Reply to the second round examination inquiry letter on the application documents for initial public offering and listing on the gem of Zhejiang Fengli Intelligent Technology Co., Ltd
Sponsor (lead underwriter)
No. 618, Shangcheng Road, China (Shanghai) pilot Free Trade Zone
Shenzhen Stock Exchange:
Zhejiang Fengli Intelligent Technology Co., Ltd. (hereinafter referred to as the “company”, “issuer” or “Fengli intelligent”) received the second round of examination and inquiry letter on the application documents for initial public offering and listing on the gem of Zhejiang Fengli Intelligent Technology Co., Ltd. (audit letter [2021] No. 011332) (hereinafter referred to as the “inquiry letter”) issued by your exchange on December 3, 2021, The company has conducted serious research and implementation with Guotai Junan Securities Co.Ltd(601211) (hereinafter referred to as ” Guotai Junan Securities Co.Ltd(601211) ” and “sponsor”), Zhejiang Tiance law firm (hereinafter referred to as “issuer’s lawyer”), Tianjian Certified Public Accountants (special general partnership) (hereinafter referred to as “reporting accountant”), and replied to the problems involved in accordance with the requirements of the inquiry letter. Now it is submitted to your office for review.
Unless the context otherwise requires, the abbreviation in the reply to this inquiry letter has the same meaning as the interpretation in the prospectus of Zhejiang Fengli Intelligent Technology Co., Ltd. for initial public offering of shares and listing on the gem (application draft) (hereinafter referred to as the “prospectus”).
There may be slight difference between the sum of individual data in some tables and the total of tables in the reply to this inquiry letter, which is caused by rounding in the calculation process.
The questions listed in the audit inquiry letter are bold. The answers to the questions listed in the audit inquiry letter and the contents of the original prospectus are quoted in Song typeface
Updates and amendments to the prospectus are bold in italics
catalogue
1. About the historical evolution 42. With respect to related parties 133. With regard to the gambling agreement 314. On business and Technology 545. On the quality of information disclosure 746. About the positioning of gem 757. With regard to operating income 978. With regard to distribution revenue 1159. With regard to operating costs 13810. With regard to major suppliers 18911. About gross profit margin 20712. With regard to inventory 24913. With regard to guarantee losses 26214. On the flow of funds two hundred and seventy-one
1. About historical evolution
The application materials and the reply to the previous audit query show that:
(1) In July 2019, Fengli electric control transferred its 10000 yuan shares to FengHao investment, 567600 yuan shares to Fengyu investment and 132000 yuan shares to Shen Jiawen, with an overall valuation of 550 million yuan and a P / E ratio of 20.51; The partners of FengHao investment are Zhou Min, Su Fengge and Wang Peng;
(2) In June 2020, Fengli electric control transferred its 383913400 yuan shares to Junyu investment, with an overall valuation of 60 million yuan and a P / E ratio of 19.59.
Please the issuer:
(1) List the price, P / E ratio and overall valuation changes of previous external investors’ shares in the issuer in a form, and explain the pricing basis and fairness;
(2) Explain the resumes of Shen Jiawen, the natural person partner and individual investor in FengHao investment and Junyu investment; (3) Explain whether the natural person partners of Yongcheng Yufeng, Fenghong investment, Fengyi investment, Fengying investment, FengHao investment and Junyu investment, as well as the individual investor Shen Jiawen, have any relationship, agency relationship or other interest arrangements with the issuer’s main customers, suppliers and their main shareholders, actual controllers and relevant personnel of the Issuance intermediary;
(4) Explain the reason why the price of Junyu’s investment in the issuer is lower than that of the previous round and its rationality. Ask the sponsor, the issuer’s lawyer and the reporting accountant to express their clear opinions.
reply:
1、 List the price, P / E ratio and overall valuation changes of previous external investors’ shares in the issuer in a table, and explain the pricing basis and fairness
The price, P / E ratio, overall valuation changes, pricing basis and fairness of previous external investors’ shares in the issuer are shown in the following table:
No. basic information of time events, share price, overall valuation, P / E pricing basis and fairness
Rate note
1. In April 1995, Fengli electromechanical was established with a registered capital of 680000 yuan; Wang You – registered capital
Li and Wu Zhengming contributed in kind
In 2014 and 2015, the issuer successively provided equity transfer price guarantee of Fengyi investment for the loans of xinqiujing, China Merchants Bank Co.Ltd(600036) , China Minsheng Banking Corp.Ltd(600016) , China Everbright Bank Company Limited Co.Ltd(601818) and undertook large guarantee losses, As a result, the company’s unaudited net profit in 2015 was significantly lower than the value of 150 million yuan held by Huang Weihong (3.61 deduction of non net profit per share).
According to the deduction of non net profit in 2015, the P / E ratio corresponding to the transfer price of non net profit deduction investment in 2015 is 6.35, which is lower, but based on the guarantee situation of the issuer at that time The P / E ratio of the net profit in 2015, the performance achieved by the issuer in 2015 and the reasonable expectation that the issuer has not achieved the performance of 65.14, The equity transfer price determined through negotiation is fair, and this equity transfer has been reviewed and approved by all shareholders of the issuer
The capital increase price of Yongcheng Yufeng is that the issuer’s operation in 2016 has gradually recovered from the guaranteed debt crisis of 35 million yuan, corresponding to the overall investment, and the performance has improved, In the first half of 2016, the registered capital increased to 46.2 million yuan and the valuation was 350 million yuan (the issuer’s performance in 7.58 years per share increased significantly year-on-year, and the price earnings ratio was 3. In July 2016, Yongcheng Yufeng increased its capital and shares by yuan; the newly increased share capital was by Yongcheng Yufeng yuan), Corresponding to the deduction of non net profit in 2015, the P / E ratio of the subscription profit invested in currency based on the equity transfer of Fengyi investment in January 2016 was 14.81, which was improved for the bank. The overall valuation of this capital increase is based on the realization of the P / E of the issuer’s 2015 net profit in the half year of 2016 and the future profit forecast rate of 152.00, which is fair, And the capital increase was reviewed and approved by all shareholders of the issuer
The registered capital of Guoyu Junan and Taizhou venture capital increased to 557333. The issuer’s operation in 2017 has completely changed from guaranteed debt 4. In September 2017, the issuer invested and increased capital by 10000 yuan; The price of the newly increased share capital was 51.965 million yuan from guoyujun and recovered from the crisis, and continued to improve. Based on the monetary contribution of 2.735 million yuan to Banan and Taizhou venture capital in 2017; Fengying investment, the achievement of Fengying annual performance and its impact on the issuer’s future performance
No. basic information of time events, share price, overall valuation, P / E pricing basis and fairness
Rate note
The equity transfer price of subscription red investment is expected to be 150637 million yuan after consultation with investors in combination with the industry P / E ratio, and the capital increase price is determined, which is fair, and the capital increase has been 27.615 million yuan. The increase of capital and shares and the deliberation and approval of all shareholders of the issuer
Wang Youli invested the whole equity corresponding to the equity transfer he held
The valuation of equity transfer from rmb1534821 million to Fengfeng is rmb547 million (the transfer price of equity per share is based on the issuer’s Fengying investment, Fenghong investment surplus investment and 780167 yuan equity of rmb9.81 after the capital increase in September 2017). The overall valuation of price earnings ratio is 25.95, and the equity transfer is transferred to Fengfeng through the transfer of the issuer’s whole capital equity
