Gem risk tips
After this stock issue, it is planned to be listed on the gem, which has high investment risk. GEM companies have the characteristics of large investment in innovation, uncertainty about the success of the integration of new and old industries, still in the growth stage, high operation risk, unstable performance and high delisting risk. Investors are facing greater market risks. Investors should fully understand the investment risks of the gem and the risk factors disclosed by the company, and make investment decisions prudently.
Zhejiang Shenglian Chemical Co., Ltd
Zhejiang Realsun Chemical Co.,Ltd.
(address: No. 9, Donghai Third Avenue, toumengang new area, Linhai City, Zhejiang Province) prospectus for IPO and listing on GEM
Sponsor (lead underwriter)
(address: No. 95, dongchenggenshang street, Qingyang District, Chengdu)
Issuer statement
The issuer and all directors, supervisors and senior managers promise that there are no false records, misleading statements or major omissions in the prospectus and other information disclosure materials, and bear corresponding legal liabilities.
The controlling shareholder and actual controller of the issuer promise that there are no false records, misleading statements or major omissions in this prospectus, and bear corresponding legal liabilities.
The person in charge of the company, the person in charge of accounting and the person in charge of the accounting agency shall ensure that the financial and accounting materials in the prospectus are true and complete.
The issuer and all directors, supervisors, senior managers, controlling shareholders, actual controllers, sponsors and underwriting securities companies promise to compensate investors for losses in securities issuance and trading due to false records, misleading statements or major omissions in the issuer’s prospectus and other information disclosure materials.
The sponsor and the securities service institution promise to compensate the investors for the losses caused to the investors due to the false records, misleading statements or major omissions in the documents prepared and issued for the issuer’s public offering.
Any decision or opinion made by the CSRC and the exchange on this issuance does not indicate that they guarantee the authenticity, accuracy and completeness of the registration application documents and the information disclosed, nor do they indicate that they make substantive judgment or guarantee on the profitability, investment value of the issuer or the income of investors. Any statement to the contrary is a false statement.
According to the provisions of the securities law, the issuer shall be responsible for the changes in the operation and income of the issuer after the shares are issued according to law; Investors independently judge the investment value of the issuer, make investment decisions independently, and bear the investment risks caused by the changes in the operation and income of the issuer or the changes in the stock price after the shares are issued according to law.
Issue overview
Type of shares issued: RMB ordinary shares (A shares)
The number of shares issued and offered this time is 27 million shares, accounting for 25% of the total share capital after issuance. The shares issued this time are new shares, and the shareholders of the company do not offer shares publicly
The par value of each share is RMB 1.00
The issue price per share is 29.67 yuan / share
Issue date: April 1, 2022
Stock exchange to be listed Shenzhen Stock Exchange gem
The total share capital after issuance is 108 million shares
Sponsor (lead underwriter) Sinolink Securities Co.Ltd(600109)
Signing date of prospectus: April 11, 2022
Tips on major issues
This major event reminder only gives a brief reminder of the company’s special events and major risks. Investors should carefully read the text of this prospectus and have a comprehensive understanding of the company. 1、 Major commitments made by the subject of this offering
The company reminds investors to carefully read the important commitments made by the company, shareholders, directors, supervisors, senior managers, sponsors and other securities service institutions of this offering and the binding measures for failure to fulfill the commitments. For specific commitments, please refer to the relevant contents of “III. commitments related to investor protection” in “section XIII documents for future reference” of this prospectus. The company reminds investors to carefully read all contents of this chapter. 2、 Important risk tips
The company specially reminds investors to pay attention to the following risks. In addition, before making investment decisions, please carefully read all the contents of “section IV Risk Factors” in this prospectus. (I) risk of macroeconomic fluctuations affected by the epidemic
The company is mainly engaged in the R & D, production, sales and import and export trade of fine chemicals focusing on pharmaceutical intermediates, pesticide intermediates, electronic chemicals and chemical solvents. The products are mainly used in many fields such as medicine, pesticides, electronic chemicals and cosmetics, which are greatly affected by the macro economic situation.
Since the beginning of 2020, the outbreak of New Coronavirus pneumonia and the following “global pandemic” have faced greater uncertainty in the global economy. Although at this stage, due to the need to fight the epidemic, the demand for various antibacterial drugs has increased significantly, which directly drives the demand for intermediates and APIs, and the increase of customers’ procurement from the company has promoted the increase of the company’s sales revenue and net profit in 2020, if the impact of the epidemic can not be eliminated in a short time, the overseas logistics obstacles and the global economic recession will greatly impact the survival of overseas drug manufacturers and affect the demand of the terminal market, So as to have a certain impact on the company’s performance. (II) risk of product price decline
The company’s sales price in China is affected by market supply, raw material prices and other factors, showing obvious fluctuations. In the first half of 2020, the outbreak of COVID-19 broke out, and the raw materials of New Coronavirus related antimicrobial drugs were in great demand in the market. The selling price was higher. The products of the issuers were mainly oriented to pharmaceutical intermediates. The main products ABL were in short supply in the market. The sales price of ABL increased gradually in 2020, leading to the rise of gross margin level. When the market environment changes, such as the elimination of the impact of the epidemic, the reduction of the company’s downstream industry’s demand for the company’s main products, and the company’s failure to explore the downstream customer market in time, there is a risk of product price decline, gross profit margin decline, slow growth of operating performance or performance decline. (III) fluctuation risk of raw material purchase price and trade business product purchase price
The main raw materials required for the company’s production include BDO, ethyl acetate, ethyl trifluoroacetate, phosphoric acid, toluene, metal sodium, etc., and their prices fluctuate due to the changes of oil prices, national industrial policies, market supply and demand and other factors. During the reporting period, the proportion of direct materials in the production cost was about 80% on average. Due to the price adjustment strategy of competitors and the bargaining power of some products to customers, the risks caused by the rise of raw material prices could not be fully and timely transmitted to the downstream.
If the price of the company’s main raw materials continues to rise sharply or the supply and demand is tight in the future, the company’s procurement and production costs will be increased, and the company may face the risk of reduced production sales and declining operating performance due to the failure to obtain sufficient raw materials in time, which may have an adverse impact on the company’s profitability. (IV) safety production risk
Dangerous chemicals and corrosive or toxic substances are involved in the production and operation of the company’s main products, which are dangerous. Although the company has not been subject to major administrative penalties for violating China’s laws and regulations on work safety supervision and administration, nor has there been any major production safety accident during the reporting period, the risk of safety accidents caused by improper production process management control or other uncertain factors, which will have an adverse impact on the company’s property, employees’ personal safety and the surrounding environment, cannot be ruled out. (V) environmental compliance risk
The production process of the company involves certain “three wastes” discharge. With the increasing improvement of national environmental pollution control standards, the cost of environmental protection treatment of the company will continue to increase. At present, the company complies with the current national and local environmental protection laws and regulations, the environmental protection equipment is kept in good condition and normal operation, and the main pollutants discharged in the production process meet the national emission standards. However, in case of environmental protection facility failure, pollutant leakage, output exceeding the treatment capacity of environmental protection facilities, etc., environmental protection accidents may be caused, which will have an adverse impact on the company’s future production and operation. (VI) customer concentration risk
The company’s final customers are mainly abroad. In 2018, 2019, 2020 and January June 2021, the sales amount of the company’s top five customers accounted for 49.12%, 58.09%, 47.01% and 51.11% of the operating revenue respectively. In particular, the total sales amount to Bayer Group and Laurence scientific research accounted for 37.01%, 50.28%, 38.43% and 34.10% of the operating revenue of each period respectively. There is a risk of concentration of sales customers. If the market competition of main customers’ products increases or substitutes for related products appear, resulting in a decline in demand, it will directly affect the operating performance of the company and have a great impact on the sustainable operation ability of the issuer. (VII) exchange rate fluctuation risk
With the expansion of the company’s overseas business in recent years, the company’s export business income has increased year by year, exceeding the domestic sales business income. The company’s export business is settled in US dollars. During the reporting period, the sales revenue of export products in each period was 3052767 million yuan, 3753722 million yuan, 3618512 million yuan and 2375843 million yuan respectively, accounting for 66.25%, 68.78%, 53.23% and 54.37% of the operating revenue respectively.
During the reporting period, affected by the national policy of promoting the reform of RMB exchange rate formation mechanism, expanding the fluctuation range of RMB against major currencies and the global economic situation, the exchange rate of RMB against the US dollar generally showed a downward trend, but the stage volatility was large. The exchange gains and losses of the company during the reporting period were -6.526 million yuan, – 3.5478 million yuan, 9.0576 million yuan and 1.9327 million yuan respectively. With the growth of the company’s export business, if the exchange rate fluctuation of RMB against US dollar and euro increases in the future, it may have a certain impact on the company’s performance. (VIII) international trade policy risks
During the reporting period, the company’s export sales revenue accounted for 66.25%, 68.78%, 53.23% and 54.37% of its operating revenue respectively. The issuer’s main products sold abroad were ABL, E2, etc., and overseas customers were mainly concentrated in India, South Korea, Japan, Germany, Switzerland, the United States and other countries and regions. During the reporting period, except that the United States imposed tariffs on some products of the company, other countries did not adopt additional tariffs, quotas or other restrictive policies on the import of issuer products. However, if the trade policies, political and economic environment and other factors of major importing countries or regions change in the future, it will have an adverse impact on the business development and profitability growth of the company.
India is still a serious epidemic area, and the border friction between China and India has increased the uncertainty of the political situation of the two countries. If the covid-19 virus pneumonia epidemic in this area continues to intensify and cannot be effectively controlled in the short term, it will have an adverse impact on the issuer’s future performance; If the negative factors of political relations between the two countries continue to ferment, it is not ruled out that the Indian government will raise tariffs or take other restrictive / alternative measures on the import of products from China, and the additional tariffs or other restrictive / alternative measures will have an adverse impact on the company’s sales in the Indian market. In addition, in terms of pharmaceutical intermediates, India has not issued relevant intellectual property protection policies so far. If other enterprises infringe the company’s intellectual property rights in the future, the relevant core technologies are leaked and learned and imitated by competitors in the same industry, the company’s intellectual property rights cannot be fully protected, and the company’s future business development and production and operation may be significantly and adversely affected. (IX) risks improperly controlled by the actual controller
The actual controllers of the company are Mou Jianyu, Yu Kuai and Yu Xiaoou. Mou Jianyu and Yu Xiaoou are husband and wife. Yu Kuai is the daughter of Mou Jianyu and Yu Xiaoou. Mou Jianyu directly holds 12.35% of the shares of the company and Yu Kuai directly holds 11.11% of the shares of the company. At the same time, Mou Jianyu and Yu Kuai indirectly hold 70.37% of the shares of the company through Liansheng group and 1.97% of the shares of Liansheng chemical through Taizhou high investment, It holds 95.80% of the equity of the company in total.
The controlling shareholders and actual controllers of the company can use their controlling position to have a substantial impact on the company’s production and operation decisions and personnel arrangements by exercising their voting rights. If the actual controller of the company cannot make reasonable decisions, it will have a certain adverse impact on the production and operation of the company. 3、 Other matters (I) treatment of accumulated undistributed profits before the issuance
On September 18, 2020, the eighth extraordinary general meeting of shareholders of the company in 2020 passed a resolution agreeing that after the company’s initial public offering of RMB common shares (A shares) and listing on the gem, if the public offering of shares to the public is successfully completed, the undistributed profits accumulated before the initial public offering of shares will be shared by the new and old shareholders according to the shareholding ratio after the company’s initial public offering and listing. (II) profit distribution policy after the issuance and dividend return plan for three years after listing
The company has formulated the profit distribution policy after the issuance and the three-year dividend return plan after listing. See “(I) dividend distribution policy and decision-making procedure after the issuance” in “II. Dividend distribution related policies” of “section 10 investor protection” of this prospectus.
4、 From the audit base date of financial report to the signing date of the prospectus, the issuer’s business model and tax policies have not changed significantly, major customers and suppliers have not changed significantly, and other major events that may affect the judgment of investors have not occurred from the audit base date of financial report to the signing date of this prospectus.
Tianjian Certified Public Accountants (special general partnership) reviewed the financial data of the issuer in the third and fourth quarters of 2021 and issued the review reports of “tianjianshen [2021] No. 9943” and “tianjianshen [2022] No. 86”.
The issuer’s main financial information and operating conditions in 2021 are as follows:
Unit: 10000 yuan
Change proportion of the project from 2021 to 2020
Operating income 83,30
