Stock abbreviation: Qingdao Gaoce Technology Co.Ltd(688556) Stock Code: Qingdao Gaoce Technology Co.Ltd(688556) Qingdao Gaoce Technology Co.Ltd(688556)
（Qingdao Gaoce Technology Co., Ltd.）
(No. 66 torch Branch Road, Qingdao high tech Industrial Development Zone)
Prospectus for issuing convertible corporate bonds to unspecified objects (Revised)
Sponsor (lead underwriter)
(16-26 floors of Guosen Securities Co.Ltd(002736) building, Hongling Middle Road, Luohu District, Shenzhen)
May 2021
statement
The company and all directors, supervisors and senior managers promise that there are no false records, misleading statements or major omissions in the prospectus and other information disclosure materials, and bear corresponding legal liabilities for their authenticity, accuracy and completeness.
The person in charge of the company, the person in charge of accounting and the person in charge of the accounting organization shall ensure that the financial and accounting materials in the prospectus are true and complete.
Any decision or opinion made by the CSRC and the exchange on this issuance does not indicate that they guarantee the authenticity, accuracy and integrity of the application documents and the information disclosed, nor do they indicate that they make substantive judgment or guarantee on the profitability, investment value of the issuer or the income of investors. Any statement to the contrary is a false statement.
Once any investor holds the bonds through subscription, transaction, transfer, inheritance or other legal means, it shall be deemed to agree to the trustee agreement, rules of bondholders’ meeting and other relevant agreements on the rights and obligations of the issuer, bondholders, bond trustee and other subjects in this prospectus.
According to the provisions of the securities law, the issuer shall be responsible for the changes in the operation and income of the issuer after the securities are issued according to law. Investors independently judge the investment value of the issuer, make investment decisions independently, and bear the investment risks caused by changes in the operation and income of the issuer or changes in the price of securities after the issuance of securities according to law.
Tips on major issues
The company specially reminds investors that before making investment decisions, they must carefully read the text of this prospectus and pay special attention to the following important matters. 1、 The risk that the convertible bonds held by the company’s convertible bond investors who do not meet the appropriateness requirements of the stock investors of the science and innovation board cannot be converted into shares
The company is a listed company on the science and innovation board. The investors who issue convertible corporate bonds to unspecified objects this time and participate in the conversion of convertible bonds into shares shall meet the suitability management requirements of stock investors on the science and innovation board. If the holders of convertible bonds fail to meet the requirements for the appropriateness management of stock investors on the science and innovation board, the holders of convertible bonds will not be able to convert their convertible bonds into company shares.
The company has set redemption terms for this issuance of convertible bonds, including maturity redemption terms and conditional redemption terms. If the holders of the company’s convertible bonds do not meet the appropriateness requirements of stock investors on the science and innovation board, when the convertible bonds they hold are facing redemption, considering that the convertible bonds they hold cannot be converted into company shares, If the redemption price determined by the company according to the redemption terms agreed in advance is lower than the price (or cost) of the convertible bond obtained by the investor, the investor has the risk of loss due to the low redemption price.
There are resale terms and conditions for the resale of the company’s bonds. If the holders of the company’s convertible bonds fail to meet the appropriateness requirements of the stock investors of the science and innovation board, and on the premise of meeting the resale terms, the holders of the company’s convertible bonds require to resell all or part of the convertible corporate bonds held by them to the company at the price of the face value of the bonds plus the accrued interest of the current period, the company will face great pressure on the capital for the resale and cashing of convertible corporate bonds, and there is a risk of affecting the production and operation of the company or the normal implementation of the raised investment projects. 2、 On the credit rating of convertible corporate bonds issued by the company this time
The company hired zhongchengxin international credit rating Co., Ltd. to conduct credit rating for the convertible corporate bonds issued this time. The credit rating of Qingdao Gaoce Technology Co.Ltd(688556) subject is a +, the credit rating of convertible corporate bonds this time is a +, and the rating outlook is stable.
During the duration of the convertible corporate bonds issued this time, the rating agency will conduct tracking rating at least once a year. If the credit rating of convertible corporate bonds is lowered due to factors such as the external business environment, the company’s own situation or the change of rating standards, it will increase the investment risk of investors and have a certain impact on the interests of investors.
3、 Explanation on no guarantee provided for this issuance
There is no guarantee for the issuance of convertible corporate bonds to unspecified objects. Please note that the convertible corporate bonds may have cashing risk due to the lack of guarantee. 4、 Special risk tips
The company urges investors to carefully read the full text of “risk factors” in this prospectus and pay special attention to the following risks:
(I) risk of policy changes in downstream industries
During the reporting period, the company was mainly engaged in the R & D, production and sales of high hard and brittle material cutting equipment and cutting consumables. The products were mainly used in the photovoltaic industry, and the downstream customers were mainly photovoltaic silicon material manufacturers. The company’s cutting equipment business is mainly affected by the customers’ willingness to expand production and the implementation progress of production expansion in the links of silicon rods and silicon wafers. The cutting consumables business is mainly affected by the operating rate of customers and the market demand of silicon wafers. The production expansion plan, operating rate and market demand of downstream customers depend on the new installed capacity and increment of photovoltaic application market outside China. The downstream photovoltaic industry of the company is highly related to the national macroeconomic situation and global photovoltaic national industrial policies, and the policy support will affect the prosperity of the industry to a certain extent. In terms of China’s policies, China’s support for the installed scale of photovoltaic power generation, the subsidy intensity for photovoltaic power generation, and the support measures for photovoltaic power generation on grid and consumption directly affect the production and operation of Companies in the industry; In terms of international policies, the European Union, the United States, India and other countries and regions have taken trade investigation or trade protection measures against Chinese photovoltaic cell products, which has brought a certain degree of negative impact on the business environment of Chinese photovoltaic enterprises. If there are major adverse changes in China’s foreign policies in the photovoltaic industry, and the growth rate of new installed capacity in the photovoltaic application market slows down or decreases, it will affect the operating rate and production expansion willingness of downstream customers of the company, and then have a significant adverse impact on the market demand of the company’s products, or will have a significant adverse impact on the company’s revenue scale, product price, sales volume and gross profit margin in a certain period, The company may face the risk of sharp decline in operating performance or even loss.
(II) overcapacity risk caused by industry recovery
At present, in the context of the clean transformation of energy structure, in order to seize the development opportunities of the industry, photovoltaic cutting equipment, cutting consumables and silicon wafer manufacturing enterprises continue to announce production expansion plans: on the one hand, leading enterprises actively expand production capacity in order to improve market share and maintain competitive position; on the other hand, emerging enterprises in the industry are also emerging, and new entrants increase production capacity construction by virtue of their subsequent advantages, This has led to a significant increase in new capacity in the market.
If the growth rate of photovoltaic application market is lower than the expectation of production expansion or even decline, the above-mentioned new capacity will further cause disorderly competition in the industry, resulting in a sharp decline in the product price and demand of the company’s cutting equipment, cutting consumables and silicon wafer cutting service business, a rapid decline in enterprise profits, and the company may face the risk of changes in the market environment caused by overcapacity, The company may face the risk of sharp decline in operating performance or even loss.
(III) risk of intensified market competition and continuous decline in product prices
During the reporting period, the average selling prices of various products of the company showed a downward trend. The annual average selling prices of the company’s main products and the compound volatility of the average selling prices are shown in the table below:
Unit: 10000 yuan / set, 10000 yuan / kilometer
Average selling price
Product category compound volatility 20212020 2019
High hard and brittle material cutting equipment – 8.35% 96.69 106.24 115.10
High hard and brittle material cutting consumables – 19.53% 39.16 48.30 60.48
Note: Compound volatility refers to the annual compound volatility of the average selling price of products from 2019 to 2021. The calculation formula is (average selling price in 2021 / average selling price in 2019) ^ (1 / 2) – 1.
In recent years, with the large-scale application of diamond wire cutting technology in more high hard and brittle material industries such as photovoltaic industry, many enterprises have successively entered the field of high hard and brittle material cutting equipment and diamond wire manufacturing, and continue to strengthen the R & D investment, capacity construction and market promotion of relevant products. The intensification of market competition may have a significant adverse impact on the sales price and sales volume of the company’s main products, This may have a significant adverse impact on the company’s operating performance.
(IV) high customer concentration risk
During the reporting period, the company mainly sold cutting equipment and cutting consumables to the photovoltaic industry, and its operating performance is closely related to the production expansion plan and operation of downstream customers. The silicon wafer manufacturing link where the company’s downstream customers are located is one of the links with high concentration in the global photovoltaic industry chain. In 2020, the output of the top five silicon wafer enterprises accounted for about 88.1% of the national total output, an increase of 15.3 percentage points year-on-year compared with 2019. Affected by the high concentration of silicon wafer links, in 2019, 2020, 2021 and January March 2022, the sales revenue from the top five customers accounted for 65.47%, 71.54%, 59.82% and 62.06% of the operating revenue respectively, and the downstream customers of the company were relatively concentrated.
Affected by the high concentration of customers, the company may face the following adverse situations: first, if the operation and financial status of the company’s important customers change adversely, or the cooperative relationship between the company and important customers is adversely affected and it is unable to quickly develop new large customers, it may have an adverse impact on the company’s operating performance; Secondly, the high customer concentration may lead to the increase of the procurement scale of the company’s single downstream customer and the enhancement of the bargaining power of downstream customers, so as to reduce their procurement price to suppliers, which may have an adverse impact on the company’s business performance; Thirdly, the high concentration of customers may aggravate the competition of downstream customers and reduce the price of downstream silicon wafer products, thus compressing the product profit space of upstream suppliers. If the above adverse circumstances occur, the sales volume, selling price and gross profit margin of the company’s products may decline, which may have a significant adverse impact on the company’s operating performance.
(V) adverse risks of new business expansion
In March 2021, the company invested in the construction of “photovoltaic large silicon wafer R & D center and intelligent manufacturing demonstration base project” in Leshan City, Sichuan Province, which is one of the first raised investment projects of the company; In July 2021, the 28th meeting of the second board of directors of the company deliberated and approved the proposal on investment and construction of Leshan 20GW photovoltaic large silicon wafer and supporting projects and the proposal on investment and construction of Jianhu 10GW photovoltaic large silicon wafer project. Among them, 12gw silicon rod and 6Gw silicon wafer projects in Leshan 20GW project are the raised investment projects. The above-mentioned new expansion projects are the projects for the company to expand downstream on the basis of existing business. They are heavy asset investment projects. At the initial stage of project construction and operation, the company’s depreciation, labor and other expenses will rise. If the production capacity construction time exceeds expectations, the production capacity climbing cycle is long, the production process is improved slowly, and the product quality does not meet the customer’s requirements The supplier is unable to provide sufficient raw materials, resulting in insufficient capacity utilization and other adverse circumstances, which will have a significant adverse impact on the company’s short-term operating performance, and the company may face the risk of sharp decline in operating performance or even loss; In the mature period of project operation, if there are adverse circumstances such as the production capacity of silicon rods and silicon wafer cutting links built by customers, significant adverse changes in customers’ business conditions, customers’ requirements for price reduction, and the decline of silicon wafer sales price, resulting in intensified competition in silicon wafer cutting links, thus squeezing the profit space of suppliers, it will have a significant adverse impact on the company’s long-term business performance, and the company may have the risk of sharp decline in business performance or even loss.
As a new entrant in the field of diamond wire cutting in semiconductor, sapphire, magnetic materials and other industries, the company is facing challenges in the early stage of business expansion, such as lack of sales channels, weak market coverage, less product reserves and so on. In addition, in the early stage of the company’s new business expansion process, the market use data of the company’s new business products is less, and the customer’s purchase decision of the company’s products needs a period of verification process. If the company fails to take effective measures to deal with market challenges in the process of carrying out the above business, it may hinder the development of new business and adversely affect the company’s operating performance.
(VI) risk of dependence on key customers of investment projects with raised funds
The investment project of the raised funds is to support the downstream 12gw silicon rod processing and 6Gw silicon wafer cutting capacity of the customer’s Beijing Jingyuntong Technology Co.Ltd(601908) 12gw crystal drawing project. The company obtains the single crystal round rod from Beijing Jingyuntong Technology Co.Ltd(601908) for processing and returns the single crystal silicon rod, square rod and single crystal silicon wafer products to the customer. Affected by the above business model, the actual processing capacity of monocrystalline silicon rod, square rod and monocrystalline silicon wafer products of the raised funds investment project is affected by the actual production capacity of Beijing Jingyuntong Technology Co.Ltd(601908) single crystal round rod, and the realization of project benefits is affected by the development of Beijing Jingyuntong Technology Co.Ltd(601908) business. On the one hand, if the capacity of Beijing Jingyuntong Technology Co.Ltd(601908) single crystal round rod fails to reach the expected capacity, the capacity of the company’s single crystal silicon rod, square rod and single crystal silicon wafer will not reach the expected capacity scale, resulting in the expected benefits of the raised investment project; On the other hand, if affected by such operating factors as the sharp decline in product prices caused by fierce competition in the silicon wafer Market and the insufficient operating rate caused by insufficient supply of polysilicon materials, Beijing Jingyuntong Technology Co.Ltd(601908) performance does not meet expectations, it will lead to Beijing Jingyuntong Technology Co.Ltd(601908) reduce the output of single crystal round rods or the scale of OEM business, resulting in the expected benefits of this raised investment project. In addition, the cooperation period of the OEM agreement signed by the company and Beijing Jingyuntong Technology Co.Ltd(601908) is 5 years, and the benefit calculation period is 10 years according to the general calculation method of the industry. If the cooperation agreement is not renewed after Beijing Jingyuntong Technology Co.Ltd(601908) 5 years and the company has no other OEM customer orders to cover the above-mentioned capacity, it will lead to the risk that the benefit of the raised investment project will not reach the expected level. Therefore, the raised investment project has the risk of relying on Beijing Jingyuntong Technology Co.Ltd(601908) and may have an adverse impact on the company’s operating performance. 5、 Measures and commitments to fill immediate returns
(I) the issuer’s proposal on filling the amortized shares
