China Securities Co.Ltd(601066)
About Sichuan Huiyu Pharmaceutical Co.Ltd(688553)
Verification opinions on investment and construction of new projects with some over raised funds
China Securities Co.Ltd(601066) (hereinafter referred to as ” China Securities Co.Ltd(601066) securities” or “sponsor”) as a sponsor of Sichuan Huiyu Pharmaceutical Co.Ltd(688553) (hereinafter referred to as ” Sichuan Huiyu Pharmaceutical Co.Ltd(688553) ” or “company”) for initial public offering of shares and listing on the science and innovation board, in accordance with the provisions of relevant laws, regulations and normative documents such as the administrative measures for securities issuance and listing sponsorship business, the Listing Rules of shares on the science and Innovation Board of Shanghai Stock Exchange, The Sichuan Huiyu Pharmaceutical Co.Ltd(688553) new projects invested and constructed with some over raised funds have been carefully and prudently verified. The details are as follows: I. Basic information of raised funds
With the approval of the Listing Committee of the science and Innovation Board of Shanghai Stock Exchange on May 26, 2021 and the approval of the China Securities Regulatory Commission on the approval of the registration of Sichuan Huiyu Pharmaceutical Co.Ltd(688553) initial public offering shares (zjxk [2021] No. 2596) on August 3, 2021, Sichuan Huiyu Pharmaceutical Co.Ltd(688553) publicly issued 63600000 RMB common shares (A shares) to the public, The issuance price is 38.87 yuan / share. The total amount of funds raised in this issuance is 2472132000 yuan. After deducting the relevant issuance expenses of 111.4572 million yuan, the net amount of funds raised is 2360674800 yuan. On October 19, 2021, Tianjian Certified Public Accountants (special general partnership) verified the availability of funds for this issuance and issued the capital verification report numbered Tianjian Yan [2021] No. 11-44.
After the raised funds were received, the company stored the raised funds in a special account, and signed a supervision agreement on the special storage of raised funds with the sponsor and the commercial bank storing the raised funds. 2、 Investment projects with raised funds
The net amount of funds actually raised by the company from the public offering of shares is 2360674800 yuan, of which the amount of over raised funds is 453359800 yuan. The use plan of the company’s investment projects with raised funds is as follows:
No. project name total planned investment construction period
1 Huiyu EU standard injection industrialization base (II 67941.00 36 month period) project
2 Huiyu innovative drug research institute construction project 42790.50 30 months
3. Supplementary working capital 80000.00/
3、 Plan for using over raised funds this time
In order to improve the use efficiency of the company’s raised funds, the company plans to use part of the over raised funds to invest in the following projects:
No. project name total investment (10000 yuan) proposed over raised funds (10000 yuan)
1. Chain extension project of high-end green drug industry 31561.00 28861.00
1. Project overview
With Sichuan Zeyu Pharmaceutical Co., Ltd. (hereinafter referred to as “Zeyu pharmaceutical”), a wholly-owned subsidiary of the company, as the main body, the company invests in the construction of high-end green pharmaceutical industry chain extension project, with a construction area of 38264.46m2 and an estimated investment amount of 315.61 million yuan. It plans to use 288.61 million yuan of over raised funds, accounting for 63.66% of the total over raised funds of the company. The project is planned to be built in Neijiang Economic Development Zone, mainly including production workshop, pilot workshop, warehouse, tank farm and other supporting facilities. At the same time, with the help of energy supply, office and quality inspection of Zeyu pharmaceutical, the project mainly produces API such as pemetrexed disodium and atracurium, and carries out pilot scale-up research on API of subsequent preparations of the company.
2. Project filing
Zeyu pharmaceutical filed and applied for the “high-end green drug industry chain extension project of Zeyu pharmaceutical No. 2 branch” on August 4, 2021, and obtained the filing form of fixed asset investment projects in Sichuan Province (Chuantou Zibei [2108-511098-04-01-141231] fgqb-0083) issued by the economic and Technological Development Bureau of Neijiang economic and Technological Development Zone on August 5, 2021, The project has been filed.
3. Project implementation subject
The project is implemented by Zeyu pharmaceutical, a wholly-owned subsidiary of the company.
4. Project implementation location
The project is implemented in the west of Neijiang Suining expressway, the south of hengsi road and the west of Zongyi road.
The project is planned to be completed in 24 months.
6. Project investment amount and capital source
The total planned investment of the project is 315.61 million yuan, including over raised funds of 288.61 million yuan and self raised funds of 27 million yuan. The investment scale of the project is as follows:
Unit: 10000 yuan
No. proportion of project investment amount
1. Working capital 5396.94 17.10%
2. Equipment purchase cost 8779.00 27.82%
3. Installation cost 4049.10 12.83%
4. Construction cost 8092.61 25.64%
5. Other construction costs 5243.35 16.61%
Total 31561.00 100.00%
7. Necessity of project implementation
(1) Improve the quality control of the company’s API: in recent years, China’s medical reform has comprehensively improved the level of drug quality evaluation by issuing a series of policies and systems, adjusting the pharmaceutical industry structure across the board, encouraging and promoting the R & D and production of innovative drugs and high-quality generic drugs. Under this background, all the listed varieties of the company at the same time passed the consistency evaluation, Rich technology and experience have been accumulated in preparation research and production. It is necessary for the company to reasonably optimize resources, overall control and realize its own control over the quality of API.
(2) Create “API preparation” integration and improve the company’s operation efficiency: provide the market with drugs with exquisite quality and reasonable price. It is necessary for the company to realize the production scale effect through the “API preparation” integration construction and reasonably optimize the production capacity layout, build an API production base with cost advantage, and vertically integrate characteristic APIs and the company’s preparations, Realize the independent supply of some APIs, create a more price competitive product pipeline, and improve the comprehensive operation efficiency of the company.
(3) The capacity design of the project is planned according to the estimated global sales volume of the company’s terminal preparations. Specifically, the construction of the project comprehensively considers the existing production capacity of the company and the expected sales of preparations. At the same time, the project reserves a certain surplus production capacity for external sales.
8. Feasibility of project implementation
(1) Solid technical foundation
All the technologies involved in the project come from the company’s R & D team. After years of technology accumulation, the company has built a technical platform for API production quality control, including chiral drug R & D, drug crystallization purification and drug preparation purification, mainly involving chiral catalysis, chiral resolution and asymmetric synthesis; Development of compound crystallization process, discovery of dominant crystal forms, industrialization of crystallization process and other technologies; Screening of new fillers, preparation and separation technology, etc.
(2) Solid project talent team
Since the establishment of API R & D team in 2018, the company has established an API R & D team with more than 150 people, and has recruited more than 100 engineering and technical personnel related to professional environment and safety, production process and equipment. The project team has rich experience.
(3) The project market is expected to be good
The project plans to produce clear varieties and carry out supporting production closely around the company’s main products of EU standard preparations. So far, the company has won the bid for 6 preparations, and the national centralized drug procurement, with more than 80 projects under research, including more than 30 API and excipient projects. After the project is completed and put into operation, it will mainly supply the company’s preparation API demand. At the same time, it will reasonably allocate resources and adjust the supply strategy according to the market situation, so as to supply to the markets outside China. (4) Comply with relevant laws and regulations
The high-end green pharmaceutical industry chain extension project of Zeyu pharmaceutical meets the requirements of national industrial development policies and planning, and the layout and structural adjustment policies of biomedicine (API) industry in Neijiang national economic and Technological Development Zone; The construction of the project has a positive significance in promoting the adjustment and optimization of API industrial structure, technical structure, organizational structure and product structure in Neijiang national economic and Technological Development Zone.
Made in China 2025 takes biomedicine and high-performance medical devices as key development areas. The state continues to take biomedicine and other strategic emerging industries as pillar industries of the national economy, accelerate the cultivation, and continue to implement science and technology plans such as “major new drug creation” science and technology projects, which will contribute to the innovation ability, quality brand Provide strong policy support for the improvement of intelligent manufacturing and green development level.
The notice of the national development and Reform Commission and the Ministry of industry and information technology on the implementation plan for promoting the high-quality development of API industry points out that chemical API is the basic raw material and active ingredient of drugs and an important part of the pharmaceutical industry. The state will continue to provide strong policy support for accelerating the high-quality development of the API industry under the new situation, promoting the improvement of the core competitiveness of the pharmaceutical industry, and orderly promoting the high-quality development of the API industry.
9. Benefit analysis
(1) Economic benefit analysis of the project
The project is planned to invest 315.61 million yuan. It is planned to complete the decoration work and the installation and commissioning of the first batch of equipment in December 2022. Therefore, 2021 and 2022 are mainly the construction period. At the beginning of 2023, with the availability of personnel and equipment, the project begins to enter the revenue output period. After all normal operations, the estimated annual capacity is 38053.90kg, It is estimated that Zeyu pharmaceutical can achieve an average annual sales revenue of 326.82 million yuan.
(2) Social benefit analysis of the project
Relying on Sichuan Huiyu Pharmaceutical Co.Ltd(688553) ‘s talent and R & D management technology advantages, the project will gradually form a talent cluster effect and enhance regional competitiveness; Technological innovation will further promote the progress of “industry university research” cooperation and strengthen the transformation of achievements.
The project focuses on the fields of high-end antibiotics and antitumor chemicals with high clinical value and great market potential, promotes the industrialization of their API, and builds an efficient, safe and green industrialization demonstration base of new continuous synthesis technology, so as to provide support for the rapid development of the company. It will help the company build an integrated competitive advantage of API preparations.
At the same time, it will play a positive role in promoting the aggregation of regional pharmaceutical industry and the high-quality development of the whole pharmaceutical industry chain in Southwest Sichuan.
10. Risk factors
(1) Technology R & D risk
The company has accumulated rich technical experience and will hire professional technicians to repeatedly demonstrate the functional layout during the project design. After the completion of the project, it is expected to reach the advanced level of China. However, the development of API has certain uncertainty. At present, the company’s API atracurium and other products are in the registration stage, and other API projects are still in the R & D stage, which may lead to the risk of registration and R & D failure.
(2) The production time of the project is uncertain
The construction period of the project is 24 months, and the construction period is long. After the project is completed, it needs to pass the on-site inspection of production license and registration. The inspection period is uncertain, and there may be a risk of failure. Therefore, there is uncertainty in the commercial production time.
(3) Risk of earnings falling short of expectations
After the completion of the project, it mainly provides the company with API for preparation production, but the company’s preparation products may face market competition. For example, there may be market competition risk under complex circumstances such as failure to win the bid for centralized procurement, or less scalar quantity, or small market or high competitive pressure of non centralized procurement products. At the same time, the benefit data such as the income and capacity of the project are estimated based on the judgment of the market. Therefore, if there is large market competition or changes in the market, there may be a risk that the project will not reach the expected income after it is put into operation.
(4) Technology brain drain risk
In the process of technology research and development of the project, there may be a risk of brain drain of high-end technical talents, which may lead to the suspension of product research and development of the project. However, in the process of technology R & D and design, the company will continue to hire professional technicians and establish employee reservation mechanism and employee incentive mechanism to reduce the risk caused by brain drain.
(5) Manage risk
The company follows the mature management system and post responsibility system established by the company, with sound financial system, clear functions of various departments and division of labor and cooperation. The management of the company has not only technical experts with innovative ability, but also experienced entrepreneurs, scientific management, strong awareness and ability of continuous innovation. However, as the project is a new project, it still needs some time to improve the project management in the process of project operation, so there are certain management risks. 11. Measures to ensure the safety of over raised funds
After the relevant approval procedures are fulfilled, the company will gradually invest the raised funds according to the implementation progress of the project, and
