Luoyang Xinqianglian Slewing Bearings Co.Ltd(300850) (address: Jiuzhou Road, Luoxin Industrial Park)
Demonstration and analysis report on issuing convertible corporate bonds to unspecified objects
January 2002
Section I background and necessity of the issuance
Luoyang Xinqianglian Slewing Bearings Co.Ltd(300850) (hereinafter referred to as " Luoyang Xinqianglian Slewing Bearings Co.Ltd(300850) " or "the company") is a company listed on the gem of Shenzhen Stock Exchange. In order to meet the capital needs of the company's business development, enhance the company's capital strength and enhance its profitability, according to the company law of the people's Republic of China (hereinafter referred to as "the company law") The provisions of the securities law of the people's Republic of China (hereinafter referred to as the "Securities Law"), the measures for the administration of securities issuance and registration of companies listed on the gem (for Trial Implementation) (hereinafter referred to as the "measures for refinancing on the gem") and other relevant laws, regulations and normative documents, The company intends to raise funds by issuing convertible corporate bonds (hereinafter referred to as "convertible bonds") to unspecified objects. 1、 Background of this issuance
(I) the global wind power installed capacity is growing rapidly
With the international community paying more and more attention to energy security, ecological environment, abnormal climate and other fields, reducing the combustion of fossil energy and accelerating the development and utilization of renewable energy have become the common consensus and concerted action of countries all over the world. In 2015, the new installed capacity of global renewable energy power generation exceeded that of conventional energy power generation for the first time, indicating that the construction of global power system is undergoing structural transformation.
As a clean and stable renewable energy, wind energy is one of the power generation methods with the most mature technology, the most large-scale development conditions and commercial development prospects in the field of renewable energy. At present, more than 100 countries around the world have begun to develop wind power. According to the statistics of the Global Wind Energy Council, the cumulative installed capacity of global wind power increased from 23.9gw to 742.7gw from 2001 to 2020, with a compound annual growth rate of 19.83%. The growth rate is fast. The specific installed capacity is as follows:
Source: Global Wind Energy Council
Among them, Asia, Europe and North America are the main global wind power markets. According to the statistics of the Global Wind Energy Council, in 2020, the cumulative installed capacity of Asia, America and Europe were 339.4gw, 169.8gw and 218.9gw respectively, accounting for about 98% of the global cumulative installed capacity.
(II) China's wind power industry policy provides an important guarantee for the rapid development of wind power market
In September 2020, China made it clear that it would strive to reach the peak of carbon dioxide emissions by 2030 and strive to achieve carbon neutralization by 2060. In October 2020, the wind power industry issued the Beijing Declaration on wind power in Beijing, saying that in order to cope with climate change and low-carbon transformation, achieve the peak of China's carbon emissions by 2030, strive to achieve carbon neutralization by 2060, and ensure an annual increase of more than 50gw of installed capacity. After 2025, the annual newly installed capacity of wind power in China shall not be less than 60GW, reaching at least 800 million KW by 2030 and at least 3 billion kw by 2060. The sustainable development of clean energy such as wind power has brought long-term development opportunities to the wind power industry.
On December 12, 2020, Xi Jinping delivered an important speech entitled "carry on the past and forge ahead into the future and start a new journey of global response to climate change" through video at the climate ambition summit, and announced that by 2030, China's carbon dioxide emission per unit of China's GDP will be reduced by more than 65% compared with 2005, and the proportion of non fossil energy in primary energy consumption will reach about 25%, Forest reserves will increase by 6 billion cubic meters over 2005, and the total installed capacity of wind power and Cecep Solar Energy Co.Ltd(000591) power generation will reach more than 1.2 billion kilowatts.
The outline of the 14th five year plan clearly points out that we should accelerate the development of non fossil energy, adhere to both centralized and distributed development, vigorously improve the scale of wind power and photovoltaic power generation, accelerate the development of distributed energy in the East and middle part, orderly develop offshore wind power, accelerate the construction of hydropower bases in the southwest, safely and steadily promote the construction of coastal nuclear power, and build a number of clean energy bases with complementary multi energy, The proportion of non fossil energy in total energy consumption has increased to about 20%. Meanwhile, the state clearly proposes that the proportion of non fossil energy in China's primary energy consumption will reach about 25% by 2030. According to the prediction of Citic Securities Company Limited(600030) Research Report, the average annual new installed capacity of wind power during the "14th five year plan" period is expected to exceed 50gw, which is a significant increase compared with the average installed capacity during the "13th five year plan" period.
(III) China's installed capacity continues to expand and the wind power industry continues to develop
In recent years, the sustained and rapid development of China's wind power industry has benefited from clear planning and development objectives of continuous upgrading. According to the statistics of China Wind Energy Association, the newly installed capacity of wind power in China will be 54.4gw in 2020, with a year-on-year increase of 102.99%; By the end of 2020, the cumulative installed capacity of wind power in China reached 290.7gw, a year-on-year increase of 23.02%; The cumulative installed capacity of wind power in China has increased from about 2% in 2000 to about 38% in 2020, far exceeding the global average. It has become the largest and fastest-growing market of wind power generation in the world.
The cumulative installed capacity and annual new installed capacity of wind power in China from 2004 to 2020 are as follows: data source: China Wind Energy Association
(IV) breakthroughs in key technologies, continuous enrichment and improvement of operation and maintenance experience and industry standards, and rapid development of offshore wind power
From the perspective of key technologies of offshore wind power, China has made many breakthroughs. In terms of localization of offshore wind turbines, manufacturers of complete wind turbines such as Xinjiang Goldwind Science And Technology Co.Ltd(002202) , Shanghai Electric Group Company Limited(601727) , Ming Yang Smart Energy Group Limited(601615) have carried out test demonstration of large capacity units above 5MW. In terms of offshore wind farm construction, the degree of specialization of wind power construction ships has been high, and its lifting and operation capacity can meet the installation requirements of large capacity units; At the same time, the piling equipment has been relatively perfect, and the foundation construction technology and construction technology are basically mature to meet the construction requirements of large-capacity wind turbine foundation.
From the perspective of offshore wind power operation and maintenance, China has accumulated some operation and maintenance experience. By the end of 2020, China's cumulative installed capacity of offshore wind power is about 10GW, and has accumulated some operation and maintenance experience; The operation and maintenance ship promotes innovation, the professional operation and maintenance ship is applied, and the operation and maintenance level is continuously improved. At the same time, China's first national standard for offshore wind farms, design standard for offshore wind farms (GB / t51308-2019), has been implemented since October 1, 2019. This standard has reached the international advanced level and filled the gap in the design standard of China's offshore wind farms.
Offshore wind power has the advantages of high power generation capacity of wind turbines, large installed capacity of single unit, stable operation of units, no land occupation, no water consumption and suitable for large-scale development. At the same time, offshore wind power is generally close to traditional power load centers, economic development in coastal areas, large power grid capacity and good wind power access conditions, which are convenient for power grid consumption, Without the problem of long-distance power transmission, the global wind farm construction has developed from land to offshore.
According to the 13th five year plan for wind power development and review and Prospect of offshore wind power 2020, China will focus on promoting offshore wind power construction in Jiangsu, Zhejiang, Fujian, Guangdong and other provinces. It is expected that by 2030, the offshore wind power installed capacity target of China's coastal provinces will be close to 60GW, and by the end of 2020, the cumulative installed capacity of China's offshore wind power will be about 10GW, There is more room for growth. 2、 Necessity of implementation of this issuance
(I) expand the business scale of gale power parts, improve the profitability of the company and enhance the competitiveness of the company
Wind power bearing business has always been the core business of the company. With long-term technical accumulation, rich production experience and high-quality management ability, the company provides customers with slewing ring products with excellent performance. After years of development, the company has strong independent innovation ability and strong market competitiveness. It has maintained a long-term and stable cooperative relationship with customers and formed a brand effect. The high-power wind power yaw pitch bearing and wind power main shaft bearing have reached the level of import substitution.
The company plans to raise funds through the issuance of convertible bonds to develop the business of gearbox bearings and precision parts. As an important part of the wind power machine, the gearbox has a huge market space. At the same time, the company can rely on the business experience and resources accumulated by wind power bearing in procurement, production and sales, and translate the experience and resources to the wind power gearbox bearing and precision parts business, so as to realize the coordinated development of wind power bearing and wind power gearbox precision parts business.
This issuance of the company can further increase the market share of wind power parts, seize the expansion opportunity of wind power market, meet customers' demand for large-scale wind power parts, improve the overall profitability of the company and enhance the core competitiveness of the company, which is of great strategic significance to realize the long-term sustainable development of the company and improve the long-term return of shareholders.
(II) it is conducive to strengthening cooperation with customers and realizing the sustainable development of the company
The company focuses on the R & D, production and sales of core components of wind power. With years of R & D accumulation and technical advantages, as well as high-quality and performance products, the company has established close cooperative relations with customers such as Ming Yang Smart Energy Group Limited(601615) , prospective energy, Dongfang Electric Corporation Limited(600875) , Harbin power wind energy, Sany Heavy energy, CSCEC marine equipment, CRRC wind power, etc.
As the core parts of the wind power machine, gearbox, gearbox bearings and precision parts are the key and difficult points in the localization of high-power wind power machine. The company's customers are mainly wind power complete machine manufacturers, and the demand for gearbox, wind power gearbox bearings and precision parts also continues to grow. The company's raised investment project can provide customers with wind power gearbox bearings and precision parts products, which will further strengthen the cooperative relationship with customers and realize the sustainable development of the company.
(III) meeting the growing demand for working capital
In recent years, the business scale of the company has increased rapidly and the revenue scale has gradually expanded. During the reporting period, the operating revenue of the company was 457.1282 million yuan, 64.3097 million yuan, 2064.401 million yuan and 1899.7764 million yuan respectively, and the revenue scale has increased rapidly. Due to the improvement of business scale, the amount of working capital required for daily operation is also increasing. The raised funds can meet the company's growing demand for working capital and improve the company's ability to resist operational risks.
At the same time, the company will make full use of this issuance to further optimize the product line, continuously deepen the business layout in the field of wind power parts, comply with the market development trend, comprehensively improve the market competitiveness of the company's products and services, and continuously improve the company's comprehensive competitive strength and sustainable profitability.
Section II appropriateness of the selection scope, quantity and standard of the issuing object I. appropriateness of the selection scope of the issuing object
The specific issuance method of convertible corporate bonds shall be determined through consultation between the board of directors authorized by the general meeting of shareholders and the sponsor (lead underwriter). The issuing objects of convertible corporate bonds are natural persons, legal persons, securities investment funds and other investors in compliance with laws and regulations holding the securities account of Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. (except those prohibited by national laws and regulations).
The convertible corporate bonds issued this time shall be subject to priority placement to the original shareholders of the company. The specific proportion of priority placement to the original shareholders shall be submitted to the general meeting of shareholders to authorize the board of directors to determine according to the specific conditions at the time of issuance, and shall be disclosed in the issuance announcement of convertible corporate bonds. The original shareholders have the right to waive the placement right. In addition to the preferential placement by the original shareholders and the part that the original shareholders give up the preferential distribution and after-sales, it shall be issued online through the trading system of Shenzhen Stock Exchange, or it shall be issued offline to institutional investors and online pricing through the trading system of Shenzhen Stock Exchange, and the balance shall be underwritten by the underwriter.
The selection scope of the offering object complies with the provisions of relevant laws, regulations and normative documents of China Securities Regulatory Commission and Shenzhen Stock Exchange, and the selection scope is appropriate. 2、 Appropriateness of the number of objects to be issued this time
The issuing objects of convertible corporate bonds are natural persons, legal persons, securities investment funds and other investors in compliance with laws and regulations holding the securities account of Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. (except those prohibited by national laws and regulations).
The standards of the issuing objects comply with the relevant laws, regulations and normative documents of the CSRC and Shenzhen Stock Exchange, and the number of issuing objects is appropriate. 3、 Appropriateness of standards for the object of this issuance
The issuing object of convertible corporate bonds shall have certain risk identification ability and risk bearing ability, and have corresponding capital strength.
The standards of the issuing objects comply with the relevant laws, regulations and normative documents of the CSRC and Shenzhen Stock Exchange, and the standards of the issuing objects are appropriate.
Section III rationality of pricing principle, basis, method and procedure of this issuance I. rationality of pricing principle of this issuance
After obtaining the approval of the CSRC on the registration of this issuance, the company will determine the issuance period after consultation with the sponsor (lead underwriter). The pricing principles of this offering are as follows:
(I) bond interest rate
The determination method of the coupon rate of the convertible corporate bonds issued this time and the final interest rate level of each interest bearing year shall be submitted to the general meeting of shareholders of the company to authorize the board of directors to negotiate and determine with the sponsor (lead underwriter) according to national policies, market conditions and specific conditions of the company before issuance.
(II) conversion price
1. Determination of initial conversion price
The initial conversion price of the convertible corporate bonds issued this time shall not be lower than the average trading price of the company's shares 20 trading days before the announcement date of the prospectus (if there has been a stock price adjustment due to ex right and ex dividend within these 20 trading days, the closing price on the trading day before the adjustment shall be calculated according to the price after corresponding ex right and ex dividend adjustment) If the price is higher than the average trading price of the company's shares on the previous trading day, the specific initial conversion price shall be submitted to the general meeting of shareholders of the company to authorize the board of directors of the company to negotiate and determine with the sponsor (lead underwriter) according to the market and the specific situation of the company before issuance.
The average trading price of the company's shares in the first twenty trading days = the total trading volume of the company's shares in the first twenty trading days / the total trading volume of the company's shares in the twenty trading days;
The average trading price of the company's shares on the previous trading day = the total trading volume of the company's shares on the previous trading day / the total trading volume of the company's shares on that day.
2. Adjustment method and calculation formula of conversion price
After this issuance, when the company's shares change due to the distribution of stock dividends, conversion to share capital, additional issuance of new shares or allotment of shares, and distribution of cash dividends (excluding the increased share capital due to the conversion of convertible corporate bonds issued this time), the conversion price will be adjusted according to the following formula (two decimal places shall be reserved, and the last one shall be rounded):
Distribution of stock dividends or conversion to share capital: P1 = P0 / (1 + n);
Additional shares or allotment: P1 = (P0 + a) × k）/（1+k）；
The above two items shall be carried out simultaneously: P1 = (P0 + a) × k）
