Reply to the examination and inquiry letter on the application documents for initial public offering and listing on the gem of Ganzhou Yihao new materials Co., Ltd. Tian shiye Zi [2022] No. 166158
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Reply to the third round of examination and inquiry letter on the application documents for initial public offering and listing on the gem ------ 1
About Ganzhou Yihao New Material Co., Ltd
Application documents for initial public offering and listing on GEM
Reply to the inquiry letter of the third round of audit
Tian Zhi Ye Zi [2022] No. 166158 Shenzhen Stock Exchange:
According to the requirements of the third round examination and inquiry letter on the application documents for initial public offering and listing on the gem of Ganzhou Yihao new materials Co., Ltd. (audit letter [2022] No. 010178) (hereinafter referred to as the "inquiry letter") issued by your exchange on February 7, 2022, Tianzhi International Certified Public Accountants (special general partnership) (hereinafter referred to as "we" or "reporting accountant") as the reporting accountant of Ganzhou Yihao new materials Co., Ltd. (hereinafter referred to as "issuer", "company" or "Yihao new materials"), based on the principles of diligence, honesty and trustworthiness, carefully discussed, verified and implemented the questions raised in the inquiry letter one by one, and replied and explained them one by one. The specific reply is attached.
Explanation on the content, interpretation, format, supplementary and updated disclosure of the reply:
1. Unless otherwise specified, the abbreviations or terms used in this reply are consistent with the prospectus of Ganzhou Yihao new materials Co., Ltd. for initial public offering and listing on the gem (application draft); 2. Unless otherwise specified in this reply, all amounts are in RMB 10000 yuan;
3. In this reply, if the mantissa of the total count is inconsistent with the mantissa of the sum of the listed values, it is caused by rounding.
1、 Question 3 About gross margin.
According to the application materials, during the reporting period, the gross profit margin of the issuer's electronic circuit copper foil was 16.75%, 12.97%, 15.70% and 26.81% respectively, and the gross profit margin of similar products of Copper Crown copper foil was 16.41%, 10.38%, 9.36% and 17.29% respectively. The difference in the last year is mainly due to the selling price. The issuer is mainly PCB board customers, and Copper Crown copper foil is mainly copper clad laminate customers. Please the issuer:
(1) Further demonstrate the reasons for the large difference in the gross profit margin of the last year due to the differences in the types of main customers, but there is basically no difference in 2018 and 2019.
(2) In combination with the selling price to main customers, the reason and rationality of the issuer's average selling price of electronic circuit copper foil products in the latest issue of the year is added.
The sponsor shall check and report to the accountant and give opinions.
[reply]
1、 Further demonstrate the reasons for the large difference in the gross profit margin of the last year due to the differences in the types of main customers, but there is basically no difference in 2018 and 2019.
The comparison of gross profit margin, sales unit price and unit cost between the issuer and Copper Crown copper foil electronic circuit copper foil in each period of the reporting period is as follows:
Unit: 10000 yuan / ton
Project year 2021 January June 20212020 20192018
Gross profit margin - 17.29%, 9.36%, 10.38%, 16.41% copper crown sales unit price - 8.53, 6.13, 6.11, 6.66 copper foil
Unit cost - 7.05 5.56 5.48 5.57
Gross profit margin 25.52%, 26.81%, 15.70%, 12.97%, 16.75%
Selling unit price of the issuer 9.47 9.23 6.49 6.27 6.80
Unit cost 7.05 6.76 5.47 5.45 5.66
Note: Tongguan copper foil has not disclosed the financial data of 2021.
The gross profit margin of the issuer's electronic circuit copper foil is basically close to that of Copper Crown copper foil in 2018 and 2019,
In 2020 and January June 2021, the gross profit margin of the issuer's electronic circuit copper foil is higher than that of Copper Crown copper foil, which is mainly affected by the sales price, and the difference of unit cost is small; The main reason for the large difference in the sales unit price of copper foil between the issuer and Tongguan copper foil is the different bargaining power of copper foil manufacturers to their customers under different market supply and demand conditions. The specific analysis is as follows:
(I) analysis of variation difference of gross profit margin
The main customers of Copper Crown copper foil are copper clad laminate manufacturers, with high customer concentration, large procurement volume of a single customer and relatively strong bargaining power; The issuer is dominated by PCB customers, with low customer concentration and relative dispersion. The purchase volume of a single customer is relatively small and the bargaining power is relatively weak; Different bargaining power to customers leads to differences in sales prices, which in turn leads to differences in gross profit margins.
In 2018 and 2019, there was little difference in the sales unit price and gross profit margin between the issuer's electronic circuit copper foil and Copper Crown copper foil, which was mainly due to the gradual production of new capacity projects in the copper foil industry since 2018, the gradual release of the tight supply and demand of copper foil, and the significant increase in the supply of the industry. In 2019, communication electronics is in the transition period of 4G and 5g, and consumers' desire to change machines has decreased significantly. In addition, the global economic environment is relatively depressed and the demand for terminal electronic products has decreased, resulting in a low prosperity of the copper foil industry. At this time, the bargaining power of downstream customers is at a high level, and the purchase volume and dispersion of customers have little impact on the sales unit price. Therefore, The sales unit price of electronic circuit copper foil between the issuer and Tongguan copper foil is at a low level, with small difference and small difference in gross profit margin.
From January to June in 2020 and 2021, the sales unit price and gross profit margin of the issuer's electronic circuit copper foil and Copper Crown copper foil are quite different, which is mainly due to the improvement of the industry prosperity since the second half of 2020, the rapid rise of the price of copper foil, the increase of the bargaining power of copper foil manufacturers, the relatively low output of the issuer's electronic circuit copper foil and the more scattered downstream customers. The issuer can take the initiative to screen customers or orders, If the order with higher sales unit price and higher profit is selected, the issuer's sales unit price will be more flexible. Copper Crown copper foil electronic circuit copper foil has large output, concentrated customers and relatively small price increase elasticity.
PCB customers of the issuer account for a relatively high proportion. Copper Crown copper foil did not disclose the proportion of PCB customers in its electronic circuit copper foil. From January to June 2021, its top five customers were copper clad laminate customers. It is assumed that all customers except the top five customers of Copper Crown copper foil are PCB customers, and the proportion of PCB customers is no more than 26.89%.
The comparison of the types and structures of the issuer and Tongguan copper foil customers in each period of the reporting period is as follows:
Project 2021 January June 20212020 20192018
Sales proportion of Tongguan's largest customer - 26.46%, 26.69%, 29.31%, 28.76%
Proportion of top five customers of copper foil - 73.11%, 73.44%, 74.78%, 81.35%
The largest customer sales of the issuer accounted for 11.39%, 14.40%, 16.77%, 18.48%, 15.96%
The top five customers accounted for 50.21%, 53.06%, 50.83%, 57.30%, 50.55%
Among all customers, PCB customers accounted for 48.03%, 49.51%, 56.47%, 49.63%, 59.77%
Note: the above proportion is the proportion of copper foil income of electronic circuits.
(II) relevant disclosure of gross profit margin of Tongguan copper foil and Zhongyi Technology
When Tongguan copper foil explained in the prospectus that its gross profit margin was lower than that of Zhongyi technology, it disclosed: "when the market recovered in the second half of 2020, Zhongyi technology with more dispersed customers can flexibly adjust the structure and choose orders with relatively higher profits".
When Zhongyi technology explained in the prospectus that its gross profit margin was higher than that of Copper Crown copper foil, it disclosed: "The gross profit margin of Tongguan copper foil electronic circuit copper foil is lower than that of Zhongyi technology, which is mainly due to the relatively high output and market share of Tongguan copper foil, the concentration of large customers and the greater impact of the return of the market price of electronic circuit copper foil. However, the output of electronic circuit copper foil of Zhongyi technology is relatively small and the customers are more dispersed, so the customer structure can be adjusted more flexibly and orders with relatively higher profits can be selected, so the gross profit margin is relatively high."
(III) comparison of gross profit margin between the issuer and comparable companies in the same industry
The comparison between the issuer and comparable companies in the same industry in each period of the reporting period is as follows:
Company name product type January June 20212020 20192018
Copper Crown copper foil electronic circuit copper foil 17.29% 9.36% 10.38% 16.41%
Zhongyi science and technology electronic circuit copper foil 31.79%, 16.53%, 12.92%, 22.71%
Defu technology electronic circuit copper foil 28.94% 12.30% 11.13% 19.74%
Issuer's electronic circuit copper foil 26.81% 15.70% 12.97% 16.75%
It can be seen from the above table that the change of the issuer's electronic circuit copper foil in the latest issue is basically consistent with that of Zhongyi technology and Defu technology.
To sum up, the issuer's gross profit margin of 2018 and 2019 is basically close to that of Tongguan copper foil. The difference between the issuer's gross profit margin of electronic circuit copper foil and that of Tongguan copper foil in 2020 and January June 2021 is reasonable.
2、 In combination with the selling price to main customers, the reason and rationality of the issuer's average selling price of electronic circuit copper foil products in the latest issue of the year is added.
(I) the reason why the average selling price of the issuer's electronic circuit copper foil in the latest issue is higher than that of the comparable companies in the same industry
In the last year, the issuer's sales unit price was higher than that of Tongguan copper foil, mainly due to (1) since the second half of 2020, the prosperity of the copper foil industry has improved, the price of copper foil has risen rapidly, the bargaining power of copper foil production enterprises has increased, the issuer's output of electronic circuit copper foil is relatively low, and the customers are mainly PCB enterprises. The purchase volume of a single customer is small and the degree of dispersion is low. They can actively screen customers or orders and choose higher sales unit price For orders with relatively higher profits, the issuer's sales unit price is relatively more flexible, and the adjustment range of customer sales price is higher. (2) Compared with Copper Crown copper foil, the issuer mainly focuses on PCB customers, and the demands of PCB customers in thickness, width and performance are more diversified. In addition, the issuer's sales to PCB customers are mainly high-end products such as ultra-thin copper foil and thin copper foil, and the price of PCB customers is relatively high.
(II) the rationality that the average selling price of the issuer's electronic circuit copper foil in the latest issue is higher than that of Tongguan copper foil of comparable companies in the same industry
In general, the sales unit price of PCB customers is higher than that of CCL customers, which is mainly affected by comprehensive factors such as product specification, performance, purchase quantity and delivery time; In the latest one-year period, the difference in sales unit price between PCB customers and CCL customers is not only affected by the above factors, but also affected by the bargaining power of customers under different market supply and demand conditions. During the reporting period, the issuer was mainly PCB customers, and the average sales price of electronic circuit copper foil of the issuer was higher than that of Copper Crown copper foil, which was reasonable. The specific analysis is as follows:
1. The average selling price of PCB customers of the issuer is higher than that of CCL customers
The issuer mainly sells conventional copper foil to CCl customers and ultra-thin copper foil, thin copper foil and other copper foil to PCB customers. Compared with conventional copper foil, the sales unit price of ultra-thin copper foil and thin copper foil is relatively high. The comparison of the unit prices of products sold by the issuer to CCl customers and PCB customers in each period of the reporting period is as follows:
Unit: 10000 yuan / ton
Project year 2021 January June 20212020 2019
PCB customer 9.66 9.33 6.69 6.44
CCL customers
