Weihai Baihe Biotechnology Co., Ltd
Special announcement on investment risk of initial public offering
Sponsor (lead underwriter): Gf Securities Co.Ltd(000776)
The application of Weihai Baihe Biotechnology Co., Ltd. (hereinafter referred to as “Baihe shares”, “issuer” or “company”) for the initial public offering of 16 million RMB common shares (A shares) (hereinafter referred to as “this offering”) has been approved by China Securities Regulatory Commission (hereinafter referred to as “CSRC”) zjxk (2022) No. 36. This issuance is conducted by online subscription at market value and direct pricing issuance (hereinafter referred to as “online issuance”) to social public investors holding non restricted A-Shares and non restricted depositary receipts in Shanghai market at a certain market value, without offline inquiry and placement. The sponsor (lead underwriter) of this offering is Gf Securities Co.Ltd(000776) (hereinafter referred to as ” Gf Securities Co.Ltd(000776) ” and “sponsor (lead underwriter)”). The offering will be implemented through the trading system of Shanghai Stock Exchange (hereinafter referred to as “Shanghai Stock Exchange”) on January 14, 2022 (T).
The issuer and the recommendation institution (lead underwriter) specially draw investors’ attention to the following contents:
(I) any decision or opinion made by the CSRC and other government departments on this issuance does not indicate that it makes a substantive judgment or guarantee on the investment value of the issuer’s shares or the income of investors. Any statement to the contrary is a false statement. Investors are invited to pay attention to investment risks, carefully study and judge the rationality of issuance pricing, and make investment decisions rationally.
(II) please pay attention to the key contents of the issuance process, subscription, payment and suspension of issuance:
1. This issuance adopts the direct pricing method, and all shares are issued online to social public investors holding a certain market value of non restricted A-Shares and non restricted depositary receipts in Shanghai market, without offline inquiry and placement.
2. The issue price is 42.14 yuan / share. Investors are requested to purchase at this price through the trading system of Shanghai Stock Exchange at 9:30-11:30 and 13:00-15:00 on January 14, 2022 (t day) and by means of online subscription according to market value. There is no need to pay subscription funds during subscription.
3. Online investors shall independently express their purchase intention and shall not fully entrust securities companies to purchase new shares on their behalf.
4. After winning the lottery for the subscription of new shares, online investors shall fulfill their payment obligations in accordance with the announcement on the results of online pricing and lottery for initial public offering of shares by Weihai Lily Biotechnology Co., Ltd., so as to ensure that their capital account will eventually have sufficient subscription funds for new shares on January 18 (T + 2) 2022, and the insufficient part shall be deemed to give up the subscription, The resulting consequences and relevant legal liabilities shall be borne by the investors themselves. The investor’s fund transfer shall comply with the relevant provisions of the securities company where the investor is located.
When the number of shares subscribed by online investors exceeds 70% (including 70%) of the number of public offerings, but does not reach the number of public offerings, the shares abandoned by the winning investors shall be underwritten by the sponsor (lead underwriter).
5. When the number of shares subscribed by online investors is less than 70% of the number of public offerings, the sponsor (lead underwriter) will suspend the issuance of new shares and disclose the reasons for the suspension and subsequent arrangements.
6. If the online investor fails to make full payment after winning the lottery for 3 times in a row within 12 months, it shall not participate in the online subscription of new shares, depositary receipts, convertible corporate bonds and exchangeable corporate bonds within 6 months (calculated as 180 natural days, including the next day) from the next day of the settlement participant’s latest declaration of abandonment of subscription.
(III) investors who intend to participate in this offering and subscription must carefully read the summary of prospectus for initial public offering of Weihai Lily Biotechnology Co., Ltd. published in China Securities Journal, securities times, Shanghai Securities News and Securities Daily on January 12, 2022 (T-2) and posted on the website of Shanghai Stock Exchange（ http://www.sse.com.cn. ）The full text of the prospectus for the initial public offering of Weihai Lily Biotechnology Co., Ltd., especially the chapters of “tips on major matters” and “risk factors”, fully understand the issuer’s risk factors, judge its operation status and investment value by itself, and make investment decisions prudently. The issuer’s operating conditions may change due to the influence of politics, economy, industry and operation management level, and the possible investment risks shall be borne by the investors themselves.
(IV) there is no circulation restriction and locking arrangement for the shares issued this time, and the shares issued this time shall be circulated from the date of listing and trading on the Shanghai Stock Exchange. Investors must pay attention to the investment risk caused by the increase of stock circulation on the first day of listing.
For the limited sale period of shares before this offering, please refer to the prospectus for the relevant commitment and arrangement of the restricted sale period. The above share restriction arrangement is a voluntary commitment made by relevant shareholders in accordance with relevant laws and regulations based on the governance needs of the issuer and the stability of operation and management.
(V) the offering price is 42.14 yuan / share, and the price earnings ratio corresponding to this price is:
1. 22.99 times (earnings per share shall be calculated by dividing the net profit attributable to the owner of the parent company in 2020 audited by an accounting firm before and after deducting non recurring profits and losses by the total share capital after this issuance);
2. 17.25 times (earnings per share shall be calculated by dividing the net profit attributable to the owner of the parent company in 2020 before and after deducting non recurring profits and losses audited by an accounting firm by the total share capital before this issuance).
(VI) the offering price is 42.14 yuan / share. Investors are requested to judge the rationality of the offering price according to the following conditions.
According to the industry classification guidelines for listed companies (revised in 2012) issued by the CSRC, the issuer’s industry is food manufacturing (C14). As of January 11, 2022 (T-3), the static average p / E ratio of the industry published by China Securities Index Co., Ltd. in the latest month was 44.20 times.
The P / E ratio of listed companies whose main business is similar to that of the issuer is as follows:
January 11, 2022 (T-3) 2020
Stock code securities abbreviation average price of the first 20 trading days (including the current earnings per share static P / E ratio day) (yuan / share) (yuan / share) (Times)
300146.SZ By-Health Co.Ltd(300146) 26.67 0.6731 39.62
300791.SZ Sirio Pharma Co.Ltd(300791) 42.56 1.2337 34.50
300765.SZ Cspc Innovation Pharmaceutical Co.Ltd(300765) 16.01 0.4820 33.22
Arithmetic mean 35.78
Data source: wind, China Securities Index
Although the offering price of 42.14 yuan / share corresponds to the lower of the issuer’s net profit attributable to the owner of the parent company before and after deducting non recurring profits and losses in 2020, the diluted P / E ratio is 22.99 times, which is lower than the average static P / E ratio of the industry in the latest month published by China Securities Index Co., Ltd. and lower than the average static P / E ratio of comparable listed companies in 2020, However, there is still a risk that the future decline of the issuer’s share price will bring losses to new share investors.
The issuer and the recommendation institution (lead underwriter) remind investors to pay attention to investment risks, carefully study and judge the rationality of issuance pricing, and make investment decisions rationally.
(VII) there may be a risk of falling below the issue price after listing. Investors should pay full attention to the risk factors contained in the pricing marketization, know that the stock may fall below the issue price after listing, effectively improve the risk awareness, strengthen the value investment concept, and avoid blind speculation. Regulators, issuers and sponsors (lead underwriters) can not guarantee that the stock will not fall below the issue price after listing.
(VIII) in 2020, the company realized an operating revenue of 578287200 yuan, an increase of 15.74% over 2019;
In 2020, the company realized a net profit attributable to the owners of the parent company of 127.1159 million yuan, an increase of 71.00% over 2019; In 2020, the company realized a net profit attributable to the owner of the parent company of RMB 117.2914 million after deducting non recurring profits and losses, an increase of 55.11% over 2019.
From January to June 2021, the company realized an operating revenue of 306262500 yuan, an increase of 24.21% over the same period last year; The net profit attributable to the owners of the parent company was 68.887 million yuan, an increase of 36.65% over the same period last year; After deducting non recurring profits and losses, the net profit attributable to the owners of the parent company was 61.6245 million yuan, an increase of 37.63% over the same period last year.
From January to September 2021, the reviewed operating revenue of the company was 470021200 yuan, an increase of 12.45% over the same period last year; The net profit attributable to the owners of the parent company was 117.9558 million yuan, an increase of 28.09% over the same period last year; After deducting non recurring profits and losses, the net profit attributable to the owners of the parent company was 104.1158 million yuan, an increase of 21.58% over the same period last year.
Investors are hereby reminded to pay attention to the risk of performance fluctuation of the issuer and participate in decision-making rationally.
(IX) based on the issuance price of 42.14 yuan / share and the number of 16 million shares, the total amount of funds raised is expected to be 67.424 million yuan. After deducting the issuance cost of 71.8089 million yuan, the net amount of funds raised is expected to be 602.4311 million yuan, which does not exceed the amount of funds raised expected to be used by the issuer for the project. There is a risk that the net asset scale will increase significantly due to the acquisition of raised funds, which will have an important impact on the issuer’s production and operation mode, operation management and risk control ability, financial status, profitability and long-term interests of shareholders.
(x) after the completion of this offering, it shall be approved by the Shanghai Stock Exchange before it can be publicly listed and traded on the Shanghai Stock Exchange. If the approval is not obtained, the shares issued this time will not be listed, and the issuer will return them to the investors participating in the online subscription according to the issue price plus the bank deposit interest for the same period.
（11） Investors are requested to pay attention to risks. In case of the following circumstances, the issuer and the recommendation institution (lead underwriter) will negotiate to take measures to suspend the issuance:
1. The number of shares subscribed by online investors is less than 70% of the number of this public offering;
2. The issuer’s major post meeting events in the issuance process affect the issuance;
3. The CSRC may order the issuer and the recommendation institution (lead underwriter) to suspend or suspend the issuance and investigate and deal with the relevant matters if it is found that there are suspected violations of laws and regulations or abnormal circumstances in the process of securities issuance and underwriting.
In case of the above circumstances, the issuer and the recommendation institution (lead underwriter) will timely announce the reasons for suspension of issuance, resumption of issuance arrangements and other matters. After the suspension of the issuance, within the validity of the issuance approval document and after filing with the CSRC, the issuer and the recommendation institution (lead underwriter) choose the opportunity to restart the issuance.
（12） The issuer and the sponsor (lead underwriter) solemnly remind investors that investors should adhere to the concept of value investment and participate in the subscription of this issuance. We hope that investors who recognize the investment value of the issuer and hope to share the growth achievements of the issuer will participate in the subscription.
（13） This special announcement on investment risk does not guarantee to reveal all the investment risks of this issuance. It prompts and recommends investors to fully and deeply understand the characteristics and risks of the securities market, rationally evaluate their own risk tolerance, and independently make a decision on whether to participate in this issuance and subscription according to their own economic strength, investment experience, risk and psychological tolerance.
Issuer: sponsor (lead underwriter) of Weihai Lily Biotechnology Co., Ltd.: Gf Securities Co.Ltd(000776) January 13, 2022
