Guangdong Vtr Bio-Tech Co.Ltd(300381) : Announcement on the supplementary reply to the inquiry letter on the restructuring of Shenzhen Stock Exchange

Stock Code: Guangdong Vtr Bio-Tech Co.Ltd(300381) stock abbreviation: Guangdong Vtr Bio-Tech Co.Ltd(300381)

Bond Code: 123018 bond abbreviation: profit convertible bond Announcement No.: 2022025 Guangdong Vtr Bio-Tech Co.Ltd(300381)

Announcement on the supplementary reply to the inquiry letter on the restructuring of Shenzhen Stock Exchange

The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions. Shenzhen Stock Exchange:

The inquiry letter on the reorganization of Guangdong Vtr Bio-Tech Co.Ltd(300381) issued by your exchange on March 10, 2022 (GEM non licensed reorganization inquiry letter [2022] No. 3) (hereinafter referred to as “reorganization inquiry letter”) has been received Guangdong Vtr Bio-Tech Co.Ltd(300381) (hereinafter referred to as ” Guangdong Vtr Bio-Tech Co.Ltd(300381) “, “the company”) together with Minsheng Securities Co., Ltd. (hereinafter referred to as “Minsheng securities”, “independent financial consultant”) and Beijing Huaya Zhengxin Asset Appraisal Co., Ltd. (hereinafter referred to as “Huaya Zhengxin” and “appraisal institution”) have checked and implemented the issues listed in the restructuring inquiry letter one by one, And made a reply and announcement on the restructuring inquiry letter on March 14, 2022. Now, we would like to make the following supplementary explanations on the reply to the previous inquiry:

Question 1

Your company’s performance forecast shows that your company is expected to lose 90 million yuan to 11 million yuan in 2021. Please add your company’s operating income, net profit, net assets and their proportion in 2021 for biomedicine (steroid hormone API), biological agriculture and animal husbandry (biological enzyme preparation, animal nutrition and health), combined with question 1 and the performance of biological agriculture and animal husbandry, Fully explain the purpose, necessity and commercial rationality of this transaction, and whether it complies with the relevant provisions of Article 11 of the measures for the administration of major asset restructuring of listed companies. Please give your company’s independent financial advisor a clear opinion.

reply:

1、 Operating income, net profit, net assets and their proportion in 2021

(I) operation of the company in 2021

1. Operation of the company in 2021

The company has not yet announced the annual report of 2021. After preliminary estimation, according to the subsidiaries directly related to the pharmaceutical sector

According to the company’s caliber, the operating revenue, net profit and net assets of the company’s branch business segments from 2019 to 2021

As follows:

Unit: 10000 yuan

20212020 2019

project

Amount proportion amount proportion amount proportion amount proportion

Revenue of pharmaceutical sector 9704005 51.43% 11073180 57.83% 12823193 62.61% (including xinhexin net profit 340642 – 1025989 50.71% 1197794 70.27%)

Net and pharmaceutical business attributable to parent company

Profits of directly related subsidiaries 278649 – 869084 53.74% 901395 70.69% net assets 10279992 23.42% 9867865 30.24% 9243921 33.88%

Income 9165883 48.57% 8074465 42.17% 7658141 37.39% agriculture and animal husbandry

(excluding the net profit of pharmaceutical sector -1059772 – 997381, 49.29% 506688, 29.73% consolidated net profit directly attributable to the parent company -1320182 – 747976, 46.26% 373825 and 29.31% subsidiaries)

Net assets 33615349 76.58% 22761370 69.76% 18043681 66.12%

Operating 18869887 100.00% 19147645 100.00% 20481334 100.00% revenue

Net profit -719130 100.00% 2023370 100.00% 1704482 100.00% total attributable to parent company

Profit -1041533 100.00% 1617060 100.00% 1275221 100.00%

Net assets 43893342 100.00% 32629235 100.00% 27287602 100.00%

Note 1: the data of 2021 are unaudited.

Note 2: the pharmaceutical sector includes three companies: xinhexin, keyixin and Lihua pharmaceutical. There are internal transactions among the three companies, which are closed here

After excluding the internal transactions between the three companies according to the consolidation criteria, the income belongs to the external realization of the pharmaceutical sector, which is the same as that of the three companies

The total amount of income in the financial statements is different.

In the above table, the comparison of business performance between the agriculture and animal husbandry sector and the pharmaceutical sector shows that the data caliber is not comparable, mainly

Part of the group headquarters expenses are directly included in the performance of the agriculture and animal husbandry sector because the parent company is located in the agriculture and animal husbandry sector.

collection

The group expenses mainly include the following items: the interest expense of the loan of the group’s merger and acquisition of subsidiary companies, and the cost of realizing the function of the group headquarters

Expenses and equity incentive expenses in 2021. The details of the above expenses from 2019 to 2021 are as follows:

Unit: 10000 yuan

Project 20212020 2019

The Group acquired the pharmaceutical sector and added

161663129080253672 arising from investment in pharmaceutical sector loans

interest

Group headquarters expenses 167944143383159964

Equity incentive fee 975.32 —

In order to facilitate analysis and decision-making and more clearly reflect the actual profitability of the two sectors, the equity incentive expenses in 2021 are apportioned between the two sectors in accordance with the requirements of accounting standards; The interest and group headquarters expenses arising from the group’s merger and acquisition of subsidiaries’ loans cannot be strictly distinguished between the two sectors, so this part of expenses shall be excluded when considering the simulated net profit of the sector. After the above adjustments, the simulated net profits of the two sectors from 2019 to 2021 are as follows:

Unit: 10000 yuan

Medicine, agriculture and animal husbandry

project

Amount amount

Operating income 97040059165883

Gross profit 315840040209072021

Gross profit margin 32.55% 43.87%

Simulated net profit 250742 -962668

Operating income 110731808074465

Gross profit 310302842801712020

Gross profit margin 28.02% 53.01%

Simulated net profit 8690841020439

Operating income 128231937658141

Gross profit 357901236684032019

Gross profit margin 27.91% 47.90%

Simulated net profit 901395787461

It can be seen from the above table that from 2019 to 2021, the proportion of the company’s income in the agricultural and animal husbandry sector increased year by year, and the gross profit margin was always higher than that in the pharmaceutical sector, which was the main contribution source of the group’s performance. In 2021, the simulated net profit of the company’s agriculture and animal husbandry sector suffered a loss, mainly for the following reasons:

1. According to the current year’s losses and future performance expectations of the subsidiary Hongying biology, the company accrued a goodwill impairment of 755941 million yuan;

2. Due to the gradual decline in the price of vitamin B12 products produced by subsidiary Hongying biology in previous years, the products are unsalable and the recovery of payment for goods is slow. At the end of the year, the provision for inventory falling price of vitamin B12 products is made for its backlog of inventory, and the credit impairment is made for the customer arrears of vitamin B12 products, affecting the profit of about 429023 million yuan.

3. Hunan base and Guangdong Vtr Bio-Tech Co.Ltd(300381) base in Inner Mongolia, where the company produces enzyme preparation, are affected by limited power production, resulting in shutdown loss of about 9 million yuan.

4. The prices of corn starch, methanol, rice syrup and other main raw materials of biological enzyme preparations, as well as the cost of electricity and steam power, increased significantly in the second half of the year, resulting in an increase in the cost of biological enzyme preparations and a decrease in gross profit; 5. Hunan base and Guangdong Vtr Bio-Tech Co.Ltd(300381) base in Inner Mongolia, where the company produces enzyme preparations, are affected by limited power production, the production capacity cannot meet the order demand of industrial enzyme products, and the operating income is affected to a certain extent.

To sum up, the company’s loss in 2021 was mainly due to the poor operation of vitamin B12 products in Hongying biogenic business

Due to the superposition of factors such as goodwill impairment, asset impairment of backlog vitamin B12 products, credit impairment of customer arrears, price rise of raw materials and energy, production restriction caused by power failure and production restriction, the company has cleaned up Hongying biological vitamin B12 business, the profit of biological agriculture and animal husbandry sector will be stable and guaranteed in the future, and the company will continue to maintain strong profitability.

2. Proportion of Hongying biological performance in biological agriculture and animal husbandry sector

Hongying biology is an enterprise that produces and sells industrial enzyme preparations acquired by the company in 2014. It has a certain market position in industrial enzyme preparations. In 2018,

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