, 2020, and put forward 20 reform measures. On February 9, 2021, the State Council further issued the notice on several policies and measures to accelerate the development of characteristics of traditional Chinese medicine, which put forward 28 specific measures for the development of high-quality characteristics of traditional Chinese medicine. With the support and guidance of national policies, the traditional Chinese medicine industry has ushered in a period of rapid development. Traditional Chinese medicine plays an increasingly significant role in building a well-off society and meeting the health needs of the people. China's traditional Chinese medicine industry has ushered in major development opportunities. China's leading enterprises of traditional Chinese medicine need to follow the trend, establish a practice benchmark for the inheritance, innovation and development of traditional Chinese medicine, and promote traditional Chinese medicine to the international market.
Shanghai Pharmaceuticals Holding Co.Ltd(601607) has rich resources of traditional Chinese medicine products and a sound R & D system of traditional Chinese medicine. It has 7 directly affiliated traditional Chinese medicine enterprises, more than 860 traditional Chinese medicine approvals, 9 core brands of traditional Chinese medicine (including Xinyi, Cangsong, Leishi, Shenxiang, qingqingbao, Guofeng, Dinglu, Longhu and Hu qingyutang), 3 confidential formulas of traditional Chinese medicine, and 12 key traditional Chinese medicine products with an annual sales scale of more than 100 million, In 2020, the sales revenue of traditional Chinese medicine and traditional Chinese medicine health products was about 7.07 billion yuan, and the scale was in a leading position in China Yunnan Baiyao Group Co.Ltd(000538) is a century old Chinese brand in the field of traditional Chinese medicine. It has a number of well-known brands in the field of traditional Chinese medicine, especially in the field of great health. It has a well-arranged sales team of great health products covering the terminal. Its sales resources cover all regions above the county level in China. In 2020, the sales revenue of the pharmaceutical industry board was 11.716 billion yuan, and more than 10 planting bases have been arranged in Yunnan Province, The market share of key varieties of Panax notoginseng has reached 20%, and the whole industry chain traceability platform of Panax notoginseng, Paris polyphylla and other core medicinal materials has been established.
In the future, Shanghai Pharmaceuticals Holding Co.Ltd(601607) will focus on the consumption upgrading needs of traditional Chinese medicine and great health, and rely on Yunnan Baiyao Group Co.Ltd(000538) 's successful experience and ability in brand operation, channel construction and marketing promotion to create several new traditional Chinese medicine product series with the extended attribute of great health consumer goods. Meanwhile, Shanghai Pharmaceuticals Holding Co.Ltd(601607) will cooperate with Yunnan Baiyao Group Co.Ltd(000538) in research and development, tackling key scientific and technological problems, transformation of innovative achievements and collaborative linkage of industrial chain, so as to further improve the scientific and technological content of traditional Chinese medicine health products and promote the inheritance, innovation and development of traditional Chinese medicine.
(III) vigorously support and significantly promote Shanghai Pharmaceuticals Holding Co.Ltd(601607) optimizing mechanism and system, enabling innovation and R & D, and accelerate the implementation of innovation transformation and development strategy
The pharmaceutical industry has entered the era of great industrial change, and "accelerating cost control, adjusting structure, encouraging innovation and promoting transformation" has become the main tone of the industry. In particular, the implementation and promotion of the national centralized procurement policy has accelerated the restructuring of the pharmaceutical industry. By the end of 2021, China had completed six batches of centralized drug procurement organized by the state, covering 234 kinds of drugs, involving an amount of about 240 billion yuan, with an average decrease of 53% and a maximum decrease of more than 90%, accounting for about 30% of the procurement amount of chemical and biological drugs in public medical institutions. In January 2021, the executive meeting of the State Council further deployed the requirements to promote the normalization and institutionalization of centralized drug procurement. According to the opinions on promoting the normalization and institutionalization of centralized drug procurement (State Office [202])
