Stock abbreviation: Sichuan Kelun Pharmaceutical Co.Ltd(002422) Stock Code: 002422 Sichuan Kelun Pharmaceutical Co.Ltd(002422)
And
Changjiang Securities Company Limited(000783) underwriting sponsor Co., Ltd
Please do a good job in the Sichuan Kelun Pharmaceutical Co.Ltd(002422) public issuance examination committee meeting of convertible bonds
Reply to the letter of preparation
Sponsor (lead underwriter)
(address: 28th floor, No. 1198, Century Avenue, China (Shanghai) pilot Free Trade Zone)
Date of signature: January 2002
China Securities Regulatory Commission:
According to the questions listed in the letter on making preparations for the meeting of the issuance and Examination Committee of Sichuan Kelun Pharmaceutical Co.Ltd(002422) public issuance of convertible bonds (hereinafter referred to as the “notification letter”) issued by your committee for Sichuan Kelun Pharmaceutical Co.Ltd(002422) , The sponsor Changjiang Securities Company Limited(000783) underwriting sponsor Co., Ltd. (hereinafter referred to as the “sponsor”) of this public offering of convertible corporate bonds, together with Sichuan Kelun Pharmaceutical Co.Ltd(002422) (hereinafter referred to as ” Sichuan Kelun Pharmaceutical Co.Ltd(002422) “, “company”, “issuer” or “applicant”), KPMG Huazhen Certified Public Accountants (special general partnership) (hereinafter referred to as “accountant”) Beijing Zhonglun law firm (hereinafter referred to as the “issuer’s lawyer”) and other relevant parties have checked and implemented the issues raised in the notification letter item by item. The verification and implementation of the issues involved in the notification letter are described as follows one by one.
Unless otherwise specified, the abbreviation in this reply has the same meaning as the abbreviation in the prospectus for public offering of convertible corporate bonds. The data listed in this reply may be slightly different from the results directly calculated by the relevant single data listed due to rounding. Please review. The font of this reply represents the following meanings:
Questions listed in the notification letter
Reply to the questions listed in the notification letter
The application documents such as the prospectus and this report are in regular script and bold
Amendment or supplementary disclosure of the notice
1. About the return on net assets. The applicant’s return on net assets after deducting non net assets during the reporting period was 9%, 6.07%, 4.74% and 3.37% respectively. From January to September 2021, the net profit deducted by the applicant from non parent company was 803194100 yuan, with a year-on-year increase of 110.56%. By the end of September 2021, the issuer’s accounts receivable totaled 5710.24 million yuan, with a total provision for bad debts of 189.29 million yuan. The issuer’s accounts receivable aged more than one year continued to increase to 718.82 million yuan. The applicant is requested to: (1) quantitatively explain the reasons and rationality of the sharp increase in net profit without significant increase in revenue from January to September 2021 in combination with the changes in product price and gross profit margin; (2) Combined with the policy changes of the medical industry, “two vote system” and the impact of centralized purchase, quantitatively analyze the main business strategies adopted by the company and their implementation effects, and their impact on the company’s sustainable profitability; (3) Explain the post period collection of all accounts receivable aged more than one year and the appropriateness of the provision for impairment. (4) Calculate the performance in 2021 and further explain whether the company continues to meet the conditions for issuing convertible bonds in combination with the change trend of return on net assets. The recommendation institution and the reporting accountant shall explain the verification basis and process, and express clear verification opinions.
[reply]
1、 Combined with the changes in product price and gross profit margin, it quantitatively explains the reasons and rationality for the sharp increase in net profit without significant increase in revenue from January to September 2021
(I) changes in main income statement items
From January to September 2021, the changes of the company’s main income statement items over the same period of last year are as follows:
Unit: 10000 yuan
Project: January September 2021 January September 2020
Amount change rate amount
Operating revenue 1268604.08 8.77% 1166334.89
Operating cost 560408.43 8.42% 516864.07
Gross profit of 647082.95%
Sales expenses 376671.38 2.58% 367197.00
Administrative expenses 87973.97 19.41% 73671.62
R & D expenses 118923.32 18.97% 99956.90
Financial expenses 37805.33 – 19.09% 46728.01
Total profit 90241.03 45.63% 61963.95
Net profit 74609.40 41.17% 52852.52
Including: net profit attributable to parent company 84829.32 69.16% 50146.43
Project: January September 2021 January September 2020
Amount change rate amount
Minority shareholders’ profit and loss -10219.92 -477.66% 2706.09
From January to September 2021, the company realized an operating revenue of 12686040800 yuan, an increase of 8.77% over the same period of last year; The company realized an operating gross profit of 7081.9565 million yuan, an increase of 9.04% over the same period of last year, and a gross profit increase of 587.2483 million yuan.
(II) changes in product selling price and gross profit margin
From January to September in 2020 and 2021, the gross profit margin of the company’s main business is 54.99% and 56.74% respectively. The specific changes of sub sectors are shown in the table below:
Unit:%
Project from January to September 2021 to 2020
Infusion 66.13 66.05
Non infusion 44.18 40.37
Including: preparation products and others 61.56 59.57
Antibiotic intermediates and APIs 23.77 21.56
Gross profit margin of main business 56.74 54.99
1. Infusion products
In 2020 and January September 2021, the gross profit margin of the company’s infusion products was 66.05% and 66.13% respectively. The company’s infusion products are divided into ordinary infusion and therapeutic / nutritional infusion. The specific sub products are introduced as follows:
Unit: yuan / bottle, bag
January September 2021
Product quantity
(10000 bottles and bags) unit price unit cost gross profit margin sales proportion
Ordinary infusion 259441.93 1.66 0.67 59.69% 60.60%
Therapeutic / nutritional infusion 31611.47 8.84 2.12 76.03% 39.40%
Year 2020
Product quantity
(10000 bottles and bags) unit price unit cost gross profit margin sales proportion
Ordinary infusion 333805.04 1.65 0.67 58.98% 59.82%
Therapeutic / nutritional infusion 41763.22 8.83 2.07 76.57% 40.18%
From January to September 2021, the overall sales of the company’s traditional infusion products recovered significantly compared with the same period last year. At the same time, the company continued to strengthen the development of the medical terminal market and sought sales increment from the product structure and medical terminals. The overall change in the year was small.
2. Non infusion preparation products and others
In 2020 and January September 2021, the gross profit margins of the company’s non infusion preparations and other products were 59.57% and 61.56% respectively. From January to September 2021, the company’s sales of non infusion preparations and other products increased year-on-year. Through the sales management and investment in the core products of non infusion preparations, the company increased the market promotion coverage of hospital channels. At the same time, the sales revenue and sales quality increased steadily under the background of large-scale national centralized procurement of bid winning varieties and continuous listing of generic drugs. From January to September 2021, the gross profit margin of the company’s non infusion preparation products and other products was 61.56%, an increase of 1.99% over 2020, mainly due to the recovery of the output in that year compared with the same period of the previous year, the purchase price of main raw materials of main products decreased compared with the same period of the previous year, and the unit packaging cost of main products decreased through technical improvement.
3. Antibiotic intermediates and APIs
In 2020 and January September 2021, the company’s gross profit margins of antibiotic intermediates and APIs were 21.56% and 23.77% respectively. During the reporting period, the changes of unit price and unit cost of the company’s main antibiotic intermediate products and their proportion in the income of antibiotic intermediate and API are as follows:
Unit: 10000 yuan / ton
January September 2021
product
Quantity (ton) unit price unit cost gross profit margin sales proportion
Erythromycin thiocyanate 2536.98 33.94 24.61 27.50% 35.31%
6-APA 5,003.36
