Securities code: Tianyu Eco-Environment Co.Ltd(603717) securities abbreviation: Tianyu Eco-Environment Co.Ltd(603717) Announcement No.: 2022020
Tianyu Eco-Environment Co.Ltd(603717)
Announcement on continuing to reply to the remaining questions in the inquiry letter of Shanghai Stock Exchange
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Important content tips:
(1) Adjustment of transaction scheme and performance compensation scheme: according to the equity strategic investment agreement signed between the company and Qinghai juzhiyuan, this transaction will be adjusted as follows: the company will increase the cash capital of RMB 210 million to Qinghai juzhiyuan new materials Co., Ltd. and obtain 35% equity of the target company. The performance compensation scheme is adjusted as follows: the target company promises that the audited net profit attributable to the parent company (calculated according to the consolidated statement of Qinghai juzhiyuan) after deducting non recurring profits and losses in 2022, 2023 and 2024 is RMB 900 million. If the total amount of net profit in the three-year assessment fails to meet the commitment, For the part with insufficient profits, Mr. Liu Bingsheng shall make a one-time cash compensation within one month after the issuance of the audit report (the same time as the issuance of the listed company).
(2) The appraisal institution is unable to issue the appraisal report, and the company's valuation is carried out by itself: first, in view of the current small number of orders in hand of the subject company and the inability to meet the full capacity in 2022, the asset appraisal institution believes that the valuation basis is not sufficient and is unable to issue the appraisal report; Second, this transaction is the valuation conducted by the listed company itself. The company is not a professional evaluation institution, and there may be a risk that the asset valuation is inconsistent with the actual situation; Third, this valuation is based on the calculation made by the listed company based on the ramp up of the target company's capacity, full production and full sales. There is a risk that the capacity and sales volume are less than expected. Draw investors' attention to relevant valuation risks.
(3) The risk that the performance commitment cannot be completed and the performance commitment is not as expected: the phase II production line is still under construction, and there is great uncertainty in the formal production time. At the same time, due to the impact of macroeconomic fluctuations, force majeure, covid-19 epidemic, as well as the availability of production line construction funds, the production line of the target company has the risk of shutdown, the annual production capacity is not as expected, and the performance commitment cannot be completed; In this transaction, the listed company and the actual controller of the target company, Mr. Liu Bingsheng, agreed to compensate the insufficient profit in cash. At that time, it is uncertain whether there will be enough cash or other channels to obtain the cash required to fulfill the compensation commitment. Please pay attention to investment risks.
(4) There is no business collaboration between the company and the target company: first, the main product of the target company is lithium hexafluorophosphate, which is a processing enterprise and has no lithium mineral resources; Second, the target company is currently losing money. After the completion of this transaction, the target company may have the risk of continuing to lose money; Third, the listed company itself does not have the equipment, technology, intellectual property and other technical reserves for the production of "lithium hexafluorophosphate". After the capital increase, the listed company has no control over the target enterprise. After the capital increase, the target company and the company have the risk of unable to operate effectively in terms of assets, personnel and business.
(5) The company has the risk of shortage of funds: the listed company is currently in a state of loss, and the amount of interest bearing liabilities is high. At the same time, in 2022, the company is facing the capital needs of corporate bond repayment, temporary replenishment repayment of raised funds, due repayment of bank loans and daily operating expenses. This transaction further exacerbated the company's capital shortage.
(6) The restriction on the sale of the company's non-public offering shares has been lifted: the prohibition on the non-public offering shares has been lifted, and some non-public offering subscribers who still hold the company's shares and Shanghai Muxin fund products have not made clear the reduction arrangement (as of the date of the announcement of the proposed investment, three shareholders of the non-public offering subscribers no longer hold the company's shares), so there is a risk of stock price fluctuation of the company.
(7) The equity strategic investment agreement has not been signed yet: the two sides of this transaction have signed the memorandum of core business terms in February 2022. The change of this transaction has been deliberated and adopted at the 40th meeting of the third board of directors of the company, and has obtained the written consent of Liu Bingsheng, the actual controller of the target company. The company has signed the equity strategic investment agreement on March 28, 2022. However, due to special reasons for epidemic prevention and control in Shanghai, the target company and its actual controller Liu Bingsheng (i.e. performance commitment compensation obligor) have not signed.
(8) This transaction does not need to be deliberated by the general meeting of shareholders of the company and will not constitute a major asset reorganization: the audit procedures of the target company have been completed and approved by the 40th meeting of the third board of directors of the company. This transaction does not need to be deliberated by the general meeting of shareholders of the company and will not constitute a major asset reorganization.
Tianyu Eco-Environment Co.Ltd(603717) (hereinafter referred to as "the company" or " Tianyu Eco-Environment Co.Ltd(603717) ") received the inquiry letter on Tianyu Eco-Environment Co.Ltd(603717) foreign investment matters (shgh [2022] No. 0136) (hereinafter referred to as "the inquiry letter") issued by Shanghai Stock Exchange on February 22, 2022. The board of directors of the company attached great importance to this and carefully checked and replied to the questions in the inquiry letter about the capital increase to Qinghai juzhiyuan New Material Co., Ltd. (hereinafter referred to as the "target company" or "Qinghai juzhiyuan"). The company replied to questions 4-7 of this inquiry letter on March 10, 2022 and questions 1-3 of this reply. As of the date of this announcement, the replies to all questions have been completed. Now, the company's replies to some questions in the inquiry letter are as follows:
Question 1: about the transaction price. The announcement shows that the capital increase of the company this time does not exceed 610 million yuan. The asset appraisal is expected to be completed in mid March 2022. The value type of the asset appraisal project is market value. Liu Bingsheng, the shareholder of the subject company, contributed 76.67% of the capital, and the initial equity acquisition was on November 26, 2020. Cai Xianwei, the shareholder, contributed 10% of the capital, and the initial equity acquisition was on March 24, 2021. The company is requested to: (1) supplement and disclose the confirmation basis, calculation process, main calculation methods of the transaction price and the Preliminary Valuation of the target company, and analyze and demonstrate whether the transaction needs to be reviewed by the general meeting of shareholders and meets the conditions of major asset reorganization in accordance with the relevant provisions of the administrative measures for major asset reorganization of listed companies and the stock listing rules of Shanghai Stock Exchange; (2) Supplementary disclosure of the shareholders of the target company Liu Bingsheng and Cai Xianwei's shareholding background, counterparty, transaction consideration and whether they have paid in capital contribution, explain whether there is obvious difference from the transaction price, and analyze and demonstrate whether the transaction price is fair in combination with the financial data, production and comparable transactions in the same industry; (3) Explain whether there is a potential relationship or interest arrangement between the shareholders of the target company and the listed company and its controlling shareholders, and explain whether there is interest transfer in combination with the pricing and payment arrangement of this transaction; (4) Evaluate the possibility that the target company cannot be put into operation in combination with the target company's pre production situation, progress in obtaining production approval, main trading customers, etc., and explain how to consider relevant risks in asset estimation.
[reply]
I Supplement and disclose the confirmation basis, calculation process, main calculation methods of the transaction price and the Preliminary Valuation of the target company, and analyze and demonstrate whether the transaction needs to be reviewed by the general meeting of shareholders and meets the conditions of major asset reorganization in accordance with the relevant provisions of the administrative measures for major asset reorganization of listed companies and the stock listing rules of Shanghai Stock Exchange. (I) confirmation basis of this transaction price
In this transaction, the company plans to use the evaluation results of the income method (with assumptions) as the reference basis for the transaction consideration. As of the date of this reply announcement, the audit of the subject company has been completed, and the appraisal institution believes that the basis for using the income method is not sufficient to issue the asset appraisal report. The reasons are as follows:
(1) The target company has no operating income in 2020. In the second half of 2021, it obtained the approval for the trial production of phase I high-end lithium hexafluorophosphate project with an annual output of 2000 tons (Document No.: dzyz [2021] No. 177), and obtained an operating income of 799794 million yuan through trial production and trial sales. (2) Given that the subject company has few orders on hand and is unable to meet the full capacity in 2022, the asset appraisal institution believes that the valuation basis is not sufficient and is unable to issue the appraisal report. The company will refer to the evaluation logic of the income method and estimate the valuation of the subject company under the premise of setting assumptions, which will be used as the reference basis for the transaction price. Based on the current production capacity, R & D capacity, customer resources and the development direction of the industry of the target company, and according to the latest business situation of the target company, the transaction plan will be adjusted to increase the capital of the listed company by RMB 21 million and obtain 35% equity of the target company through friendly negotiation between the two parties.
After reviewing the valuation method, assumptions, production capacity and pricing basis of Qinghai juzhiyuan company by the listed company, as well as the audited revenue of Qinghai juzhiyuan in 2021 in combination with the current situation of the industry, and taking into account the performance gambling terms between the listed company and the counterparty, the independent directors believe that the changed investment plan is determined through negotiation between the two parties, which has less risk to the listed company and fair transaction price, There is no situation that damages the interests of the company and other shareholders.
The valuation of the subject company of this transaction is the result calculated by the listed company according to the income method. Since the calculation is based on certain assumptions, if the future situation changes greatly than expected, there may be a risk that the asset valuation is inconsistent with the actual situation. Draw investors' attention to relevant valuation risks.
(II) the calculation process of the transaction price, the main calculation methods and the Preliminary Valuation of the target company
1. Valuation method
According to the actual situation of the target company, this transaction is valued with the income method. The valuation model adopts the enterprise free cash flow model, and the calculation formula is: equity income cash flow = present value of enterprise free net cash flow - interest bearing debt + value of non operating assets - non operating liabilities + surplus assets
Enterprise free net cash flow = EBIT × (1 - income tax rate) + depreciation and amortization - capital expenditure - additional amount of working capital
2. Valuation calculation process
2.1 assumptions of valuation
Hypothesis 1: it is assumed that there is no significant change in the market conditions, industrial environment and national laws, regulations and policies of the target company, and the target company has the ability of sustainable operation. The specific reasons are as follows: first, after investing in the target company, the listed company can directly reduce the debt ratio of the target company. The main risk source of the target company's continuous operation is the high asset liability ratio; Second, the target company has normal production and operation capacity, production capacity and performance capacity, and has orders in hand; Third, after the listed company completes its investment, it will help the target company obtain greater loan support from the bank; Fourth, the construction of phase II production line of the target company still needs funds. According to the actual capital needs of the target company, it is not ruled out to introduce other equity investors. At that time, the listed company will decide whether to exercise the priority of capital increase or the priority of transfer according to the transaction price by the board of directors; Fifth, as strategic investors, listed companies will work with the target company to solve the capital gap of the target company's phase II production line.
Hypothesis 2: it is assumed that juzhiyuan's established investment, production plan and operation policy will be implemented on schedule in the foreseeable future; The predicted income, costs and expenses can be realized as scheduled in the future operation, and the funds required for investment can be in place as scheduled. At present, the target company has signed supply contracts of 739.6 tons with four customers, accounting for 49.31% of the predicted capacity of 1500 tons in 2022. According to the analysis of the management of Qinghai juzhiyuan, the target company is currently negotiating with a number of potential customers, among which, it is negotiating a long-term cooperation agreement with signed customers; Sample delivery has been completed with some new customers, and supply agreements will be signed later. It is uncertain whether potential customers will cooperate in the future.
Customer name signing date quantity (ton) supply period
Shanghai qirun New Material Technology Co., Ltd. from February 13.20, 2022 to March 2022
Shenzhen Capchem Technology.Ltd(300037) March 26, 2022
Tianjin Tianci high tech materials Co., Ltd. from March 400.00, 2022 to December 2022
Zhangjiagang Free Trade Zone Yongyi Chemical Trade Co., Ltd. from March 300.00, 2022 to December, 2022
Total 739.60
Hypothesis 3: it is assumed that the management (or future management) of Qinghai juzhiyuan has responsibly fulfilled the obligations of the asset owner and effectively managed the relevant assets. Qinghai juzhiyuan's core scientific research personnel and technical team have remained at more than 15-20 in recent two years, remained relatively stable, and can complete the expected scientific research achievements or technical updates. At the same time, Cai Xianwei, the core technician, holds the shares of the target company and has strong stability. After investment, the listed company can appoint some managers to the target company, which will help the target company improve its compliance and internal control ability.
2.2 specific calculation process of target company valuation
2.2.1 main business income forecast
(1) Product price
Since 2021, the downstream application field of lithium hexafluorophosphate, especially in the field of new energy vehicles, has increased rapidly, and the demand for electrolyte has increased greatly, making the supply of lithium hexafluorophosphate in short supply. Since 2021, the ex factory price of lithium hexafluorophosphate has increased rapidly. According to Wande data terminal, it has increased from 11.25 thousand tons at the beginning of the year to 56.50 thousand tons at the end of the year, with an annual increase of 402%. As shown in the figure below:
At present, the sales price excluding tax of lithium hexafluorophosphate is about 500000 yuan / ton. According to the average sales price excluding tax of Qinghai juzhiyuan in 2021, the company predicts that the average sales price excluding tax will be 420000 yuan / ton in 2022. In view of the obvious periodicity of the lithium hexafluorophosphate industry, referring to the process of rapid rise, rapid decline and finally stabilization of the lithium hexafluorophosphate price in 20152020, using the regression analysis method and combined with the production expansion expectations currently announced by the main manufacturers of the lithium hexafluorophosphate industry, the prices in the forecast period are as follows:
20222023 20242025
