Qingyan environment: IPO and listing on GEM prospectus gem investment risk tips: after this stock issuance, it is planned to be listed on GEM market, which has high investment risk
Capital risk. GEM companies have large investment in innovation, uncertainty about the success of the integration of new and old industries, and are still in a dilemma
With the characteristics of long-term growth, high operation risk, unstable performance and high delisting risk, investors are facing a large market
Risk. Investors should fully understand the investment risks of the gem and the risk factors disclosed by the company and be cautious
Make investment decisions.
Qingyan Environmental Technology Co., Ltd. (c527, 5th floor, Tsinghua University Research Institute, No. 019, Gaoxin South seventh Road, high tech Zone community, Yuehai street, Nanshan District, Shenzhen)
Prospectus for initial public offering and listing on GEM
Sponsor (lead underwriter)
(Building 4, No. 66 Anli Road, Chaoyang District, Beijing)
statement
Any decision or opinion made by the CSRC and the exchange on this offering does not indicate that they have guaranteed the authenticity, accuracy and completeness of the registration application documents and the information disclosed, nor that they have made substantive judgments or guarantees 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.
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 they have prepared and issued for the public offering of the issuer.
Issue overview
Type of shares issued: RMB ordinary shares (A shares)
27.01 million RMB ordinary shares (A shares) were issued, accounting for 25.01% of the total number of shares after the issuance. This offering does not involve the public offering of shares by the original shareholders
The par value of each share is RMB 1.00
The issue price per share is 19.09 yuan
Issue date: April 12, 2022
Stock exchanges and sectors to be listed Shenzhen Stock Exchange gem
The total share capital after issuance is 108.01 million shares
Sponsor and lead underwriter China Securities Co.Ltd(601066)
Signing date of prospectus: April 18, 2022
Tips on major issues
The company specially reminds investors to pay full attention to the following major matters and carefully read all contents of this prospectus. 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 this offering and the binding measures for failure to fulfill the commitments. For specific commitments, please refer to the relevant contents of “III. specific commitments related to investor protection” in the “annex to section 13” of this prospectus. 2、 Profit distribution policy and commitment
For the specific contents and commitments of the issuer’s profit distribution policy, please refer to the relevant contents of “(I) dividend distribution policy and decision-making procedure after the issuance” in “II. Dividend distribution policy and decision-making procedure after the issuance, and the difference of dividend distribution policy before and after the issuance” in “section 10 investor protection” of this prospectus. 3、 Major risk tips
In addition to the above important matters, the company reminds investors to carefully read the “risk factors” part of this prospectus and pay special attention to the following risks: (I) the risk that the performance cannot grow continuously and rapidly or even decline
The development of the company’s business is affected by internal and external factors. In the future, there are risks that the company’s business scale cannot grow continuously and rapidly due to the slowdown of downstream demand, the failure of technology promotion to meet expectations, the birth of new technologies, the entry of emerging competitors, the intensification of industry competition and the uncertainty of business growth point cultivation. The details are as follows: 1. The slowdown of downstream demand
As the developer of water treatment equipment, the company’s downstream customers are the engineering contractors of water environment treatment projects, and the final owners are local governments. Therefore, the company is in the upstream of the industry chain, and its business development is affected by the downstream demand. If the downstream demand slows down, it will have an adverse impact on the company’s business development.
2. Technology promotion fails to meet expectations
Rpir technology is independently researched and developed by the company’s core team. After the establishment of the company, it has been commercially applied and promoted. The technology promotion time is short and is currently in the initial promotion period. A2O, MBR, MBBR and other sewage treatment technologies were born abroad and have been verified by long-term practice in sewage treatment projects abroad. They have competitive advantages such as scale advantage, customer advantage, promotion advantage, brand advantage and so on. Although rpir technology has the characteristics of low investment and small land occupation, it also has some technical limitations, such as the cleaning and replacement cost of inclined pipe packing, the control accuracy of suspended solids in single ring section is less than that of MBR membrane filtration technology, and the cost of water distribution in a small amount of pipeline. Due to the cost of technology replacement, obvious first mover advantage of traditional technology, inertia of customer selection, different promotion subjects, long construction cycle of long-term projects, promotion efforts of the company need to be improved, and the technical indicators are only part of the factors considered by customers, rpir technology has a low market share compared with other sewage treatment technologies, and there is a certain gap in brand influence.
If the company cannot further promote its own technology in the future, it may face the risk of not increasing its market share.
3. The birth of new technologies, the entry of emerging competitors and the intensification of industry competition
At present, the technology and market demand of the sewage treatment industry are constantly changing. In the future, if more competitive technologies and enterprises in terms of land occupation, investment and operating costs are produced in the market, they will also seize the market share and have a certain impact on the technology promotion of the company.
4. There is uncertainty in the cultivation of business growth points
There are certain uncertainties in the R & D of new technologies and the implementation of technology industrialization. In the future, if the growth of existing products slows down and the company fails to launch new products in time, or fails to effectively explore new application fields and business regions to form business growth points, it may affect the rapid growth of business.
In the last three years, the company’s operating revenue was 72.52 million yuan, 1509784 million yuan and 1824018 million yuan respectively. The growth was rapid in 2019, but the growth slowed down in 2020. From January to September 2021, the growth of the company’s business income continued to slow down. While the growth of income slowed down, the impact of factors such as the increase of low gross profit margin items and the decrease of ton water treatment price led to the decrease of gross profit margin of main business, the increase of period expenses caused by the increase of employee compensation and share based payment expenses, and the increase of credit impairment loss caused by the growth of the scale of accounts receivable (including contract assets) were superimposed, As a result, the net profit attributable to the shareholders of the parent company decreased from January to September 2021 after deducting non recurring profits and losses.
If the above or other factors leading to the slowdown of business income growth or the decline of profitability still occur in the future business development of the company, and the company fails to take effective measures, there is still a risk that the operating performance will not grow continuously and rapidly, or even decline.
(II) risk of failure of scientific and technological innovation
Since its establishment, the company has been committed to the research and development of sewage treatment technology and products. Due to the relatively high R & D barriers of innovative products in the field of water treatment, and a certain process is required for new products from successful R & D to industrialized application. If the company can not accurately grasp the technology development trend in the future, and there is certain uncertainty in R & D, it may lead to the failure of the company’s scientific and technological innovation, the iteration of technology upgrading does not meet expectations, and the company cannot launch new products in line with the market demand as planned, which will have an adverse impact on the company’s operation. (III) risk of loss of key technology R & D personnel
Since the introduction of the “ten water policies” and other policies, the national sewage treatment field has entered the “effect era”, and the traditional process is difficult to meet the increasing sewage treatment standards and the construction needs of sewage treatment projects under the condition of limited land resources. The water treatment industry is rapidly changing from investment driven to technology driven, the importance of core technical talents is increasing, the demand of enterprises in the industry for technical R & D personnel is growing rapidly, and the competition for excellent talents is becoming increasingly fierce. With the further expansion of the company’s business scale and the steady implementation of fund-raising projects in the future, the company’s demand for high-quality technology R & D talents will continue to increase. If the company’s key technology R & D personnel lose or fail to supplement the required talents in time, it will have an adverse impact on the company’s business. (IV) risk of decline in gross profit margin
During the reporting period, the gross profit margin of the company’s main business was 65.24%, 63.19%, 60.95% and 54.65% respectively. The overall gross profit margin level was high, but there was a continuous downward trend. On the whole, the change of the company’s gross profit margin is mainly affected by industrial policy, industrial competition, technology research and development, market development, customer customization demand, product sales price, raw material price, labor cost and other factors. In the future, with the change of industrial policy, the continuous maturity and promotion of water treatment technology and the expansion of project application area of the company, the company cannot maintain competitiveness in technology research and development, market development and industrial application, so the company has the risk of continuous decline of gross profit margin, as follows:
1. Market competition may gradually intensify, leading to the risk of decline in gross profit margin
China’s water treatment industry generally started late, and due to the characteristics of low degree of marketization and strong regionality in the early development of the industry, as well as more water treatment technical routes and longer water treatment process links, there are a large number of enterprises in the industry and fierce market competition. Rpir technology is independently developed by the core team of the company, which has the characteristics of low investment and less land use, but it is still in the initial promotion stage. Compared with traditional sewage treatment technologies with obvious first mover advantages such as A2O and MBR, rpir technology has relatively low market share and relatively insufficient brand influence. During the reporting period, based on the needs of maintaining long-term customers and developing new customers, the company made certain concessions in the negotiation process of some projects, resulting in a relatively low gross profit margin of some projects. If the market competition in the water treatment industry where the company is located is further intensified in the future, which will have an adverse impact on the bargaining power of the company, there is a risk that the gross profit space of the company will be further compressed and the gross profit margin will decline.
2. Risk of decrease in gross profit margin due to increased customized demand from customers
From January to June 2021, the gross profit margin of rpir process package business of the company was 56.92%, which decreased compared with that in 2020. The main reason is that the gross profit margin of impure rpir equipment projects decreased significantly, which lowered the gross profit margin of the current period. At the same time, the change of rpir process package revenue structure also had a certain impact on the gross profit margin of rpir process package. Rpir process package is a product developed by coupling process design, core equipment, auxiliary equipment and materials. Among them, auxiliary equipment and materials such as aerator, pump and fan belong to general equipment in the market, and the gross profit margin is lower than that of core equipment. During the reporting period, in order to meet the customized needs of customers and consider its own business development strategy, the company had some non pure rpir equipment projects with high cost of auxiliary equipment and materials, resulting in low gross profit margin. The gross profit margin of non pure rpir equipment project decreased from 65.23% in 2020 to 34.72% from January to June 2021, which is the main reason for the decline of gross profit margin of rpir process package. If the proportion of auxiliary equipment and materials continues to increase with the increase of customized demand of customers in the future, resulting in a further decline in the gross profit margin, or the proportion of the company’s non pure rpir equipment project business increases, the company has the risk of further decline in the gross profit margin.
3. The change of revenue structure of rpir process package leads to the risk of decline in gross profit margin
During the reporting period, the gross profit margin of rpir process package was 69.92%, 66.47%, 66.06% and 56.92% respectively. It decreased significantly from January to June 2021, which was mainly affected by the large decline of gross profit margin of non pure rpir equipment projects. At the same time, the change of revenue structure of rpir process package also had a certain impact on the gross profit margin of rpir process package. During the reporting period, the company’s rpir all-in-one machine project accounted for 3.10%, 0.83%, 3.70% and 16.66% of the revenue of rpir process package respectively, with a large increase from January to June 2021. Due to the fact that the company’s rpir all-in-one machine needs to integrate electrical materials, pumps, fans and other auxiliary equipment in the box in addition to the box structure, the overall gross profit level of the company’s rpir all-in-one machine project is lower than that of rpir process package in 2020, The increase of its revenue proportion has a certain impact on the gross profit margin of rpir process package. If the future
