After this stock issue, it is planned to be listed on the gem, which has high investment risk. GEM companies have the characteristics of large investment in innovation, uncertainty about the success of the integration of new and old industries, still in the growth stage, high operation risk, unstable performance and high delisting risk. Investors are facing greater market risks. Investors should fully understand the investment risks of the gem and the risk factors disclosed by the company, and make investment decisions prudently.
Hunan Junxin environmental protection Co., Ltd
HUNAN JUNXIN ENVIRONMENTAL PROTECTION CO.,LTD.
(office building of Hunan Junxin environmental protection Co., Ltd., Qiaoyi Town, Wangcheng District, Changsha City, Hunan Province) letter of intent for IPO and listing on GEM
Sponsor (lead underwriter)
March, 2002, North block, Zhuoyue Times Square (phase II), No. 8, Zhongxin Third Road, Futian District, Shenzhen, Guangdong Province
Important statement
Any decision or opinion made by the CSRC and the exchange on this issuance does not indicate that they guarantee the authenticity, accuracy and completeness of the registration application documents and the information disclosed, nor do they indicate that they make substantive judgment or guarantee on the profitability, investment value of the issuer or the income of investors. Any statement to the contrary is a false statement.
According to the provisions of the securities law, the issuer shall be responsible for the changes in the operation and income of the issuer after the shares are issued according to law; Investors independently judge the investment value of the issuer, make investment decisions independently, and bear the investment risks caused by the changes in the operation and income of the issuer or the changes in the stock price after the shares are issued according to law. The issuer and all directors, supervisors and senior managers promise that the prospectus and other information disclosure materials are free from false records, misleading statements or major omissions, and bear corresponding legal liabilities.
The controlling shareholder and actual controller of the issuer promise that there are no false records, misleading statements or major omissions in this prospectus, and bear corresponding legal liabilities.
The person in charge of the company, the person in charge of accounting and the person in charge of the accounting institution shall ensure that the financial and accounting materials in the prospectus are true and complete.
The issuer and all directors, supervisors, senior managers, controlling shareholders, actual controllers, sponsors and underwriting securities companies promise to compensate investors for losses in securities issuance and trading due to false records, misleading statements or major omissions in the issuer's prospectus and other information disclosure materials.
The sponsor and the securities service institution promise to compensate the investors for the losses caused to the investors due to the false records, misleading statements or major omissions in the documents prepared and issued for the issuer's public offering.
Overview of this offering
Type of shares issued: RMB ordinary shares (A shares)
The number of shares to be issued this time is 68.34 million, accounting for 25.00% of the total share capital of the company after issuance
This issuance is all new shares, and the original shareholders will not offer shares to the public
The par value of each share is RMB 1.00
The issue price per share is RMB [●]
Expected issue date: March 31, 2022
The stock exchange to be listed and the growth enterprise market of Shenzhen Stock Exchange
The total share capital after issuance is 273.34 million shares
Sponsor and lead underwriter Citic Securities Company Limited(600030)
Signing date of the prospectus: March 23, 2022
Tips on major issues
The company specially reminds investors that before making investment decisions, they must carefully read the text of this prospectus and pay special attention to the following matters. 1、 The issuer specially reminds investors of the risks concerned
The issuer specially reminds investors to pay attention to the following risk factors and carefully read all the contents of "section IV Risk Factors" in this prospectus. (I) environmental protection policy risk
According to the requirements of the notice on further improving the planning and site selection of domestic waste incineration power plant (fghzg [2017] No. 2166) issued by five ministries and commissions including the national development and Reform Commission, Hunan Provincial Development and Reform Commission and Hunan Provincial Department of housing and urban rural development have prepared the medium and long-term special plan for domestic waste incineration power generation in Hunan Province (20192030), which makes a special plan for waste incineration power generation. In the future, if the competent authorities of the Chinese government introduce new policies and regulations, revise existing policies and regulations, or introduce new industry norms and standards, industry access, operation supervision, qualification management and other implementation rules, it may bring adverse factors to industry participants, such as access restrictions, the need to apply for new operation qualifications, the increase of environmental protection treatment facilities or the rise of operation costs, which may slow down the development of the whole environmental protection industry, And have a certain impact on the profitability of the company. (II) risk of electricity price subsidy policy
The waste power generation industry is a comprehensive resource utilization industry encouraged by the state. The State implements a full guaranteed purchase system for waste power generation. In order to guide the healthy development of waste incineration power generation industry and promote resource conservation and environmental protection, the national development and Reform Commission issued the notice of the national development and Reform Commission on improving the price policy of waste incineration power generation (fgjg [2012] No. 801) to further improve the price policy of waste incineration power generation. The notice stipulates that waste incineration power generation projects with domestic waste as raw material shall be settled first by converting the waste treatment capacity into on grid power. The converted on grid power per ton of domestic waste is tentatively set at 280 kwh, and the national unified benchmark electricity price of waste power generation is 0.65 yuan per kWh (including tax); The remaining on grid electricity shall be subject to the on grid electricity price of similar local coal-fired generating units, and the waste incineration power generation projects approved after January 1, 2006 shall be subject to the provisions.
According to several opinions on promoting the healthy development of non-aqueous renewable energy power generation (CJ [2020] No. 4), measures for the administration of additional subsidy funds for renewable energy electricity price (CJ [2020] No. 5), supplementary notice on relevant matters of several opinions on promoting the healthy development of non-aqueous renewable energy power generation (CJ [2020] No. 426) and other documents issued by the Ministry of finance, the national development and Reform Commission and the national energy administration, In the future, the competent authorities will reasonably determine the scale of new subsidy projects each year in accordance with the principle of "determining expenditure by revenue".
Changsha Municipal Government shall bear the reduction of power generation income caused by the policy adjustment of power sales unit price as agreed in the relevant contracts of the company's waste incineration project (phase I) and waste incineration project (phase II).
If the national or local government reduces its support for the waste incineration power generation industry, the company's waste incineration project may face the risk of declining subsidy level, which may have an adverse impact on the company's operation. (III) risk of reduction of solid waste treatment service fee
During the franchise period of solid waste treatment (including waste incineration, sludge disposal, leachate (sewage) treatment, landfill and ash treatment), the company provides solid waste treatment services to relevant government departments / units, calculates and charges treatment service fees according to the treatment unit price and actual treatment capacity agreed in relevant agreements, and regularly adjusts the prices with reference to the changes of main materials, labor costs and other costs during the franchise period. The unit price of solid waste treatment is generally approved and determined by relevant government departments / units according to the project investment scale, environmental protection standards, waste characteristics, boundary conditions and other factors, and considering a certain income level of franchisees. If the follow-up price adjustment mechanism of the company's franchise project is not implemented in time or there are major policy changes, resulting in the reduction of the unit price of solid waste treatment, it may have an adverse impact on the profitability of the company. (IV) risks related to the obtained franchise project contract
Changsha municipal solid waste treatment plant was approved and constructed in 1997, and was completed and put into operation in April 2003. In March 2004, Changsha municipal government issued an investment invitation announcement on the transfer of franchise rights of Changsha municipal solid waste treatment plant on the Internet. As of the deadline for investment invitation, only Junxin road and Bridge signed up to participate in investment invitation. In May 2005, authorized by Changsha municipal government, Changsha Urban Management Bureau held investment negotiation with Junxin road and bridge. After several rounds of negotiations, Changsha municipal government, Changsha Urban Management Bureau and Junxin road and Bridge signed the transfer contract of franchise right and asset use right of Changsha municipal solid waste treatment plant at the "2006 China Changsha (London) key project investment and Trade Fair" in April 2006. With the consent of Changsha municipal government, the implementation subject of the above franchise was changed from Junxin road and bridge to Junxin construction (the predecessor of Junxin group) in December 2006. Junxin environmental protection transferred the franchise from Junxin group in June 2017.
Pingjiang harmless waste treatment plant was built by Pingjiang county government in early 2012. In 2012, Pingjiang county government organized public bidding, but only Junxin group participated in the bidding process, and the bidding process was not completed due to the lack of bidders. Pingjiang county government signed the transfer contract of franchise right and asset use right of solid waste disposal in Pingjiang county with Junxin group through negotiation in May 2012. In June 2020, Pingjun environmental protection company acquired 100% of the franchise.
The regulations of Hunan Province on the franchise of municipal public utilities adopted by the Standing Committee of Hunan Provincial People's Congress on May 31, 2006 and implemented on October 1, 2006 stipulates that the franchise of municipal public utilities refers to the government's permission of specific operators to operate a certain municipal public product or provide a certain public service within a certain period of time and a certain region through fair competition such as bidding. According to relevant regulations, the process of obtaining the above franchise rights of the company may pose a certain potential risk to the operation and profitability of the company. (V) risk of early termination or impairment of franchise rights
At the end of each reporting period, the book value of the issuer's franchise rights accounted for 75.91%, 62.26%, 47.74% and 80.91% of the total assets respectively, accounting for a relatively high proportion. During the franchise period, if the company or the relevant project company violates the relevant requirements of the franchise contract or fails to meet the requirements of environmental protection, it may lead to the franchisor's early termination of the franchise contract, which will have an adverse impact on the company's future operation and profitability.
The issuer's main franchise projects comply with the existing overall planning for the treatment of local urban domestic waste and municipal sludge. If the urban planning of the project site is adjusted in the future, or the amount of urban domestic waste is reduced, the franchisor may terminate the franchise contract in advance, which will have an adverse impact on the company's future operation and profitability.
After the completion and operation of the company's waste incineration project (phase II), the landfill will be gradually closed, and the domestic waste will be treated by clean incineration first. If the relevant government departments renegotiate the relevant terms of the landfill project franchise contract with the company, it may lead to the impairment risk of the company's landfill project franchise. (VI) risks of high customer concentration and fierce industry competition
The company adopts BOT and tot based franchise mode to provide customers with comprehensive solutions for urban domestic waste and by-products treatment suitable for their characteristics, and provide them with diversified, professional and intensive investment and operation services of pollutant treatment facilities integrating domestic waste, leachate and municipal sludge. During the reporting period, the total sales of the company's top five customers accounted for 99.99%, 99.96%, 99.82% and 99.87% of the current operating revenue respectively. The concentration of the company's customers was high.
With the rapid development of waste incineration power generation industry in recent years, the industry market competition is becoming increasingly fierce. Some companies that entered the waste incineration power generation industry earlier, developed on a large scale, and had strong financing and R & D capabilities occupied a high market share in the industry with strong competitive advantages. The broad market space of waste incineration power generation industry may attract more capital driven enterprises to enter the industry, and the market competition may further intensify in the future. With the intensification of industry competition, it will be more difficult for the company to obtain new projects in the future, and there is also a risk of decline in the yield of new projects. (VII) risk of partial land and real estate not obtaining ownership certificate
Some houses and buildings of the company have not obtained the house ownership certificate, and there are a small amount of land and houses beyond the red line of land use. The planning adjustment of this part of land has been completed, and the corresponding land compensation has been paid. As of the signing date of this offering intention, the ownership certificate of relevant houses and the relevant procedures of construction land beyond the red line are being handled. If the issuer fails to obtain the ownership certificate in time, it may have an adverse impact on the company's future production and operation. 2、 Main financial information and operating conditions after the audit deadline of financial report (I) main financial information and operating conditions in 2021
The audit deadline of the company's financial report is June 30, 2021. The reporting accountant reviewed the company's consolidated balance sheet and balance sheet as of December 31, 2021, consolidated income statement and income statement, consolidated cash flow statement and cash flow statement and notes to financial statements from July to December, 2021 and 2021, and issued a review report of "Tian Ye Ye Zi [2022] No. 9236".
After review, as of December 31, 2021, the total assets of the company were 74737909 million yuan, and the owner's equity attributable to the parent company was 23541641 million yuan; In 2021, the company's operating revenue was 20633889 million yuan, the operating profit was 5707904 million yuan, and the net profit was 5397865 million yuan. After deducting non recurring profits and losses, the net profit attributable to shareholders of the parent company was 439953 million yuan. See "XIII. Main financial information and operation after the audit base date of financial report" in "Section VIII Financial Accounting Information and management analysis" of this prospectus for specific information. (II) performance forecast for the first quarter of 2022
In combination with the current market and industry development trends and the actual operating conditions of the company, the company is expected to be realized from January to March 2022
