Securities abbreviation: Shanghai Yaoji Technology Co.Ltd(002605) securities code: Shanghai Yaoji Technology Co.Ltd(002605) Shanghai Yaoji Technology Co.Ltd(002605)
Public issuance of convertible corporate bonds in 2021
Feasibility analysis report on the use of raised funds
(Revised Version)
March, 2002
In order to promote the business development of Shanghai Yaoji Technology Co.Ltd(002605) (hereinafter referred to as ” Shanghai Yaoji Technology Co.Ltd(002605) ” or “the company”) and further enhance the competitiveness of the company, the company plans to publicly issue convertible corporate bonds to raise funds. The feasibility analysis of the board of directors on the use of the funds raised by the public offering of convertible corporate bonds is as follows: I. The use plan of the funds raised this time
The total amount of funds raised by the company in this public offering of convertible corporate bonds shall not exceed RMB 583127300 (including RMB 583127300). After deducting the issuance expenses, the funds raised are intended to be used for the following items: unit: RMB 10000
No. project name project investment amount proposed investment amount of raised funds
1. Construction project of production base with an annual output of 600 million sets of playing cards 58312735831273
Total 5831273
If the actual net amount of raised funds after deducting the issuance expenses is less than the total amount of raised funds to be invested, the insufficient part of the company will be solved through self raised funds. Before the raised funds are in place, the company will first invest with self raised funds according to the actual situation of the project progress, and replace them after the raised funds are in place.
Within the scope of the above-mentioned projects invested with raised funds, the board of directors or the person authorized by the board of directors of the company may appropriately adjust the amount of raised funds invested in the above-mentioned projects according to the actual situation such as the progress and capital demand of the project. 2、 Background of the project invested by the raised funds
(I) China’s expenditure on leisure and entertainment has been increasing
According to the National Bureau of statistics, the per capita disposable income of urban and rural residents has continuously increased by 22000 yuan in recent years, compared with the national disposable income in 2020, which has reached 80000 yuan. With the rapid growth of disposable income, residents’ pursuit of quality of life and quality continues to upgrade. After the material consumption was satisfied to a certain extent, Chinese residents began to pursue a rich spiritual life, which also promoted the adjustment and upgrading of China’s consumption structure. The family consumption structure gradually shifted from the original necessities such as food and clothing to medical and health care, education expenditure, transportation and communication, leisure and entertainment, etc. The change of residents’ consumption focus to education, culture and entertainment expenditure shows that on the basis of the improvement of consumption level and consumption quality, Chinese residents’ consumption concept is constantly updated and consumption is upgraded from low level to high level. According to the data of the National Bureau of statistics, in the first half of 2021, the per capita consumption expenditure of residents nationwide was 11471 yuan, an actual increase of 17.4% over the same period last year; Among them, education, culture and entertainment consumption grew the fastest, with a growth rate of 68.5%, ahead of other expenditure categories. Education, culture and entertainment consumption has become a new leader in national consumption.
(II) automation, intelligence and environmental protection production have gradually become the development trend of poker manufacturing industry
Since entering the 21st century, China’s manufacturing industry has developed rapidly, the scale and strength of enterprises have been significantly improved, and the industrial competitiveness has been continuously enhanced. With the continuous development of modern production, science and technology and the continuous increase of human cost, the demand for automation and intelligence in the manufacturing industry has been significantly improved. The popularization of automation and intelligence is very important to improve the production efficiency The reduction of product quality and manufacturing cost has played a decisive role. In the context of the new era of industry, China has attached great importance to the development of industrial automation and intellectualization in recent years, and has successively issued a series of industrial policies and plans, such as made in China 2025, intelligent manufacturing development plan (20162020), light industry development plan (20162020), to guide and promote the healthy and sustainable development of the industry and accelerate the automation and Digital transformation, and gradually develop to intelligence.
Automatic and intelligent manufacturing is a necessary condition for the upgrading of China’s traditional manufacturing industry to intelligent manufacturing. It is also a strategic direction to seize the highest point of future economic and scientific and technological development, as well as the poker manufacturing industry. As a low-cost fast-moving consumer goods, poker has become the main research direction of the industry in recent years, with the slowdown of market scale growth, how to effectively reduce production costs and improve product profit level. The application of automation and information technology can effectively help the company monitor the production line, improve the degree of numerical control and product yield, reduce the difficulty of management, and make the application of automation and information technology the key to the future development of the poker industry. How to make rational use of information technology and automatic production line for mass, efficient and high-quality production has become the prerequisite for poker enterprises to seize the market in the future. The transformation of poker production enterprises to automatic and intelligent production has become an inevitable trend.
In addition, the state has paid more and more attention to environmental protection, formulated and revised a series of environmental protection laws, regulations, policies and normative documents, continued to promote the establishment and improvement of a green and low-carbon circular development economic system, and strive to form an economic development mode of “low input, low consumption, low emission and high efficiency”, so as to promote the comprehensive green transformation of economic and social development. Driven by the green and low-carbon goal, China’s environmental protection policy will be further tightened. In the production process of playing cards, there are certain exhaust emissions from printing, polishing and other links. With the further improvement of China’s environmental protection requirements, playing card manufacturers also need to further improve their own process and technology level, increase investment in environmental protection equipment, and realize energy conservation and emission reduction, so as to comply with the trend of green and low-carbon development.
3、 Basic information, necessity and feasibility analysis of the project invested by the raised funds
(I) basic information of the project
1. Project overview
The company plans to invest and build the project in Quanjiao County, Chuzhou City, Anhui Province through its subsidiary Anhui Yaoji poker industry Co., Ltd., which is used for the production of various poker products of the company, and form a total production capacity of 600 million pairs / year of various poker products.
The project will expand the production scale of the company’s poker business, further enhance the scale effect of the company, and further improve the automatic production capacity and efficiency of poker products through the joint R & D and transformation of automatic production equipment. The project will help to enhance the company’s overall industrial scale and market competitiveness, further improve the company’s revenue and profitability in the future, have a positive impact on the company’s future financial situation and operating results, and provide guarantee for the company’s sustainable development.
2. Project implementation subject and investment
Anhui Yaoji poker industry Co., Ltd. is subordinate to Shanghai Yaoji Technology Co.Ltd(002605) (Stock Code: Shanghai Yaoji Technology Co.Ltd(002605) ). The company has been deeply engaged in the design, production and sales of all kinds of playing cards. After years of efforts, “Yaoji Poker” has established a national sales network through dealer distribution mode based on high-quality product quality and good brand image. At the same time, the company’s brand “Wanshengda” is also exported to Vietnam, the United States and other overseas countries. The company has accumulated a large number of “Yaoji” user fans at home and abroad. From 2018 to 2020, the company’s Poker sales were 590 million, 710 million and 810 million respectively, ranking first in China for many consecutive years.
Since its establishment, the company has always focused on strengthening brand building. The company’s products have excellent quality and exquisite patterns. For a long time, it has enjoyed a good reputation in Chinese and foreign markets. It has successively won the honorary titles of “Shanghai famous brand product”, “China Light Industry Quality Trustworthy Product”, “China Light Industry Federation science and Technology Progress Award”, “Shanghai urban level technology center” and so on, Its brands “Yaoji” and “Wanshengda” are listed in one of the six “well-known brands in China’s poker industry” announced by China culture, education and sporting goods association to the public. At present, the company takes “big entertainment” as the development strategic direction. Based on the linkage between the main business of traditional playing cards and “big entertainment” strategy, the company has gradually realized the competition pattern of continuous expansion to the Internet field with the focus on Internet mobile game business and playing cards.
The company has always adhered to “scientific and technological innovation” as the leading and “creating a world brand” as the goal, and established a strong technical team, which provides a guarantee for the development and production of first-class products and cutting-edge technologies. At present, the company has more than 1700 employees, and engineering R & D technicians account for more than 25% of the total employees. It has trained and hired a large number of poker experts and printing experts to focus on the improvement of poker product quality and process technology. While recruiting talents from the society, the company also continues to cultivate the technical ability of on-the-job employees, so that employees can better adapt to the developing working environment while continuously improving their ability, so that the enterprise can maintain a leading position in the fierce market competition.
3. Project initiation, environmental assessment and other approval matters
As of the issuance date of this report, the project has been filed with the development and Reform Commission of Quanjiao County, Anhui Province, with the project code of 210734112404-01462753.
The project has been approved by the reply on the environmental impact report form of the construction project of Anhui Yaoji poker industry Co., Ltd. with an annual output of 600 million pairs of poker production base (Quan Huan Ping [2022] No. 21) issued by the ecological environment branch of Quanjiao County, Anhui Province.
(II) necessity of the project
1. The project construction will help the company further expand its market share
Poker is one of the most common fast-moving consumer goods in the cultural, educational and sporting goods industry. It is the most basic cultural and entertainment tool in people’s daily entertainment life. China is the world’s largest poker consumption market. According to Zhiyan consulting data, China’s Poker consumption was nearly 4.04 billion pairs in 2019.
In recent years, the demand of China’s poker market is relatively stable, and the annual consumption is basically maintained at about 4 billion pairs. However, due to the influence of environmental protection policies and covid-19 epidemic factors, small and medium-sized poker enterprises are gradually withdrawing from the market. At the same time, with the national pursuit of high-quality life and the growth of disposable income, its requirements for product quality are further improved. Playing cards, as low-value consumables, have relatively low price sensitivity, and playing cards with high brand awareness and good product quality are more likely to be favored by consumers. Therefore, it is expected that the market concentration of China’s poker industry will be further improved in the future. In addition, as a large manufacturing country, China’s annual export of playing cards is in a continuous growth trend. According to the data of China’s customs, China’s export of playing cards reached 945 million pairs in 2020, with a year-on-year increase of 9.8%. The further expansion of the export demand of playing cards will also bring new growth points to the playing card market.
In this context, as one of the leading poker manufacturers in China, the implementation of this project will greatly improve the production efficiency, production scale and production technology of the company’s poker products, effectively improve the quality of products, help to face the market share gradually released in the future, give priority to market opportunities and meet the market demand for high-quality poker, Consolidate the company’s leading position in the market and further expand the company’s influence in the market. 2. The construction of the new base will solve the company’s capacity bottleneck and support the company’s future business development
Since its establishment, the company has been deeply engaged in the production of high-quality playing cards. With the company’s excellent product quality and brand reputation, the production and sales of the company’s products are good. From 2018 to 2020, the company’s sales of playing cards were 590 million, 710 million and 810 million respectively, with an average annual growth rate of about 17%. In the first three quarters of 2021, the company sold 700 million sets of playing cards, accounting for more than 86% of the annual sales in 2020.
The company’s existing production base is Qidong base, with a rated capacity of 756 million pairs. In 2020, the company’s Poker sales reached 810 million pairs, which has been in excess production. Although the company has ensured the delivery and quality of products through reasonable order planning, processing and additional points, at present, subject to the limited factors such as the existing production area, the number of employees and the number of production equipment, the production capacity can only barely meet the existing business needs of the company. According to the current development trend of the company’s poker business, the production capacity will not be able to meet the actual business needs. Therefore, the company urgently needs to build a new production base to realize the company’s future development plan, improve its profitability and production stability, and lay a good foundation for the company’s future development.
The project plans to build a new production base in Quanjiao County, Chuzhou City, Anhui Province, so as to expand the production scale of poker products and optimize the existing production layout. At the same time, the project will further improve the intelligent level of the company’s production line and effectively improve the production efficiency, so as to improve the production level and supply capacity to meet the demand of poker business, further improve the company’s comprehensive competitive strength, consolidate and enhance the company’s market position, and lay a solid foundation for the company to strengthen international market expansion in the future.
3. The project will help the company reduce production and transportation costs and disperse production risks
With the continuous improvement of China’s safety and environmental protection requirements, the environmental protection policy has been further tightened. Regional shutdown caused by regional policies or environmental accidents has occurred from time to time, which has a certain impact on the normal production of some manufacturing enterprises. In addition, with the increasingly fierce market competition and the rising prices of raw materials, labor and other factors, the demand for safety and environmental protection investment is increasing, and the cost pressure of enterprises is increasing.
The project is located in Quanjiao County, Chuzhou City, Anhui Province. The company’s playing card paper is mainly shipped from Nanchang by suppliers. Quanjiao county has convenient geographical location and short transportation distance, which can reduce the company’s transportation cost to a certain extent. Meanwhile, Chuzhou has certain advantages in recruitment, which can effectively reduce the difficulty of recruitment. The construction of this raised investment project will expand the production scale of the company’s poker products, further improve the degree of production automation and ensure that the production emissions meet the standards through the purchase of advanced production and environmental protection equipment, which will help the company reduce production costs and improve production efficiency. In addition, Chuzhou’s new production base and the company’s existing Qidong production base belong to two provinces, which can effectively avoid the impact of regional uncontrollable factors on the company and provide strong support for the company’s future development layout. (III) feasibility of the project
1. The company’s excellent product quality and quality control system provide strong support for the project
As one of the high-end poker manufacturers, the poker produced by the company is excellent
