There is a high risk of investing in the gem after the issuance of the stock. 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 risks. Investors should fully understand the investment risks of the gem and the risk factors disclosed by the company, and make investment decisions prudently.
Guangdong taienkang Pharmaceutical Co., Ltd
Building a, No. 8 Wanji south 2nd Street, Taishan North Road, Longhu District, Shantou
Initial public offering and listing on GEM
Letter of intent
Sponsor (lead underwriter)
No. 618, Shangcheng Road, China (Shanghai) pilot Free Trade Zone
Issuer 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 completeness 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 the changes in the operation and income of the issuer or the 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 the accounting institution 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.
Issue overview
Type of shares issued: RMB ordinary shares (A shares)
Number of shares issued and shareholders’ public offering of 59.1 million RMB ordinary shares, accounting for no less than 25.00% of the total number of shares issued and the share capital of the company after the issuance. All the shares issued this time are new shares issued to the public, which does not involve the public offering of shares by the company’s shareholders.
The par value of each share is RMB 1.00
Issue price per share [] yuan / share
Expected issue date: March 18, 2022
The stock exchange to be listed is the growth enterprise market and the board of Shenzhen Stock Exchange
The total share capital after issuance is 236387500 shares
Sponsor (lead underwriter) Guotai Junan Securities Co.Ltd(601211)
Signing date of the prospectus: March 10, 2022
Tips on major issues
The company specially reminds investors that before making investment decisions, please carefully read the text of this prospectus and pay special attention to the following major matters:
1、 Important commitments and instructions related to this offering
See “Annex 2 important commitments made by the issuer and its actual controllers, major shareholders, directors, supervisors, senior managers and other relevant responsible subjects” in this prospectus for the important commitments made by the institutions or personnel related to this offering.
2、 Accumulated profit arrangement before this offering
See “III. distribution plan of accumulated profits before the completion of this offering” in “section 10 investor protection” of this prospectus for the arrangement of accumulated profits before this offering.
3、 Provisions on profit distribution plan and cash dividend ratio after the issuance and listing
See “II. Dividend distribution policy” in “section 10 investor protection” of this prospectus for the provisions on the profit distribution plan and cash dividend ratio after the issuance and listing.
4、 Risk factor tips
Investors are requested to carefully read all the contents of “section IV Risk Factors” of this prospectus and relevant materials in other chapters, pay attention to the description of all relevant risk factors, and pay special attention to the following risk factors:
(I) R & D risk
In order to strengthen the company’s research and innovation ability, the company has maintained a large R & D investment. During the reporting period, the company’s R & D expenditure was 240275 million yuan, 258643 million yuan, 367157 million yuan and 174097 million yuan respectively. The R & D expenditure was mainly the drug R & D expenditure incurred by the company.
According to the relevant provisions of China’s measures for the administration of drug registration and other laws and regulations, the R & D of new drugs generally needs to go through multiple stages, such as small-scale test, pilot test, quality research, stability research, safety evaluation, clinical trial, new drug registration and approval, etc; Generic drug research and development generally needs to go through multiple stages, such as small-scale test, pilot test, quality research, stability research, be or other research, registration application and so on. If the company’s relevant R & D projects fail to pass the drug registration approval, it may lead to the failure of drug R & D, which may affect the recovery of the company’s early investment and the realization of the company’s benefits.
(II) risk of drug marketing
If the drugs developed by the company cannot meet the changing market demand after listing, or the drugs developed are not accepted by the market, or there are similar competitive products in the field of treatment, efficacy and safety on the market at that time, it will bring risks to the company’s achievement of drug research and development.
(III) the risk of fluctuations in operating performance caused by the epidemic of New Coronavirus pneumonia.
At the beginning of 2020, affected by covid-19 epidemic, the global demand for masks surged in a short time. The huge market demand led to the growth of the company’s mask sales and the increase of unit price. In 2020, the operating revenue of the company’s masks reached 239 million yuan, accounting for 33.76% of the operating revenue. With the gradual improvement of the follow-up epidemic and the changes of market supply and demand, the sales volume, sales price and gross profit margin of the company’s masks may not be able to maintain a high level in the early stage of the epidemic. The average sales price of masks in the first half of 2020 was 1.06 yuan / piece. Due to the decline of mask price in the second half of 2020, the average sales price of masks in 2020 fell to 0.89 yuan / piece, From January to June 2021, the average price of masks is 0.24 yuan / piece.
If the sales volume and price of masks fall further, it will have an adverse impact on the company’s operating performance.
(IV) operational risks of agency business
During the reporting period, the agency operation business is an important source of income and profit of the company, and the stability of the agency right has a significant impact on the operating performance of the company.
The company has been acting as an agent for Hewei Zhengchang pill and voritin since 1999, Johnson & Johnson Medical devices since 2002, and baoxinan oil since 2003. There is no disqualification and dispute during the cooperation with the main agent product suppliers. However, in the subsequent cooperation process, the possibility of affecting the cooperative relationship between the issuer and the agent product supplier due to the inability to reach an agreement with the supplier on the purchase price adjustment is not ruled out. If the agency relationship between the company’s main agent products, especially the core agent products, weizhengchang pill and voritin is suspended or terminated, it will have a significant adverse impact on the company’s operation.
If there are disputes over the quality of the agent products in the future, the agent drug business will have a certain adverse impact on the issuer’s short-term cash flow according to the requirements of advance compensation and other terms. After the occurrence of quality problems, it will affect the sales revenue of the issuer’s agent products to a certain extent. If it has a negative impact on the re registration of the agent’s imported drug registration certificate and the renewal of relevant business qualifications, making the relevant products unable to be sold in China, it will have an adverse impact on the profitability of the issuer. Meanwhile, relevant matters will indirectly affect the reputation of the issuer. The combination of the above factors will adversely affect the overall operation of the issuer.
(V) risk of re registration when the registration certificate of imported drugs expires
The company’s main agent products and weizhengchang pills, voritin and baoxinan oil are imported drugs. According to the provisions of the measures for the administration of drug import, imported drugs must obtain the import drug registration certificate (or pharmaceutical product registration certificate) issued by the State Food and drug administration before going through the import filing and port inspection procedures. The term of validity of the imported drug registration certificate (or pharmaceutical product registration certificate) is five years. If it is necessary to continue production or import at the expiration of the term of validity, the applicant shall apply for re registration six months before the expiration of the term of validity. At present, according to the drug re registration approval notice of Hewei Zhengchang pill, its drug approval numbers are zj20150009, zj20150010 and zj20191000, which are valid until September 24, 2025. According to voritin’s drug re registration approval notice, its drug approval number is gyzz hj20160151, which is valid until April 7, 2026. According to relevant regulations, temporary import can be applied for during the re registration of drugs produced abroad. If the re registration application fails to pass the examination or the examination takes too long when the relevant import registration certificate expires, the company may not continue to import relevant products and have an adverse impact on the normal production and operation of the company.
The expiration date of the agency agreement with weizhengchang pill and voritin is December 31, 2025 and December 31, 2026. The agency agreement stipulates that after the expiration of the agreement, if a new drug registration certificate has not been obtained, the agreement will continue to obtain a new drug registration certificate. However, if the relevant drugs do not meet the re registration requirements at the next renewal; Or, due to the manufacturer’s own reasons, there are major defects in the safety, effectiveness and quality controllability of the corresponding drugs; Or, due to the change of relevant policies and the improvement of the re registration requirements for imported drugs by the drug regulatory department, and the manufacturer cannot meet the relevant requirements in a short time; As a result, after the expiration of the imported drug registration certificate, the re registration cannot be completed in a short time, and there is even a risk that the drug regulatory department will not handle the re registration and cancel the drug registration certificate. At that time, the relevant imported drugs will not be sold in China within a certain period of time, the agency agreement will become meaningless, and the terms of the relevant agreement cannot be fulfilled, which will affect the stability of the issuer’s agency right and may have an adverse impact on the issuer’s profitability after 2026.
(VI) risk of performance decline
According to the audit report issued by Huaxing certified public accountants, from January to June 2021, the issuer’s operating income decreased by 414293 million yuan or 11.58% compared with the same period in 2020, and its operating profit decreased by 446401 million yuan or 40.04% compared with the same period in 2020. The main reason is that in 2021, with the effective control of covid-19 pneumonia and the increase of mask supply in the market, Compared with the same period in 2020, the contribution of the issuing population mask business to revenue and performance decreased significantly; In addition, compared with the same period in 2020, the issuer has increased the marketing and promotion of the new product “aiting IX” and the original product, and the sales expenses have increased; As a result, the operating performance of the issuer from January to June 2021 decreased compared with the same period in 2020. If the future sales of the issuer’s main products such as “aiting Jiu” dapoxetine hydrochloride tablets, Hewei Zhengchang pills and voritin are less than expected, the company’s performance still has the risk of further decline. In extreme cases, there may even be the risk that the operating profit of the whole year in 2021 will decrease by more than 50% compared with that in 2020. 5、 Main financial information and operating conditions after the audit deadline of financial report
(I) main financial information and operation of the issuer in 2021
The audit base date of the issuer’s latest financial report is June 30, 2021. Huaxing certified public accountants reviewed the issuer’s consolidated and parent company’s balance sheet as of December 31, 2021, consolidated and parent company’s income statement, consolidated and parent company’s cash flow statement, consolidated and parent company’s statement of changes in owner’s equity and notes to relevant financial statements in 2021, And issued the review report (hxzz [2022] 2 Fiyta Precision Technology Co.Ltd(000026) 0368). The review opinions are as follows: “according to our review, we have not noticed anything that makes us believe that the financial statements have not been prepared in accordance with the provisions of the accounting standards for business enterprises and fail to fairly reflect the financial position, operating results and cash flow of tynkon in all major aspects.”
According to the above review report, the main financial indicators of the issuer as of December 31, 2021 / 2021 and the comparison with the previous year are as follows:
Unit: 10000 yuan
Project 202112.31/ 202012.31 / change proportion of change amount 20212020
Total assets 941522283348731080348 12.96%
Owner’s equity 709808158962981201783 20.38%
Operating income 65365
