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 risk. Investors should fully understand the investment risks of the gem and the risk factors disclosed by the company, and make investment decisions prudently.
Anhui Tongguan copper foil Group Co., Ltd
Anhui Tongguan Copper Foil Group Co., Ltd.
(No. 189, Qingxi Avenue, Chizhou economic and Technological Development Zone, Anhui Province)
Initial public offering and listing on GEM
Letter of intent
Sponsor (lead underwriter)
(No. 618, Shangcheng Road, China (Shanghai) pilot Free Trade Zone)
Co lead underwriter
(floor 22-25, block B, Ping An financial center, No. 5023, Yitian Road, Futian street, Futian District, Shenzhen)
statement
Any decision or opinion made by the CSRC and the exchange on this issuance does not indicate that they guarantee the authenticity, accuracy and integrity 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 changes in the operation and income of the issuer or changes in the stock price after the shares are issued according to law. The issuer and all directors, supervisors and senior managers promise that the prospectus and other information disclosure materials are free from false records, misleading statements or major omissions, 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 accounting institutions 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.
Overview of this offering
Type of shares issued: RMB ordinary shares (A shares)
The number of shares publicly issued this time is 207253886, accounting for 25% of the total share capital of the number of shares issued after this issuance. This issuance is all new shares, and does not involve the public offering of shares by shareholders
The par value of each share is RMB 1.00
The issue price per share is RMB []
Expected issue date: January 18, 2022
Stock exchanges and plates to be listed Shenzhen Stock Exchange gem
The total share capital after issuance is 829015544 shares
Sponsor (lead underwriter) Guotai Junan Securities Co.Ltd(601211)
Co lead underwriter Ping An Securities Co., Ltd
Signing date of the prospectus: January 10, 2022
Special risk tips
The company reminds investors to pay special attention to the following risk factors: first, the risk of performance decline
From 2018 to 2020, the company's operating revenue was 241.2351 million yuan, 239.909 million yuan and 2460.052 million yuan respectively; The net profits were 226761200 yuan, 99.6279 million yuan and 72.1939 million yuan respectively. From 2018 to 2020, the issuer's performance showed a downward trend, mainly due to the decline in the prosperity of downstream industries, the decline in unit processing income caused by the change in the supply and demand relationship of PCB copper foil, and the impact of covid-19 pneumonia. With the effective control of covid-19 pneumonia in China and the release of new energy vehicle policy dividends, the company's performance in the second half of 2020 has been significantly improved compared with the first half of the year. In the first half of 2021, benefiting from the strong demand of downstream industries and the continuous recovery of prosperity, the company realized an operating revenue of 1925.9454 million yuan, a year-on-year increase of 89.77%; The net profit was 170.8444 million yuan, a year-on-year increase of 718.73%. The operating performance of copper foil enterprises is greatly affected by the downstream market. If the downstream industry policies change, or the company cannot timely provide products and services that meet the market demand in the future, there will be a risk of significant fluctuation in the company's future performance. In addition, if the prosperity of the copper foil industry declines or the industry competition intensifies in the future, it will have an adverse impact on the company's business growth, product sales or production costs, and may still lead to the risk of fluctuation or even decline in the company's operating performance. In extreme cases, it is impossible to completely rule out the possibility that the company's operating profit will decline due to the above factors, and even the operating profit will decline by more than 50% year-on-year in the year of listing or loss in the year of listing.
In addition, the issuer's lithium battery copper foil revenue has a certain seasonality. The first quarter is a relatively low sales season, which is mainly due to the influence of factors such as the Spring Festival holiday on the downstream market. The overall operating rate in the first quarter is low, and the procurement volume of downstream lithium battery manufacturers is relatively small, while the third quarter and the fourth quarter are the peak sales seasons of lithium batteries, It is mainly due to the large sales volume in the new energy vehicle market at the downstream end of the industrial chain in the second half of the year, and new products are usually listed intensively in the second half of the year. The seasonal characteristics of the production and sales of new energy vehicles in the first half of the year is the off-season and the second half of the year is the peak season, which makes the company's lithium battery copper foil performance present a certain risk of seasonal fluctuation. 2、 High proportion of related procurement and potential risks of alternative procurement of cathode copper
During the reporting period, the company's related purchases from Tongling Nonferrous Metals Group Co.Ltd(000630) and its subsidiaries were 1708.1399 million yuan, 167.3072 million yuan, 1749.8969 million yuan and 1333.3416 million yuan respectively, accounting for 84.69%, 78.45%, 77.77% and 81.98% of the operating costs respectively, and the related purchases accounted for a relatively high proportion.
Related party procurement is mainly to purchase cathode copper from the controlling shareholder Tongling Nonferrous Metals Group Co.Ltd(000630) . During the reporting period, the amount of cathode copper purchased by the company from Tongling Nonferrous Metals Group Co.Ltd(000630) was 1634574200 yuan, 1605864200 yuan, 1699.2658 million yuan and 1302775600 yuan respectively, accounting for 81.05%, 75.30%, 75.52% and 80.10% of the operating cost respectively. The main reason why the issuer purchases cathode copper from the controlling shareholder Tongling Nonferrous Metals Group Co.Ltd(000630) is that Tongling Nonferrous Metals Group Co.Ltd(000630) cathode copper is of high quality and has regional advantages. If the company purchases cathode copper from other regions, the freight is high and does not have economic benefits. In order to maximize the company's interests, the issuer will maintain a certain scale of cathode copper related procurement in the future. Cathode copper is a bulk commodity in the futures market, and the market price is transparent. The company's procurement price refers to the public quotation in the market, and the transaction price is fair.
As a bulk commodity, cathode copper has many supply channels, and the issuer can also purchase from Jiangxi Copper Company Limited(600362) , Yunnan Copper Co.Ltd(000878) , Daye Nonferrous Metals and other cathode copper suppliers at the open market price. Due to the distance between the issuer's location and other suppliers, such as purchasing cathode copper from alternative suppliers, according to the estimated freight level, the estimated freight generated from purchasing cathode copper from Jiangxi Copper Company Limited(600362) and Daye Nonferrous Metals accounted for 1.01% and 0.96% of the purchase unit price from 2018 to 2020 respectively, and the net impact on the profit and loss of the issuer in each period of the reporting period was about 12 million yuan. In addition, the additional storage cost incurred by the issuer in purchasing cathode copper from alternative suppliers and preparing goods is expected to be 207000 / year. Therefore, if cathode copper is purchased from alternative suppliers, the net profit of the issuer from 2018 to 2020 will be about 215 million yuan, 87 million yuan and 60 million yuan respectively.
In addition, in order to improve the efficiency of the copper dissolving process, after the issuer purchases the cathode copper, it entrusts the processor to process it into copper wire, that is, the copper wire processing corresponds to the cathode copper procurement. During the reporting period, the purchase amount of the issuer's associated entrusted processing accounted for about 80% of the processing cost. In order to ensure sufficient copper wire supply guarantee, the issuer may maintain a certain scale of entrusted processing related procurement in the future. At the same time, the issuer also has other unrelated entrusted processors as supplements. There is no significant difference between the processing fee unit price of copper wire entrusted processing services purchased by the issuer from related parties and unrelated third parties.
In conclusion, in order to maximize the company's interests and achieve the continuity and stability of production, the issuer will maintain a certain scale of cathode copper and entrusted processing related procurement in the future. Among them, the alternative procurement of entrusted processing services from unrelated third parties will have no significant impact on the issuer's financial status, but if the issuer purchases cathode copper through alternative channels, The potential cost increase caused by the increase of freight and storage fee will have a certain adverse impact on the operating performance of the issuer.
3、 Copper price fluctuation risk
The cathode copper of the company is mainly purchased from the controlling shareholder Tongling Nonferrous Metals Group Co.Ltd(000630) . The supply is stable, and the purchase price refers to the public quotation in the market. In the first quarter of 2020, the average market price of cathode copper was 40100 yuan / ton. Since the second quarter of 2020, the copper price has shown a unilateral rapid rise trend. The range growth rate from April to December 2020 was 47.30%. In the first half of 2021, the average market price of cathode copper was 59100 yuan / ton, a year-on-year increase of 50.28%. From January 2020 to June 2021, the price fluctuation rate of cathode copper market was 18.16%, It has shown obvious wave dynamic potential. The fluctuation of copper price will cause the fluctuation of the company's main business cost and affect the product gross profit margin and net profit margin. Although the price of copper foil products sold by the company will refer to the market price of raw materials, due to the time difference between raw material procurement and product sales, when the market copper price fluctuates greatly in a short period of time, If the sales price of the company's products fails to reflect the change of the copper price in time, the company still faces the risk that the price fluctuation of main raw materials will have an adverse impact on the company's operating performance. In addition, the increase of copper price will increase the base of sales revenue, and then the company has the risk of decline in gross profit margin. At the same time, the copper foil industry has a great demand for working capital. If the copper price continues to rise, the demand for daily working capital of the company may rise, resulting in the pressure risk of cash flow. 4、 Risk of power and production restriction
On September 21, 2021, Anhui Energy Bureau issued the emergency notice on doing a good job in orderly power consumption (wannengyingdian [2021] No. 6). In order to ensure the stable operation of Anhui power grid and reliable power supply, Anhui Energy Bureau decided to start the province's orderly power consumption scheme from September 22, giving priority to enterprises with high energy consumption and high emission to avoid peak load. Although the issuer and its subsidiaries are not within the scope of power restriction enterprises (high energy consumption and high emission enterprises) clearly listed in the emergency notice on orderly power consumption, in view of the tense power supply and demand situation in Anhui Province, the relevant departments of Chizhou City, Tongling City and Hefei city where the issuer and its subsidiaries are located have formulated requirements for orderly power consumption. The current power restriction policy has little impact on the issuer's overall copper foil output and does not constitute a significant adverse impact. However, if the government departments further strengthen the power restriction policy in the future or have an adverse impact on the issuer's production and operation, in extreme cases, the possibility of the issuer's shutdown and power transfer is not ruled out. In addition, the issuer's main raw material is cathode copper. The preparation of cathode copper involves copper smelting process, which has a relatively high demand for power. The power restriction policy may have an adverse impact on the cathode copper production of the issuer's controlling shareholder Tongling Nonferrous Metals Group Co.Ltd(000630) . The cathode copper purchased by the issuer accounts for a small proportion of the total output of Tongling Nonferrous Metals Group Co.Ltd(000630) cathode copper, and Tongling Nonferrous Metals Group Co.Ltd(000630) cathode copper price volatility (coefficient of variation) = standard deviation / average market price * 100% of the daily cathode copper price from January 2020 to June 2021. It is promised to give priority to the purchase demand of the issuer's cathode copper, such as the intensification of local power supply tension and the further increase of power restriction policy in the future, The possibility of Tongling Nonferrous Metals Group Co.Ltd(000630) cathode copper production decline is not ruled out.
Tips on major events
The company specially reminds investors that before making investment decisions, they must carefully read the text of this prospectus and pay special attention to the following matters. 1、 Important commitments made by relevant entities of this issuance
The company reminds investors to carefully read the important commitments made by the company, shareholders, actual controllers, directors, supervisors, senior managers, other core personnel, as well as the sponsors and securities service institutions of the offering, as well as the binding measures for failure to fulfill the commitments, For specific commitments, please refer to "v. important commitments and performance made by relevant institutions and personnel" in "section 10 investor protection" of this prospectus. 2、 Dividend distribution policy
As approved by the second extraordinary general meeting of shareholders in 2020 held by the Issuer on September 21, 2020, the accumulated undistributed profits of the company before this issuance shall be jointly enjoyed by the new and old shareholders after this issuance according to the share proportion after this issuance.
The company promises to abide by and implement the profit distribution policy in the articles of association in force at that time. Investors are requested to pay attention to and read in detail the relevant contents of "(I) dividend distribution policy and decision-making procedures after the issuance" of "II. Dividend distribution policy of the issuer" in "section 10 investor protection" of this prospectus. 3、 Major risk tips
The company reminds investors to carefully read all the contents of "section IV Risk Factors" in this prospectus and focus on the following
