Changjiang Securities Company Limited(000783) underwriting and recommendation Co., Ltd
About Shanghai Guanlong valve energy saving equipment Co., Ltd
Initial public offering and listing on GEM
of
Issuance and recommendation work report
Sponsor (lead underwriter)
28th floor, No. 1198, Century Avenue, China (Shanghai) pilot Free Trade Zone
February, 2002
Statement
Changjiang Securities Company Limited(000783) underwriting sponsor Co., Ltd. (hereinafter referred to as “the sponsor” or “Changjiang sponsor”) accepts the employment of Shanghai Guanlong valve energy saving equipment Co., Ltd. (hereinafter referred to as “the issuer”, “Guanlong Co., Ltd.” or “the company”), As the sponsor of the initial public offering of Guanlong shares and its listing on the gem (hereinafter referred to as “this offering” or “initial public offering”), it issued the recommendation work report on the issuance of Guanlong shares (hereinafter referred to as “this report”).
In accordance with the company law of the people’s Republic of China (hereinafter referred to as the “company law”), the securities law of the people’s Republic of China (hereinafter referred to as the “Securities Law”) and the measures for the administration of securities issuance and listing recommendation business Relevant laws and administrative regulations such as the measures for the administration of the registration of initial public offerings on the gem (for Trial Implementation) (hereinafter referred to as the “measures for the administration of initial public offerings on the gem”), the Listing Rules of GEM stocks on the Shenzhen Stock Exchange, the standards for the content and format of information disclosure by companies issuing securities No. 27 – issuance recommendation letter and issuance recommendation work report In accordance with the provisions of the China Securities Regulatory Commission (hereinafter referred to as the “CSRC”), we are honest, trustworthy, diligent and conscientious, issue this issuance recommendation work report in strict accordance with the business rules, industry practice norms and ethical standards formulated according to law, and ensure the authenticity, accuracy and integrity of this issuance recommendation work report after due diligence and careful verification.
Unless otherwise specified, the abbreviation and interpretation in this report are the same as those in the prospectus of the issuer.
1、 Project operation process (I) internal project audit process of the sponsor
The sponsor has established a perfect project audit process. The project audit process includes project approval audit, internal verification department audit, core Committee audit, Distribution Committee audit and other links.
1. Establishment and functions of project audit organization
The sponsor has set up special institutions for project audit – project initiation Committee, quality control department, core Committee, core department (under the risk management department), issuance Committee and capital market department. The project establishment committee of the company is the project establishment review body of the company’s investment banking business. It is independent of the functional departments of the company and is composed of personnel from the business department, capital market department, risk management department, compliance management department, quality control department and other relevant departments. The quality control department is the daily office of the project approval committee and also the functional department of the company specifically responsible for quality control. Through the dynamic tracking and management of the whole process and all links of investment banking business, the quality control department is responsible for the process management of the quality of professional activities of the project team and business departments, whether the investment banking project meets the standards and conditions such as project initiation and core, and whether the materials and documents to be submitted, submitted, issued or disclosed by the project team meet the laws and regulations Check and judge the relevant provisions of the CSRC, the relevant requirements of the self-discipline rules, and whether the business personnel are diligent in performing their due diligence obligations. The core committee is a non established organization responsible for the core of the company’s investment banking business. It is responsible for export management and terminal risk control of investment banking projects in the form of company level audit, and performs the final approval decision-making responsibility of submitting, submitting, issuing or disclosing materials and documents in the name of the company. It is composed of the company’s management, department heads, senior personnel of the business department, senior personnel of the capital market department, auditors of the quality control and compliance risk control department and qualified external members; The core department under the risk management department is the daily work organization of the core Committee and the permanent core organization of the company. It is responsible for organizing and convening the core meeting, tracking and implementing the core opinions and performing the core procedures in a non meeting manner; The issuance Committee, as the decision-making body of the company’s securities issuance and underwriting business, deliberates on major matters related to the company’s securities issuance and underwriting; The capital market department is the daily work organization of the issuance Committee, which is responsible for organizing and convening the meetings of the issuance Committee and performing the review procedures in a non meeting manner.
2. Project audit process
(1) Project approval stage audit
① The business department initiates the process through the investment bank information system and submits electronic project initiation application materials, including project initiation application report, internal review minutes of the Department, supporting documents (if any), etc., in addition to military and secret related projects. ② The quality control department shall review the project initiation materials, understand the project situation, confirm whether the conditions for convening the project initiation meeting are met, and arrange on-site investigation if necessary.
③ After the audit post of the quality control department confirms that the conditions for project approval are met, the quality control department determines the time of the project approval meeting.
④ The company shall establish ordinary procedures and summary procedures for project initiation and review of projects of different business types. The number of members participating in the ordinary project review shall reach 7, and the number of members from the business department and the internal control department shall reach 3 or more respectively, of which the number of members from the internal control department shall not be less than 1 / 3 of the number of members participating in the review. There shall be five members participating in the review of simple project initiation, all of whom may come from the internal control department. Before the meeting, the project committee members participating in the meeting shall make a statement of withdrawal. The person in charge of the business department shall participate in the project initiation meeting of the Department. If not, the initiation meeting will be postponed. The project leader and main project team members shall participate in the project initiation meeting.
⑤ The project initiation meeting can be held in the form of on-site, video or audio. The simplified project initiation procedure can be deliberated by non meeting methods such as communication and written voting.
⑥ In principle, the ordinary project initiation meeting of IPO project shall be held 3 working days after the quality control department pushes the project initiation application materials to the project initiation Committee; The interval of other projects can be determined by the quality control department according to the actual situation; The quality control department may extend the convening time of the project initiation meeting according to the specific conditions of the project if there are major projects without precedent or complex schemes, involving more traders or targets, more media doubts, and more concerns of the securities regulatory authorities.
⑦ The project team shall briefly state the basic situation, main problems, professional judgment and basis of the project at the project initiation meeting. The audit post of the quality control department shall state the preliminary review. The project initiation members can inquire about the project and put forward concerns. The project team shall answer the questions of the project initiation members about the project. After the inquiry, the project initiation committee can further discuss, and the leaders in charge of the project department, department heads and project team members should avoid.
⑧ After the discussion, the convener or designated person can organize on-site voting, or the comprehensive post of the quality control department can initiate the process on the investment bank information system, and the project approval committee can decide whether to approve the project by voting. The voting result of the process is the project approval resolution.
With the consent of more than two-thirds of the members participating in the meeting, the project was approved. Otherwise, it is rejected. With the consent of more than two-thirds of the members participating in the meeting, the project initiation can be postponed, and the project initiation meeting can be held again after the project team supplements the due diligence and working papers.
(2) Kernel phase audit
① The project team shall complete the acquisition and collection of working papers at the stage of on-site due diligence and submit them to the quality control department for acceptance. The quality control department shall issue clear acceptance opinions on the project due diligence and working papers. After the acceptance, the quality control department shall issue the project quality control report. After the working paper is accepted, the review procedure of the kernel meeting can be started;
② In addition to military and secret related projects, core application materials need to be submitted and pushed through the investment bank information system. ③ The comprehensive post of the core department shall conduct formal review on the application documents of the core meeting. After passing the review, the information system of the investment bank shall push them to the core members for review.
The arrangement of the kernel meeting shall ensure that the kernel members have sufficient time to review the application documents. In principle, the review time shall not be less than 5 working days. The kernel person in charge can appropriately adjust the review time of the kernel when he thinks it necessary. For projects that are not subject to administrative licensing and are not subject to the supervision of self regulatory organizations, the review time of the kernel is not limited by the above time. At least 7 members shall participate in the core meeting each time, among which the number of core members from the internal control department shall not be less than 1 / 3 of the number of members participating in the meeting, and at least one member of the compliance management department shall participate in the voting.
④ After reviewing the project, the core members participating in the meeting shall form written feedback and send it to the core department. The core department shall summarize and sort out the feedback and send it to the project team. The project team must reply to the feedback before the core meeting and leave sufficient review time for the members.
⑤ The comprehensive post of the kernel Department arranges the place of the kernel meeting and issues the notice of the kernel meeting according to the specific time of the kernel meeting determined by the kernel person in charge.
⑥ At the kernel meeting, the project team briefly introduced the basic situation of the project, the main problems concerned and solved, and the analysis and judgment of the main advantages and risks of the project. The audit post of the quality control department introduces the main contents of the quality control report, the main problems concerned or doubtful matters, and the problems that need to be submitted to the kernel meeting for discussion. The kernel committee members expressed their audit opinions, questioned and discussed with the project team on issues of concern, and formed clear opinions. After the inquiry and discussion of the core meeting, the members of the project team, the audit post of the quality control department and the personnel with conflict of interest shall withdraw. The kernel committee members shall discuss in a collegial manner and make brief concluding remarks as appropriate. After the collegial discussion of the kernel members, vote through the investment bank information system. The voting opinions of the kernel meeting can be divided into three situations: passed, not passed and suspended.
⑦ After the core meeting, if there are requirements for follow-up implementation of relevant issues, the core department shall collect and sort out the core opinions and feed them back to the project team for implementation. The project team shall implement the feedback and modify and improve the application documents, which shall be approved after being confirmed by the core members attending the meeting. After the project is voted and the implementation of the core opinions is confirmed, the relevant documents of the project can enter the company’s signature procedure.
(3) Review in release stage
After the project passes the review of the CSRC, the issuance committee meeting shall be held before the issuance. The work flow of the issuance committee is as follows: the project team shall prepare the relevant issuance scheme and attachments (if any) and submit them to the capital market department one working day before the issuance committee meeting. The issuance Committee shall conduct deliberation in the form of meeting or OA approval process, and the specific method shall be determined by the chairman of the issuance Committee. (II) approval process of the project
After preliminary due diligence, the project team applied for project initiation on May 11, 2021 and submitted project initiation application materials. The sponsor held the project initiation meeting for the initial public offering and listing of Guanlong shares on May 19, 2021. A total of 7 members participated in the project initiation review, including 1 member from the quality control department, 1 member from the risk management department and 1 member from the compliance management department. The number of members from the internal control department shall not be less than 1 / 3 of the total number of members, meeting the requirements of relevant regulations. After discussion, the project establishment committee agreed to establish the project. (III) main implementation process of the project
1. Composition of project executors
There are 8 members in the project team: Su Haiqing, he Junguang, Li Tong, Wang Haitao, Dong Zhengming, Zheng Menghan, Wang Xinluo and Tan Zhichao. The above-mentioned personnel participated in the process of due diligence, counseling and the preparation and review of application documents.
Name Project role mobilization time specific work situation
Su Haiqing’s sponsor representative will see “(III) 4. Time and main process of sponsor representative participating in due diligence” in this section in May 2020
He Junguang, the sponsor representative, saw “(III) 4. Time and main process of the sponsor representative participating in the due diligence work” in this section in May 2020
Participate in due diligence and counseling, prepare working papers, prepare materials for applying for the co sponsor of Li Tong project in May 2020, and assist the sponsor representative in overall managing the project progress and coordinating the project operation
Wang Haitao and other members of the project team participated in due diligence and guidance, examined and approved application materials and coordinated project operation in May 2020
Dong Zhengming and other members of the project team participated in due diligence and guidance, prepared working papers and prepared application materials in May 2020
Zheng Menghan and other members of the project team participated in the due diligence in May 2020
Other members of Wang Xinluo’s project team participated in due diligence and guidance, prepared working papers and prepared application materials in May 2020
Tan Zhichao and other members of the project team participated in due diligence, counseling, preparation of working papers, preparation of application materials, etc. in March 2021
2. Mobilization working hours
The project team will officially enter the site in May 2020.
3. Main process of due diligence
The sponsor began to contact the issuer in June 2017, conducted preliminary due diligence in October 2019, and then accepted the employment of the issuer to officially serve as the sponsor and lead underwriter of the issuer’s IPO and listing. In November 2020, the issuer applied to Shanghai stock exchange for listing application documents on the science and innovation board.
Later, due to the adjustment of the company’s listing plan, on May 5, 2021, the issuer submitted an application to withdraw the listing of the science and innovation board to the Shanghai Stock Exchange. On May 7, 2021, Shanghai Stock Exchange issued the decision on terminating the examination of Shanghai Guanlong valve energy saving equipment Co., Ltd. for its initial public offering and listing on the science and innovation board.
The executives of the project team conducted in-depth due diligence on the issuance and listing of Guanlong shares. (1) Preliminary due diligence phase
In the preliminary due diligence stage, the project team’s executors mainly implement the following procedures:
