Orient Securities Company Limited(600958) underwriting and recommendation Co., Ltd. about
Initial public offering of Suzhou fujilai Pharmaceutical Co., Ltd
And a recommendation report on listing on the gem
Orient Securities Company Limited(600958) underwriting sponsor Co., Ltd. (hereinafter referred to as “Oriental Investment Bank” and “the sponsor”) is entrusted by Suzhou fujilai Pharmaceutical Co., Ltd. to act as the sponsor of its initial public offering and listing on the gem.
In accordance with 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 gem (for Trial Implementation), the measures for the administration of securities issuance and listing recommendation business and other relevant laws and administrative regulations, as well as the China Securities Regulatory Commission In accordance with the regulations of Shenzhen Stock Exchange, we are honest and trustworthy, diligent and responsible, issue the recommendation work report of this issuance in strict accordance with the business rules, industry practice norms and ethical standards formulated according to law, and ensure the authenticity, accuracy and integrity of the documents issued.
Unless otherwise specified, the abbreviations or terms in this recommendation work report have the same meanings as those in the prospectus of the company’s initial public offering and listing on the gem.
Section I project operation process
1、 Project audit process within the sponsor
Eastern Investment Bank has formulated strict internal audit procedures for the projects of IPO and listing on gem:
(I) project approval stage audit
IPO project initiation is divided into pre initiation and formal initiation. If the business department needs to determine the cooperation relationship with the reserve customers who have completed the filing on the IPO declaration, and the declaration time is more than 12 months (including 12 months), it shall apply for pre project approval. The pre project approval adopts the review system, and a pre project approval meeting shall be held. Before the project enters the counseling stage, that is, before submitting the counseling filing materials, it shall apply for formal project approval. The formal project approval needs to hold a project approval meeting. After the formal project approval, the project can enter the counseling stage.
The quality control department shall, on the basis of (pre) project initiation application materials, judge whether the project meets the project initiation standards and conditions, whether the project initiation application materials meet the company’s regulations, and whether there are major risks or obstacles, and form a project initiation quality control report, which shall be submitted to the project initiation Committee for review.
China Eastern Investment Bank has set up a project initiation Committee, which is an extraordinary professional decision-making body for investment banking business, and is responsible for the review and decision-making of investment banking projects. The project initiation committee is composed of CEO, compliance director, vice president in charge of business, head of capital market department, head of quality control department, and other financial experts, legal experts or other experts nominated by CEO. The project initiation committee members reviewed the project initiation materials and put forward written opinions, measured the overall risk and income of the project, and provided professional reference opinions for the decision-making of the project team in project commitment.
(II) quality control verification
The investment bank shall be responsible for the quality control of the whole process of the investment bank according to the quality control procedures of the project bank. In the process of project implementation, effectively monitor the project implementation through the project management system, and supervise the implementation of the company’s arrangements and decisions on project management.
The quality control department shall check and judge whether the project meets the standards and conditions such as project initiation and core, whether the materials and documents to be submitted, submitted, issued or disclosed by the project team meet the relevant requirements of laws and regulations, relevant provisions of China Securities Regulatory Commission and self-discipline rules, and whether the business personnel fulfill their due diligence obligations.
At any stage of the project process, if the quality control department and the nuclear office find that there are major risks in the project itself or the implementation process or it is difficult to judge the risks, they can arrange on-site inspection at any time, issue on-site inspection report, and the project team will reply and rectify the main problems raised in the on-site inspection report.
In the core stage of the project, after reviewing the preliminary core materials, the quality control department shall conduct project verification, verification and acceptance of the working papers separately or jointly with the core office according to the regulations, form the project verification report, and submit the formal core application after the project team improves the core materials accordingly. The quality control department shall check the completeness, completeness and effectiveness of formal core materials, and form a project core quality control report in combination with the project verification, verification, manuscript acceptance and problem rectification and implementation, listing the problems in doubt or needing attention of the project and submitting it to the core organization for review.
(III) kernel phase audit
Eastern Investment Bank has set up a core office as a permanent core institution and a core Committee as a non permanent core institution to jointly perform the core deliberation and decision-making responsibilities of investment banking business, independently study and judge the risks of investment banking business and express opinions. Among them, the core committee is a special organization for the company to prevent and resolve investment banking business risks, and the core office is the daily work organization of the core Committee, which undertakes the daily affairs of the core Committee under the leadership of the head of the company’s core.
After receiving the kernel application materials, the kernel office will study and judge the project risks on the basis of the preliminary review of the quality control department and in combination with the project kernel quality control report, and convene the kernel meeting for deliberation as required. After reviewing the kernel application materials, the kernel members participating in the meeting fully communicated and discussed with the project team on relevant issues at the kernel meeting, and finally formed the feedback of the project kernel. For the projects voted by the kernel meeting, the project team shall reply and implement the kernel opinions in time, submit the written reply and relevant implementation materials to the kernel office for review, and declare to the public only after the kernel office approves and the kernel members attending the meeting have no objection.
2、 Main process of project approval
The project team submitted a formal project initiation application to the quality control department on June 4, 2020, and submitted the project initiation application documents including the basic information form of project initiation, due diligence report, etc. The sponsor held a project initiation meeting on July 9, 2020 to review the project initiation application documents. After full discussion by the project initiation members, the formal project initiation of the project was agreed. The project members participating in the project approval meeting include Ma Ji, Cui Hongjun, Wei Huanzhong, Yin Lu, Xu Yang, Zhang Han, Zheng Xianhong and Lei Tingting. The voting result is: 8 affirmative votes, 0 negative votes and 0 suspension votes.
3、 Main process of project implementation
(I) mobilization and execution time of project members
The executive members of the project include Bian Jiazhen, GE shaozheng, song Yinzhi (resigned), Wang Kuan, Jiang Xiaohua, Xu Jie (resigned), Wang Junhu (resigned), Liu Wei, Zhu Renjie (resigned), Fu Shuai and Huang Yu. Members of the project team have entered the site successively since May 2020 to carry out due diligence and production of application materials.
(II) main process of due diligence
After the fujilai project team of Dongfang investment bank officially entered the site in May 2020, the project executors followed the guidelines for due diligence of sponsors Opinions on further improving the quality of financial information disclosure of initial public offering companies (CSRC announcement [2012] No. 14) and guidelines on information disclosure related to profitability in the prospectus of initial public offering and listed companies (CSRC announcement [2013] No. 46) And other relevant laws and regulations have conducted in-depth due diligence on the issuance and listing.
Due diligence workers run through the whole process of this recommendation, including project initiation, counseling, production and application of application materials. 1. Main methods of due diligence
(1) Issued a list of due diligence documents to the issuer and related parties and collected relevant documents
Prepared in accordance with the working standards for due diligence of sponsors and the standards for the content and format of information disclosure by companies offering securities to the public No. 28 – prospectus of GEM companies (revised in 2020), list the problems that the sponsor needs to know as the sponsor and lead underwriter of the issuer’s offering and listing, and form a list of due diligence documents, And distribute it to the issuer and related parties to collect the relevant documents provided by them.
During the follow-up due diligence, a supplementary due diligence list will be issued to the issuer and related parties according to the review of the feedback materials of the previous due diligence and the further understanding of the enterprise.
(2) Review the documents collected by due diligence and relevant documents of other securities service institutions
After collecting the documents provided by the issuer, sort and review them according to the directory of working papers, pay attention to whether they are consistent with the directory of due diligence list, and form corresponding working papers. The documents reviewed mainly include the historical evolution of the issuer, the historical evolution of the issuer’s shareholders and subsidiaries, the issuer’s foreign equity investment and its changes, the issuer’s qualification certificate, the issuer’s main assets (land, real estate and equipment), issuance governance and internal control, horizontal competition and related transactions, finance and accounting, taxation, business development objectives Application of raised funds, major contracts, creditor’s rights, debts and guarantees, litigation, arbitration and administrative punishment. Reviewed the legal opinion and lawyer work report issued by Shanghai jintiancheng law firm, and the audit report, tax verification report, internal control verification report and other documents issued by Rongcheng Certified Public Accountants (special general partnership).
The project team analyzes the reviewed documents, finds and records various problems, and preliminarily determines the key points of verification in the next step; For key issues, formulate further verification plans and conduct in-depth verification.
(3) On site verification of the issuer’s office and business premises
Conduct on-site verification of the issuer’s office space, including the issuer’s office environment, personnel, department setting, and whether the issuer’s office space is separated from the controlling shareholder, the actual controller and the company under its control. Check the issuer’s production and business premises, including production workshops, R & D centers and other places.
(4) Interview with actual controller, shareholders and management
Interview the actual controller, major shareholders, senior managers and core personnel of the issuer, including the company’s historical evolution, financial situation, related party transactions, industry situation, main business development, production and operation, future development direction and objectives, investment direction of raised funds and other major matters. (5) External verification
Interviewed the issuer’s holding subsidiaries and external relevant units, mainly including the issuer’s main suppliers, main customers and competent authorities (such as the tax bureau, the Administration for Industry and commerce, social insurance, etc.), or obtained relevant information notes or confirmation opinions issued by them.
(6) Attend the shareholders’ meeting, board of directors and other meetings of the issuer as nonvoting delegates
Attend the general meeting of shareholders, the board of directors, the board of supervisors and other meetings of the issuer as nonvoting delegates.
(7) Regularly hold intermediary coordination meetings and special meetings on major issues
Regularly hold intermediary coordination meetings, report and discuss the phased results of due diligence, and timely put forward solutions and rectification plans for the main problems found.
Hold special meetings on major issues, fully communicate and discuss with the issuer and relevant intermediaries on major issues found in due diligence, and put forward solutions and rectification plans.
2. Main contents of due diligence
(1) Basic information
1) Restructuring and establishment
Checked the relevant materials of the issuer’s restructuring, including the financial data of the original enterprise before the restructuring, the composition of assets and business, the restructuring plan, audit report, evaluation report, etc., and talked with the senior management of the issuer.
The business processes of the original enterprise or promoter, the business processes of the issuer, the relationship with the main promoters and the evolution before and after the restructuring were examined.
Examined the issuer’s business license, articles of association, sponsor agreement, documents of the founding meeting, evaluation report, audit report, capital verification report, industrial and commercial registration documents, etc.
2) Historical evolution survey
Examined the issuer’s business license, articles of association, industrial and commercial registration and other documents over the years, annual financial reports and other materials, and investigated the issuer’s historical evolution. It mainly includes the previous equity changes, asset restructuring and capital increase of the issuer and important holding subsidiaries.
The sponsor shall consult the documents of the three meetings and relevant approval documents, audit reports, capital verification reports, capital increase agreements, industrial and commercial change registration documents related to the issuer’s previous capital increase, verify the legality and compliance of the issuer’s capital increase and shareholder change, verify the evolution of shareholder structure, and verify whether there are significant changes in the actual controller.
3) Capital contribution of sponsors and shareholders
Checked the identity documents and other relevant materials of the promoters when the issuer was established, and checked the number, domicile and capital contribution proportion of the promoters; Checked the direct and indirect shareholding of natural person promoters, paid attention to their employment in the issuer, and paid attention to the investment and employment of their relatives in the issuer; Check whether the sponsors legally own the property rights of the invested assets, whether there are disputes or potential disputes over the ownership of the assets, and the measurement attributes of the assets invested by the sponsors; Checked the share transfer of the sponsors.
Checked the issuer’s registration materials, capital verification report and transaction records between the issuer and shareholders after capital contribution, and talked with the issuer’s senior executives and relevant intermediaries. Checked the transfer of property rights of assets contributed by shareholders.
4) Major equity changes
Examined the relevant documents of the general meeting of shareholders, the board of directors and the board of supervisors, evaluation reports, audit reports, capital verification reports, equity transfer agreements, industrial and commercial change registration documents, etc.
5) Major restructuring
Examined the relevant documents of the issuer’s general meeting of shareholders, the board of directors, the board of supervisors, the reorganization agreement, the audit report, the evaluation report, the consideration payment voucher related to the reorganization and other materials, and interviewed the relevant parties and handling personnel of the reorganization.
6) Major shareholders
Checked the ID cards and basic information questionnaires of the controlling shareholders and actual controllers of the issuer; Business license, articles of association, financial report or audit report, main business, ownership structure, production and operation of major shareholders; The related relationship or concerted action between the major shareholders and relevant agreements, the pledge, freezing and other restrictions on the rights of the issuer’s shares held by the major shareholders, the dispute over the major ownership of the issuer’s shares held by the controlling shareholders and shareholders controlled by the controlling shareholders and actual controllers Changes of major shareholders and actual controllers in the last three years or potential changes in the future, and interviews were conducted with senior executives and employees of controlling shareholders and actual controllers.
7) Employees
Checked the roster of the issuer’s employees, labor contracts, payroll, detailed statement of social security expenses, certificates issued by the social insurance fund management centers at all levels of the issuer and its subsidiaries and branches, visited the workplaces and living places of the issuer’s employees, talked with the issuer’s employees, and checked the age, education The distribution of specialties and other structures and the changes in recent years, and whether the issuer has violated laws and regulations in the implementation of the national employment system, labor protection system, social security system, housing system and medical security system.
8) Independence survey
Checked the issuer’s organizational structure data, industrial and commercial registration and financial data of subordinate companies, investigated the issuer’s production, supply and marketing system on the spot, and calculated the issuer’s related purchase amount
