Jiangsu Hongde special parts Co., Ltd
Initial public offering and listing on GEM
Special announcement on investment risk
Sponsor (lead underwriter):
The application of Jiangsu Hongde special parts Co., Ltd. (hereinafter referred to as “Hongde shares”, “issuer” or “company”) for initial public offering of no more than 20.4 million ordinary shares (A shares) (hereinafter referred to as “this offering”) was examined and approved by the GEM Listing Committee of Shenzhen Stock Exchange (hereinafter referred to as “Shenzhen Stock Exchange”) on October 20, 2021, On February 23, 2022, it was approved to register by the China Securities Regulatory Commission (hereinafter referred to as “CSRC”) zjxk [2022] No. 379.
After negotiation between the issuer and the recommendation institution (lead underwriter) Minsheng Securities Co., Ltd. (hereinafter referred to as “Minsheng securities” and “recommendation institution (lead underwriter)”), it is determined that 20.4 million new shares will be issued this time, accounting for 25.00% of the total share capital after issuance, all of which are public issued new shares. The shares issued this time are planned to be listed on the gem of Shenzhen Stock Exchange.
The issuer and the recommendation institution (lead underwriter) specially draw investors’ attention to the following contents:
The issuance price of 26.27 yuan / share corresponds to the lower net profit diluted P / E ratio of the issuer before and after deducting non recurring profits and losses in 2020, which is 28.78 times higher than the average static P / E ratio of the industry in the latest month released by China Securities Index Co., Ltd. on March 31, 2022 (T-3), with an excess range of 8.77%; It is 25.62 times higher than the average static P / E ratio of comparable companies after deducting non-profit in 2020, with an excess range of 12.33%. There is a risk that the decline of the issuer’s share price will bring losses to investors in the future. The issuer and the recommendation institution (lead underwriter) remind investors to pay attention to investment risks, carefully study and judge the rationality of issuance pricing, and make investment decisions rationally. 1. This offering is conducted through a combination of offline inquiry and placement to qualified offline investors (hereinafter referred to as “offline issuance”) and online pricing issuance to social public investors holding non restricted A-share shares and non restricted depositary receipts in Shenzhen market (hereinafter referred to as “online issuance”).
The initial inquiry and offline issuance of this issuance shall be organized and implemented by the sponsor (lead underwriter) through the offline issuance electronic platform of Shenzhen Stock Exchange; Online issuance is carried out through the trading system of Shenzhen Stock Exchange.
2. After the preliminary inquiry, the issuer and the sponsor (lead underwriter) shall, in accordance with the exclusion rules stipulated in the announcement on preliminary inquiry and promotion of initial public offering of shares by Jiangsu Hongde special parts Co., Ltd. and listing on the gem (hereinafter referred to as the “announcement on preliminary inquiry and promotion”), after excluding the preliminary inquiry results of investors who do not meet the requirements, Eliminate all placing objects whose proposed purchase price is higher than 31.00 yuan / share (excluding 31.00 yuan / share); The proposed subscription price is 31.00 yuan / share, and the placing objects whose subscription quantity is less than 4.8 million shares are eliminated; The proposed subscription price is 31.00 yuan / share, and the placing objects whose subscription amount is equal to 4.8 million shares are eliminated. A total of 85 placing objects were excluded in the above process, and the total number of shares to be purchased was 470.1 million, accounting for 1.0047% of the total number of shares to be purchased after excluding invalid quotations in this preliminary inquiry. The excluded part shall not participate in offline and online subscription.
3. According to the preliminary inquiry results, the issuer and the recommendation institution (lead underwriter) comprehensively consider the issuer’s fundamentals, industry, valuation level of comparable listed companies, market conditions, demand for raised funds, effective subscription multiple, underwriting risk and other factors, and negotiate to determine that the price of this issuance is 26.27 yuan / share, and the offline issuance will not conduct cumulative bidding inquiry.
Investors are requested to make online and offline subscription at this price on April 7, 2022 (t day), and there is no need to pay the subscription fund at the time of subscription. The offline issuance and Subscription Date and online subscription date are the same as April 7, 2022 (t day), in which the offline subscription time is 9:30-15:00, and the online subscription time is 9:15-11:30 and 13:00-15:00.
4. The issuing price of this offering shall not exceed the median and weighted average of the quotations of offline investors after excluding the highest quotation, as well as the Securities Investment Fund (hereinafter referred to as “public fund”), the National Social Security Fund (hereinafter referred to as “social security fund”), the basic old-age insurance fund (hereinafter referred to as “pension”) established through public offering after excluding the highest quotation The enterprise annuity fund (hereinafter referred to as “enterprise annuity fund”) established in accordance with the measures for the administration of enterprise annuity fund and the insurance fund (hereinafter referred to as “insurance fund”) in accordance with the measures for the administration of the use of insurance funds, whichever is lower, so the relevant subsidiaries of the sponsor need not participate in the follow-up investment.
This offering does not arrange the strategic placement to the senior management and core employees of the issuer, asset management plans and other external investors. The initial number of shares invested by the relevant subsidiaries of the sponsor is 5.00% of the shares of this public offering, i.e. 1.02 million shares. The difference between the initial strategic placement and the final strategic placement will be transferred back to offline issuance.
5. The issue price is 26.27 yuan / share, and the corresponding P / E ratio is:
(1) 21.59 times (earnings per share is calculated by dividing the net profit attributable to shareholders of the parent company after deducting non recurring profits and losses audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital before the issuance);
(2) 21.05 times (earnings per share is calculated by dividing the net profit attributable to shareholders of the parent company before deducting non recurring profits and losses audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital before this issuance);
(3) 28.78 times (earnings per share is calculated by dividing the net profit attributable to shareholders of the parent company after deducting non recurring profits and losses audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital after this issuance);
(4) 28.06 times (earnings per share is calculated by dividing the net profit attributable to shareholders of the parent company before deducting non recurring profits and losses audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital after this issuance).
6. The issue price is 26.27 yuan / share. Investors are requested to judge the rationality of the issue price according to the following conditions.
(1) According to the industry classification guidelines for listed companies (revised in 2012) issued by China Securities Regulatory Commission, the industry of Hongde Co., Ltd. is “C33 metal products industry”. As of March 31, 2022 (T-3), the average static P / E ratio of the industry in the latest month released by China Securities Index Co., Ltd. was 26.46 times.
The issuance price of 26.27 yuan / share corresponds to the issuer’s diluted P / E ratio of the lower net profit attributable to the parent before and after deducting non recurring profits and losses in 2020, which is 28.78 times higher than the average monthly static P / E ratio of “C33 metal products industry” released by China Securities Index Co., Ltd. on March 31, 2022 (T-3), with an excess range of 8.77%,
As of March 31, 2022 (T-3), the valuation levels of comparable listed companies are as follows:
Securities code securities abbreviation: static pre market EPS (yuan / post EPS (yuan / closing price earnings ratio – non pre earnings ratio – non post deduction shares) (yuan / share) (2020) (2020)
Riyue Heavy Industry Co.Ltd(603218) .SH Riyue Heavy Industry Co.Ltd(603218) 1.0122 0.9907 20.70 20.45 20.89
Jiangsu Sinojit Wind Energy Technology Co.Ltd(601218) .SH Jiangsu Sinojit Wind Energy Technology Co.Ltd(601218) 0.2392 0.2362 5.42 22.66 22.95
Suzhou Mingzhi Technology Co.Ltd(688355) .SH Suzhou Mingzhi Technology Co.Ltd(688355) 0.9563 0.7691 25.40 26.56 33.02
Wencan Group Co.Ltd(603348) .SH Wencan Group Co.Ltd(603348) 0.3197 0.3207 38.88 121.62 121.23
Average 23.22 25.62
Data source: Ifind
Note 1: if there is mantissa difference in the calculation of P / E ratio, it is caused by rounding;
Note 2: EPS before / after deduction of non recurring profit and loss in 2020 = net profit attributable to the parent before / after deduction of non recurring profit and loss in 2020 / total share capital on T-3 day; Note 3: among the comparable companies disclosed in the prospectus, Yongguan group is a Taiwan share and is not comparable;
Note 4: the extreme value influence is excluded when calculating the average value of P / E ratio, so the data of Wencan Group Co.Ltd(603348) is not included.
The pricing rationality of this offering is as follows:
In terms of industry position, the company is one of the major suppliers of key casting products at home and abroad. Relying on its advantages in technology, quality and scale, the company has established long-term and stable cooperative relations with well-known customers at home and abroad, especially in the field of new energy wind power, and has achieved an industry-leading market position. The company’s main customers in the wind power equipment industry include Siemens COMESA, Xinjiang Goldwind Science And Technology Co.Ltd(002202) , nangaochi, Vestas, Crrc Corporation Limited(601766) , Enercon, etc. In addition, the company’s main customers also include Siemens Medical and Neusoft medical in the field of medical devices; Abb, Koizumi, etc. in the field of power equipment; Engel, Kraussmaffei Company Limited(600579) mafi, etc. in the field of injection molding machine; Grundfos in the field of pump and valve, etc. The company has been recognized by major customers by virtue of its product quality advantages, and has won Siemens gomeisa best quality supplier, Siemens Medical Technology Innovation Award, Xinjiang Goldwind Science And Technology Co.Ltd(002202) AAAAA supplier, Xinjiang Goldwind Science And Technology Co.Ltd(002202) long-term cooperation award, technical support award, abb excellent supplier, Grundfos excellent supplier, etc.
Compared with major comparable companies in the same industry, Hongde shares have the following competitive advantages:
Hongde Co., Ltd. specializes in the R & D, production and sales of key castings of high-end equipment. Its main products include cast iron and cast aluminum. The diversified development of “cast iron + cast aluminum” enriches the product structure. In addition, Hongde shares has the advantage of customer resources. With advanced technical advantages, strict quality control and perfect production technology, Hongde Co., Ltd. has accumulated more high-quality customer resources for a long time, and most of its main customers are well-known or leading enterprises in various fields. For example, Siemens gomeisa, Xinjiang Goldwind Science And Technology Co.Ltd(002202) , NanGaoYa, Vestas, Crrc Corporation Limited(601766) , Enercon, etc. in the field of wind power, Siemens Medical, Neusoft medical, etc. in the field of medical devices; ABB in the field of power equipment; Engel, Kraussmaffei Company Limited(600579) mafi, etc. in the field of injection molding machine; Grundfos in the field of pump and valve, etc.
Hongde Co., Ltd. has regional advantages. The company is located in Nantong, in the southeast of Jiangsu Province, adjacent to the Yellow Sea in the East and the Yangtze River in the south. It is located in the foundry industry cluster in the Yangtze River Delta. It has high industrial concentration, convenient transportation and good infrastructure, capital, labor and other factors of production. In addition, Jiangsu Province, as a key area to promote the development of onshore and offshore wind power in China during the 13th Five Year Plan period, has good conditions for the rapid development of wind power industrialization. Good location advantages can meet the company’s expanding production and sales needs.
In terms of core technology, Hongde Co., Ltd. is one of the few casting production enterprises in China that master the core technology of nodular cast iron and cast aluminum at the same time. Among them, iron castings mainly adopt nodular inoculation treatment technology of nodular cast iron, stable filling control technology, casting technology of thick section high-performance ferrite nodular iron and microstructure and control technology of high-strength, tough and thick section nodular iron; Stable mold filling control technology and key aluminum alloy casting and control technology are mainly used for aluminum castings. Hongde’s related product technology is in the first echelon with comparable listed companies in the same industries as Riyue Heavy Industry Co.Ltd(603218) , Jiangsu Sinojit Wind Energy Technology Co.Ltd(601218) , and Yongguan group, reaching the advanced level in China.
(2) Investors are reminded to pay attention to the difference between the issue price and the quotation of offline investors. For the quotation of offline investors, please refer to China Securities Journal, Shanghai Securities News, securities times, securities daily and cninfo (www.cn. Info. Com. CN) published on the same day The announcement on the initial public offering of Jiangsu Hongde Co., Ltd. (hereinafter referred to as the announcement on the listing of special parts on the GEM). (3) This offering follows the principle of market-oriented pricing. In the preliminary inquiry stage, offline institutional investors will quote based on the real subscription intention. The issuer and the sponsor (lead underwriter) will comprehensively consider the effective subscription multiple, the fundamentals of the issuer, the number of shares in this public offering, the industry of the issuer, market conditions, the valuation level of Listed Companies in the same industry Determine the issue price through negotiation based on the demand for raised funds, underwriting risk and other factors. The offering price shall not exceed the lower of the median and weighted average of the offline investors’ quotation after excluding the highest quotation, and the median and weighted average of the quotation of public funds, social security funds, pensions, enterprise annuity funds and insurance funds after excluding the highest quotation (262787 yuan / share). If any investor participates in the subscription, it shall be deemed that it has accepted the issue price. If there is any objection to the issue pricing method and issue price, it is suggested not to participate in this issue.
(4) This offering may have the risk of falling below the offering price after listing. Investors should pay full attention to the risk factors contained in the pricing marketization, know that the stock may fall below the issue price after listing, effectively improve the risk awareness, strengthen the value investment concept, and avoid blind speculation. Regulators, issuers and recommendation institutions (lead underwriters) can not guarantee that the stock will not fall below the issue price after listing.
7. Based on the issuance price of 26.27 yuan / share and 20.4 million new shares, the total amount of funds raised by the issuer is expected to be 535908 million yuan. After deducting the estimated issuance cost of about 61161700 yuan (excluding value-added tax), the net amount of funds raised is expected to be about 4747463 million yuan.
There are problems in this issuance
