After the initial fund-raising of 651 million yuan, Crown Advanced Material Co.Ltd(688560) ( Crown Advanced Material Co.Ltd(688560) . SH) immediately changed its face. The company reduced the investment in some projects with good market prospects and increased the investment in some highly competitive projects. Now, the company plans to increase the 2 billion yuan increase plan to increase investment in previously adjusted projects.
The company’s operation made the outside world confused. On April 1, the Shanghai Stock Exchange issued an inquiry letter requesting Crown Advanced Material Co.Ltd(688560) to make a written explanation on the rationality of Poe adhesive film expansion project, aluminum plastic film construction project and fluorine-free backplane construction project.
initial project “big face change”
Crown Advanced Material Co.Ltd(688560) is mainly engaged in the R & D, production and sales of new composite membrane materials. The main products are Cecep Solar Energy Co.Ltd(000591) battery back sector and packaging adhesive film.
According to the prospectus, Crown Advanced Material Co.Ltd(688560) was listed on the Shanghai Stock Exchange on December 24, 2020. The company publicly issued 41.022 million shares at 15.87 yuan / share, raising a total of 651 million yuan. According to the plan, the company invested 410 million yuan to build “expansion project of Cecep Solar Energy Co.Ltd(000591) battery backplane with an annual output of 30 million square meters”, “expansion project of lithium battery aluminum plastic film with an annual output of 10 million square meters”, “expansion project of Jiangxi photoelectric composite engineering technology research center” and replenishing working capital projectsP align = “center” figure: Crown Advanced Material Co.Ltd(688560) initial public offering project information source: Company prospectus
However, in April 2021, the company adjusted the investment amount of raised investment projects. Among them, Cecep Solar Energy Co.Ltd(000591) battery back sector expansion project and lithium battery aluminum plastic film expansion project were reduced by 83.01 million yuan and 362359 million yuan respectively.
Meanwhile, Crown Advanced Material Co.Ltd(688560) plans to invest 149 million yuan to raise funds for the construction of Poe film expansion project for PV module packaging. By the end of 2021, the amount of raised funds has been invested is 1269629 million yuan, but the notes to the financial statements show that the budget of Poe new project is only 20 million yuan.
Moreover, the committed investment amount of the first raised lithium battery aluminum-plastic film expansion project was reduced from 80 million yuan to 437641 million yuan. It is expected to reach the expected usable state on April 30, 2022, and the actual investment amount was 242842 million yuan by the end of 2021.
The Cecep Solar Energy Co.Ltd(000591) battery packaging adhesive film market where Poe adhesive film is located has high concentration and significant head effect. The existing production capacity and capacity under construction of major enterprises basically match the market demand. During the reporting period, the company’s Cecep Solar Energy Co.Ltd(000591) battery packaging adhesive film business revenue is small, the gross profit margin of products is only 2.13%, and the inventory goods also have the situation of returned products and inferior products.
In this regard, the Shanghai stock exchange requires the company to explain the reasons and rationality of the reduction of the investment amount of the initial raised investment project, the current use progress and the project reaching production, and whether there is a risk of delayed completion; The specific content and calculation basis of Poe adhesive film expansion project are inconsistent with the notes to the financial statements, the specific investment direction of the raised funds invested so far, and the matching relationship between the new plant and equipment and the production capacity; Combined with the reasons for the small scale of revenue and low gross profit margin of Cecep Solar Energy Co.Ltd(000591) battery packaging adhesive film business of the company, this paper explains the reasons and rationality for the company to change the use of the previously raised funds and invest in Poe adhesive film expansion project.
the prospect of aluminum plastic film project is unknown
It is worth noting that the Crown Advanced Material Co.Ltd(688560) initial project reduced the expansion project of lithium battery aluminum-plastic film, but the company plans to expand the aluminum-plastic film project on a large scale.
According to the prospectus, Crown Advanced Material Co.Ltd(688560) this time, it is planned to raise 2 billion yuan to invest and build “mingguan lithium film company’s annual output of 200 million square meters of aluminum plastic film construction project”, “mingguan lithium film company’s annual output of 100 million square meters of aluminum plastic film construction project”, “Jiaming film company’s annual output of 100 million square meters of fluorine-free backplane construction project” and supplement working capitalP align = “center” figure: Crown Advanced Material Co.Ltd(688560) fixed increase fund raising investment project data source: fixed increase fund raising prospectus
As for the aluminum-plastic film construction project, according to the application materials and prospectus, the production process of aluminum-plastic film is relatively difficult, and the global and Chinese markets are mainly monopolized by a few Japanese enterprises. It is estimated that by 2025, the global total demand will reach 759 million square meters, while the current planned new capacity of Chinese enterprises has reached 827 million square meters. The company’s aluminum-plastic film production capacity in 2020 is only 3.3607 million square meters, accounting for 4.99% of the operating revenue. The company plans to invest 2.017 billion yuan in the aluminum-plastic film construction project, including 1.180 billion yuan of raised funds, with a planned annual production capacity of 300 million square meters, which is divided into two phases for implementation and filing.
In this regard, the Shanghai stock exchange requires the company to explain the difference and connection between the aluminum-plastic film products to be produced in this raised investment project and the company’s existing products and the products of the first raised investment project, whether the company has mastered all the technologies and processes required by this raised investment project and whether there are major uncertainties or risks in order to implement the preparation of the raised investment project and the R & D investment of relevant products during the reporting period; Reasons for the implementation and filing of aluminum plastic film construction project divided into two phases; Combined with the current composition of the company’s main business, analyze the impact of the implementation of the raised investment project on the business structure; Analyze whether there is overcapacity or risk in China’s aluminum plastic film industry in combination with the market development trend and the production expansion planning of major companies at home and abroad; In combination with the comparative advantages and disadvantages of the product technical route and key technical indicators, the company’s current market share, the amount of orders on hand and the corresponding capacity, the progress of customer verification, etc., fully analyze the capacity digestion risk of the raised investment project, and explain the necessity, urgency and rationality of the implementation of the raised investment project; Compare the actual use of the initial raised funds, analyze the specific investment direction and calculation basis of the investment amount of the project, explain the matching relationship between the warehouse or workshop area, the number of equipment and the new production capacity, and demonstrate the rationality of the financing scale.
gross profit margin of fluorine backplane products is higher than the industry average
As for the fluorine-free backplane construction project, according to the application materials and prospectus, Cecep Solar Energy Co.Ltd(000591) battery backplane is the main product of the company, which can be divided into fluorine-containing backplane and fluorine-free backplane, which are applied to single glass components, and fluorine-free backplane is expected to be the development direction in the future. According to the data of Photovoltaic Industry Association, the market share of single glass modules shows a downward trend. The technical level of fluorine-free backplane products of the company is high, and there are no direct benchmarking products in the industry. In 2020, the gross profit margin of products was 31.32%, and the average value of comparable companies in the same industry was 18.65%. The company plans to invest 420 million yuan to raise funds for the construction project of fluorine-free backplane with an annual output of 100 million square meters, which is mainly used for construction engineering and equipment purchase. The construction contents mainly include warehouse / workshop, comprehensive office building, dormitory, staff canteen and activity center. At present, the production equipment of different backplane products of the company is common.
In this regard, the Shanghai stock exchange requires the company to analyze and determine whether the fluorine-free backplane is the basis for the development direction and whether there is a risk of being replaced in the future in combination with the above-mentioned data of the photovoltaic industry association; In order to prepare for the implementation of the raised investment project, analyze the basis for the high technical level of the company’s products in combination with the technical route and key indicators and the comparison with companies in the same industry; List the production capacity of the company’s fluorine-free backplane in the coming years in a table, and analyze the rationality of the capacity planning of this raised investment and construction and whether there are capacity digestion risks in the future in combination with the market scale of fluorine-free backplane, the company’s current market share, the amount of orders on hand and the corresponding capacity, the progress of customer verification, the advantages and disadvantages of market competition, etc; The specific content, calculation basis, capital investment direction and fairness of the investment amount of the project, indicating the matching relationship between the plant area, the number of equipment and the new production capacity, and whether the purchased equipment is only used for the production of fluorine-free backplane; The necessity and rationality of investing a large amount of money in the project to build comprehensive office buildings, dormitories, staff canteens and activity centers, whether the relevant buildings formed are used in this raised investment project, and whether they belong to the field of investment, scientific and technological innovation; The reason why the gross profit margin of the company’s products is significantly higher than that of comparable companies in the same industry.
doubtful about the rationality of replenishing working capital
According to the application materials, as of September 2021, Crown Advanced Material Co.Ltd(688560) monetary fund balance was 2183509 million yuan. As of December 31, 2021, Crown Advanced Material Co.Ltd(688560) used some idle raised funds to purchase large certificates of deposit with a balance of 30 million yuan. The company plans to use 550 million yuan of the funds raised from specific objects to supplement working capital. In addition to 400 million yuan of funds raised for supplementary working capital investment projects, the initial working capital expenditure in the aluminum-plastic film construction project with an annual output of 200 million square meters of mingguan lithium film company and the fluorine-free backplane construction project with an annual output of 100 million square meters of Jiaming film company is a total of 150 million yuan of funds raised Crown Advanced Material Co.Ltd(688560) it is predicted that the demand for working capital in the next three years will be 485632900 yuan.
In this regard, the Shanghai stock exchange requires Crown Advanced Material Co.Ltd(688560) to analyze the necessity and scale rationality of replenishing working capital in combination with daily operation needs, monetary capital balance and use arrangement, and the comparison of the company’s asset structure and debt structure with comparable companies in the same industry; According to the amount of non capital expenditure in this raised investment project, calculate the specific amount actually used to supplement working capital in this raised investment project and its proportion in the total amount of funds to be raised.
In addition, at the end of each reporting period (20182020 and January September 2021), the book balance of Crown Advanced Material Co.Ltd(688560) accounts receivable was 372 million yuan, 410 million yuan, 469 million yuan and 494 million yuan respectively. The amount of commercial acceptance bills receivable at the end of the latest period increased significantly, and the sponsor paid attention to the relevant situation. At the end of each reporting period, the net cash flow from the company’s operating activities was 489746 million yuan, 140 million yuan, 336222 million yuan and – 283 million yuan respectively. In the fourth quarter of 2021, the company discounted bank acceptance bills and recovered 124 million yuan in cash.
The Shanghai stock exchange requires the company to explain the reasons for the large amount of accounts receivable at the end of the latest period, the collection up to now, whether the credit policy has changed during the reporting period, and whether there are significant differences between the credit policy and comparable companies in the same industry; The reasons for the increase in the amount of commercial acceptance bills receivable at the end of the latest period, the aging of commercial acceptance bills receivable, the provision for bad debts and the collection after the period; The reasons for the large difference between the cash flow and net profit of operating activities from January to September in 2020 and 2021, the specific reasons for the company’s bill discount, and whether there is any illegal bill discount.
