Stock Code: Shenzhen Fluence Technology Plc(300647) stock abbreviation: Shenzhen Fluence Technology Plc(300647) listing place: Shenzhen Stock Exchange Shenzhen Fluence Technology Plc(300647)
Shenzhen Fluence Technology PLC.
(3602, venture capital building, No. 9, Tengfei Road, huanggekeng community, Longcheng street, Longgang District, Shenzhen) demonstration and analysis report on the scheme of issuing shares to specific objects through simple procedures in 2022
(Revised Version)
April, 2002
Shenzhen Fluence Technology Plc(300647) (hereinafter referred to as " Shenzhen Fluence Technology Plc(300647) " or "the company") in order to meet the needs of the company's business development and enhance the company's profitability and market competitiveness, in accordance with the company law of the people's Republic of China, the securities law of the people's Republic of China, the Shenzhen Fluence Technology Plc(300647) articles of association of the people's Republic of China, the measures for the administration of securities issuance registration of companies listed on GEM (for Trial Implementation) and other relevant laws According to the regulations and normative documents, it is planned to issue shares to specific objects in 2022 through simple procedures (hereinafter referred to as "this issuance"), and the total amount of funds raised in this issuance will not exceed 200 million yuan. After deducting the issuance expenses, it is proposed to be used for the phase I sub project of the construction of lithium battery cathode key material production base.
1、 Background and purpose of this offering
(I) background of this stock issuance
1. The "double carbon" strategic goal defines the future development direction of the industry, and relevant industrial support policies have been issued one after another. In order to deal with global energy shortage and environmental crisis, accelerating the promotion and application of new energy has become a major strategic choice for all countries. On September 22, 2020, president Xi Jinping delivered an important speech at the general debate of the 75th United Nations General Assembly, pointing out that China will enhance its national independent contribution, adopt more powerful policies and measures, strive to reach the peak of carbon dioxide emissions by 2030 and strive to achieve carbon neutrality by 2060. The goals of "carbon peak" and "carbon neutralization" have not only promoted the vigorous development of new energy vehicles and 5g new generation electronic products industry, but also promoted the introduction of a series of industrial related policies.
In November 2020, the general office of the State Council issued the new energy vehicle industry development plan (20212035), which proposed that by 2025, the sales of new energy vehicles will account for about 20%. In December 2020, the Ministry of finance, the Ministry of industry and information technology, the Ministry of science and technology and the development and Reform Commission issued the notice on further improving the financial subsidy policy for the promotion and application of new energy vehicles, proposing that in order to create a stable policy environment, the framework and threshold requirements of the current purchase subsidy technical index system will remain unchanged in 2021. In February 2021, the State Council issued the guiding opinions on accelerating the establishment and improvement of a green and low-carbon circular development economic system, which further pointed out the importance of promoting the comprehensive green transformation of economic and social development. In September 2021, the Yunnan provincial government issued the "14th five year plan" for scientific and technological innovation in Yunnan Province to promote the research and industrial development of key technologies such as new lithium-ion battery anode and cathode materials, diaphragm materials and fuel cell catalytic materials, as well as the research and development of technologies and equipment for the recycling of rare and precious metal secondary resources. The project is located in Mengzi economic and Technological Development Zone, Yunnan Province. Local governments in Yunnan Province further respond to the national strategic call, vigorously promote the development of local new energy materials, energy conservation and environmental protection, resource recycling and other industries, and provide policy support for the development of relevant industries.
It can be seen that the key material industry of lithium battery cathode has been strongly supported by national and local policies, and has a good external policy environment and broad market space.
2. The vigorous development of downstream application market drives the rapid growth of the demand for key materials of ternary cathode
With the policy support of many governments around the world, the new energy vehicle industry has ushered in an explosive development stage. GGII predicts that by 2025, China Shipbuilding Industry Group Power Co.Ltd(600482) lithium battery shipments will reach 470gwh, with a compound annual growth rate of 42% compared with 2020. At the same time, with the popularity of the Internet and the development of 5g technology, the mobile and intelligent trend of consumer electronic products has also promoted many emerging markets, including UAV, smart wear, smart home and so on. According to the data of IDC and Gartner, the global shipment of consumer lithium batteries increased from 57.0 GWH to 92.1gwh in 20172020, showing a steady growth trend.
Because ternary lithium battery has the advantages of energy density, low-temperature characteristics, power characteristics and high-temperature storage, it is still the most important lithium battery product in the market. The characteristics of ternary cathode key materials directly determine the energy density, cycle life and safety performance of ternary lithium battery. Therefore, the market demand for ternary cathode key materials also continues to grow rapidly with the vigorous development of downstream industries. China is the world's largest country and consumer of ternary cathode materials. According to GGII data, from 2017 to 2020, the shipment of ternary cathode materials in China increased rapidly from 86000 tons to 236000 tons, with an average annual compound growth rate of 40.0%. From January to June 2021, the shipment of ternary cathode materials in China was 190000 tons, nearly doubling year-on-year. In 2020, the global shipment of ternary precursors was 420000 tons, with a year-on-year increase of 34%. It is expected that the global shipment of ternary precursors will reach 1.48 million tons in 2025, 3.52 times that in 2020. The rapid increase in shipments of ternary cathode key materials has not fully filled the gap in market demand. Due to excessive market demand and tight supply, the market price of ternary cathode key materials is also rising. According to the data of Shanghai Nonferrous Metals network, the commodity price of lithium carbonate in China increased by more than 350% and the commodity price of ternary precursor increased by about 60% from 2020 to 2021.
3. Relevant manufacturers of lithium battery cathode key materials have expanded their production, and the industry competition pattern is becoming more and more fierce
With the rapid development of downstream application market, market resources will continue to be concentrated to large-scale enterprises in the industry. Therefore, when there is still a certain gap in market supply, manufacturers of key cathode materials for lithium batteries have sought to build new production lines and expand production capacity, so as to seize market share and consolidate their position in the industry. Among them, Hunan Changyuan Lico Co.Ltd(688779) , Xtc New Energy Materials(Xiamen) Co.Ltd(688778) , Guangdong Fangyuan Environment Co.Ltd(688148) , Cngr Advanced Material Co.Ltd(300919) , Shandong Fengyuan Chemical Co.Ltd(002805) and other listed companies regard the new production projects related to the cathode key materials of lithium batteries as their financing investment projects.
With the change of macroeconomic environment outside China and the release of new production capacity in the industry, it is expected that the reshuffle and reorganization pattern of the industry will gradually take shape, which will eventually be better than the manufacturers of lithium battery cathode key materials with certain scale and financial strength and core technology. Some enterprises with small scale, weak financial strength, lack of core technology, weak independent innovation ability and low product added value will be gradually eliminated by the market.
(II) purpose of this stock issuance
1. Expand the company's product line and improve the company's comprehensive strength and anti risk ability
The company's traditional main business is the R & D, production and sales of new heat dissipation devices of electronic products and LED lighting lamps, and provides high-quality LED lighting contract energy management and lighting engineering services for downstream customers. The company's product structure is relatively traditional and significantly affected by the epidemic. In order to optimize the company's product layout and resist the systemic risks caused by the slowdown of the original market growth, the company actively adjusts its development strategy and creates new performance growth points while maintaining the market advantages of the company's original products, so as to enhance the company's overall anti risk ability and profitability. Through the implementation of this raised investment project, the company will rapidly expand the key material industry of lithium battery cathode, anchor the production link of lithium battery materials in the upstream of the industry, and expand the business scale, so as to obtain new profit growth points, improve the company's comprehensive market competitiveness and anti risk ability, and realize the comprehensive and sustainable development of the company's business.
2. Optimize the capital structure to meet the capital needs of future business development
The company raised funds through bank loans to provide financial support and guarantee for the company to expand its business scale and enhance its market competitiveness, but this led to the increase of financial leverage, increased interest expenses and reduced the company's profitability. This issuance is an important means for the company to use the capital market for equity financing, which is conducive to broadening the financing channels and enriching the financing methods. The company will further optimize the product structure, improve the R & D capacity and enhance the financial strength, so as to lay a solid foundation for the long-term sustainable development of the company. 2、 The necessity of this issuance of securities and its variety selection
(I) types of securities issued this time
The shares issued this time are domestic listed RMB ordinary shares (A shares), with a par value of RMB 1.00 per share.
(II) necessity of selection of securities issued this time
1. The investment projects of the raised funds are mainly capital expenditures, which need long-term financial support
The funds raised in this issuance are invested in the phase I sub project of the construction of lithium battery cathode key material production base. The total investment of the project is 3269232 million yuan and the construction period is 12 months. The raised investment project not only improves the overall income scale of the company and enhances the overall profitability of the company, but also helps to further improve the comprehensive competitiveness of the company. At present, the company's own funds are difficult to meet the capital needs of project construction, so the company needs long-term financial support.
2. Limitations of bank financing
The financing amount of bank loans is relatively limited, and will produce high financial costs. If the investment project of the raised funds completely adopts debt financing such as bank loans, on the one hand, it will further increase the asset liability ratio of the company and increase the financial risk of the company. On the other hand, higher financial expenses will reduce the overall profit level of the company and reduce the flexibility of the use of the company's funds, which is not conducive to the stable operation of the company.
3. This issuance meets the development needs of the company
Equity financing has good planning and coordination, which is in line with the company's long-term development strategy. Choosing to issue shares to specific objects is conducive to optimizing the company's capital structure, reducing the company's future debt repayment pressure and capital outflow, reducing the company's financial risk and improving the company's financing ability. The use plan of the funds raised in this issuance has been demonstrated in detail, which is conducive to further improving the profitability of the company and enhancing its core competitiveness. After the completion of the investment project with raised funds in the future, the net profit of the company will increase, and the dilution impact of equity expansion on the immediate income will be gradually eliminated, so as to provide a better return on investment for all shareholders. 3、 Appropriateness of the selection scope, quantity and standard of the issuing object
(I) appropriateness of the selection range of issuing objects
The issuing object of this issuance is determined by the board of directors of the company and its authorized persons in accordance with the authorization of the 2021 annual general meeting of shareholders, through consultation with the lead underwriter in accordance with the provisions of relevant laws, regulations and normative documents and the bidding situation of the issuance, in accordance with the principle of price priority, and in line with the relevant provisions of laws and regulations such as the measures for the administration of securities issuance registration of companies listed on GEM (for Trial Implementation).
(II) appropriateness of the number of objects of this issuance
The objects of this issuance are Yunnan golden seed equity investment fund partnership (limited partnership), Huaxia Fund Management Co., Ltd., Zhuhai Golden rattan equity investment fund partnership (limited partnership), Shandong Caijin Venture Capital Co., Ltd., Xingzheng Global Fund Management Co., Ltd. and Tibet Tengyi Investment Co., Ltd., with no more than 35 objects (including 35), The number complies with the relevant provisions of laws and regulations such as the measures for the administration of securities issuance and registration of companies listed on the gem (for Trial Implementation), and the number of issuing objects is appropriate.
(III) appropriateness of standards for the objects of this issuance
The issuing object should have certain risk identification ability and risk bearing ability, and have corresponding capital strength. The standards of the objects of this offering comply with the relevant provisions of laws and regulations such as the measures for the administration of securities issuance and registration of companies listed on the gem (for Trial Implementation), and the standards of the objects of this offering are appropriate. 4、 Rationality of the pricing principles, basis, methods and procedures of this offering
(I) pricing principle and basis of this offering
1. Pricing base date
The pricing benchmark date of this issuance is the first day of the issuance period of this issuance, i.e. April 19, 2022. 2. Issue price
The issue price shall not be less than 80% of the average trading price of the company's shares 20 trading days before the pricing benchmark date (average trading price of shares 20 trading days before the pricing benchmark date = total trading volume of shares 20 trading days before the pricing benchmark date / total trading volume of shares 20 trading days before the pricing benchmark date).
According to the subscription quotation of investors and in strict accordance with the procedures and rules for determining the issuance price, issuance object and the number of allocated shares in the subscription invitation, the issuance price is determined to be 7.49 yuan / share.
If the company's shares have ex right and ex interest matters such as dividend distribution, share distribution and conversion of capital reserve into share capital from the pricing benchmark date of this issuance to the issuance date, the issuance price of this issuance will be adjusted accordingly. The adjustment formula is as follows:
Cash dividend: P1 = p0-d
Bonus shares or converted into share capital: P1 = P0 / (1 + n)
Distribution of cash dividends and bonus shares or conversion to share capital: P1 = (p0-d) / (1 + n)
Where P0 is the issue price before adjustment, D is the cash dividend distributed per share, n is the number of bonus shares or converted share capital per share, and P1 is the issue price after adjustment.
(II) pricing methods and procedures for this offering
The pricing methods and procedures of this offering are in accordance with the relevant provisions of laws and regulations such as the measures for the administration of securities issuance and registration of companies listed on the gem (for Trial Implementation) and the detailed rules for the implementation of non-public development and issuance of shares by listed companies (revised in 2020). The board of directors held relevant announcements on the website of the exchange and the designated information disclosure media. The pricing method of this offering has been deliberated and adopted by the company's 2021 annual general meeting of shareholders, And authorize the board of directors of the company to negotiate with the sponsor (lead underwriter) to determine the issuance price according to the inquiry results.
The pricing method and procedure of this offering comply with the measures for the administration of securities issuance and registration of companies listed on the gem (for Trial Implementation) and the Shenzhen Stock Exchange GEM listed companies
