Stock abbreviation: Jiangsu Huahong Technology Co.Ltd(002645) Stock Code: Jiangsu Huahong Technology Co.Ltd(002645) Jiangsu Huahong Technology Co.Ltd(002645)
And
Shenwan Hongyuan Group Co.Ltd(000166) securities underwriting and recommendation Co., Ltd
About Jiangsu Huahong Technology Co.Ltd(002645)
Application documents for public issuance of convertible corporate bonds
Reply to secondary feedback
(Revised Version)
Sponsor (lead underwriter)
(room 2004, 20th floor, Dacheng International Building, No. 358, Beijing South Road, high tech Zone (new urban area), Urumqi, Xinjiang) April 2002
China Securities Regulatory Commission:
The notice of the CSRC on the second feedback on the examination of administrative licensing projects (No. 212154) (hereinafter referred to as the "feedback") issued by your commission on December 9, 2021 has been received. According to the requirements of your feedback, Jiangsu Huahong Technology Co.Ltd(002645) (hereinafter referred to as " Jiangsu Huahong Technology Co.Ltd(002645) ," company "," listed company "," applicant "or" issuer ") together with Shenwan Hongyuan Group Co.Ltd(000166) securities underwriting recommendation Co., Ltd. (hereinafter referred to as" Shenwan Hongyuan Group Co.Ltd(000166) underwriting recommendation "or" recommendation agency ") Notarial Tianye Certified Public Accountants (special general partnership) (hereinafter referred to as "accountant", "notarial Tianye") and Jiangsu century Tongren law firm (hereinafter referred to as "lawyer", "century Tongren") and other intermediaries discussed the issues raised in the feedback, checked and expressed opinions on relevant matters.
The data in the 2021 annual report is supplemented and updated in this reply report as follows. Please review it. Unless otherwise specified in this feedback response document, the relevant terms and abbreviations have the same meanings as those in the prospectus for the public offering of convertible corporate bonds (draft application); For the data quoted in the reply to this feedback, if there is a difference between the sum of the total number and the number of sub items, or the mantissa after the decimal point is different from the original data, it is formed by the difference of the exact digits or rounding.
The font in this feedback reply represents the following meanings:
Questions listed in bold (BOLD) feedback
Song typeface reply to the questions listed in the feedback
Italics (BOLD): Based on the 2021 annual report, the amendments to this reply are listed in bold italics
catalogue
Question 1 3 question 2 73 question 3 82 question 4 109 question 5 112 question 6 114 question 7 120 question 8 one hundred and twenty-three
Question 1. Impairment of goodwill. By the end of 2020, the applicant's goodwill balance was 1.016 billion yuan, including 579 million yuan for the acquisition of Wilman and 408 million yuan for the acquisition of Xintai technology. There was no provision for impairment during the reporting period. During the performance commitment period from 2015 to 2017, Wilman basically completed the performance commitment. Since 2018, he has not completed the total profit predicted at the time of acquisition in 2015, and the completion rate in 2018 has decreased significantly from 99.79% in the last phase of the performance commitment period to 74.24%, which has continued to decline since then. From 2015 to 2018, the revenue completion ratio was 88.40%, 76.49% and 78.48% respectively, but the profit completion ratio was 103.10%, 101.24% and 99.79% respectively. From 2018 to January September 2021, Wilman's revenue completion ratio was 73.44%, 81.60%, 81.89% and 94.82% respectively, and the profit completion ratio was 74.24%, 72.96%, 68.04% and 41.34% respectively. Although the actual income does not reach the predicted income at the time of acquisition, the predicted income at the time of goodwill impairment test is even higher than the predicted income at the time of acquisition. The difference between the predicted gross profit margin and profit margin (about 13%) and the actual gross profit margin and profit margin in 2021 (6.9%) is high.
The applicant is requested to: (1) explain the pricing basis and fairness of the acquisition of Wilman and the rationality of the performance commitment, and explain whether the committed performance indicators are consistent with the historical performance and the development trend of the industry in combination with the net profit status and volatility of the three years before the acquisition of Wilman; (2) Wilman, including the main business of Suzhou Nilon and the acquisition evaluation report, including the comparison of various evaluation methods, calculation processes and conclusions, the final determination of the pricing basis and the fairness and rationality of the pricing, the reasons for the formation of goodwill, whether the acquisition consideration is apportioned to identifiable tangible and intangible assets, whether the confirmation of various assets is different from the evaluation report, and if so, explain the reasons and rationality; Explain whether the initial recognition of the company's goodwill complies with the provisions of accounting standards; (3) Explain whether there are changes in Wilman's daily operation and management mode and management team before and after the equity acquisition in 2015, the employment of natural person shareholders, and whether there is a situation that the original operation and management team of natural person shareholders is actually entrusted to contract after the equity acquisition; (4) Explain whether there are related party transactions with the applicant and its related parties during the performance commitment period after Wilman was acquired in 2015, if so, whether the relevant transaction prices are fair, and whether there are circumstances in which Wilman's performance is thickened by related party transactions to achieve the promised performance; (5) The reason and rationality of the sharp decline in the operating performance of the target company after the performance commitment period, whether it is consistent with the change trend of the industry and comparable companies in the same industry, and in combination with the sharp decline in the performance after the performance commitment period, explain the authenticity of the achievement of the performance commitment and whether there is a situation of recognizing the income in advance; (6) Explain the basis of main assumptions of goodwill impairment test in combination with historical income, gross profit margin, profit margin, growth rate, etc; List the differences between the main forecasts, parameters, the calculated recoverable amount of the asset group containing goodwill in the goodwill impairment test in each period of the reporting period, the above data and the relevant forecasts and parameters at the time of acquisition in 2015 and the book value of the asset group containing goodwill. If there are differences, explain the reasons and rationality of the differences. (7) Focus on the adequacy of the provision for goodwill impairment in 2018, 2019 and 2020 in combination with the financial status of the acquired assets, the evaluation and prediction at the time of acquisition, the prediction and Realization of the main financial indicators of impairment test over the years, etc; Whether there is sufficient basis for not withdrawing the provision for impairment of goodwill when neither income nor profit reaches the predicted level at the time of acquisition, and whether it complies with the accounting standards for business enterprises. (8) Assuming that the original forecast at the time of acquisition in 2015 is replaced by the actual amount (including the actual amount at the time of other forecasts) such as operating revenue, gross profit margin and profit from 2015 to the end of the reporting period, and the discount rate and other parameters remain unchanged, calculate and explain the amount of goodwill at the time of acquisition of Wilman in 2015, and compare it with the book amount of goodwill at the time of acquisition of the applicant to explain the differences and whether the forecast at the time of acquisition is prudent and reasonable, And if the impairment (if any) in the reporting period is calculated based on the goodwill measured by the above assumptions and included in the profit and loss, whether it will affect the issuance conditions; (9) For the main forecasts and parameters in the goodwill impairment test in each period of the previous reporting period, the table shows the sensitivity impact on the recoverable amount of the asset group containing goodwill and whether the recoverable amount will be less than the book value of the asset group containing goodwill under the condition that other condition parameters (relevant conditions at the time of acquisition in 2015) remain unchanged.
Among them, the forecast numbers and parameters that have a positive impact on the recoverable amount of each reporting period (i.e. the forecast numbers and parameters that affect the growth of the recoverable amount under other unchanged conditions), explain the differences and reasons between the forecast numbers and parameters in 2015, the basis and rationality of the forecast; (10) When the purchase price of raw materials rises sharply in the fourth quarter of 2020, explain the difference between the gross profit margin calculated based on the purchase price of raw materials in the fourth quarter of 2020 and the predicted gross profit margin, and explain the rationality of the sales gross profit margin forecast in the impairment test in 2020 in combination with the above difference; (11) Explain the reason and rationality that the profits in the forecast period in the impairment test in 2020 are higher than the actual profits in the previous period and show an upward trend phase by phase under the condition that Wilman's total profits in 2020 decreased year-on-year; In combination with the operation in 2021, explain whether there is any sign of impairment of goodwill in 2021 and whether the accrual of goodwill is cautious; In combination with the weighted average return on net assets of the applicant in the last three years, explain whether the impact of adjusting the recognition of goodwill or impairment provision on the issuance conditions will lead to the failure to meet the issuance conditions; (12) The impairment test of Wellman's goodwill in each period, the specific methods and parameters of goodwill impairment test, whether the provision of goodwill impairment is sufficient and cautious, whether it complies with the relevant provisions of accounting standards for Business Enterprises No. 8 - asset impairment and accounting regulatory risk tips No. 8 - goodwill impairment, and whether the risk of goodwill impairment is fully disclosed.
The recommendation institution and the applicant's accountant shall explain the verification basis and process, and give clear verification opinions, and the accountant shall give special audit opinions.
reply:
1、 Explain the pricing basis and fairness of the acquisition of Wilman and the rationality of the performance commitment, and explain whether the committed performance indicators are consistent with the historical performance and the development trend of the industry in combination with the net profit status and volatility of the three years before the acquisition of Wilman
(I) pricing basis, fairness and reasonableness of performance commitment for acquisition of Wilman
1. Pricing basis and fairness of acquisition of Wilman
According to the transaction plan deliberated and approved by the seventh meeting of the Fourth Board of directors of the issuer and the second extraordinary general meeting of shareholders in 2015 and approved by the document of CSRC zjxk [2015] No. 2356, The company's acquisition of Wilman is based on the appraisal report (Tianxing pingbao Zi (2015) No. 0407) issued by Beijing Tianjian Xingye Asset Appraisal Co., Ltd. (hereinafter referred to as "Tianjian Xingye"), an appraisal institution with securities business qualification.
According to the appraisal report, Tianjian Xingye has evaluated all shareholders' equity of Wilman by using asset-based method and income method, and the appraisal result of income method is taken as the final appraisal conclusion. The benchmark date of the appraisal is December 31, 2014, and the appraisal value of Wilman's 100% equity is 836745300 yuan. After deducting the cash dividend of 20 million yuan that has been implemented after the benchmark date, the 100% equity of Wilman is valued at 813 million yuan after being confirmed by all parties to the transaction.
When acquiring Wilman, the evaluation and pricing of 100% equity of Wilman fully considered the favorable industry environment, outstanding competitive advantage, good financial performance and future development prospects of Wilman, and the relative valuation was lower than the P / E ratio of listed companies and the P / E ratio of Listed Companies in the same industry.
According to the net profit, net assets and predicted value of Wilman determined in the audit report (thsz [2015] No. 01446) issued by Tianheng Certified Public Accountants (special general partnership) and the appraisal report (thpbz (2015) No. 0407) issued by Tianjian Xingye, the relative valuation level of Wilman is as follows:
(1) The relative valuation level of Wilman is shown in the table below:
Project forecast for 2014, 2015 and 2016
Net profit (10000 yuan) 674160755195854810
Owner's equity (10000 yuan) 1664295 --
The price of this transaction (10000 yuan) is 8130000
Project forecast for 2014, 2015 and 2016
Trading P / E ratio (Times) 12.06 10.77 9.51
Trading price to book ratio (Times) 4.88 --
In 2014, Jiangsu Huahong Technology Co.Ltd(002645) 's basic earnings per share was 0.0650 yuan. According to the price of the shares issued to the counterparty of 15.21 yuan / share, the price earnings ratio of the shares issued this time was 234 times (the price of the shares issued this time / the basic earnings per share in 2014). The static P / E ratio of Wilman, the subject of this transaction, in 2014 was 12.06 times, and the P / E ratio calculated according to the predicted net profit in 2015 and 2016 were 10.77 times and 9.51 times respectively. The P / E ratio of Wilman was significantly lower than that of Jiangsu Huahong Technology Co.Ltd(002645) .
(2) Comparative analysis of P / E ratio and P / B ratio of comparable listed companies
Wilman mainly focuses on the independent R & D, production and sales of elevator accessories. At the time of acquisition, the main business of China's A-share market is very little the same as that of Wilman. Therefore, in this comparative analysis, Changjiang Runfa, a listed company of elevator accessories, was selected as a comparable company, and five listed companies were selected, all of which are related to the whole elevator. As of the benchmark date of the transaction, December 31, 2014, the comparison of P / E ratio and P / B ratio between Wilman and major comparable listed companies in the same industry in China is as follows:
Serial number securities code securities abbreviation P / E P / b
1 Canny Elevator Co.Ltd(002367) . SZ Canny Elevator Co.Ltd(002367) 23.22 4.45
2 Changjiangrunfa Health Industry Co.Ltd(002435) . SZ Changjiang Runfa 44.66 2.24
(current name: Changjiangrunfa Health Industry Co.Ltd(002435) )
3 Shenyang Yuanda Intellectual Industry Group Co.Ltd(002689) . Sz bolint
