Inquiry letter on reorganization of Baoding Technology Co.Ltd(002552) approval type reorganization inquiry letter [2022] No. 4 Baoding Technology Co.Ltd(002552) board of directors:
On March 17, 2022, your company directly disclosed the report on issuing shares to purchase assets and raising supporting funds and related party transactions (Draft) (hereinafter referred to as the "restructuring report"). Our department has conducted post review on the above disclosure documents and now gives feedback as follows:
1. The restructuring report shows that before this transaction, your company was mainly engaged in the R & D, production and sales of large castings and forgings, and the main products were used in shipbuilding, electric power, construction machinery, petrochemical and other industries. The target company Jinbao Electronics (the same meaning as the report, the same below) is mainly engaged in the design, R & D, production and sales of electronic copper foil and copper clad laminate. Its main products are used in 5g communication, tablet computers, smart phones and other fields. Your company only purchases 63.87% of the shares held by shareholders of Jinbao electronics except Changlin industry. The audited total assets of Jinbao electronics at the end of 2021 accounted for 451.09% of your company, and the operating revenue accounted for 900.89%. One of the purposes of this transaction is "China Merchants Group will actively fulfill its commitments and make use of the advantages of industrial resources to help the development of listed companies". China Merchants Group will gradually inject high-quality assets under its control or associated into listed companies.
After bidding for 8.00% of the shares of the listed company in January 2020, Zhaojin group holds 37.90% of the shares of your company and becomes the controlling shareholder. The controlling shareholder of Zhaojin group is Zhaoyuan state owned assets supervision and Administration Bureau, and the actual controller is Zhaoyuan Municipal People's government. This transaction is less than 36 months from the change of control of the listed company.
In this transaction, your company purchased 8.78% shares of Jinbao electronics held by Zhaojin group. Zhaoyuan state owned assets operation center holds 19.50% of the equity of Yongyu electronics, one of the counterparties, which was obtained after free transfer by Zhaoyuan state owned Assets Management Co., Ltd. and Zhaoyuan state owned Assets Management Co., Ltd. increased its capital to Yongyu electronics with its 19.50% equity of Zhaoyuan Electronic Material Factory Co., Ltd. at a price of RMB 9712195 in November 2018. In addition, the electronic material factory is one of the original investors of the target company Jinbao electronics, and transferred its 131036000 shares of Jinbao electronics to Yongyu electronics at the price of 975616 million yuan in November 2017. Please your company:
(1) In combination with the proportion of total assets, operating income and other financial data of Jinbao electronic in the listed company during the reporting period, the change of the main business of the listed company after the completion of the transaction and the purpose of this transaction, it shows that this transaction will lead to the change of the actual controller within 36 months, Whether it constitutes the situation of reorganization and listing specified in Item (V) of paragraph 1 of Article 13 of the administrative measures for major asset reorganization of listed companies (2020 Amendment) (hereinafter referred to as the reorganization measures);
(2) Explain whether Zhaoyuan state-owned assets operation center, Yongyu electronics and other counterparties belong to the affiliates of Zhaojin group, the controlling shareholder of your company. If not, please explain the basis and whether this transaction has the situation of reducing the amount of assets purchased from affiliates and avoiding reorganization and listing by transferring the shares of Jinbao electronics actually controlled by Zhaoyuan Municipal People's government to non affiliates. If so, Please explain whether this transaction constitutes the situation of reorganization and listing specified in Article 13 of the reorganization measures;
(3) In combination with your company's business development strategy, explain whether the target company's business has significant synergy with the company's existing main business. If so, please specify the performance of synergy. If not, please fully explain your company's business development strategy and business management mode after this transaction, as well as the possible risks and Countermeasures of business transformation in accordance with the provisions of paragraph 2 of Article 43 of the reorganization measures;
(4) Explain the reasons why the transaction did not purchase all the shares of the target company, whether there is a major dispute or dispute over the remaining shares (if yes, specify the details), whether there is an agreement or arrangement for the remaining shares, and whether the subsequent acquisition of the remaining shares by your company will lead to the change of control of the company;
(5) In combination with the equity ratio of the target company held by Changlin industry, your company's management and business team arrangement of the target company, explain the impact of Changlin industry on the operation decision of the target assets. On this basis, explain whether your company can effectively control the target company after the completion of this transaction, whether it has the necessary personnel, technology and business reserves for managing and operating the target assets, and whether cross-border acquisition is necessary and prudent.
Ask the independent financial adviser to check all the above questions and the lawyer to give clear opinions on the above questions (1) (2) (4).
2. The restructuring report shows that from September to November 2021, Jinbao Electronics was affected by the power and production restriction policy of "dual control of energy consumption", and the production power consumption was limited to a certain extent. During the reporting period, the power procurement of the target company accounted for a large proportion. Zhaoyuan power supply company of State Grid Shandong electric power company was one of the top five suppliers of the target company during the reporting period, and the purchase amount from the target company accounted for 5.4% and 4.3% of the total purchase amount respectively. In addition, in August 2021, Yantai Ecological Environment Bureau issued the notice of rectification within the pollution discharge time limit to Jindu electronics. Because Jindu electronics had "other - not installing / using automatic monitoring equipment and networking", Yantai ecological environment bureau decided to withdraw the pollution discharge license of Jindu electronics.
Please your company:
(1) Explain whether the projects built, under construction or proposed to be built by the target company belong to "high energy consumption and high emission" projects, whether they meet the relevant national or local policy requirements and implementation, whether they need to comply with the procedures and implementation of approval, approval and filing of relevant competent departments;
(2) Explain whether the production and operation of the target company comply with the national industrial policies, whether it is included in the corresponding industrial planning layout, whether it belongs to the restricted and eliminated industries in the Guiding Catalogue for industrial structure adjustment (2019 version), whether it belongs to backward production capacity, and whether the requirements for production capacity elimination and replacement have been implemented (if any). Please classify it according to business or products;
(3) Explain whether the built, under construction or proposed projects of the target company meet the dual control requirements of energy consumption in the project location, whether the review opinions on energy conservation of fixed asset investment projects are obtained as required, the consumption of main energy resources of the target assets, and whether they meet the regulatory requirements of local energy conservation authorities; (4) Explain whether the existing projects of the target company meet the requirements of environmental impact assessment documents, whether the total pollutant reduction and substitution requirements are implemented, whether the projects under construction and proposed to be built have obtained the environmental impact assessment Reply of the corresponding level competent department of ecological environment, and whether the project meets the control requirements of ecological environment entry list or the environmental access requirements of the park, Whether it is included in the industrial park and whether the planning environmental impact assessment is not carried out in the park according to law (such as new construction and expansion of petrochemical, chemical, coking, non-ferrous metal smelting and flat glass projects);
(5) to explain the specific links involved in environmental pollution in the production and operation of the target company, the names and emissions of major pollutants, the capacity to prevent pollution installations, the operation and the advanced technology, whether the treatment results of energy saving and emission reduction are in line with the requirements, whether the daily emission monitoring is up to standard, and the on-site inspection of environmental protection departments;
(6) Explain whether the cost of environmental protection related expenses in the reporting period matches the pollution caused by production and operation;
(7) Explain whether the target company has been subject to administrative punishment in the field of environmental protection during the reporting period, whether it constitutes a major illegal act, whether the rectification measures and after rectification comply with the provisions of environmental protection laws and regulations, whether the target company has environmental protection accidents or major mass environmental protection events, and whether there are negative media reports on environmental protection.
Independent financial advisers and lawyers are invited to check the above issues and give clear opinions.
3. The restructuring report shows that by the end of 2021, the asset liability ratio of the target company was 70.46%, far higher than that of listed companies. After the completion of this transaction, the total asset scale of your company for reference will increase by 541.01%, the total liability scale will increase by 238061%, the asset liability ratio will increase from 13.68% to 52.94%, the current ratio and quick ratio will decrease by 74.82% and 71.64% respectively, and the solvency of listed companies will decrease significantly. The restructuring report also shows that the working capital of Jinbao electronic is relatively tight. At the end of each reporting period, the balance of short-term borrowings of Jinbao electronic is 1119466500 yuan and 573026900 yuan respectively, accounting for 56.79% and 30.82% of current liabilities respectively. The amount of short-term borrowings is relatively high. Please explain whether this transaction will have a significant adverse impact on your company's solvency, whether it is conducive to the company's ability to enhance sustainable operation, and whether it meets the provisions of item (V) of Article 11 of the reorganization management measures. The independent financial advisor is requested to check and give clear opinions.
4. The restructuring report shows that the transaction plans to raise no more than 300 million yuan of supporting funds from Zhaojin nonferrous metals, a wholly-owned subsidiary of the controlling shareholder Zhaojin group, for the construction of the copper foil project of the target company (HVLP), supplement the working capital of listed companies, and pay intermediary fees. The success of raising matching funds does not affect the implementation of this issuance of shares to purchase assets. If the raising of supporting funds fails to be successfully implemented, the listed company will use its own or self raised funds to solve the fund gap.
Please your company:
(1) Explain the specific use arrangements of the raised supporting funds, including whether the arrangements for supplementing the working capital of listed companies comply with the relevant provisions of the guidelines for the application of regulatory rules - listing class No. 1;
(2) Combined with the financial status, solvency, changes in solvency after preparation, cash flow, financing channels and other factors of the listed company after the completion of the transaction, this paper explains the impact of using self owned or self raised funds to solve the fund gap on the solvency of the listed company if the raising of supporting funds fails.
The independent financial advisor is requested to check the above issues and give clear opinions.
5. The restructuring report shows that in this transaction, the 100% equity of Jinbao Electronics was evaluated by income method and asset-based method, and the evaluation result of income method was finally selected as the evaluation conclusion. The appraisal base date is August 31, 2021, and the forecast period is from September to December 2021. Under the income method, the assessed value of 100% shareholders' equity of Jinbao electronics is 1874625900 yuan, which is 86.01% higher than the net assets belonging to the parent company according to the consolidated statement of the company. Under the asset-based method, the assessed value of 100% shareholders' equity of Jinbao electronics is 1546693600 yuan, with an increase of 65.48%. On the one hand, the higher value-added rate is due to the obvious increase in the gross profit margin of Jinbao electronics products in 2021 compared with previous years, on the other hand, the profit growth caused by the expansion of production capacity in the forecast period.
From the perspective of product composition, the current copper foil production capacity of Jinbao electronics is 11500 tons, and the production capacity in the forecast period is 1500 tons higher than the current production capacity, which is mainly due to the completion of the high-end HVLP very low profile electrolytic copper foil project and its trial production stage; The current capacity of CCL is 23.13 million, and the capacity utilization rates in 2019 and 2020 are 63.49% and 64.91% respectively. The capacity utilization rate from January to August 2021 has increased to 76.40%. However, during the forecast period, the capacity of CCL from September to December 2021 is 25.9 million, and that in 2022 and beyond is 27.9 million, an increase of 21% over the current capacity. The average capacity utilization rate from 2022 to 2026 is 84.15%, Compared with 2019 and 2020, the average capacity utilization rate increased by 31%.
Please your company:
(1) Explain the performance of Jinbao electronics from September to December 2021, and whether there are significant differences between the predicted data from September to December and the actually realized financial data in the asset evaluation. If so, please explain the reasons and rationality of the differences;
(2) Combined with the historical sales price changes of main products and the future sales price trend, explain whether the rise of Jinbao electronic gross profit margin level is sustainable. On this basis, explain whether the estimation of gross profit margin level in the prediction period is reasonable and cautious, and whether the influence of technology update, price fluctuation and other factors is fully considered in the evaluation;
(3) Explain the specific situation of the trial production of HVLP very low profile electrolytic copper foil production line and whether the effect meets the project planning objectives. Combined with the trial production and operation, explain the realizability of the copper foil capacity increase of 1500 tons in the prediction period compared with the current capacity;
(4) Explain the actual production capacity and utilization of Jinbao electronic copper clad laminate products from September to December 2021, and whether there is any significant difference between the production capacity and utilization predicted in the asset appraisal and the actual situation. If so, please explain the reasons and rationality of the difference, and explain the reasons and rationality for the significant increase of the production capacity and capacity utilization of copper clad laminate products in 2022 and beyond compared with the current situation;
(5) In combination with the above matters, explain whether the evaluation value-added is prudent and reasonable, whether the transaction damages the interests of the listed company, and whether the transaction complies with the relevant provisions of item (III) of Article 11 of the reorganization measures.
Independent financial advisers and appraisers are invited to check the above problems and give clear opinions.
6. The restructuring report shows that in the current appraisal process, under the asset-based appraisal method, the appraisal value-added rates of medium and long-term equity investment, fixed assets and intangible assets of non current assets are 65.2%, 28.82% and 118.69% respectively. Among them, in the long-term equity investment, the value added of the subsidiaries Jindu electronics and Tongling Jinbao was as high as 83.76% and 59.18% respectively; Among the fixed assets, the value-added rate of equipment fixed assets is 31.82%; The book value of the patent right in the intangible assets is zero because the R & D cost in the R & D stage is disbursed in the current profit and loss. However, since the intangible assets group entrusted for appraisal adopts the income method, the appraisal value is 676779 million yuan, and the appraisal value increases greatly.
Please your company:
(1) The specific asset categories of jieliandu electronics and Tongling Jinbao illustrate the reasons and rationality of the high appreciation rate of Jindu electronics and Tongling Jinbao in the long-term equity investment;
(2) In combination with the actual service life and service status of the equipment fixed assets of the subject company, explain the reasons and rationality for the high appreciation of its evaluation;
(3) Explain the reason why the intangible assets group adopts the income method in the patent evaluation, the basis and rationality of the selection of relevant parameters such as share rate and discount rate, and conclude
