Tips on investment risk of science and Innovation Board: after this stock issuance, it is planned to be listed on the science and innovation board market, which has high investment risk. Kechuang board company has the characteristics of large R & D investment, high operation risk, unstable performance and high delisting risk. Investors are facing greater market risk. Investors should fully understand the investment risks of the science and innovation board market and the risk factors disclosed by the company, and make investment decisions prudently.
Shaanxi Laite photoelectric material Co., Ltd
SHAANXI LIGHTE OPTOELECTRONICS
MATERIALCO., LTD.
(Building 3, building 3, building 3, No. 99, Longfeng Road, high tech Zone, Xi’an, Shaanxi)
Initial public offering and listing on the science and Innovation Board
Prospectus
Sponsor (lead underwriter)
(North block of excellence Times Square (phase II), No. 8, Zhongxin Third Road, Futian District, Shenzhen, Guangdong)
March, 2002
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 there are no false records, misleading statements or major omissions in the prospectus and other information disclosure materials, and bear individual and joint legal liabilities for their authenticity, accuracy and completeness.
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 individual and joint legal liabilities for its authenticity, accuracy and completeness. 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 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.
Overview of this offering
Type of shares issued: RMB ordinary shares (A shares)
Number of shares issued / share capital publicly offered by shareholders 40243759 shares issued this time, accounting for 10% of the total share capital of the company after this issuance (if any) (the original shareholders do not offer shares this time)
The number of senior managers and employees of the issuer participating in the strategic placement under the special asset management plan for senior executives and core employees of the issuer is 4024375 shares, accounting for 10% of the number of this public offering. The amount of allocated funds participating in the strategic placement is 8918115609 yuan (including the brokerage commission for the placement of new shares), and the restricted sale period of allocated shares is 12 months, The restricted sale period shall be calculated from the date when the shares issued to the public are listed on the Shanghai Stock Exchange
The final follow-up ratio of Citic Securities Company Limited(600030) Investment Co., Ltd., the relevant subsidiary of the sponsor, is 4.51%, the number of shares allocated is 1814058, the amount allocated is 3999997890 yuan, the distribution situation is slightly RMB yuan, and the sales restriction period of the allocated shares is 24 months, The restricted sale period shall be calculated from the date when the shares issued to the public are listed on the Shanghai Stock Exchange
10% of total share capital after issuance
The par value of each share is 1.00 yuan
The issue price per share is 22.05 yuan
Issue date: March 8, 2022
Stock exchanges and sectors to be listed Shanghai Stock Exchange Kechuang board
Total share capital after issuance: 402437585 shares
Sponsor (lead underwriter) Citic Securities Company Limited(600030)
Signing date of prospectus: March 14, 2022
Tips on major issues
The company specially reminds investors that before making investment decisions, they must carefully read the text of this prospectus and pay special attention to the following important matters. 1、 Special risk warning (I) the company has a great risk of dependence on BOE, the largest customer
During the reporting period, the company’s sales revenue to BOE accounted for 75.81%, 86.16%, 74.22% and 62.88% of its main business revenue respectively. BOE was the company’s largest customer.
The company’s main products are OLED terminal materials. During the reporting period, the company’s sales revenue of OLED terminal materials to BOE accounted for 100%, 99.85%, 94.66% and 77.62% of the sales revenue of OLED terminal materials respectively, accounting for a relatively high proportion. During the reporting period, the OLED terminal materials sold by the company to BOE were mainly redprime materials, with a relatively single variety. If the company is unable to maintain its advantages among BOE’s material suppliers, the supply of red prime products, or the cooperative relationship with BOE in the future, resulting in a decline in the company’s sales revenue to BOE, the company’s operating performance will be greatly affected.
BOE is currently the second panel manufacturer in the world and the first in China in the field of OLED small-size display panel. According to the statistics of omdia, in 2020, BOE AMOLED display panel production capacity accounted for 46.12% in the Chinese market, ranking first in China. At present, the company’s OLED terminal materials mainly face the Chinese market. In the case of BOE’s high market share, if the company cannot maintain the cooperative relationship with BOE and expand other customers to make up for the impact of BOE’s decline in sales revenue, the company’s operating performance will be greatly affected.
(II) risk of product price decline
During the reporting period, the framework agreement signed between the company and BOE agreed that the price of the same contract product of the company should be reduced by a certain range every year. During the reporting period, after the initial pricing of the same product sold by the company to BOE, the sales price decreased year by year, but the pricing of new products still maintained a high level. The company introduced new products through continuous iteration to reduce the impact of the decline in the price of old products. However, in the future, if the company cannot reduce the impact of the decline in the price of old products through the continuous introduction of new products, or the pricing of new products decreases significantly, the company may face the risk of decline in gross profit margin caused by product price reduction, which will have an adverse impact on the company’s gross profit margin and operating performance.
The OLED display material industry where the company is located is in rapid development. In order to gain an advantage in international competition, Chinese manufacturers continue to optimize costs through continuous process improvement and large-scale production. At the same time, the reduction of production cost is the only way for OLED display panel to gradually improve its penetration in downstream application fields and continuously expand its market share. Therefore, “volume rise and price fall” is a common sales situation in the industry. In addition to BOE, the products of other customers may also have the possibility of price decline, which will have an adverse impact on the company’s gross profit margin and operating performance. (III) risk of product or technology iteration
During the reporting period, the company’s OLED organic material revenue accounted for 100%, 99.19%, 95.31% and 100% of its main business revenue respectively, accounting for a relatively high proportion.
At present, the OLED display industry is still in the stage of rapid development. All kinds of display panel products of BOE and other customers need to be updated and upgraded every other period. In addition to using the original materials, new materials will also be tested in new products, and the requirements for material performance are constantly updated and iterated. If the R & D and innovation of the company’s products can not keep up with the needs of customers or the continuous innovation is insufficient, and the company is unable to follow up the technical upgrading iteration of the industry, it may be impacted by competitive alternative technologies and competitive products, so that the company’s products may be replaced, upgraded or eliminated by other suppliers of similar products, so that the company’s business performance faces the risk of decline. In addition, in the future development of the industry, it is not ruled out that major technological innovation may lead to significant changes in the process flow of OLED panel; Nor does it rule out the possibility that new products or materials with more advantages in cost or performance may realize significant substitution for existing products. If the above situation occurs, it will have a significant adverse impact on the operation of the company. (IV) inventory falling price risk
At the end of each reporting period, the book value of the company’s inventory was 25.329 million yuan, 33.538 million yuan, 468651 million yuan and 507214 million yuan respectively, accounting for 4.84%, 5.19%, 5.79% and 5.63% of the total assets respectively. At the end of each reporting period, the company’s inventory falling price reserves were 7.1439 million yuan, 15.516 million yuan, 168654 million yuan and 220421 million yuan respectively, accounting for 22.00%, 31.63%, 26.46% and 30.29% of the inventory book balance respectively.
The OLED organic material industry where the issuer is located has the characteristics of rapid product technology update. In this industry context, the issuer may face the possibility of increased inventory impairment in the future due to product technology update, changes in market demand environment, customer delivery delay or even default.
(V) risks of digestion of new production capacity after the implementation of the project invested with raised funds
During the reporting period, the company’s OLED terminal material capacity was 1.86 tons, and the capacity utilization rates were 15.92%, 54.31%, 73.23% and 117.35% respectively. The fund-raising investment project of the company is intended to increase the production capacity of 15 tons of OLED terminal materials to meet the needs of the company’s business growth.
At present, the OLED industry is developing rapidly. The production capacity of Chinese OLED panel manufacturers such as BOE and Huaxing optoelectronics continues to grow. At the same time, it has also attracted a number of manufacturers to enter the field of OLED materials, including Jilin Oled Material Tech Co.Ltd(688378) and other emerging material enterprises in China, as well as well-known foreign companies such as Merck, DuPont and UDC. Therefore, after the implementation of this raised investment project, the company needs to continuously digest the new production capacity through customer maintenance and development, product development and marketing. If the subsequent industry demand is less than expected, adverse changes occur in the market environment, or the company’s subsequent product marketing and market development efforts fail to meet the expectations, it may lead to the risk that the new production capacity of the raised capital investment project cannot be digested in time and can not reach the expected income, which will have an adverse impact on the improvement of the company’s income and operating performance. 2、 Mass produced products of the company
OLED terminal materials mainly include electron injection layer materials, electron transport layer materials, hole barrier layer materials, light-emitting layer materials, hole transport layer materials, hole injection layer materials, etc.
At present, the company’s mass-produced OLED terminal material products are mainly red prime material and hole transport layer material in light-emitting layer materials. During the reporting period, the proportion of red prime material revenue in OLED terminal material revenue was 89.99%, 95.18%, 97.35% and 99.36% respectively, and the proportion of hole transport layer material revenue in OLED terminal material revenue was 7.35%, 4.80%, 2.65% and 0.64% respectively. 3、 The cooperative development agreement signed by the company with BOE and Huaxing optoelectronics has exclusive terms. In 2020, the company signed joint development (cooperative development) agreements with BOE and Huaxing optoelectronics to jointly develop OLED terminal materials. There are exclusive clauses in the joint development (cooperative development) agreement signed by the company with BOE and Huaxing optoelectronics. For details, please refer to “(III) cooperative research and development” in “VII. Technology and research and development” of “section VI business and technology”.
The above exclusive terms are only applicable to the products jointly developed by both parties. There are no exclusive terms for the products independently developed by the company, and there are no restrictions on sales to other customers.
As of the signing date of this prospectus, the products jointly developed by the company and its customers are still in the research and development stage, and batch supply has not been realized. The above terms have not had an impact on the company. In the future, after the mass production and supply of jointly developed products, the company shall not provide the jointly developed materials to other customers within the limited period, which may lead to the extension of the R & D cycle of relevant products and the delay of application in other customers. 4、 Technical sources of the company
In 2016, the company established lightmax with MS and began to engage in the R & D, production and sales of OLED terminal materials. In the early days of its establishment, the technology came from Ms. After years of development, the R & D and production teams of lightmax have continuously broken through the original achievements through digestion, absorption and re innovation on the basis of the original technology of MS and the combination of theory and practice, forming a core technology system with its own characteristics. The subsequent product and technology development of the company are independent of MS.
In June 2020, the company acquired 49% equity of lightmax held by MS, and lightmax became a wholly-owned subsidiary of the company. After Ms withdrew from lightmax, the company is constantly improving product performance and expanding different application fields with its own R & D ability, and has gradually developed a new generation of red prime, green prime, blue prime, red host, green host and other materials. January 2020
