Jiangsu Azure Corporation(002245)
And
China Securities Co.Ltd(601066)
Reply to the notification letter on the preparations for the meeting of the issuance and Examination Committee of Jiangsu Azure Corporation(002245) non-public offering of shares
Sponsor (lead underwriter)
January 2002
China Securities Regulatory Commission:
According to the letter on making preparations for the Jiangsu Azure Corporation(002245) non-public development bank stock issuance and examination committee meeting (hereinafter referred to as the “notification letter”) issued by your association, Jiangsu Azure Corporation(002245) (hereinafter referred to as ” Jiangsu Azure Corporation(002245) “, “company”, “issuer” and “applicant”) has worked with the recommendation institution China Securities Co.Ltd(601066) (hereinafter referred to as “recommendation institution”) and the issuer’s lawyer Tianjian Certified Public Accountants (special general partnership) (hereinafter referred to as the “issuer’s accountant”) explained, verified and implemented the issues listed in the notification letter one by one, and replied to the notification letter one by one. The specific situation is reported as follows, please review it.
Unless otherwise specified, the abbreviation in the reply to this notification letter has the same meaning as the abbreviation in the due diligence report of the sponsor.
catalogue
1. Question 1 32. Question 2 73. Question 3 twenty-nine
1. About Suzhou Keyes. In order to avoid potential horizontal competition, Chen Kai, the actual controller of the applicant, transferred 95% of the equity of Suzhou keyis to Wu Jianyong, chairman of Suzhou keyis, with RMB 128.25 million.
Please explain: (1) whether the source of Wu Jianyong’s payment for equity acquisition comes directly or indirectly from Chen Kai or its related parties; Whether Chen Kai and Wu Jianyong are related, and whether the relevant equity transfer is true; (2) Whether Keyes purchased lithium battery cells from the issuer during the reporting period, and if so, whether the price is fair.
The recommendation institution, the reporting lawyer and the accountant shall explain the verification basis and process, and express clear verification opinions.
reply:
1、 Whether the source of Wu Jianyong’s payment for equity acquisition comes directly or indirectly from Chen Kai or its related parties; Whether Chen Kai and Wu Jianyong are related, and whether the relevant equity transfer is true
(I) the source of Wu Jianyong’s payment for equity acquisition is his own funds, and there is no direct or indirect source from Chen Kai (Chen Kai) or its affiliates
1. Mr. Chen Kai (Chen Kai) began to plan the transfer of Suzhou keyis Intelligent Drive Technology Co., Ltd. (hereinafter referred to as “Suzhou keyis”) in early September 2021
Suzhou Keyes was established in June 2018. Its main business is the production and sales of lithium-ion battery modules, including battery assembly (pack) and configuration of battery management system (BMS).
In September 2021, considering that Suzhou keyis and Jiangsu Tianpeng power supply Co., Ltd., the main business entity of the company’s lithium battery business, are in the lithium battery industry chain. Although their main products are different and have an upstream and downstream relationship, Chen Kai (Chen Kai) began to plan the equity transfer of Suzhou keyis in order to avoid potential horizontal competition.
2. Mr. Wu Jianyong’s payment for equity acquisition comes from his own funds, and there is no direct or indirect source from Chen Kai or his related parties
On September 23, 2021, after negotiation, lvwei Co., Ltd. (hereinafter referred to as Hong Kong lvwei) signed an agreement with Mr. Wu Jianyong and Mr. Li shaoting respectively to transfer 95% equity of Suzhou keyis (corresponding to registered capital of USD 25175000 and paid in capital of RMB 104301520.30) to Mr. Wu Jianyong in RMB 128.25 million; Transfer the 5% equity of Suzhou keyis (corresponding to the registered capital of USD 1325000 and the paid in capital of RMB 5489553.70) to Mr. Li shaoting with RMB 6.75 million. As of the issuing date of the reply to this notification letter, the transferee has paid a total transfer amount of 73.49 million yuan in accordance with the contract, of which Mr. Wu Jianyong has paid a transfer amount of 69.99 million yuan.
Mr. Wu Jianyong is a shareholder of the listed company Jiangsu Azure Corporation(002245) . As of September 30, 2021, he directly holds 4.74% equity of the listed company and has strong financial strength. At the same time, the recommendation institution, the reporting lawyer and the accountant obtained and inspected the equity transfer agreement signed by Chen Kai (Chen Kai) and Wu Jianyong, the payment certificate of equity transfer money, and the bank flow of each transaction party from 2 months before the signing of the agreement to 1 month after the payment (from early July 2021 to early December 2021), and interviewed the equity transfer and transferee, Checked the business background, agreement signing, payment terms, capital source, payment progress and tax payment of equity transfer. In addition, the sponsor, the reporting lawyer and the accountant checked the directional flow between Mr. Wu Jianyong, Mr. Chen Kai (Chen Kai) and their close relatives, and obtained the directional flow details between the two parties during the reporting period (from January 1, 2018 to early October 2021).
After verification, Mr. Wu Jianyong has strong financial strength. The source of payment for equity acquisition is his own funds. There is no case that the relevant sources of funds come directly or indirectly from Chen Kai (Chen Kai) or its related parties.
(II) Chen Kai (Chen Kai) is not related to Wu Jianyong, and the relevant equity transfer is true. Mr. Wu Jianyong is not related to Mr. Chen Kai (Chen Kai), the actual controller of the company, and the controlling shareholder Hong Kong lvwei.
At the same time, the sponsor, the reporting lawyer and the accountant interviewed Mr. Wu Jianyong, the transferee of the equity transfer, who had a certain understanding of the relevant industrial chain of Suzhou keyis and was optimistic about the prospect of the pack market; In addition, as of September 2021, the net assets of Suzhou keyis are about 104 million yuan, and the main assets are the land, plant and a small amount of equipment located in Jintang West Road, Zhangjiagang City. According to the record of Su [2020] Zhangjiagang real estate right No. 8250860 real estate certificate, the land parcel area owned by Suzhou keyis is about 36400 square meters, and the building area of the plant is about 52400 square meters. Considering the rising factors such as land, plant and infrastructure materials, both parties to the transfer negotiated and determined that the transaction price is 135 million yuan, Based on the initial investment and overall net assets of Suzhou keyis, there is a certain premium, and the transfer price is commercially reasonable.
To sum up, Mr. Wu Jianyong, the actual controller of the company, Mr. Chen Kai (Chen Kai), and the controlling shareholder Xiang have related businesses and industries. The transfer price of this equity transfer is also commercially reasonable. Therefore, this equity transfer is the true expression of intention of both parties and the relevant equity transfer is true.
2、 Whether Keyes purchased lithium battery cells from the issuer during the reporting period, and if so, whether the price is fair (I) specific conditions of Suzhou Keyes purchasing lithium battery cells from the issuer during the reporting period
During the reporting period, Suzhou keyis purchased lithium battery cells from the issuer as follows:
Unit: 10000 yuan
Project: January September 2021, 2020, 2019, 2018
Purchase amount 139.57 —
Accounting for 0.08% of the issuer’s lithium battery business revenue —
From the above table, Suzhou Keyes has not actually carried out business related to its main business since its establishment to 2020, so it did not purchase lithium battery cells from the issuer from 2018 to 2020.
From January to September 2021, Suzhou Keyes gradually began to carry out the production and sales of lithium-ion battery modules. The amount of lithium battery cells purchased from the company was RMB 1395700, which accounted for only 0.08% of the issuer’s sales revenue of lithium battery business from January to September 2021, accounting for a small proportion.
(II) the price of lithium battery cells purchased by Suzhou keyis is fair
From January to September 2021, the comparison between the sales unit price of lithium battery cells sold by the company to Suzhou keyis and the average sales price to unrelated third parties is as follows:
Average unit price of the project (yuan / piece) average unit price of unit capacity (yuan / piece / ah)
The sales unit price of the company to Suzhou keyis is 10.58 3.39
The average selling price of the company to unrelated third parties is 6.71 3.43
According to the above table, the sales unit price of lithium battery cells sold by the company to Suzhou keyis from January to September 2021 is higher than the average sales price to unrelated third parties from January to September 2021, mainly because the capacity of cells sold by the company to Suzhou keyis is mainly 2.9ah and 3.5ah, while the capacity of cells sold by the company to unrelated third parties is mainly 1.5Ah, 2.0ah, 2.2ah and 2.6ah, There is a difference between the cell capacity sold by the company to Suzhou keyis and that sold to unrelated third parties. The cell capacity sold to Suzhou keyis is large, resulting in high sales unit price. However, from the perspective of average unit price per unit capacity, the sales unit price of electric cells sold by the company to Suzhou keyis is basically the same as that to unrelated third parties, and there is no significant difference.
In conclusion, the price of lithium battery cells sold by the company to Suzhou keyis is fair.
3、 The recommendation institution, the reporting lawyer and the accountant are invited to express their verification opinions
(I) verification process
The recommendation institution, the reporting lawyer and the accountant have verified the above matters through the following procedures:
1. Obtain and check the bank flow of all parties to the transaction;
2. Obtain and check the equity transfer agreement and payment certificate of equity transfer payment signed by all parties to the transaction; 3. Interviewed the equity transfer and transferee to understand the business background, agreement signing, payment terms, capital source, payment progress and tax payment of equity transfer;
4. Obtained and checked the issuer’s management system on connected transactions, meeting materials related to connected transactions and statistical tables of recurrent and non recurrent connected transactions;
5. Obtain the sub ledger of the issuer’s operating income, and analyze the specific composition, sales content, amount and proportion of the transaction with Suzhou keyis;
6. Obtain the sales order of the issuer for selling lithium battery cells to Suzhou keyis, and compare and verify the sales unit price of lithium battery cells sold by the issuer to Suzhou keyis with the average sales price to unrelated third parties; 7. Interview the financial director of the issuer to understand the fairness of the issuer’s sales pricing of Suzhou keyis. (II) verification conclusion
After verification, the recommendation institution, the reporting lawyer and the accountant believe that:
1. Wu Jianyong’s source of payment for equity acquisition is his own funds. There is no direct or indirect source from Chen Kai (Chen Kai) or its related parties. Chen Kai (Chen Kai) has no related relationship with Wu Jianyong, and the relevant equity transfer is true;
2. During the reporting period, Suzhou Keyes purchased lithium battery cells from the issuer. The relevant procurement scale was small and the price was fair.
2. About raised investment projects. The industrialization project of LED epitaxial wafer and chip (phase II) invested by the applicant with the previous raised funds was completed by the end of November 2017, and the benefit in 2017 was 99.5496 million yuan. As of September 30, 2021, the cumulative realized benefit of the project is 28.3259 million yuan, and the promised benefit is 87510100 yuan, which is more than 20% lower than the promised benefit.
The applicant is requested to: (1) explain whether the feasibility demonstration of the previous raised investment project is sufficient; (2) When the actual benefit of the previous raised investment does not reach the promised benefit, explain the capacity digestion measures of this raised investment in combination with market capacity, industry development, on-hand orders and intended orders, and explain whether the relevant decision-making process is prudent and reasonable, whether the feasibility study is sufficient, whether the benefit calculation basis, process and prudence are reasonable, and whether there are enough talents Technology and other resources ensure the smooth implementation of the project, and whether there is major uncertainty in the implementation of the project.
The recommendation institution and the reporting lawyer shall explain the verification basis and process, and express clear verification opinions.
reply:
1、 Explain whether the feasibility demonstration of the previous raised investment project is sufficient
(I) basic information of the company’s previous raised investment projects
In August 2014, the company issued the plan for public issuance of convertible corporate bonds, and the total amount of funds to be raised shall not exceed 510 million yuan. In January 2016, the raised funds were in place, and the total amount of actually raised funds was 510 million yuan. After deducting the issuance expenses, the net amount of raised funds was 492.879 million yuan, which was invested in the following projects:
Unit: 10000 yuan
No. project name total investment of the project
Amount of raised funds net amount of raised funds
1 LED epitaxial chip and chip industry 92571.20
