Securities code: 300185 securities abbreviation: Tongyu Heavy Industy Co.Ltd(300185) Tongyu Heavy Industy Co.Ltd(300185)
With Citic Securities Company Limited(600030)
Inquiry letter on Tongyu Heavy Industy Co.Ltd(300185) application for issuing convertible corporate bonds to unspecified objects
of
Reply Report
Sponsor (lead underwriter)
North block, excellence Times Plaza (phase II), No. 8, Zhongxin Third Road, Futian District, Shenzhen, Guangdong
Shenzhen Stock Exchange:
We have received the inquiry letter on the second round of examination of Tongyu Heavy Industy Co.Ltd(300185) application for issuing convertible corporate bonds to unspecified objects (hereinafter referred to as the “inquiry letter”) issued by your exchange on December 29, 2021, Citic Securities Company Limited(600030) (hereinafter referred to as “sponsor”) as a sponsor of Tongyu Heavy Industy Co.Ltd(300185) (hereinafter referred to as ” Tongyu Heavy Industy Co.Ltd(300185) “, “company” or “issuer”) issuing convertible corporate bonds to unspecified objects and listing on the gem, and Tongyu Heavy Industy Co.Ltd(300185) Beijing Jindu law firm (hereinafter referred to as “Jindu”, “issuer’s lawyer”) and Zhitong accounting firm (special general partnership) (hereinafter referred to as “Zhitong” and “accountant”) have implemented the relevant issues of the inquiry letter one by one. Now, the reply to the inquiry letter is as follows, please review.
explain:
1、 Unless otherwise specified, the abbreviations or terms in this reply report have the same meanings as those in the prospectus (Revised Version).
2、 The font in this reply report represents the following meanings:
Questions listed in the inquiry letter are in bold (not bold)
Answers to questions in arial (not bold)
Supplementary disclosure of the prospectus (BOLD)
3、 In this reply report, if the total is inconsistent with the listed value and, it is caused by rounding.
catalogue
catalogue 2 question 1 3 question 2 14 question 3 18 question 4 twenty-two
Question 1
According to the application documents, the change of the issuer’s gross profit margin is mainly affected by the change of operating cost, and the change of the issuer’s operating cost is mainly affected by the fluctuation of direct material cost. The decline of the issuer’s gross profit margin in the latest period was greater than that of comparable companies in the same industry.
The issuer is requested to supplement: (1) further analyze and explain the reasons for the decline of the issuer’s gross profit margin in the latest period, the reasons and rationality for the difference between the change degree of gross profit margin and comparable companies in the same industry in combination with the change of product unit price, the composition and change of main business cost, the impact of the change of direct material price on operating cost, etc, Whether there is a risk of continuous decline in the issuer’s gross profit margin; (2) Carry out sensitivity analysis on the price fluctuation of main raw materials, quantitatively analyze the issuer’s breakeven point, and explain whether the issuer has loss risk in the case of raw material price fluctuation in combination with the breakeven point.
The issuer is requested to disclose the above risks.
The sponsor and accountant are requested to check and express clear opinions.
[reply]
1、 Further analyze and explain the reasons for the decline of the issuer’s gross profit margin in the latest period, the reasons and rationality for the difference between the change degree of the gross profit margin and comparable companies in the same industry, and whether there is a risk of continuous decline in the issuer’s gross profit margin in combination with the change of product unit price, the composition and change of main business cost, and the impact of the change of direct material price on the operating cost;
(i) Further analyze and explain the reasons for the decline of the issuer’s gross profit margin in the latest period in combination with the change of product unit price, the composition and change of main business cost, and the impact of the change of direct material price on operating cost
In 2020 and January September 2021, the company’s gross profit margin and gross profit margin contribution by product composition are shown in the following table:
Unit:%
January September 2021 2020
Project revenue accounts for gross profit margin gross profit margin revenue accounts for gross profit margin gross profit margin ratio contribution changes to gross profit margin ratio contribution
Gale motorized spindle 29.3614.374.22-5.1936.8325.549.41
Mold casting 16.8221.713.65-1.9722.9424.515.62
January September 2021 2020
Project revenue in gross profit margin gross profit margin revenue in gross profit margin
The contribution of gross profit rate ratio changes to the contribution of gross profit rate ratio
move
Casting other forgings 30.4415.694.781.1530.5511.873.63 forging pipe die
Part 28.592.430.690.2420.602.210.46
Forging blank 4.097.660.31-0.339.336.890.64 (ingot)
Cemented carbide products 13.627.170.980.3111.175.960.67
Wind power equipment modularization 4.1810.160.42-0.236.5110.110.66 business
Metallurgical equipment 18.703.390.630.2020.102.140.43 standby
Nuclear power business 12.011.010.120.0026.820.450.12
Other products 15.4816.422.540.3920.8610.322.15
Total 18.35100.0018.35-5.4323.78100.0023.78
Note: gross profit margin contribution = gross profit margin of each product * proportion of revenue of the product. The total gross profit margin contribution is the issuer’s comprehensive gross profit margin of the current period. It can be seen from the above table that the issuer’s gross profit margin in the latest period decreased from 23.78% in 2020 to 18.35% from January to September 2021. The main reasons for the decrease are as follows: 1) after the rush for installation of onshore wind power in 2020, the proportion of the company’s revenue of Wind Turbine Spindle products with high gross profit margin decreased from 25.54% of last year to 14.37% from January to September 2021; 2) Since 2021, the prices of raw materials such as scrap steel and pig iron have continued to rise, and the gross profit margin of wind turbine spindle and casting products has also decreased significantly from January to September 2021. In conclusion, the total contribution of the gross profit margin of Wind Turbine Spindle products and casting products decreased to 7.87%, a decrease of 7.16% compared with 15.03% in 2020, resulting in a significant decrease in the issuer’s comprehensive gross profit margin from January to September 2021.
1. The decrease in gross profit margin of wind turbine spindle and casting products is mainly due to the sharp rise in unit cost
The impact of changes in unit price and unit cost of castings and Wind Turbine Spindle products on gross profit margin from January to September 2021 is as follows:
Project casting Wind Turbine Spindle
January September 2021 2020 January September 2021 2020
Unit price (10000 yuan / ton) 1.171.000.980.98
Unit price change rate 17.01% – 0.30%
Unit cost (10000 yuan / ton) 0.970.770.690.62
Unit cost change rate 26.30% – 12.15%-
Gross profit margin 16.82% 22.94% 29.36% 36.83%
Change in gross profit margin – 6.12% – 7.46%-
Impact of unit price change on gross profit margin of 11.20% – 0.19%
Impact of unit cost change on gross profit margin – 17.32% – 7.65%
Note: the impact of unit price change on gross profit margin = (unit price of the current period – unit cost of the previous period) / unit price of the current period – gross profit margin of the previous period; Impact of average unit cost change on gross profit rate = current gross profit rate – (current unit price – previous unit cost) / current unit price;
From January to September 2021, the unit price of castings and Wind Turbine Spindle products increased. Among them, the unit price per ton of casting products increased rapidly, from 10000 yuan / ton in 2020 to 11700 yuan / ton from January to September 2021, mainly due to the large variety of casting products of the company. With the decline of wind power subsidies and the arrival of the trend of large-scale fan, In 2021, the company’s large-scale casting products began to realize batch sales. The unit price per ton of large-scale casting products was high, which increased the average unit price of casting products. However, due to the impact of the sharp rise in the prices of pig iron, scrap and other raw materials in 2021, the unit cost of castings and Wind Turbine Spindle products increased rapidly, resulting in a certain decline in the gross profit margin of the above-mentioned main products. It can be seen from the above table that the impact of the unit price rise of casting products on the gross profit margin from January to September 2021 is 11.20%, but the impact of the unit cost rise on the gross profit margin is – 17.32%. The unit cost rises rapidly, resulting in a certain decline in the gross profit margin when the unit price rises; The unit price of Wind Turbine Spindle products is relatively stable, and the rise of unit cost leads to the decline of gross profit margin of Wind Turbine Spindle products.
2. Changes in purchase price of raw materials and direct material changes in main business costs
In 2020 and January September 2021, the changes in the purchase price of pig iron and scrap, the issuer’s main raw materials, are as follows:
Unit: yuan / ton
Project from January to September 2021 to 2020
Average purchase price growth rate average purchase price
Pig iron 4262.7835.28% 3150.99
Scrap 3370.9528.16% 2630.28
In 2020 and January September 2021, the unit cost of castings and wind turbine spindles and the amount and changes of direct materials in the unit cost are as follows:
