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.
Zhongfu Shenying Carbon Fiber Co., Ltd
Jiangsu Lianyungang Port Co.Ltd(601008) economic and Technological Development Zone Dapu Industrial Zone South Ring Road North
Initial public offering and listing on the science and Innovation Board
Letter of intent
Sponsor (lead underwriter)
No. 618, Shangcheng Road, China (Shanghai) pilot Free Trade Zone
Co lead underwriter
27th floor and 28th floor, building 2, international trade building, No. 1, Jianguomenwai street, Chaoyang District, Beijing
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 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 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)
The issuer’s initial public offering to the public this time shall not exceed 100 million shares. The number of shares issued is RMB common shares (A shares), accounting for no less than 10% of the total share capital after issuance; This issuance is all new shares, and the original shareholders do not offer shares to the public.
The par value of each share is RMB 1.00
The issue price per share is [] yuan
Expected issue date: March 24, 2022
Stock exchanges and sectors to be listed Shanghai Stock Exchange Kechuang board
The total share capital after issuance shall not exceed 900 million shares
Sponsor (lead underwriter) Guotai Junan Securities Co.Ltd(601211)
Co lead underwriter China International Capital Corporation Limited(601995)
Signing date of the prospectus: March 16, 2022
Tips on major issues
This major event reminder is a summary reminder of the company’s risks and other important matters that investors need to pay special attention to. The company specially reminds investors to carefully read the full text of this prospectus. 1、 Special risk tips
The company specially reminds investors of the following risks:
(I) risk of purchasing machinery and equipment from related parties
Considering the protection of the company’s core interests and other factors, the company should not purchase the polymerization kettle, spinning machine and other key equipment with core process technology from other parties. At the same time, the carbon fiber machinery and equipment produced by Jiangsu yingyou are only sold to the company. In 2020 and January June 2021, due to the construction needs of Xining 10000 ton carbon fiber project, the company purchased machinery and equipment, installation and inspection application services from the related party Jiangsu yingyou, with the amount of 283671400 yuan and 97.226 million yuan respectively. By the end of June 2021, the company expects to purchase carbon fiber equipment from Jiangsu yingyou for Xining 10000 ton carbon fiber project, 14000 ton high-performance carbon fiber and supporting precursor project, aerospace high-performance carbon fiber and precursor test line project from the second half of 2021 to 2023, and the purchase amount is expected to be about 1.054 billion yuan. If the related party transaction pricing of the company’s purchase of machinery and equipment from Jiangsu yingyou in the future is unfair or unreasonable, it may have an adverse impact on the company’s independence and operating performance.
(II) iterative risk of technology upgrading
The company’s main products are carbon fibers, which are widely used in aerospace, wind power blades, sports and leisure, pressure vessels, carbon / carbon composites, transportation construction and other fields. The carbon fiber industry has significant technology intensive characteristics. At present, the development of the company’s main business and the maintenance of competitive advantage depend on the process technology and industrial application of the company’s high-performance carbon fiber. During the reporting period, the issuer met the carbon fiber performance requirements specified in the Guiding Catalogue for the first batch of application demonstration of key new materials (2019 Edition), and the product revenue in the application field was 436713 million yuan, 959407 million yuan, 1384419 million yuan and 899446 million yuan respectively, accounting for 14.18%, 23.11%, 26.01% and 23.60% of the operating revenue respectively, accounting for a relatively low proportion.
At present, China’s carbon fiber technology upgrading mainly focuses on the R & D and engineering application of carbon fiber preparation process with higher strength (such as t1100 level) and higher modulus (such as M55 level), as well as higher preparation efficiency (such as high-speed spinning and large tow). At the end of June 2021, the proportion of R & D personnel in the total number of employees was 2.16%, and the proportion of R & D investment in revenue in 2018, 2019, 2020 and January June 2021 were 3.74%, 2.70%, 3.23% and 4.19% respectively. R & D personnel and R & D investment were relatively low, and technology development was uncertain. If the company could not strengthen the investment and layout of R & D resources, Timely grasp the development trend of industry technology, or new carbon fiber products with more advantages in cost, quality and application in the market may have an adverse impact on the company’s future production and operation.
(III) internal control risk
During the reporting period, the issuer had internal control defects such as “re lending”, bill financing without real transaction background, third-party payment collection, cash transaction, personal card collection and payment, and the issuer has made rectification according to the suggestions of the counseling organization. Among them, “re lending” is divided into two situations: one is the situation that the loan is granted to the supplier through the lending bank, and then the supplier or the designated third party returns the obtained bank loan to the company. The amounts involved in 2018, 2019, 2020 and January June 2021 are RMB 281.45 million, RMB 194.35 million, RMB 243.2 million and RMB 0 million respectively, By the end of December 2020, the company had paid off the loans corresponding to the above-mentioned re lending, and there was no overdue repayment; The other is to assist the related parties to obtain bank loans and then return the obtained bank loans to the related parties. The amounts involved in 2018, 2019, 2020 and January to June 2021 are RMB 10 million, RMB 4.6 million, RMB 80 million and RMB million respectively. The loans corresponding to the above-mentioned re loans have been paid off by the related parties as of the signing date of this prospectus intention, There is no overdue repayment. The company has no bank lending after December 31, 2020.
At present, the company is in the stage of rapid development, and is building a number of production, construction and R & D projects, such as Xining 10000 ton carbon fiber project, Xining 14000 ton high-performance carbon fiber and supporting precursor project. After the construction of the above projects, the company’s assets and business scale will be further expanded, the demand for high-quality talents such as human resource management, marketing, financial management, quality management and technology research and development will increase significantly, and the company’s internal control management requirements will be further improved. If the company fails to carry out management and organizational change in time in the process of development, Effective management of business and assets can not cultivate, introduce or retain high-quality talents to meet the needs of the company’s scale expansion, and the construction and implementation requirements of internal control system can not match the scale after expansion, which will have an adverse impact on the company’s operation and sustainable development.
(IV) price fluctuation risk of raw materials and energy
The company’s main raw materials and energy for carbon fiber production include acrylonitrile, natural gas, electricity, steam, etc. Acrylonitrile is a petrochemical product, and the market price is greatly affected by the fluctuation of international oil price. The unit price of acrylonitrile purchased by the company during the reporting period was RMB 370000 / ton, and the unit price of acrylonitrile purchased by the company during the reporting period was RMB 170000 / ton, respectively. Based on the gross profit margin of the company’s main business of 43.15% in 2020, if the price of direct materials including acrylonitrile increases by 5%, the gross profit margin of the company’s main business will decrease by 2.84 percentage points. The prices of natural gas, electricity and steam are regulated and controlled by the government, and the prices are relatively stable. If the prices of the company’s main raw materials and energy rise sharply in the future, it may have an adverse impact on the company’s operating performance.
(V) risk of mortgage of main assets of the company
As China building materials group provided a guarantee with a maximum amount of no more than RMB 2.2 billion for the loan contract under the loan contract between the issuer and its subsidiaries and relevant bank lenders, the issuer made a counter guarantee by pledging production equipment, 14 houses and buildings and 4 lands to China Building Materials Group. By the end of June 2021, the net book value of the mortgaged production equipment was 1089046 million yuan, accounting for 14.04% of the net book value of the production equipment at the end of the period. As of the date of signing this prospectus, the proportion of the building area of the mortgaged house to the total building area of the company was 11.40%, and the proportion of the mortgaged land area to the total land area was 41.32%. The mortgaged land and real estate are the main business sites of the company’s daily business activities such as R & D, production, sales and management. The in-service carbonization production line involved in the mortgaged machinery and equipment is the main equipment of the company’s production activities and belongs to the key assets of the company’s operation. The above guarantee covers the construction loan of Xining 10000 ton carbon fiber project. The company plans to make a counter guarantee to China building materials group with the land, real estate and equipment of the project as collateral. If the operation of the company deteriorates in the future, the relevant bank financial institutions that fail to provide guarantee bank loans to the company as agreed fulfill the repayment obligations, and lead to the actual performance of the guarantee responsibility of China Building Materials Group, there is a risk that China Building Materials Group will dispose of the company’s mortgaged assets according to the contract.
(VI) risk of intensified market competition
At present, the competition pattern of China’s carbon fiber market is still dominated by imported carbon fiber. In 2020, the sales volume of imported carbon fiber in China’s carbon fiber market accounted for 62.30%. The main overseas carbon fiber enterprises include Japan’s Toray, Japan’s Toho, Japan’s Mitsubishi, the United States’ Hexcel, the United States’ Zoltek SGL et al. In recent years, due to the restrictions of foreign import and export policies and the impact of covid-19 epidemic, the share of imported carbon fiber in China’s carbon fiber market has decreased, and the market share in 2020 is 6 percentage points lower than that in 2019. Affected by the rapid growth of China’s carbon fiber market demand and the increasing difficulty of foreign carbon fiber supply, Chinese carbon fiber manufacturers have a strong willingness to expand production, and it is expected that the overall production capacity of Chinese carbon fiber enterprises will further increase. If the import supply and domestic supply of carbon fiber are greatly increased in the future, the competition in China’s carbon fiber market will intensify, which may have an adverse impact on the company’s market position, business development and profitability.
(VII) the risk of the company’s shareholder yingyou group holding all the shares of the company pledged
As of the signing date of this offering intention, yingyou group, the shareholder of the company, pledged all 239990306 shares of Zhongfu Shenying held by it to China Building Materials Group as a counter guarantee measure for China Building Materials Group to provide bank loan guarantee to the company and its subsidiary Shenying Xining. At present, the relevant bank loan contracts are normally performed, and the company pays the loan principal and interest on schedule, so there is no risk of transfer of shares of the pledged issuer due to failure to pay off the debt. Considering the impact of external factors such as market operation and changes in macroeconomic situation, the risk that China Building Materials Group will dispose of the pledged equity of yingyou group and the change of the company’s equity structure in accordance with the contract due to the issuer’s failure to repay the relevant due loans in the future cannot be ruled out. 2、 Tips on other major matters
(I) the company was punished for environmental protection during the reporting period
On August 1, 2018, the Environmental Protection Bureau of Jiangsu Lianyungang Port Co.Ltd(601008) city issued the decision on administrative punishment for environmental protection (Lian Huan Xing Zheng Zi [2018] No. 19). The environmental protection facilities of the company’s phase II technical transformation project with an annual output of 3500 tons of polyacrylonitrile precursor and 1500 tons of syt45 high-performance carbon fiber have not been accepted, and the precursor 6 production line was completed and put into operation in November 2016, The company will be fined 300000 yuan for the environmental violation of “the construction project is put into production without the acceptance of the supporting environmental protection facilities of the construction project”. On August 16, 2018,
