Beijing Zhonglun law firm
About runbei Aviation Technology Co., Ltd
Initial public offering and listing
Supplementary legal opinion (III)
February, 2002
Beijing Shanghai Shenzhen Guangzhou Chengdu Chongqing Hangzhou Nanjing Haikou Tokyo Hong Kong London New York Los Angeles San Francisco Almaty
catalogue
interpretation...... 2. Matters declared by the exchange 2 text 3 I. about business 3 II. Accounts receivable from HNA 35 III. about orders and selling prices 48 IV. about sustainable management 55 v. about core competitiveness 68 VI. about suppliers 87 VII. About consignment mode 98 VIII. About share based payment 106 IX. related party guarantee and fund lending one hundred and eight
Beijing Zhonglun law firm
About runbei Aviation Technology Co., Ltd
Initial public offering and listing
Supplementary legal opinion (III)
To: runbei Aviation Technology Co., Ltd
Beijing Zhonglun law firm (hereinafter referred to as "the firm") has accepted the entrustment of runbei Aviation Technology Co., Ltd. (hereinafter referred to as "runbei aviation", "the company" or "the issuer") to act as the special legal adviser for the issuer's application for initial public offering of RMB common shares (A shares) and listing (hereinafter referred to as "the offering" or "the listing").
The exchange has issued the legal opinion of Beijing Zhonglun law firm on the initial public offering and listing of runbei Aviation Technology Co., Ltd. and the supplementary legal opinion of Beijing Zhonglun law firm on the initial public offering and listing of runbei Aviation Technology Co., Ltd. for the issuer's issuance and listing The supplementary legal opinion of Beijing Zhonglun law firm on the initial public offering and listing of runbei Aviation Technology Co., Ltd. (II) (hereinafter collectively referred to as the "original legal opinion") and the lawyer work report of Beijing Zhonglun law firm on issuing legal opinions for the initial public offering and listing of runbei aviation technology Co., Ltd. (hereinafter referred to as the "lawyer work report").
In accordance with the requirements of the notice of the CSRC on the second feedback on the examination of administrative licensing projects (No. 211638) (hereinafter referred to as the "feedback") issued by the China Securities Regulatory Commission on January 6, 2022, the exchange hereby issues the following supplementary legal opinions on the matters related to the feedback:
interpretation
Unless otherwise specified, the terms, names and abbreviations used in this legal opinion have the same meanings as those in the original legal opinion and lawyer work report issued by this office. In this legal opinion, if there are differences in the mantissa between the total and the sum of the sub items, these differences are caused by rounding. Matters declared by the exchange
The statements and commitments made in the original legal opinion and lawyer work report of the office are applicable to this legal opinion.
text
1、 About business
The issuer is a distributor. The upstream customers are mainly international well-known original manufacturers, and the downstream are airlines, aircraft maintenance companies, aircraft manufacturers and OEM manufacturers. The upstream and downstream have strong bargaining power and high market concentration on aviation material distributors. During the reporting period, the distribution agreement was stopped, and downstream customers directly purchased from the original factory, domestic substitution, etc.
The issuer is requested to: (1) explain the rationality of higher gross profit rate in combination with the issuer's gross profit rate of ExxonMobil and other original distributed products, the necessity for ExxonMobil to choose the issuer as the distributor, and whether it is possible to change the distributor or conduct direct sales in the future; Why the downstream customers of the issuer do not purchase directly, but buy from the issuer and give higher gross profit; Whether the issuer's business model is reasonable, necessary and sustainable in the future; Whether the price given by ExxonMobil and other upstream original manufacturers to other distributors is consistent with the issuer, and whether there is a large difference between the gross profit margin of other distributors and the issuer; (2) Explain the sustainability of the distribution mode of the industry in combination with the direct purchase of downstream customers, application for distribution qualification and domestic substitution of main products; (3) Most of the authorized distribution contracts obtained by the issuer from the original factory have a term of 1-3 years. In combination with the basic information, cooperation history, procurement method, pricing method, settlement method, etc. of the main suppliers, and in combination with the authorized period and expiration renewal of the suppliers during the reporting period, explain the stability and sustainability of the cooperation between the issuer and the main suppliers, and explain and disclose whether there are major uncertainties in the continuous acquisition of distribution contracts; (4) Further explain the specific impact on the issuer's production and operation caused by the failure to renew the authorized distribution agreement after the expiration of the reporting period and the requirements of some suppliers for volume procurement; (5) Explain the reason and rationality of downstream customers purchasing through agents, the proportion and trend of customers' independent purchase amount and its impact on the issuer's business in combination with the specific situation of downstream main customers' independent application for aviation material distribution qualification and the specific contents of product solution services and supply chain management services provided by the issuer in the distribution process; (6) Explain whether there is any situation that Chinese airlines or their domestic and foreign subsidiaries directly purchase aviation fuel from the issuer's suppliers (or their subsidiaries), whether there are legal and policy obstacles to direct procurement, and the main commercial considerations of airlines purchasing aviation fuel through intermediaries; (7) Combined with the impact of international trade friction on downstream customers, explain the impact on the issuer's business and whether the relevant risk disclosure is sufficient; (8) Explain whether the latest changes of covid-19 epidemic have a significant adverse impact on the issuer's business. The sponsor and the issuer's lawyer shall explain the verification basis and process, and express clear verification opinions.
(I) verification reply
1. In combination with the issuer's gross profit margin on ExxonMobil and other products distributed by the original factory, explain the rationality of higher gross profit margin, the necessity for ExxonMobil to choose the issuer as the distributor, and whether it is possible to change the distributor or conduct direct sales in the future; Why the downstream customers of the issuer do not purchase directly, but buy from the issuer and give higher gross profit; Whether the issuer's business model is reasonable, necessary and sustainable in the future; Whether the price given by ExxonMobil and other upstream original manufacturers to other distributors is consistent with the issuer, and whether there is a large difference between the gross profit margin of other distributors and the issuer.
(1) In combination with the issuer's gross profit margin on ExxonMobil and other original products, it shows the rationality of higher gross profit margin
During the reporting period, the aviation oil distributed by the company basically came from ExxonMobil. The corresponding gross profit margin of aviation oil distributed by the company is as follows:
Products January June 2021202020192018
Gross profit margin of aviation fuel 26.60%, 26.36%, 19.39%, 26.24%
Among them, the gross profit margin of aviation fuel in 2019 is lower than that in other years, which is mainly affected by the tax rebate of the customs. The company will need to refund part of the sales price increased by the customs in the early stage, offset the operating revenue by the end of 2019, and offset the operating cost in 2019 by receiving the customs tariff and the supplier's refund of the purchase unit price increased by the tariff. Excluding the above-mentioned fluctuation factors of gross profit margin caused by customs tax rebate, the gross profit margin of aviation fuel in 2019 was 25.79%, which was basically the same as that of other years in the reporting period.
The rationality analysis of the high gross profit margin of aviation fuel distributed by the company is as follows:
① Downstream customers need to purchase aviation materials according to professional technical data. The company is ExxonMobil's only authorized distributor of aviation lubricants in China, and downstream airlines have few aviation lubricant products to choose from, and the degree of market competition is low
Aviation lubricants mainly provide lubrication, heat dissipation and other functions for aircraft engines, which directly affect aviation safety. Similarly, downstream airlines need to select aviation lubricants of corresponding models according to aircraft maintenance manuals. At present, Chinese airlines mainly use two major aviation lubricant brands, ExxonMobil and Eastman, of which ExxonMobil has better brand influence than Eastman. The company has a long history of cooperation with ExxonMobil and has a stable and good relationship. It is the only authorized distributor of ExxonMobil aviation lubricants in China and has certain bargaining power for downstream customers. In addition, according to the requirements of China's current laws and regulations, to engage in aviation material distribution in China, it is necessary to obtain the corresponding aviation material distributor Certificate (hereinafter referred to as "aviation material distribution qualification" or "aviation material distributor qualification"). By the end of 2021, there are 9 enterprises (excluding issuers and subsidiaries) that have obtained the aviation material distributor qualification (business category includes aviation oil dangerous goods), and the number of market participants is small, The degree of competition is relatively low.
② Downstream airlines are relatively insensitive to the price of aviation lubricants, but aviation lubricants have a great impact on aircraft safety
Aviation lubricants are not the main operating costs of downstream airlines, accounting for less than 1% of the operating costs of airlines. The operating costs of airlines mainly include (fuel) aviation fuel costs, employee compensation, depreciation and amortization, takeoff and landing service fees, etc. the core of airlines is to dilute their operating costs by improving aircraft operation efficiency and reducing AOG (aircraft grounding). However, aviation lubricating oil is used in aircraft engine parts, which has a great impact on aircraft safety. Therefore, downstream airlines are relatively insensitive to the price of aviation lubricants.
③ The gross profit margin of comparable companies in aviation material distribution industry is generally high
The company is mainly engaged in the distribution business of aviation materials. At present, there is no listed company whose main business is the distribution of aviation materials in a shares. Therefore, overseas enterprises in the same industry, such as amaerospaceholdings Ltd. ("am"), Wesco aircraft holdings, Inc. (hereinafter referred to as "Wesco") and Hubei chaozhuo Aviation Technology Co., Ltd. (hereinafter referred to as "chaozhuo aviation technology") are selected for comparison.
The comparison between the gross profit margin of the issuer's distribution business and comparable companies is shown in the table below:
Gross profit margin
Main products distributed by company name 20212018
January June 20202019
Am mainly distributes undisclosed 66.99% and 54.80% fasteners and bearings related to aviation in the Asia Pacific region
Worldwide distribution of aviation fasteners, bearings
Wesco's electronic products, processed parts, tools, chemicals and other aviation materials are not disclosed, 23.76% and 25.67% of which are not disclosed, and there are also non aviation customers
Chaozhuo avionics sealing, bearing, electrical appliance, gear, 36.24%, 39.81%, 32.93%, 36.54% valve and fastening spare parts
Average 36.24%, 39.81%, 41.23%, 39.00%
Comprehensive gross profit margin 30.66%, 30.80%, 26.06%, 30.92% issuer
Including: gross profit margin of distribution mode: 29.79%, 29.09%, 25.63%, 30.83%
Note 1: the accounting period corresponding to Wesco is from October 1 of last year to September 30 of this year, and the accounting period of AM is from July 1 of last year to June 30 of this year. The above indicators do not take into account the differences between domestic and foreign accounting periods, the same below. Am submitted its listing application to the main board of the Hong Kong Stock Exchange in November 2019, which is currently in an invalid state and the financial statements have not been updated; Wesco is a listed company on the New York Stock Exchange with the stock code of wair. It has been delisted in early 2020.
Note 2: chaozhuo Aviation Technology (after the meeting) is mainly engaged in the maintenance business of pneumatic accessories, hydraulic accessories, fuel accessories and electrical accessories of military and civil aircraft. Other business income of the company is the sales amount and proportion of aviation materials and spare parts, and the above gross profit margin is taken from the gross profit margin of other business income of the company.
It can be seen from the above table that the gross profit margin of aviation material distribution business of the company and comparable companies in the same industry is generally high. (2) The necessity for ExxonMobil to choose an issuer as a distributor. Is there any possibility of changing distributors or direct selling in the future
It is necessary for ExxonMobil to select the issuer as the distributor, and it is less likely to change the distributor or conduct direct sales in the future. The specific analysis is as follows:
① Aviation lubricants are not the core business source of ExxonMobil, but ExxonMobil has achieved a high market share in the world mainly through distribution mode
