Huarong Chemical Co., Ltd
Initial public offering and listing on GEM
Special announcement on investment risk
Sponsor (lead underwriter): Huatai United Securities Co., Ltd
The application of Huarong Chemical Co., Ltd. (hereinafter referred to as “Huarong chemical”, “issuer” or “company”) for initial public offering of 120 million RMB common shares (A shares) (hereinafter referred to as “this offering”) has been approved by the GEM Listing Committee of Shenzhen Stock Exchange, It has been registered by China Securities Regulatory Commission (hereinafter referred to as “CSRC”) (zjxk [2022] No. 252).
After negotiation between the issuer and the sponsor (lead underwriter) Huatai United Securities Co., Ltd. (hereinafter referred to as “Huatai United Securities” and “sponsor (lead underwriter)”), the number of shares issued this time is 120000000, accounting for 25.00% of the total share capital after issuance. All new shares are issued publicly, and the shareholders of the issuer will not transfer their old shares. The shares issued this time are planned to be listed on the gem of Shenzhen Stock Exchange (hereinafter referred to as “Shenzhen Stock Exchange”).
The issuer and the recommendation institution (lead underwriter) specially draw investors’ attention to the following contents:
1. The issuance of shares to the non-public depository market (hereinafter referred to as “A-NET”) shall be carried out in combination with the market value of the shares issued to the non-public depository market (hereinafter referred to as “A-NET”).
This offline issuance is conducted through the offline issuance electronic platform of Shenzhen Stock Exchange; The online issuance is carried out through the trading system of Shenzhen Stock Exchange by means of subscription and pricing according to market value.
2. After the preliminary inquiry, the issuer and the recommendation institution (lead underwriter) shall, in accordance with the exclusion rules stipulated in the announcement on preliminary inquiry and promotion of initial public offering of shares by Huarong Chemical Co., Ltd. and listing on the gem (hereinafter referred to as the “announcement on preliminary inquiry and promotion”), after excluding the preliminary inquiry results of investors who do not meet the requirements, Eliminate all placing objects whose proposed purchase price is higher than 10.14 yuan / share (excluding 10.14 yuan / share); The proposed subscription price is 10.14 yuan / share, and all placing objects whose subscription quantity is less than 45 million shares (excluding 45 million shares) are eliminated; The proposed subscription price is 10.14 yuan / share, the number of subscription is equal to 45 million shares, and the subscription time is the same as 14:19:25:915 on March 4, 2022 (T-4), which will be removed from the placing objects automatically generated by the offline issuance electronic platform of Shenzhen Stock Exchange from the back to the front. A total of 114 placing objects were excluded in the above process, and the total number of shares to be purchased was 3588.5 million, accounting for 1.0055% of the total number of shares to be purchased after excluding invalid quotations in this preliminary inquiry. The excluded part shall not participate in offline and online subscription.
3. According to the preliminary inquiry results, the issuer and the recommendation institution (lead underwriter) comprehensively consider the issuer’s fundamentals, industry, valuation level of comparable listed companies, market conditions, demand for raised funds, effective subscription multiple, underwriting risk and other factors, and negotiate to determine that the price of this issuance is 8.05 yuan / share, and the offline issuance will not conduct cumulative bidding inquiry.
Investors are requested to make online and offline subscription at this price on March 10, 2022 (t day), without paying subscription funds. The offline issuance and Subscription Date and online subscription date are the same as March 10, 2022 (t day). Among them, the offline subscription time is 9:30-15:00, and the online subscription time is 9:15-11:30 and 13:00-15:00.
4. The issuing price of this offering shall not exceed the median and weighted average of the quotations of offline investors after excluding the highest quotation, as well as the Securities Investment Fund (hereinafter referred to as “public fund”), the National Social Security Fund (hereinafter referred to as “social security fund”), the basic old-age insurance fund (hereinafter referred to as “pension”) established through public offering after excluding the highest quotation The enterprise annuity fund (hereinafter referred to as “enterprise annuity fund”) established in accordance with the measures for the administration of enterprise annuity fund and the insurance fund (hereinafter referred to as “insurance fund”) in accordance with the measures for the administration of the use of insurance funds, whichever is lower. Therefore, relevant subsidiaries of the sponsor need not participate in follow-up investment.
This offering does not arrange strategic placement to other external investors. According to the issuing price, the relevant subsidiaries of the sponsor will not participate in the strategic placement. Finally, this issuance will not be targeted to strategic investors. The difference between the initial strategic placement and the final strategic placement of 6 million shares will be transferred back to offline issuance.
5. The issue price is 8.05 yuan / share, and the corresponding P / E ratio is:
(1) 28.85 times (earnings per share is calculated by dividing the net profit attributable to shareholders of the parent company after deducting non recurring profits and losses audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital before the issuance);
(2) 28.06 times (earnings per share is calculated by dividing the net profit attributable to shareholders of the parent company before deducting non recurring profits and losses audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital before this issuance);
(3) 38.47 times (earnings per share is calculated by dividing the net profit attributable to shareholders of the parent company after deducting non recurring profits and losses audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital after this issuance)
Calculate;
(4) 37.41 times (earnings per share is calculated by dividing the net profit attributable to shareholders of the parent company before deducting non recurring profits and losses audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital after this issuance.
6. The issue price is 8.05 yuan / share. Investors are requested to judge the rationality of the issue price according to the following conditions.
(1) According to the industry classification guidelines for listed companies (revised in 2012) issued by China Securities Regulatory Commission, the industry of Huarong chemical is “C26 chemical raw materials and chemical products manufacturing industry”. As of March 4, 2022 (T-4), the static average p / E ratio of “C26 chemical raw materials and chemical products manufacturing industry” released by China Securities Index Co., Ltd. in the latest month is 41.65 times.
(2) As of March 4, 2022 (T-4), the valuation levels of comparable listed companies are as follows:
Closing price on day T-4: 2020 deduction non 2020 deduction 2020 deduction securities code securities abbreviation (EPS before March 2022 (yuan / non post EPS deduction non pre market non post market earnings 4 days, people’s shares) (yuan / share) earnings ratio
Currency)
Tangshan Sunfar Silicon Industry Co.Ltd(603938) .SH Tangshan Sunfar Silicon Industry Co.Ltd(603938) 42.61 0.50 0.47 85.44 91.46
Sichuan Jinlu Group Co.Ltd(000510) .SZ Sichuan Jinlu Group Co.Ltd(000510) 6.89 0.12 0.11 58.67 65.24
Jiangyin Jianghua Microelectronics Materials Co.Ltd(603078) .SH Jiangyin Jianghua Microelectronics Materials Co.Ltd(603078) 25.86 0.30 0.25 87.09 102.76
Average 77.07 86.49
Source: wind data, as of March 4, 2022 (T-4)
Note 1: if there is mantissa difference in the calculation of P / E ratio, it is caused by rounding;
Note 2: EPS before / after deduction of non recurring profit and loss in 2020 = net profit attributable to the parent before / after deduction of non recurring profit and loss in 2020 / total share capital on T-4 day;
The issuance price of 8.05 yuan / share corresponds to the lower diluted P / E ratio of the issuer’s net profit attributable to the parent before and after deducting non recurring profits and losses in 2020, which is 38.47 times lower than the static P / E ratio of comparable listed companies and the average static P / E ratio of “C26 chemical raw materials and chemical products manufacturing industry” published by China Securities Index Co., Ltd. on March 4, 2022 (T-4).
The issuer and the recommendation institution (lead underwriter) remind investors to pay attention to investment risks, carefully study and judge the rationality of issuance pricing, and make investment decisions rationally.
(3) According to the issue price determined in this offering, the number of investors who submitted valid offers in this offline offering is 310, and the number of placement objects managed is 6848, accounting for 70.85% of the total number of placement objects after excluding invalid offers. The total number of effective proposed subscriptions is 23883980 million shares, accounting for 66.92% of the total number of subscriptions after excluding invalid offers, The corresponding effective subscription multiple is 245720 times of the initial offline issuance scale after the strategic placement callback and before the online and offline callback mechanism is started.
(4) Investors are reminded to pay attention to the difference between the issue price and the quotation of offline investors. For the quotation of offline investors, please refer to China Securities Journal, Shanghai Securities News, securities times, securities daily and http://www.cn.info.com.cn And economic reference network (www.jjckb. CN.) Announcement on initial public offering and listing on gem of Huarong Chemical Co., Ltd. (hereinafter referred to as the “issuance announcement”).
(5) The fund-raising demand amount disclosed in the letter of intent for initial public offering and listing on the gem of Huarong Chemical Co., Ltd. (hereinafter referred to as the “letter of intent”) is 495 million yuan, and the total fund-raising corresponding to the issuance price of 8.05 yuan / share is 966 million yuan, which is higher than the above-mentioned fund-raising demand amount.
(6) This offering follows the market-oriented pricing principle. In the preliminary inquiry stage, offline institutional investors quote based on the real subscription intention. The issuer and the sponsor (lead underwriter) comprehensively consider the issuer’s fundamentals, industry, market conditions, valuation level of Listed Companies in the same industry, demand for raised funds Effective subscription multiple, underwriting risk and other factors, and negotiate to determine the issue price. The offering price does not exceed the lower of the median and weighted average of the offline investors’ quotation after excluding the highest quotation, and the median and weighted average of the quotation of public funds, social security funds, pensions, enterprise annuity funds and insurance funds after excluding the highest quotation. If any investor participates in the subscription, it shall be deemed that it has accepted the issue price. If there is any objection to the issue pricing method and issue price, it is suggested not to participate in this issue.
(7) Investors should pay full attention to the risk factors contained in the pricing marketization, know that the stock may fall below the issue price after listing, effectively improve the risk awareness, strengthen the value investment concept, and avoid blind speculation. Regulators, issuers and recommendation institutions (lead underwriters) can not guarantee that the stock will not fall below the issue price after listing. 7. Based on the issuance price of 8.05 yuan / share and the issuance of 120000000 new shares, the total amount of funds raised by the issuer is expected to be 966 million yuan. After deducting the issuance cost of 645777 million yuan (excluding value-added tax), the net amount of funds raised is expected to be about 9014223 million yuan.
There is a risk that the net asset scale will increase significantly due to the acquisition of raised funds, which will have an important impact on the issuer’s production and operation mode, operation management and risk control ability, financial status, profitability and long-term interests of shareholders.
8. Among the stocks issued this time, the stocks issued online have no circulation restrictions and limited sales period arrangements, and can be circulated from the date when the stocks issued this time are listed on the Shenzhen Stock Exchange.
The offline issuance part adopts the proportional sales restriction method, and the offline investors shall promise that the sales restriction period of 10% (rounded up) of the number of shares allocated to them is 6 months from the date of the issuer’s initial public offering and listing. That is, among the shares allocated to each placing object, 90% of the shares are sold indefinitely and can be circulated from the date when the issued shares are listed and traded on the Shenzhen Stock Exchange; The sales restriction period of 10% of the shares is 6 months, and the sales restriction period starts from the date when the issued shares are listed and traded on the Shenzhen Stock Exchange.
When offline investors participate in the preliminary inquiry and quotation and offline purchase, they do not need to fill in the arrangement of the restricted sale period for the placing objects under their management. Once the quotation is made, it is deemed to accept the arrangement of the online restricted sale period disclosed in this announcement.
9. Online investors shall independently express their purchase intention and shall not fully entrust securities companies to purchase new shares.
10. Offline investors shall, according to the announcement on the results of initial public offering of shares by Huarong Chemical Co., Ltd. and initial offline placement listed on the gem, timely and fully pay the subscription funds for new shares according to the final issuance price and initial placement quantity before 16:00 on March 14 (T + 2) 2022.
The subscription funds shall be paid in full within the specified time. If the subscription funds are not paid in full within the specified time or as required, all the new shares allocated to the placing object shall be invalid. If the above-mentioned circumstances occur when multiple new shares are issued on the same day, all the placing objects are invalid. If different placing objects share bank accounts, if the subscription funds are insufficient, all the new shares allocated to the placing objects sharing bank accounts will be invalid. Offline investors are allocated multiple new shares on the same day. Please pay for each new share separately.
After winning the lottery of new shares, online investors shall fulfill the obligation of capital settlement in accordance with the announcement on the results of initial public offering and online lottery of shares listed on the gem of Huarong Chemical Co., Ltd., so as to ensure that their capital account will eventually have sufficient new share subscription funds on March 14 (T + 2) 2022, and the insufficient part shall be deemed to have given up the subscription, The resulting consequences and relevant legal liabilities shall be borne by the investors themselves. The transfer of investors’ funds shall comply with the relevant provisions of the securities company where the investors are located.
The shares abandoned by offline and online investors shall be underwritten by the sponsor (lead underwriter).
11. When the total number of shares paid and subscribed by offline and online investors is insufficient, 70% of the number of this public offering after deducting the final strategic placement
