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 risk factors of the company's investment in the gem and the risks of the company's investment in the gem. Shanghai Karon eco Valve Manufacturing Co., Ltd. (No. 815, Deyuan Road, Nanxiang Town, Jiading District, Shanghai)
Letter of intent for initial public offering and listing on GEM
Sponsor (lead underwriter)
28th floor, No. 1198, Century Avenue, 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.
Overview of this offering
Type of shares issued: RMB ordinary shares (A shares)
The number of shares to be issued is 42 million, accounting for 25.05% of the total share capital after issuance. This issuance is all new shares and does not involve the public offering of shares by shareholders.
The par value of each share is 1.00 yuan
Issue price per share [] yuan / share
Expected issue date: March 28, 2022
Stock exchanges and sectors to be listed Shenzhen Stock Exchange gem
The total share capital after issuance is 167674290 shares
Sponsor (lead underwriter) Changjiang Securities Company Limited(000783) underwriting sponsor Co., Ltd
Signing date of the prospectus: March 17, 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 tips
The company specially reminds investors of the following risks in "section IV Risk Factors" of this prospectus: (I) the risk of changes in laws and regulations on investment or technology transfer to China in the region where the actual controller is located
The actual control of the company is China's natural person in Taiwan. The regulations on the relations between the people in Taiwan and the mainland, the Licensing Measures for investment or technical cooperation in the mainland and the principles of examination in China's investment and technical cooperation in the mainland are formulated by China's Taiwan authorities. The scope of investment by legal persons to Chinese mainland is limited to prohibited categories and general categories. Products or business items that do not belong to the prohibited category belong to the general category. The industry of the company belongs to general projects and is not limited by the investment scope of the above regulations. Although the current cross-strait economic and trade cooperation is relatively stable, the changes in the cross-strait economic and political environment are uncertain. During the reporting period, the sales amount to the customers in China's Taiwan region was 21 million 706 thousand and 600 yuan, 28 million 731 thousand and 300 yuan, 33 million 138 thousand and 600 yuan and 8 million 143 thousand and 700 yuan respectively, accounting for 2.62%, 3.04%, 3.26% and 1.81% of the company's operating income respectively. The amount of procurement to suppliers in China's Taiwan region was 5 million 307 thousand and 500 yuan, 3 million 222 thousand and 400 yuan, 5 million 637 thousand and 400 yuan and 3 million 461 thousand and 700 yuan respectively, accounting for 1.40%, 0.77%, 1.16% and 1.45% of total purchases respectively. If the regulations on investment in the mainland of China change in China's Taiwan region, strict restrictions on investment in the mainland will have adverse effects on the actual controller's increase in capital investment to the company, the sale of the company to the customers in Taiwan and the procurement of suppliers, and thus adversely affect the production and operation of the company. (II) increased risk of accounts receivable
At the end of 2018, 2019, 2020 and June 2021, the book value of the company's accounts receivable was 404230800 yuan, 443612500 yuan, 474188900 yuan and 421592900 yuan respectively, accounting for 40.94%, 40.36%, 46.08% and 38.34% of the current assets at the end of each period. During the reporting period, the scale of the company's accounts receivable increased with the increase of income scale. If there are significant adverse changes in the macroeconomic situation and industry development prospects outside China or the business situation of the company's customers deteriorates, the company may not be able to recover the payment on time and in full, which will have an adverse impact on the company's business performance. (III) increased risk of inventory impairment
The company's inventory mainly includes raw materials, goods in stock and goods issued. At the end of 2018, 2019, 2020 and June 2021, the book value of the company's inventory was 275732600 yuan, 262 Zhejiang Huatie Emergency Equipment Science & Technology Co.Ltd(603300) yuan, 276930700 yuan and 322896000 yuan respectively, accounting for 27.93%, 23.89%, 26.91% and 29.37% of the current assets at the end of the period respectively, which is generally stable.
With the increase of customer orders and the expansion of production scale, the company's raw material reserves and finished product production will increase rapidly. If macroeconomic fluctuations, intensified market competition, difficulties in individual customers and other factors lead to the decline of product sales and price, there is a risk of impairment of the company's inventory. (IV) risk of intensified market competition
The concentration of the valve industry is low, there are many Chinese production enterprises, and the competition is fierce. On the one hand, the competition of existing large enterprises for the market has intensified, which is embodied in seizing the market and increasing the market share by continuously improving product quality and performance, expanding sales and service areas, etc; On the other hand, small and medium-sized enterprises continue to pour into the market in order to obtain a certain market share and compete mainly in product prices, resulting in a decline in the profit space of the industry. From 2018 to 2020, the company's market share of valves in the field of water supply and drainage was about 2.97%, 3.43% and 3.78% respectively, and the market share was generally low. In the future, the company may be in a disadvantageous competitive position due to intensified market competition or low market share, which will have an adverse impact on the company's operating performance. (V) risk of concentration of business scope
Global head valve manufacturers, mainly European and American enterprises, have a wide range of business. Their products are widely used in many fields such as oil and gas, chemical industry, water conservancy and hydropower, metallurgy, pharmacy, urban water supply and drainage, and some enterprises have related businesses such as instruments, actuators or regulators, with strong comprehensive business competitiveness. In contrast, the issuer's main products are water-saving valves, which are mainly used in downstream fields such as urban water supply and drainage, water conservancy and industry. The product application field is relatively single, and there is a risk of concentration of business scope.
Among comparable companies in the same industry, Sufa Technology Industry Co.Ltd.Cnnc(000777) and Qingdao Weflo Valve Co.Ltd(002871) have entered the issuer's product application field, Neway Valve (Suzhou) Co.Ltd(603699) and Jiangsu Shentong Valve Co.Ltd(002438) and other enterprises have the possibility to enter the water supply and drainage subdivision field through technology R & D, business transformation, cooperative operation or intra industry M & A, so as to compete directly with the company. If other enterprises in the industry enter the application field of the issuer's products, it may lead to more fierce competition in the industry and adversely affect the company's operating performance. 2、 Important commitments made by relevant entities of this issuance
The company reminds investors to carefully read the important commitments made by the company, shareholders, actual controllers, directors, supervisors, senior managers, sponsors and securities service institutions of this offering, the binding measures for failure to fulfill the commitments and the performance of commitments that have triggered the conditions for performance, For specific commitments, please refer to "v. commitments" in "section 10 investor protection" of this prospectus. 3、 Arrangement of profit distribution policy
The company reminds investors to pay attention to the profit distribution policy after the issuance and listing of the company. For details, see "(I) dividend distribution policy after the issuance and listing" in "II. Dividend distribution policy" of "section 10 investor protection" of this prospectus. 4、 Main operating conditions after the audit deadline of financial report (I) main financial information and operating conditions in 2021
The deadline for the audit of the company's financial report is June 30, 2021. According to the guidelines on the disclosure of main financial information and operating status information after the deadline for the audit of the financial report of the prospectus of initial public offering and listed companies (revised in 2020), Dahua certified public accountants made an audit of the company's consolidated and parent company's balance sheet on December 31, 2021, The consolidated and parent company's income statement, consolidated and parent company's cash flow statement and notes to financial statements in 2021 were reviewed, and the review report (dahuahe Zi [2022] No. 000106) was issued. The main financial information reviewed by the company is as follows:
1. Consolidated balance sheet
Unit: 10000 yuan
Change proportion of the project from December 31, 2021 to December 31, 2020
Total assets 1373769411812749 16.30%
Total liabilities 6 Beijing Shiji Information Technology Co.Ltd(002153) Ccs Supply Chain Management Co.Ltd(600180) 1 0.01%
Total owner's equity 77355415810949 33.12%
Owner's equity attributable to the parent company 77355415810949 33.12% total
As of December 31, 2021, the company's total assets, total liabilities and total owner's equity have increased. The main reason for the large increase in owner's equity is the accumulation of the company's operating profit.
2. Consolidated income statement
Unit: 10000 yuan
Change proportion of the project from 2021 to 2020
Operating income 1046848510153641 3.10%
Operating profit 23793611608125 47.96%
Total profit 23731371595355 48.75%
Net profit 19231441110912 73.11%
Net profit attributable to owners of parent company: 19231441110912 73.11%
Net profit attributable to 16724341642072 1.85% of the owners of the parent company after deducting non recurring profits and losses
In 2021, the company's operating revenue was 1046848500 yuan, a year-on-year increase of 3.10%; The operating profit is 237936100 yuan, and the total profit is 23
