Jilin Chemical Fibre Co.Ltd(000420)
and
Huajin Securities Co., Ltd
Letter on making preparations for the meeting of the stock issuance and Examination Committee of Jilin Chemical Fibre Co.Ltd(000420) non-public Development Bank
Reply Report
Sponsor (lead underwriter)
March, 2002
China Securities Regulatory Commission:
According to the requirements of the letter on making preparations for the meeting of the stock issuance and Examination Committee of Jilin Chemical Fibre Co.Ltd(000420) non-public Development Bank (hereinafter referred to as the “notification letter”) issued by your association on March 1, 2022, Jilin Chemical Fibre Co.Ltd(000420) (hereinafter referred to as ” Jilin Chemical Fibre Co.Ltd(000420) ,” issuer “,” applicant “and” company “) together with the sponsor (lead underwriter) Huajin Securities Co., Ltd. (hereinafter referred to as” Huajin securities “or” sponsor “), Accountants and lawyers were organized to study and verify the issues raised in the notification letter and make a written explanation. The relevant intermediaries have issued verification opinions on the issues that need to be verified and commented by the relevant intermediaries. The answers to the questions mentioned are as follows in order. Please review them.
explain:
1、 Unless otherwise specified, the abbreviations or terms in the reply report of this notification letter have the same meanings as those in the due diligence report of Huajin Securities Co., Ltd. on Jilin Chemical Fibre Co.Ltd(000420) 2021 non-public development of A-share shares (hereinafter referred to as the “due diligence report”).
2、 In the reply of this counter notification letter, if there is any difference between the total number and the mantissa of the sum of the sub item values, it is caused by rounding.
catalogue
Question 1 4 question 2 18 question 3 21 question 4 23 question 5 26 question 6 twenty-nine
Question one
1. About raised investment projects. The issue is intended to raise 1.2 billion yuan, of which 900 million yuan is used for 12000 tons of carbon fiber composite project. The viscose staple fiber business put into operation by the applicant in 2019 suffered significant losses during the reporting period, and the capacity utilization rate was low in 2019 and 2020.
Please explain the similarities and differences between the carbon fiber composite to be produced by the raised investment project and the existing main products of the applicant, viscose filament and viscose staple fiber, in terms of application field, production process, core technology and other production factors, in combination with the significant loss of viscose staple fiber business during the reporting period and the failure to achieve the expected income of the raised investment project in recent years The preparation progress and difficulties encountered in order acquisition, whether the applicant will substantially enter a new industry, the competitors to enter the carbon fiber composite industry, the market competition pattern, the competitive advantages and disadvantages of the applicant, and whether the product performance does not meet the standard, the quality does not pass or the yield is insufficient, and the capacity utilization rate is low after the raised investment project is put into operation, Whether there may be a substantial loss or failure to reach the expected income, whether it will have a significant adverse impact on the applicant’s future performance, and whether the relevant risks have been fully revealed.
The recommendation institution is requested to explain the verification basis and process, and express clear verification opinions.
reply:
1、 Situation of the issuer’s viscose staple fiber business and related raised investment projects during the reporting period
(I) viscose staple fiber business of the issuer during the reporting period
At present, the viscose staple fiber business of the company has been gradually put into operation since 2019. During the reporting period, the company has gradually overcome the difficulties of small output, unable to give full play to economies of scale and high fixed cost during the new production line just put into operation, broke through the great adverse impact of the epidemic exceeding the expected development on the production and operation of the company, steadily improved the production capacity and capacity utilization, and maintained a high production and marketing rate since 2020. During the reporting period, the issuer’s viscose staple fiber production capacity increased from 20000 tons in 2019 to 120000 tons at the end of 2021. From January to September 2021, the viscose staple fiber business income reached 9628627 million yuan, accounting for 38.60% of the company’s main business income, contributing a gross profit of 723747 million yuan, accounting for 24.03% of the main business gross profit, which has become one of the issuer’s main businesses. During the reporting period, the issuer’s production capacity, output, capacity utilization, sales volume and production and sales rate are as follows:
Product indicators January September 20212020 20192018
Capacity (10000 tons) 9.00 12.00 2.00-
Viscose staple
Output (10000 tons) 8.46 7.76 1.24-
Capacity utilization rate 94.00%, 64.69%, 61.80%
Sales volume (10000 tons) 8.51 8.29 0.64-
Production and marketing rate 101% 107% 52%-
During the reporting period, the revenue and gross profit of the issuer’s viscose staple fiber business were as follows:
Unit: 10000 yuan,%
Product indicators January September 20212020 20192018
Operating income 96286276936941614878-
Viscose staple fiber gross profit 723747 -1465785 -242162-
Gross profit margin 7.52 -21.13 -39.38-
From 2019 to 2020, the gross profit margin of the company’s viscose staple fiber was negative, mainly because the new production line had just been put into operation and was in a climbing period. At the same time, due to the impact of international trade friction and covid-19 epidemic in recent years, the staple fiber market was depressed and the product price was low, so the gross profit margin was low. With the expansion of the company’s viscose staple fiber production and the recognition of product quality, the gross profit margin of viscose staple fiber improved.
(II) benefits of raised investment projects related to viscose staple fiber of the issuer during the reporting period
Whether the benefits achieved in the last three years (10000 yuan) have reached the promised benefits by June 30, 2021? 1 in 2021 – the cumulative benefits expected to be achieved in 2018, 2019 and 2020 (10000 yuan)
June 2014 (yuan)
30000 tons high, the project has been completed to
After the modified compound production, it will reach discomfort -250832 -1399968, 745144 -905656, and the strength and toughness benefit is 7754
Silk project 10000 yuan / year.
The above-mentioned raised investment projects did not achieve the expected benefits, mainly because the new production line has just been put into operation and is in the climbing period, with high unit cost. At the same time, due to the impact of international trade friction and covid-19 epidemic in recent years, the short fiber market is depressed and the product price is low, resulting in the project benefits not meeting the expectations. In addition to the above projects, all the issuers have been put into operation during the reporting period, and the previous raised investment projects have achieved the expected benefits.
During the reporting period, affected by the production capacity climbing and epidemic factors, the issuer’s viscose staple fiber business suffered a large loss, and one of the previous raised and invested projects, “30000 tons of high modified composite strong and tough silk project”, also failed to achieve the expected income. However, the issuer’s entry into the field of viscose staple fiber is based on Jilin Province, accelerating the upgrading and transformation while continuing to strengthen the company’s leading position in the viscose filament industry, It is an important measure to further expand the company’s main business varieties and expand the overall competitiveness. With the expansion of the company’s viscose staple fiber output, the product quality has been improved
2、 Similarities and differences between the issuer’s products of this raised investment project and the existing main products
At present, the issuer is mainly engaged in the R & D, production and sales of products related to regenerated cellulose fiber, and the main products are viscose fiber. With a long history of viscose filament production, R & D and sales, the issuer has accumulated a large number of process and technical secrets in the field of viscose filament, formed a complete set of large-scale production management system and trained a group of mature and stable production technical workers in the long-term production and operation process, making the issuer one of the few suppliers in the world who can produce high-quality viscose filament.
This raised investment project of the issuer is a carbon fiber composite material construction project. The carbon fiber composite material belongs to the downstream product of carbon fiber. The main business process is to stretch and extrude the polyacrylonitrile carbon fiber precursor into carbon fiber composite material after oxidation, carbonization, drying, roll burning and other processes. Jilin economic and Technological Development Zone, where the company is located, is a national carbon fiber high-tech industrialization base. Industrial agglomeration and supporting facilities have been formed in the upstream and downstream areas of the carbon fiber industrial chain.
The carbon fiber composite materials to be produced by the issuer in this raised investment project and the existing main products of the applicant, viscose filament and viscose staple fiber, belong to the manufacturing field related to chemical fiber. Their production factors have certain commonality and differences due to different product characteristics. The details are as follows:
Similarities and differences
Viscose filament is mainly used in various clothing fabrics instead of real silk
The application fields are industrial viscose staple fibers, which are mainly used in various clothing fabrics instead of cotton
Room products are used for the main structure of large equipment or building reinforcement, such as wind-driven carbon fiber composite power, rail transit, automobile manufacturing and other fields
The raw viscose filament is made of some natural high molecular compounds or their derivatives as the raw production process material. Through the chemical viscose staple material, it is dissolved into textile solution, and then spun into fiber.
The polyacrylonitrile carbon fiber precursor is oxidized, carbonized and dried according to the process of flow and physics. After the drying, rolling and burning of the carbon fiber composite, it is pultruded into the change material of carbon fiber composite.
All are process controlled viscose filaments
Preparation method and production device technology of various viscose fibers, etc
Core technology and cost control viscose staple fiber
Manufacturing technology carbon fiber composite carbonization process control technology, pultrusion process control technology, etc
The company’s existing business and raised investment projects are in the field of chemical fiber manufacturing. The company has decades of production experience in the chemical fiber industry and has reserved a certain number of technical talents and industrial workers. In the early stage, the company has gradually extended to the field of carbon fiber composites and has various businesses, talents and technical reserves to invest in the project. This raised investment project is the company’s use of its influence, talents and Experience and technology are important measures to upgrade the company’s industrial structure and improve the company’s profitability.
3、 The issuer’s business preparation progress and difficulties involved in this raised investment project
(I) technical reserves of the company
Jilin economic and Technological Development Zone, where the company is located, is a national carbon fiber high-tech industrialization base. Industrial agglomeration and supporting facilities have been formed in the upstream and downstream fields of carbon fiber industry in the zone. The company has decades of production experience in the chemical fiber industry. In the early stage, the company has gradually extended to the field of carbon fiber composites. At present, the company has accumulated certain technical reserves for this raised investment project, as follows:
Process technology name and technology type
Porous uniform waste discharge carbonization furnace and carbonization technology kemec non patented technology
Automatic sizing device technology with balanced and stable concentration in oxidation and carbonization process Jilin Chemical Fibre Co.Ltd(000420) non patented technology
Carbon fiber heat setting technology Jilin Chemical Fibre Co.Ltd(000420) non patented technology
Jilin uniform yarn discharge technology
