Reply to the inquiry letter on the examination of Xinjiang Daqo New Energy Co.Ltd(688303) the application documents for issuing shares to specific objects
Sponsor (lead underwriter)
(27th and 28th floors, building 2, international trade building, No. 1 Jianguomenwai street, Beijing)
March, 2002
Shanghai Stock Exchange:
We have received the inquiry letter on the examination of the application documents of Xinjiang Daqo New Energy Co.Ltd(688303) to issue shares to specific objects (hereinafter referred to as the “inquiry letter”) issued by your exchange on March 4, 2022, Xinjiang Daqo New Energy Co.Ltd(688303) (hereinafter referred to as ” Xinjiang Daqo New Energy Co.Ltd(688303) ,” issuer “,” company “), China International Capital Corporation Limited(601995) (hereinafter referred to as” recommendation institution “, Citic Securities Company Limited(600030) ) Deloitte Touche Tohmatsu (special general partnership) (hereinafter referred to as “accountant”, “reporting accountant”), Beijing JUNHE law firm and other relevant parties have implemented and verified the questions listed in the inquiry letter item by item. Now the replies to the questions in the inquiry letter are as follows, please review.
Unless otherwise specified, the definitions of abbreviations or terms in this reply are the same as those in the prospectus (draft application). The font in this reply represents the following meanings:
The questions listed in the inquiry letter are in bold (BOLD)
Answers to questions in arial (not bold)
Amendments and supplements to the prospectus and other application documents (in BOLD)
The application documents of the prospectus are not quoted in bold
catalogue
1. About this raised investment project 32. On environmental impact assessment, land and other matters 183. About violations of laws and regulations 214. Related party transactions 265. About the operation 306. About the investment scale 437. About benefit calculation 598. About financial investment 739. Others 771. About this raised investment project
According to the application materials, 1) the total investment of the project with an annual output of 100000 tons of high-purity silicon-based materials is 8003348600 yuan, which is planned to be invested with all the raised funds; 2) The current production capacity of the company is 105000 tons / year. According to the data of silicon industry branch, China’s polysilicon output in 2021 was about 488000 tons, and the company’s polysilicon output in the corresponding period was 86600 tons, accounting for 17.75% of China’s polysilicon output; 3) Before this issuance, the company’s main production location was Shihezi City, Xinjiang. After this issuance, the company will implement the raised investment project of this issuance in Baotou City, Inner Mongolia. The issuer is requested to explain: (1) the differences between the products of this raised investment project and the issuer’s existing products and the 35000 T / a polycrystalline silicon project of the previous raised investment project in terms of technical level, process difficulty and application field; (2) Analyze the rationality of the above new capacity planning in combination with market capacity, current and under construction capacity of the market, industry development trend, changes in industrial policies, market share of the issuer, current and under construction project capacity of the issuer, etc; In combination with the above situation, the issuer’s business plan, the estimated capacity utilization after the previous raised investment, the main customers, the proportion of the issuer’s sales volume to the main customers in its purchase volume, the issuer’s orders, etc., analyze whether the issuer’s raised investment project capacity can be fully eliminated; (3) The issuer’s specific arrangements for Inner Mongolia Daquan in terms of business management, personnel team and corporate governance, relevant internal control systems and their effectiveness, and whether the issuer can effectively control the production and operation of Inner Mongolia Daquan; (4) The reason and rationality of the close time interval between the funds raised this time and the funds raised last time. The lawyer of the issuer is requested to check and comment on the above matters (3) and (4).
reply:
1、 Issuer description
(I) differences in technical level, process difficulty and application fields between the products of this raised investment project and the issuer’s existing products and the 35000 ton polysilicon project of the previous raised investment project
Xinjiang Daqo New Energy Co.Ltd(688303) relying on the mature and stable improved Siemens cold hydrogenation process, through years of technical research and industrial construction, we have successfully mastered the key processes and technologies such as distillation coupling technology, silicon tetrachloride comprehensive utilization technology, polysilicon reduction furnace parameter formula and control technology, reduction furnace start-up technology, boron and phosphorus removal technology of trichlorosilane, deep recovery technology of waste gas from polysilicon production, crushing and screening technology of polysilicon, And prepare high-quality, low-energy and low-cost polysilicon products through information and intelligent production devices Xinjiang Daqo New Energy Co.Ltd(688303) at present, the production capacity is 105000 tons, the proportion of single crystal materials in the products has reached more than 99%, and the batch supply of n-type materials can be realized, which can effectively alleviate the situation that China still needs to import some high-quality silicon materials.
The raised investment project continues to use Xinjiang Daqo New Energy Co.Ltd(688303) existing technologies and processes, and some processes have been further improved
promote; In the process, a better reduction furnace design is adopted to reduce power consumption, and a closed circulating water process is adopted
In order to save water consumption, the zero discharge process of production sewage is adopted to promote recycling and reduce the pressure of environmental protection.
The process units, utilities and auxiliary facilities of the raised investment project are generally configured according to the unit with an annual output of 100000 tons per single line,
More economies of scale; High purity polycrystalline silicon, the product of this raised investment project, will still be used in Cecep Solar Energy Co.Ltd(000591) photovoltaic industry,
As the main raw material for downstream silicon wafer processing; The product quality of the raised investment project will not be lower than that of Xinjiang Daqo New Energy Co.Ltd(688303) existing products
Product quality level.
(II) combined with market capacity, current and under construction capacity of the market, industry development trend and industrial policy
Analysis of policy changes, market share of the issuer, current and under construction project capacity of the issuer, etc
Rationality of the above new capacity planning
1. Changes in industrial policies
In September 2020, president Xi Jinping proposed at the UN General Assembly that “achieve carbon dioxide by 2030”
After reaching the peak of emissions and striving to achieve the strategic goal of “carbon neutrality” by 2060, China has gradually formed a “1 + n”
On October 24, 2021, the CPC Central Committee and the State Council issued the
Opinions on completely, accurately and comprehensively implementing the new development concept and doing a good job in carbon peak and carbon neutralization (hereinafter referred to as the opinions)
Officially released as “1”, it is the guidance for carbon peak and carbon neutralization.
In the energy industry, “Italy”
The “see” pointed out that we should accelerate the construction of a clean, low-carbon, safe and efficient energy system and vigorously develop Cecep Solar Energy Co.Ltd(000591) and other renewable energy,
Build a new power system based on new energy.
Specifically, since 2019, China’s main relevant photovoltaic industry policies are as follows:
S / N release time policy name issuing unit related content
By 2025, the intelligent level of photovoltaic industry will be significantly improved and breakthroughs will be made in industrial technological innovation. The mass production and conversion efficiency of new high-efficiency solar cells has been significantly improved, forming a complete silicon material, silicon wafer, equipment, materials, devices and supporting capacity for urban and rural construction of the Ministry of industry and information technology and housing. Based on the completion of the Ministry of intelligent photovoltaic industry and the Ministry of transportation, the level of integration with the new generation of information technology will be gradually improved. In December 2021, the Ministry of innovation and development action plan and the deepening of agriculture and rural areas. Significant progress has been made in intelligent manufacturing and green manufacturing, and the supply capacity of energy intelligent photovoltaic products of the Ministry of planning (20212025) and the state will be enhanced. The ability to support the new power system has been significantly enhanced, and the characteristic application fields of intelligent photovoltaic have been greatly expanded. The construction of intelligent photovoltaic power generation system has been fruitful, and the performance of adapting to the power grid has been continuously enhanced. The application scale in green industry, green building, green transportation, green agriculture, Rural Revitalization and other new fields has gradually increased
S / N release time policy name issuing unit related content
Expand and form a stable business operation mode to effectively meet the needs of multi scenario and large-scale applications
On printing and distributing the “ten ministries of industry and information technology, scientifically support enterprises to implement the substitution of raw materials and fuels, accelerate the promotion of the fourth five year plan of December 2021”, the Ministry of raw materials industry and technology, coal to electricity and coal to gas in natural industry, and improve the proportion of clean energy used by the Ministry of communications and resources in the development plan of renewable resources and industry
Knowledge
Implementation of the Convention on carbon dioxide
The goal of peak carbon neutralization is to encourage the national development and Reform Commission to encourage the use of wind energy, Cecep Solar Energy Co.Ltd(000591) and other renewable energy, promote the network information office of the data center, the self built special line of industry and information technology or bilateral transactions, improve the utilization level of new base and national energy green power in the data center in November 2021 and 5g, and promote the consumption of renewable energy by the green and high quality Bureau of nearby infrastructure
Quantity development implementer
Case
Announcement on the of the whole county
(city, district) roof fully mobilize and give full play to local enthusiasm, guide local governments to develop distributed photovoltaic in September 2021. The national energy administration will coordinate more roof resources, further explore the market, and expand the construction scale of roof distributed photovoltaic through the pilot list
Knowledge
On the basis of maintaining the basic stability of the general level of sales electricity price, the notice on further improving the catalogue time of use electricity price mechanism and improving the time of use electricity price mechanism in September 2021, the national development and Reform Commission to guide users to cut peak and fill valleys, improve power supply and demand, and promote the consumption of new energy, It provides support for building a new power system with new energy as the main body and ensuring the safe, stable and economic operation of the power system
Guidance on strengthening industry and finance, promoting breakthroughs in new energy storage battery industry, guiding smart light cooperation, and promoting the high-quality development of the Ministry of industry, green industry and information technology and the people’s volt industry; expanding new energy vehicles and the development of June 2021 in September, Bank of Italy, China Banking and Insurance Regulatory Commission photovoltaic photothermal products, green consumer electrical and electronic products, China Securities Regulatory Commission Consumption of green building materials; Support smart photovoltaic, new energy vehicles and other industries to play a demonstration and leading role
Develop regional circulation
