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 risks. Investors should fully understand the investment risks of the gem and the risk factors disclosed by the company, and make investment decisions prudently. Weifeng Electronics (Guangdong) Co., Ltd
WCON Electronics (Guangdong) Co., Ltd.
(01A, Changxing Road, Ludong community, Humen Town, Dongguan City, Guangdong Province)
Prospectus for initial public offering and listing on GEM (Registration draft) the issuance application of the company still needs to be performed by Shenzhen Stock Exchange and China Securities Regulatory Commission. This prospectus (Registration draft) has no legal effect on the issuance of shares and is only for pre disclosure. Investors shall take the officially announced prospectus as the basis for investment decisions.
Sponsor (lead underwriter)
No. 358, Beijing South Road, high tech Zone (new urban area), Urumqi, Xinjiang
Room 2004, 20th floor, Dacheng International Building
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 completeness 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 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.
All directors, supervisors and senior managers shall not be liable for misleading information, omission or other legal information recorded in the prospectus.
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 prepared and issued for the issuer’s public offering.
Issue overview
Type of shares issued: domestic RMB ordinary shares (A shares)
The number of this public offering shall not be less than 25% of the total share capital of the issuer after the issuance, and shall not exceed 18.32 million shares. The shares issued this time are all new shares issued to the public, and the original shareholders do not offer shares to the public.
The par value of each share is 1.00 yuan
The issue price per share is [] yuan
Expected issue date: mm / DD / yyyy
Stock exchange and gem of Shenzhen Stock Exchange to be listed
The total share capital after issuance shall not exceed 7326239600 shares
Sponsor and lead underwriter Shenwan Hongyuan Group Co.Ltd(000166) securities underwriting and recommendation Co., Ltd
Signing date of prospectus: April 11, 2022
Tips on major issues
The company specially reminds investors that before making investment decisions, they must carefully read all the contents of this prospectus and pay special attention to the following major matters. 1、 Special risk tips
The company reminds investors to carefully read the “risk factors” section of this prospectus and pay special attention to the following risks: (I) fluctuation risk of international macroeconomic and political situation
Connector is a connecting bridge in electronic circuit, and its development is closely related to the international macroeconomic and political situation. Macroeconomic fluctuations will have varying degrees of impact on related industries downstream of the connector, such as industrial control, automobile and new energy, and then affect the demand of the connector industry.
In recent years, the international economic and political situation has been complex and changeable, the escalation of Global trade frictions and the increase of policy uncertainty have superimposed the adverse impact of covid-19 epidemic, and the risk of global economic uncertainty has intensified, which may affect the company’s purchase of imported raw materials and imported equipment in the future, or major adverse changes in the price or exchange rate of imported raw materials in the future, which will affect the company’s delivery quality and cost level, This will have an adverse impact on the company’s production and sales.
During the reporting period, the issuer’s overseas sales revenue was 943808 million yuan, 114080 million yuan and 1474612 million yuan respectively, accounting for 41.06%, 41.96% and 36.36% of the company’s main business revenue respectively. If the international economic and political situation deteriorates further and affects the trade environment and policies of the connector industry, resulting in the reduction of the demand of the company’s overseas customers, if the company fails to take positive response measures, it may have an adverse impact on the company’s operating performance. (II) defective ownership of leased plant and relocation risk
As of the signing date of this prospectus, the company’s production and business premises located at 01A, Changxing Road, Ludong community, Humen Town, Dongguan City, Guangdong Province were obtained by lease, and the lessor was fengzhengtang, an affiliated enterprise controlled by the actual controller. The production and operation site covers an area of 1687630 square meters, has obtained the state-owned land use certificate (dongfuguoyong [2005] No. 1287), and the plant area is 3115000 square meters. The plant has not yet applied for the house ownership certificate, and the property right is defective. The plot where the plant is located has been included in the overall planning of TOD area of Binhai Bay station of Shenzhen Maoming high speed railway, and the relevant government agencies have not issued a specific implementation plan. The issuer may be required to relocate or cannot continue to use the plant in the future.
Although the leased plant for production and operation is common in Dongguan, the issuer has no special requirements for the site for production and operation, and there are a large number of plants of the same type around for leased production and use. Moreover, the issuer has obtained industrial land with a land area of 1470155 square meters near the current production and operation site for the construction of new plants, and plans to transfer the production and operation functions to the new plants in the future, However, before the above self built plant is completed, passes the acceptance process of relevant departments and meets the formal production conditions, the company still needs to carry out production and operation activities in the existing leased plant, which poses the risk of being required to relocate in advance or unable to continue to use the plant.
In addition, the process of plant relocation involves equipment disassembly and commissioning, organization and adjustment of production plan, relocation expenses, etc. If the implementation of the relocation plan fails to meet the expectations, the machinery and equipment are damaged during the relocation, or the response measures such as preparing goods in advance due to phased shutdown during the relocation cannot meet the sales demand, the normal production and delivery date will be affected, and then the normal operation and business development of the company will be affected. After the relocation of the company’s production plant, it cannot be ruled out that there may be a risk that some customers may require the issuer to re evaluate the supplier’s relevant qualification certification or re perform the factory audit procedures. During the re certification of relevant qualifications, the number of orders of such customers may be affected, which will further affect the company’s business development. If the above-mentioned risks occur in the future, it may have an adverse impact on the company’s production and operation. (III) risk of intensified industry competition
The global connector industry has a high degree of marketization and fierce competition. From the perspective of market scale, the top ten connector manufacturers are mainly occupied by enterprises in Europe, America, Japan and other places, and gradually show a trend of centralization. The company has been operating in the connector industry for nearly 20 years, but compared with international well-known enterprises, the company has a large gap in business scale and market share.
With international connector giants successively setting up production bases in China to develop the Chinese market, and Chinese connector enterprises expanding their production, the market competition may intensify in the future. If the company fails to continuously improve its technology research and development, production process, product quality, response speed and marketing in the increasingly fierce market competition, it may lead to the decline of the company’s market competitiveness and adversely affect the company’s future business performance. (IV) risk of gross profit rate decline
During the reporting period, the gross profit margin of the company’s main business was 45.33%, 47.83% and 45.59% respectively, maintaining a high level. Compared with listed companies in the same industry, the company’s operating income and profit scale are relatively small at this stage, and its anti risk ability is weak. In the next stage, the company will balance the growth of market scale and the improvement of profitability. If the growth rate of downstream market scale slows down in the future, competition will intensify and the company’s product prices will face downward pressure. It is not ruled out that the company may adopt price adjustment strategy to deal with competition, resulting in the risk of decline in the company’s gross profit margin. At the same time, if the company enters the market with more space and fierce competition in the later stage, or with the expansion of the field covered by the company’s new products, there is a risk that the company’s income scale will increase and the gross profit margin will decrease.
The company is in the industrial control connector market. In the future, with the strengthening of domestic substitution and the continuous expansion of market capacity, connector enterprises in other fields may enter and further intensify the competition in this field. If the company cannot maintain a high level in new product development and production process automation, there is a risk that the company’s market share and gross profit margin will decline due to the entry of new enterprises or the expansion of production scale of existing enterprises.
In addition, the downstream application fields of electronic components industry cover a wide range, and the market demand and industry trend change rapidly. If the company fails to make correct research and judgment on the product direction and the new product development is not timely, it may not be able to timely match the new market demand, follow up the new industry trend, and carry out corresponding technology upgrading and product iteration, which will lead to the risk of decline in the sales revenue of some customers. At the same time, compared with consumer connectors, industrial control connectors have the characteristics of long product life cycle and slow iteration. Therefore, the company may also face the risk of slow iteration leading to the decline of price and then the decline of gross profit margin. 2、 Important commitments related to this offering
Important commitments related to this offering, including the commitment to lock up the shares held by shareholders before the company’s listing, the commitment to shareholding intention and reduction intention, and the measures and commitments to stabilize the stock price. For details, see “IV. main commitments related to this offering” in “section 10 investor protection” of this prospectus. 3、 Distribution arrangement of accumulated profits before the issuance and dividend distribution policy of the company after the issuance
On March 13, 2021, the company held the 2020 annual general meeting of shareholders, deliberated and passed the proposal on the distribution of accumulated profits before the company’s initial public offering, and agreed that the undistributed profits accumulated before the completion of the company’s initial public offering should be shared by the new and old shareholders according to the shareholding ratio after the issuance. For the dividend distribution policy after this issuance, please refer to “II. Dividend distribution and accumulated profit arrangement before issuance” in “section 10 investor protection” of this prospectus. 4、 Main financial information and operating conditions after the period
Between the audit base date of the financial report and the signing date of this prospectus, the company’s operation is in good condition, and the company’s main business and business model have not changed significantly. The company’s main customers, suppliers, senior managers and core technicians have remained stable, and there are no events that have a significant adverse impact on the company, nor other major events that may affect the judgment of investors.
catalogue
Declare that 1 issue Overview 2. Tips on major issues three
1、 Special risk tips three
2、 Important commitments related to this offering five
3、 The distribution arrangement of accumulated profits before the issuance and the company’s dividend distribution policy after the issuance five
4、 Main financial information and operating conditions after the period 5 catalog Section 1 interpretation 11 section II Overview eighteen
1、 Basic information of the issuer and the intermediary of this offering eighteen
2、 Overview of this offering eighteen
3、 Main financial data and financial indicators of the issuer during the reporting period twenty
4、 Main business of the issuer V. the issuer’s own innovation, creation and creative characteristics, scientific and technological innovation, model innovation and business form innovation
Integration of new and old industries twenty-one
6、 Specific listing criteria selected by the issuer twenty-three
7、 Important matters such as special arrangements for corporate governance of the issuer twenty-three
8、 Purpose of raised funds Section III overview of this offering twenty-five
1、 Basic information of this offering twenty-five
2、 The parties involved in this offering twenty-six
3、 The relationship between the issuer and the intermediary twenty-seven
4、 Important date of issuance and listing 27 Section IV risk factors twenty-eight
1、 Operational risks twenty-eight
2、 Innovation risks thirty-one
3、 Technical risks thirty-one
4、 Internal control risk thirty-two
5、 Financial risks thirty-two
6、 Legal risks thirty-three
7、 The risk of gambling agreements thirty-four
8、 Risks of investment projects with raised funds thirty-five
9、 Issue failure risk Section V basic information of the issuer thirty-six
1、 Basic information of the issuer thirty-six
2、 The establishment of the issuer and the changes in share capital and shareholders during the reporting period thirty-six
3、 Equity structure and organizational structure of the issuer forty-six
4、 Information of the issuer’s holding and participating companies
