Stock abbreviation: Changzhou Galaxy Century Microelectronics Co.Ltd(688689) Stock Code: Changzhou Galaxy Century Microelectronics Co.Ltd(688689) Changzhou Galaxy Century Microelectronics Co.Ltd(688689) (registered address: No. 19, Changjiang North Road, Xinbei District, Changzhou City)
Prospectus for issuing convertible corporate bonds to unspecified objects
(last draft)
Sponsor (lead underwriter)
April, 2002
Statement
The company 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 for their authenticity, accuracy and completeness.
The person in charge of the company, the person in charge of accounting and the person in charge of the accounting organization shall ensure that the financial and accounting materials in the prospectus are true and complete.
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 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.
Once any investor holds the bonds through subscription, transaction, transfer, inheritance or other legal means, it shall be deemed to agree to the trustee agreement, rules of bondholders' meeting and other relevant agreements on the rights and obligations of the issuer, bondholders, bond trustee and other subjects in this prospectus.
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 securities 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 price of securities after the issuance of securities according to law.
Tips on major issues
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 important matters. 1、 The risk that the convertible bonds held by investors who do not meet the appropriateness of investors cannot be converted into shares after entering the conversion period
The company is a listed company on the science and innovation board. The investors who issue convertible corporate bonds to unspecified objects this time and participate in the conversion of convertible bonds into shares shall meet the suitability management requirements of stock investors on the science and innovation board. If the convertible bond holder does not meet the requirements for the appropriateness management of stock investors on the science and innovation board, the convertible bond holder will not be able to convert its convertible bonds into company shares.
The company has set redemption terms for this issuance of convertible bonds, including maturity redemption terms and conditional redemption terms. The maturity redemption price is determined by the board of directors (or the person authorized by the board of directors) through consultation with the sponsor (lead underwriter) according to the market conditions at the time of issuance, and the conditional redemption price is the face value plus the accrued interest for the current period. If the holders of the company's convertible bonds fail to meet the requirements for the appropriateness of the stock investors of the science and innovation board, when the convertible bonds they hold are facing redemption, considering that the convertible bonds they hold cannot be converted into the company's shares, if the redemption price determined by the company according to the redemption terms agreed in advance is lower than the price (or cost) of the investors to obtain the convertible bonds, the investors are at risk of loss due to the low redemption price. 2、 On the credit rating of the convertible bonds issued by the company this time
The convertible corporate bonds issued by the company to unspecified objects are rated by Dongfang Jincheng International Credit Evaluation Co., Ltd. according to the rating report issued by Dongfang Jincheng, the credit rating of the convertible corporate bonds is a +, the credit rating of Changzhou Galaxy Century Microelectronics Co.Ltd(688689) subject is a +, and the rating outlook is stable.
After the convertible bonds issued this time are listed, during the duration of the bonds, Dongfang Jincheng will conduct regular or irregular follow-up rating on the credit status of the bonds and issue a follow-up rating report. Regular follow-up rating shall be conducted at least once a year during the duration of the bond. If the credit rating of convertible corporate bonds is lowered due to factors such as the external business environment, the company's own situation or the change of rating standards, it will increase the investment risk of investors and have a certain impact on the interests of investors.
3、 Explanation on no guarantee provided for this issuance
There is no guarantee for the issuance of convertible bonds to unspecified objects this time. Please note that the convertible corporate bonds may have cashing risk due to the lack of guarantee. 4、 Special risk tips
The company urges investors to carefully read the full text of "risk factors" in this prospectus and pay special attention to the following risks:
(I) project risk
1. Implementation risk of investment projects with raised funds
The implementation of the investment project with raised funds will greatly promote the company's development strategy, performance level and sustainable development level. If there are major adverse changes in product R & D, market development and external economic environment during the implementation of the project, there will be uncertainty whether the project invested by the raised funds can be implemented on time, whether the production products can finally be successfully recognized by the market, whether the implementation effect of the project can meet the expectations, and whether the expected benefits of the project can be realized, which will bring certain risks to the production, operation and future development of the company. 2. Order development risk of this raised investment project
The products of the company's raised investment project are vehicle specification level semiconductor discrete devices. Vehicle specification products have the characteristics of high performance requirements, high certification threshold and long product introduction cycle. At present, the company has introduced some leading customers in the automotive electronics industry, and individual customers have entered the stage of mass production, but the overall sales scale of vehicle specification products is still small. At the same time, the vehicle specification products of Chinese semiconductor discrete device manufacturers are in the peripheral import stage, which may lead to fierce competition in the future. In the future, if the company fails to pass the product certification or vehicle test of important downstream customers, or the process of importing the supply chain of downstream customers is slow due to market competition, the development of sales orders of this raised investment project may be less than expected, thus affecting the realization of the benefits of the raised investment project.
3. Risks of depreciation of new fixed assets of raised capital investment projects affecting the company's operating performance
The investment project with raised funds involves large capital expenditure, and the new fixed assets are mainly machinery and equipment. After the construction of all the investment projects with raised funds is completed, the annual depreciation expense will increase significantly. As the project construction, capacity release and economic benefits still need some time, the newly added depreciation will affect the company's net profit and return on net assets to a certain extent, and have a certain negative impact on the company's overall profitability.
(II) operational risk
1. High risk of chip outsourcing
In each period of the reporting period, the amount of purchased chips of the company was 90.036 million yuan, 1186266 million yuan and 1872311 million yuan, and the proportion of purchased chips in the chip demand of the company was high. Chips are the core components of discrete devices. Although the company has mastered the basic principles of chip design such as semiconductor diodes and has the ability to identify the performance of discrete device chips and self-made some power diode chips, it does not have the ability to manufacture all chips required for production and operation.
At present, the market supply of small signal devices, optoelectronic devices and some power device chips purchased by the company is sufficient, and a new chip production line will be built this time. However, the products of self-made chips are mainly power diodes, and the proportion of chip outsourcing of small signal devices and power triodes (including MOSFETs) is still high. If some chips cannot be purchased due to various external reasons, or the raised investment fails to achieve the expected benefits, it will have a significant adverse impact on the production and operation of the company.
2. Market competition risk
In the international market, after more than 60 years of development, international leading enterprises represented by Infineon, ansenmey and Italian French semiconductor have occupied the main market share of global semiconductor discrete devices. At the same time, international leading enterprises master multi specification medium and high-end chip manufacturing technology and advanced packaging technology, and their R & D investment intensity is also higher than that of Chinese enterprises. They maintain an advantageous position in the global competition and almost monopolize the application fields with high profit margins, such as automotive electronics, industrial control, medical equipment and so on.
China's market is relatively scattered, with a high degree of marketization, and companies are in a state of full competition. At present, China has become the world's largest semiconductor discrete device market and maintained a rapid development speed, which may attract more competitors to join, resulting in intensified market competition. If the R & D effect of the company fails to meet the requirements of emerging markets and fields, the company's market share is at risk of decline.
3. Raw material price fluctuation risk
During the reporting period, the company's material cost accounted for more than 60% of the cost, which had a great impact on the company's gross profit margin. The price of main raw materials required by the company is closely related to the price of bulk commodities such as silicon, copper and oil, and is affected by many factors such as market supply and demand, national macro-control, International Geopolitics and so on. If the price of the above raw materials fluctuates sharply, it will directly lead to the fluctuation of the company's product cost, and then affect the company's profitability.
(III) risks related to the issuance of convertible bonds
1. Risk of principal and interest payment
During the duration of convertible bonds, the company shall pay the interest on the convertible bonds that have not been converted into shares and cash the principal at maturity. In addition, when convertible bonds trigger the resale conditions, if investors exercise the resale right, the company will face greater cash expenditure pressure in a short time, which will have a negative impact on the production and operation of the enterprise. Therefore, if the company's business activities fail to achieve the expected return and cannot obtain sufficient funds from the expected repayment sources, it may affect the company's timely and full payment of the principal and interest of convertible bonds and the acceptance ability of investors when selling back.
2. Risk of failure to convert convertible bonds into shares at maturity
The convertible bond conversion is affected by many factors, such as the conversion price, the company's stock price during the conversion period, investor preferences and expectations. If the convertible bonds cannot be converted into shares during the conversion period due to the downturn of the company's stock price or failure to meet the expectations of bondholders, the company needs to pay the principal and interest of the convertible bonds that have not been converted into shares, thus increasing the company's financial expense burden and capital pressure.
3. If the downward revision clause of the convertible bond price is not implemented or the downward revision range is uncertain during the duration of the convertible bond, the company has set the downward revision clause of the convertible bond price in this convertible bond issuance, but when triggering the downward revision clause of the convertible bond price in the future, the board of directors of the company may not propose the downward revision scheme of the convertible bond price based on multiple factors such as market factors, business development and financial status of the company, Or the board of directors proposed a downward correction plan for the conversion price, but the plan failed to pass the vote of the general meeting of shareholders and then failed to be implemented. If the above circumstances occur, the holders of convertible bonds may face the risk that the downward correction clause of the conversion price cannot be implemented during the duration. In addition, if the board of directors of the company proposes a downward correction scheme for the conversion price and is approved by the general meeting of shareholders, but the downward correction range of the conversion price in the correction scheme is uncertain, the stock price of the company may still be lower than the corrected conversion price. The occurrence of the above situation may still lead to the risk that the convertible corporate bonds held by investors cannot be converted into shares.
4. Investment value risk of convertible bonds
The duration of the convertible bonds issued this time is long, and the market interest rate and stock price level affecting the investment value of the convertible bonds are affected by many uncertain factors such as the international and Chinese political and economic situation, the overall operation of the national economy, the national monetary policy and so on. Therefore, during the duration of this convertible bond, when the above factors change adversely, the value of the convertible bond may decrease accordingly, thus causing losses to investors.
5. Risk of dilution of earnings per share and return on net assets after share conversion
After the issuance of convertible bonds, if the bondholders convert most or all of the convertible bonds into the company's shares within a short period after the start of the conversion period, the company's share capital and net assets will increase to a certain extent. However, it will take a certain time for the raised funds to generate income from investment, so the growth rate of the company's profit may be less than that of the total share capital and net assets. After the funds raised in this offering are in place, the company has the risk of decline in earnings per share and return on net assets. 5、 Measures to fill the diluted immediate return of this offering and commitments of relevant subjects
(I) main measures taken by the company to dilute the immediate return of this offering
In order to protect the legitimate rights and interests of investors and reduce the impact of the possible dilution of the immediate return of this issuance, the company plans to take a variety of measures to ensure the effective use of the funds raised in this issuance and effectively prevent the risk of dilution of the immediate return. The specific measures taken by the company to fill the immediate return are as follows:
1. Actively and steadily promote the construction of raised investment projects, and improve business efficiency and profitability
The implementation of this raised investment project will enhance the company's profitability and core competitive strength, optimize the company's capital structure, enhance the company's influence and provide guarantee for subsequent business development. The company will actively and steadily promote the construction of raised investment projects, improve the utilization efficiency of raised funds, and strive for the expected benefits of raised investment projects as soon as possible, so as to improve the profitability of the company, enhance the return to shareholders and reduce the risk of dilution of immediate return caused by issuance. 2. Strengthen the management of raised funds and ensure the standardized and effective use of raised funds
After the raised funds of this offering are in place, The company will strictly implement the securities law of the people's Republic of China, the measures for the administration of securities issuance and registration of listed companies on the science and Innovation Board (for Trial Implementation), the rules for the listing of shares on the science and Innovation Board of Shanghai Stock Exchange, the guidelines for the application of self regulatory rules for listed companies on the science and Innovation Board of Shanghai Stock Exchange No. 1 - standardized operation, and the guidelines for the supervision of listed companies No. 2 - regulatory requirements for the management and use of raised funds by listed companies And the requirements of the company's raised funds management system, store and use the raised funds in a special account to ensure that the raised funds are fully and effectively utilized according to the original purpose and effectively prevent the use risk of the raised funds. 3. Continuously improve corporate governance and improve the company's operation and management level
The company will continue to improve its corporate governance structure in strict accordance with the requirements of laws, regulations and normative documents such as the company law of the people's Republic of China, the securities law of the people's Republic of China, the guidelines for the governance of listed companies and other laws, regulations and normative documents, so as to ensure that shareholders can fully exercise their rights, the board of directors can exercise their functions and powers in accordance with the provisions of the articles of association, independent directors can earnestly perform their duties, and the board of supervisors can independently and effectively exercise The supervision and inspection rights of senior managers and the company's finance provide scientific and effective governance structure and institutional guarantee for the sustainable and stable development of the company. At the same time, the company will continue to improve business processes, improve business efficiency, strengthen the management of R & D, procurement, sales and other links, and further improve the operation and management level of the company.
4. Further improve the profit distribution policy, especially the cash dividend policy, and optimize the return on investment mechanism
According to the opinions on Further Strengthening the protection of the legitimate rights and interests of small and medium-sized investors in the capital market issued by the State Council, the notice on further implementing matters related to cash dividends of listed companies issued by the CSRC and the guidelines for the supervision of listed companies No. 3 - listed companies
