About Zhejiang Haizheng biomaterials Co., Ltd
Application documents for initial public offering and listing on the science and Innovation Board
Notes on financial matters in the audit inquiry letter
TJH [2021] No. 2005
Shanghai Stock Exchange:
We have received the inquiry letter on the examination of the application documents for the initial public offering of shares and listing on the science and Innovation Board of Zhejiang Haizheng biomaterials Co., Ltd. (szksh [2021] No. 654, hereinafter referred to as the inquiry letter) transferred from China Securities Co.Ltd(601066) . We have carefully verified the financial matters of Zhejiang Haizheng biomaterials Co., Ltd. (hereinafter referred to as Haizheng biomaterials Co., Ltd. or the company) mentioned in the audit inquiry letter, and now report as follows.
Unless otherwise specified in this note, the amount unit is RMB.
1、 About sales and key customers (audit inquiry question 5)
According to the disclosure in the prospectus, (1) during the reporting period, the sales unit price of pure polylactic acid and composite modified polylactic acid showed an upward trend. (2) Guangdong Yike City, which has a large scale of business cooperation, and Kobe Jinghua, Japan, signed an agency agreement with the company and obtained the agency right in Guangdong and Japan.
The issuer is requested to explain: (1) whether the price and change trend of the issuer’s main products pure polylactic acid and composite modified polylactic acid are significantly different from the sales unit price of similar products in the market; (2) List the composition of revenue in the reporting period by terminal application field; (3) The company’s sales of the top ten customers in each period of the report period, including but not limited to product type, application field, sales amount and proportion, and the basic information of the top ten customers in each period of the report period, including but not limited to customer name, establishment time, registered capital, main business, shareholding structure, and whether there is an association relationship with the company, related parties and former employees; (4) Whether there are natural person customers during the reporting period, and if so, explain their sales amount and proportion; (5) The main partners, terms of cooperation, terms of payment and credit period of trade sales, the main terms and agreements of agency agreements signed by the issuer with Guangdong Yike city and Kobe Jinghua in Japan, whether the business model is consignment sales, and whether there are contradictions with the buyout sales disclosed by the issuer; (6) Whether the export tax rebate matches the issuer’s overseas sales scale.
The recommendation institution is requested to check the above matters and express clear opinions. The recommendation institution and the reporting accountant are requested to explain: (1) the verification procedures performed on major customers during the reporting period; (2) The verification of the issuer’s export revenue and the verification conclusion; (3) The verification of the issuer’s trade sales revenue and the performance of major trade customers and the verification conclusion.
（1） Whether the price and change trend of the company’s main products pure polylactic acid and composite modified polylactic acid are significantly different from the sales unit price of similar products in the market
1. During the reporting period, the sales amount, sales quantity and average price of the company’s main products pure polylactic acid and composite modified polylactic acid are as follows:
Product category project January June 2021 2020 2019 2018
Sales amount 14841.40 11393.86 8413.82 118719000 yuan
Sales quantity 6103.20 4599.10 4702.36 7508.18 pure polylactic acid (ton)
Average price: 243, 248, 179, 15800 yuan / ton
Price change – 2.20%, 38.55%, 13.29%-
Sales amount: 1125338, 13978.33, 1417457, 107226800 yuan
Sales quantity 4905.13 6599.55 8169.08 6617.32 composite modified (ton)
Average price of polylactic acid
(10000 yuan / ton) 2.29 2.12 1.74 1.62
Price change 8.02%, 21.84%, 7.41%-
Note: the above average price is the sales price excluding tax
During the reporting period, the price trend of pure polylactic acid and composite modified polylactic acid in each quarter of the company is as follows:
It can be seen from the above table that the average price of pure polylactic acid of the company generally showed an upward trend in 2018-2020 and January June 2021, among which the price in 2019 increased slightly year-on-year; In 2020, the price increased by 38.55%, with a large increase; The price from January to June 2021 is basically the same as that in 2020. Since the composite modified polylactic acid is produced with pure polylactic acid as the base material, the change trend of its average selling price is generally consistent with that of pure polylactic acid.
During the reporting period, the main factor affecting the company’s product price was the change in the supply and demand relationship of polylactic acid market caused by the “plastic restriction and prohibition” policy outside China. In terms of using degradable materials to replace traditional plastics, Europe and the United States have been exploring earlier, and the terminal market of polylactic acid materials is mainly in Europe and the United States. Since 2017, the introduction of the policy represented by the notice on the implementation plan of prohibiting the entry of foreign garbage and promoting the reform of solid waste import management system has forced other countries to find solutions to their own solid waste disposal problems, making it a consensus of all countries to replace traditional plastics with degradable materials such as polylactic acid, and the polylactic acid market is gradually heating up. In January 2020, with the introduction of a series of policies represented by the opinions on further strengthening plastic pollution control, the specific schedule of “plastic restriction and plastic prohibition” was implemented. The end of 2020 became the first time point to restrict the production and use of non degradable plastics. These policies completely opened the production and product end market of polylactic acid industry in China, It has greatly promoted the development of China’s polylactic acid market. Under the influence of the above policies, the market demand for polylactic acid continued to grow during the reporting period; At the same time, due to the technical limitations of the “two-step” process and the shortage of key raw material lactide, China’s polylactic acid enterprises have a low output of polylactic acid.
Therefore, the price of the company’s products generally showed an upward trend, and rose sharply in 2020 due to the introduction of the schedule of “plastic restriction and prohibition”.
2. Price of similar products in the market
In terms of import price of polylactic acid, the import of polylactic acid in the Chinese market in each period of the reporting period is as follows:
Project from January to June 2021, 2020, 2019 and 2018
Import amount (USD 10000): 5039.62 8213.77 5846.39 3701.20
Import quantity (ton) 14897.61 25740.63 24471.05 15793.50
Import price (10000 USD / ton) 0.34 0.32 0.24 0.23
Import price converted into RMB (10000 yuan / ton) 2.20 2.15 1.65 1.57
Note 1: the import amount and quantity come from China Customs Statistics platform
Note 2: the import price converted into RMB is converted based on the arithmetic mean of the middle rate of RMB against US dollar at the beginning and end of the period
In terms of the selling price of similar products of Chinese polylactic acid enterprises, the output of polylactic acid is low due to the technical limitations of Chinese polylactic acid enterprises that can not get through the “two-step” process and the shortage of key raw material lactide. According to the data disclosed by Ningbo Jialian Technology Co., Ltd. (hereinafter referred to as Jialian Technology), the prices of polylactic acid purchased by Jialian technology in 2018-2020 and January June 2021 are as follows:
Unit: 10000 yuan / ton
Project from January to June 2021, 2020, 2019 and 2018
The overall average purchase price of polylactic acid is 2.06 1.70 1.65 1.60
The average purchase price of imported polylactic acid was not disclosed 1.86 1.59 1.57
The average purchase price of domestic polylactic acid was not disclosed 2.55 1.99 7.92
Note 1: the above data comes from the prospectus and other public disclosure materials of Jialian technology
Note 2: Jialian technology’s average purchase price of domestic polylactic acid in 2018 was high, which was due to the small purchase volume in that year
To sum up, the average sales price of the company’s products is basically consistent with the change trend of the price of similar products in the market, showing an overall upward trend, and the increase is large in 2020. In addition, the selling price of the company’s products is also consistent with the changes in industrial policies.
（2） Revenue composition in the reporting period by terminal application field
In terms of application mode, due to its good mechanical and physical properties, polylactic acid is suitable for extrusion molding, injection molding, extrusion blow molding, spinning, foaming and other main plastic processing processes, and can be made into films, sheets, fibers, silk, powder and other forms. With the passage of time, the application scenarios of polylactic acid in the world continue to expand. At present, polylactic acid has been widely used in food contact packaging and tableware, membrane bag packaging, shale gas mining, fiber, fabric, 3D printing materials and other products and fields, and its application in medicine is being further explored
Field, auto parts, agriculture, forestry and environmental protection. In China, packaging and food containers
Tableware, disposable plastic products, membrane products and 3D printing materials are the fields where polylactic acid is widely used. Among them, membrane products have soft texture, and polylactic acid usually needs to be blended with other materials to meet the requirements
The flexible requirements of these products.
According to Wohlers published by Wohlers associates, a global authoritative 3D industry research institution
Report 2021, the global market scale of 3D printing consumables in 2020 is estimated to be USD 2.105 billion, compared with
9.9% growth in 2019; 49% of its market share is polymer materials and 40% is metal materials; 2020
PLA has become the second richest product category among 3D printing polymer consumables, from 2017 to
The changes in the number of specific materials and products in the polymer category of 3D printing materials in 2020 are as follows:
one hundred and twenty
one hundred
eighty
sixty
forty
twenty
0
2017 2018 2019 2020
ABS PA PLA TPU PP
In the future, with the continuous growth of 3D printing market, PLA as 3D printing material will be more popular
A wide range of application scenarios.
During the reporting period, the revenue composition of the company’s products by terminal application field is as follows:
Unit: 10000 yuan
January June 2021 2019 2018
End products
Amount proportion amount proportion amount proportion amount proportion amount proportion amount proportion
Disposable tableware 5358.09 20.17% 9422.71 35.87% 9574.47 41.29% 7060.23 30.98%
Disposable 3410.00 12.84% 3803.38 14.48% 3685.45 15.89% 2708.42 11.89% extruded plastic products for food
Membrane bags
