After this stock issue, it is planned to be listed on the gem, which has high investment risk. 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.
Ningbo Tianyi Medical Instrument Co., Ltd
Ningbo Tianyi Medical Appliance Co., Ltd.
(No. 788, Mozhi North Road, Dongqian Lake Tourist Resort, Ningbo)
Initial public offering and listing on GEM
Letter of intent
(declaration draft)
The issuance application of the company still needs to go through the corresponding procedures of Shenzhen Stock Exchange and China Securities Regulatory Commission. This prospectus is only used to disclose the intention to issue shares in advance and has no legal effect. Investors shall take the officially announced prospectus as the basis for investment decisions.
Sponsor (lead underwriter)
(No. 618, Shangcheng Road, China (Shanghai) pilot Free Trade Zone)
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.
The issuer shall be responsible for the change of income according to the provisions of the securities operation 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 shareholders, actual controllers and persons acting in concert 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, persons acting in concert, sponsors and underwriting securities companies promise that investors suffer 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, Investors will be compensated for their losses in accordance with the law.
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)
The number of shares in this public offering is 14736842, accounting for 25% of the total issued shares and share capital after this offering. All of this issuance is the issuance of new shares, which does not involve the public offering of shares by the original shareholders.
The par value of each share is RMB 1.00
The issue price per share is RMB []
Expected issue date: March 23, 2022
Stock exchanges and sectors to be listed Shenzhen Stock Exchange gem
The total share capital after issuance is 58947368 shares
Sponsor (lead underwriter) Guotai Junan Securities Co.Ltd(601211)
Signing date of the prospectus: March 15, 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 matters. 1、 Important commitments related to this offering
Important commitments made by the issuer and its shareholders, directors, supervisors and senior managers of the issuer, as well as the sponsors and securities service institutions of this issuance See “II. Important commitments and performance made by relevant institutions and personnel” in “annex to section 13” of this prospectus for the specific contents of the binding measures for failing to fulfill the commitments and the commitments that have triggered the fulfillment conditions. 2、 Accumulated profit distribution
After the deliberation and approval of the fourth extraordinary general meeting of shareholders in 2020, the accumulated undistributed profits before the completion of this issuance and listing are shared by the new and old shareholders registered after this issuance and listing. 3、 Special risk tips
Investors should fully understand the investment risks of the gem and the risk factors disclosed by the company, and remind investors to pay special attention to the following risks in “section IV Risk Factors”: (I) the risk that the gross profit margin fluctuates and the gross profit margin of the main products of extracorporeal circulation is relatively low
In 2018, 2019, 2020 and January June 2021, the gross profit margin of the company’s main business was 35.13%, 39.35%, 42.65% and 35.22% respectively, and the gross profit margin fluctuated. At the same time, the gross profit margin of the company’s main core technology products in each period of the reporting period was 27.45%, 29.43%, 29.78% and 27.66% respectively, which was lower than that of ward nursing products such as liquid feeding tube, feeder and disposable integrated oxygen suction tube. During the reporting period, the company’s gross profit margin was mainly affected by market demand, product structure, sales unit price, unit cost, new product launch and other factors.
If there are major adverse changes in the macro-economy, market competition and raw material prices in the future, and the company cannot reduce production costs by improving production efficiency, technological innovation, process innovation and expanding production scale, and cannot continuously launch new products with strong profitability, the gross profit margin of the company will decline, which will have an adverse impact on the profitability of the company.
The main reason for the low gross profit margin of extracorporeal circulation blood products is that the company has adopted the business strategy of lower pricing than that of foreign manufacturers. The industry of extracorporeal circulation blood products has realized higher domestic import substitution, and the hospital terminal price of extracorporeal circulation blood products is limited due to the influence of serious illness medical insurance policy. Therefore, the unit price of the company’s extracorporeal circulation blood products is low; At the same time, the unit cost of the product is relatively high, resulting in a relatively low gross profit margin of the product.
If the sales price and unit cost of the company’s extracorporeal circulation blood products are adversely affected by factors such as health industry policies such as volume purchase of medical devices and price fluctuations of raw materials in the future, there is a risk that the price of the core product will decline and the gross profit margin will decline. (II) product R & D risk
The company’s main business is the R & D, production and sales of medical devices such as medical polymer consumables in the field of blood purification and ward nursing. It has high requirements for technology and process innovation. At the same time, the demand for products of medical institutions is also changing and improving.
In each period of the reporting period, the R & D investment of the company was 8.9810 million yuan, 160724 million yuan, 159736 million yuan and 101228 million yuan respectively. The R & D investment of the company was relatively low, which was related to the characteristics of the medical device industry. The product R & D of the industry was mainly based on the improved innovation of the original products and the development of new products, key parts and new technologies according to the clinical needs, The cost of product design, improvement of materials and processes and clinical trial involved in R & D investment are far behind that of new drug R & D.
If the company’s future scientific research, technological transformation and update are slow, it is unable to accurately grasp the development trend of products and technologies, there are directional mistakes in the decision-making of product development, or it is unable to apply new technologies to product research and development in time, the company may lose the leading advantage of technology and market, thus reducing the company’s market position, It will have an adverse impact on the development and operating performance of the company in the future. (III) customer concentration and loss risk of feeders, liquid feeding tubes and disposable integrated oxygen suction tubes
In each period of the reporting period, the sales revenue of the company’s feeder and liquid feeding tube products was 462242 million yuan, 685521 million yuan, 650698 million yuan and 502841 million yuan respectively, accounting for 18.47%, 21.94%, 17.83% and 29.08% of the main business revenue respectively. The company’s feeders and feeding tubes are mainly finally sold to neomed in the United States. Among them, in 2020 and the first half of 2021, the sales revenue contribution of neomed accounted for 99.72% and 99.52% of feeders and feed tube products. The issuer has high customer concentration of feeders and feed tube products and dependence on relevant customers.
In each period of the reporting period, the sales revenue of the company’s disposable integrated oxygen tube products was 277671 million yuan, 288397 million yuan, 19.513 million yuan and 9.9549 million yuan respectively, accounting for 11.09%, 9.23%, 5.35% and 5.76% of the main business revenue respectively. Among them, from January to June 2021, the sales revenue contribution of Nanjing Tianwen and Shangyao kantle accounted for 57.02% of the issuer’s one-time integrated oxygen inhalation tube products, which poses the risk of customer concentration.
If the above-mentioned important customers reduce the demand for the company’s products due to their own reasons, external policy environment or market changes, such as the aggravation of covid-19 pneumonia, and the issuer’s products are included in the list of tariff imposed commodities, the issuer will have the risk of unsustainable order acquisition and substitution by competitors. If the above important customers are lost, it may have a significant adverse impact on the operating performance of the issuer. (IV) high concentration of equity and improper risk control by the actual controller
As of the signing date of this offering intention, the actual controllers of the issuer are Wu Zhimin, Wu Bin and his son, and Zhang Wenyu is the person acting in concert of the actual controller. Among them, Wu Zhimin directly holds 28 million shares of the issuer, accounting for 63.33% of the total shares of the issuer before issuance; Wu Bin directly holds 12 million shares of the issuer, accounting for 27.14% of the total shares of the issuer before issuance; Zhang Wenyu directly holds Shanghai Pudong Development Bank Co.Ltd(600000) shares of the issuer, accounting for 1.36% of the total shares of the issuer before issuance. After this issuance, the total shareholding ratio of the actual controller will be reduced to 67.86%, and the proportion of equity controlled will be reduced to 68.88%, which is still in the control position and highly concentrated. The actual controller can take advantage of its control position to exercise control and significant influence on the selection and employment of directors, supervisors and senior managers, development strategy, personnel arrangement, production and operation, finance and other decisions of the issuer through the exercise of voting rights. If the corporate governance system cannot be strictly implemented, it may lead to the risk that the actual controller uses its control position to damage the interests of the company and other minority shareholders. (V) policy and industry regulatory risks
1. Potential impact of medical device volume procurement policy on the issuer’s performance
On July 31, 2019, the general office of the State Council issued the notice on the reform of medical consumables, Among them, it is clearly proposed to “improve the classified centralized procurement method. For high-value medical consumables with large clinical consumption, high procurement amount, mature clinical use and produced by multiple enterprises, explore centralized procurement by category, encourage medical institutions to jointly carry out volume negotiation procurement and actively explore inter provincial alliance procurement”, and specify the timetable as follows:
It will be launched in the second half of 2019. Purchasing with quantity will cause adverse effects on the performance of enterprises that fail to win the bid in terms of income and profit
influence.
As of June 30, 2021, provinces and cities across the country have issued policies on the purchase of medical consumables
Policy, among the provinces and cities that have carried out volume procurement, Xinjiang, Shandong, Shanxi, Chongqing, Fujian, Guizhou and Hubei
The purchased varieties of some municipal areas in southern provinces and Henan Province involve the issuer’s main products. Among them,
Industries involved in Altay region, Xinjiang, seven cities in Shandong, the South Bank of Chongqing, Qiannan Prefecture, Guizhou and Hengyang, Hunan
The product is the blood route of extracorporeal circulation, involving Yangquan, Shanxi, Datong, Taiyuan, seven cities in Shandong, Henan and Quanzhou, Fujian
Our products are disposable integrated oxygen suction tubes. During the reporting period, the issuer was not in Altay, Xinjiang and Hunan
Hengyang area sells extracorporeal circulation blood, and it has not sold one-time use in Yangquan City and Datong City, Shanxi Province
Type oxygen suction tube, so it did not participate in the local procurement negotiation with quantity; The issuer is located in seven cities in Shandong and Taiyuan in Shanxi
The original, Henan, Fujian Quanzhou, Guizhou Qiannan and Chongqing Nan’an regions have sales of extracorporeal circulation blood routes and one-time blood circulation
Integrated oxygen suction tube products are used, but due to the main non provincial volume procurement, the municipal volume procurement is involved
The procurement volume is small, so the issuer did not actively participate in the negotiation of procurement with volume or failed to win the bid. Usually with quantity mining
The purchase rules stipulate that the consumption of selected consumables in the purchase shall not be less than 70% of the annual consumption of consumables. For the remaining consumption,
Medical institutions can purchase other consumables with appropriate prices. Therefore, the issuer is still able to conduct relevant transactions in the above regions
Sales of related products.
The reason why the issuing issuer won the bid and did not actively participate in the negotiation on the practice of purchasing provincial, provincial and municipal documents, product category and price, or the specific situation of failure to win the bid
