Hunan Changyuan Lico Co.Ltd(688779)
Hunan Chang yuan Lico Co.,Ltd.
(No. 61, Yangao Road, Yuelu District, Changsha City, Hunan Province)
About Hunan Changyuan Lico Co.Ltd(688779)
Issue convertible corporate bonds to unspecified objects
Inquiry letter on examination of application documents
of
Reply Report
Co sponsor (lead underwriter)
(North block of excellence Times Square (phase II), No. 8, Zhongxin Third Road, Futian District, Shenzhen, Guangdong) (2401, Minmetals finance building, No. 3165, Binhai Avenue, Haizhu community, Yuehai street, Nanshan District, Shenzhen) may 2022
Shanghai Stock Exchange:
The inquiry letter on the examination of the application documents of Hunan Changyuan Lico Co.Ltd(688779) issuing convertible corporate bonds to unspecified objects (szkss (refinancing) [2022] No. 84) (hereinafter referred to as “the inquiry letter”) issued by your exchange on April 26, 2022 has been received. Hunan Changyuan Lico Co.Ltd(688779) (hereinafter referred to as ” Hunan Changyuan Lico Co.Ltd(688779) ,” the company “or” the issuer “) and Citic Securities Company Limited(600030) Minmetals Securities Co., Ltd. (hereinafter referred to as “sponsor” or “sponsor”), Beijing Jiayuan law firm (hereinafter referred to as “issuer’s lawyer”) and Tianzhi International Certified Public Accountants (special general partnership) (hereinafter referred to as “reporting accountant”) and other relevant parties have implemented and replied to the problems mentioned in the audit inquiry letter one by one, and supplemented the application documents accordingly, Please review.
explain:
1、 Unless otherwise specified, the abbreviations or terms in this reply report have the same meanings as those in the prospectus for Hunan Changyuan Lico Co.Ltd(688779) issuing convertible corporate bonds to unspecified objects.
2、 The font in this reply report represents the following meanings:
Questions listed in the audit inquiry letter in bold (BOLD)
Song typeface (not bold) reply to questions in the audit inquiry letter and verification opinions of intermediaries
In response to the questions of the audit inquiry letter in Song typeface (not bold), the disclosure contents of the prospectus shall be supplemented and revised
The reply revision and the disclosure of the prospectus involved in the question reply update of the audit inquiry letter in regular script GB2312 (BOLD)
Note: there may be slight differences between the sum and total data of individual data in some tables of this reply report, which are caused by rounding in the calculation process.
catalogue
catalogue 2 I. about the previous fund-raising project 3 II. About the fund-raising project 8 III. about the fund-raising scale 27 IV. benefit calculation 47 v. about operation 64 VI. related party transactions 74 VII. About others ninety-three
1、 About the previous fund-raising project
According to the application materials: (1) by the end of 2021, the use progress of the raised funds of the phase I project for the expansion of the production of cathode materials for automotive lithium batteries (hereinafter referred to as the phase I project) is 50.95%, which is expected to be put into operation in June 2022; (2) The company makes settlement and payment of project funds in the form of endorsement and transfer of bills.
The issuer is requested to explain: (1) the use content, amount and proportion of the funds of the previous raised investment project up to now, the subsequent use plan and expected progress of the funds, the project construction progress and subsequent construction, and whether there is any delay; (2) Whether the pre raised project is settled by endorsement and transfer of bills. If so, please explain the amount involved and its impact on the calculation of the investment amount of raised funds and the management of the special account of raised funds.
The reporting accountant is requested to verify the above matters and express clear opinions.
reply:
1、 Issuer description
(I) the use content, amount and proportion of the funds of the previous raised investment project up to now, the subsequent use plan and expected progress of the funds, the project construction progress and subsequent construction, and whether there is any delay.
1. Use content, amount and proportion of the funds of the previous raised investment project up to now
The total amount of funds raised by the company’s initial public offering is 272503900 yuan. After deducting the issuance expenses, the net amount of funds raised is 26473336 million yuan, which will be fully paid in August 2021. As of December 31, 2021, the company has used 17042889 million yuan, accounting for 64.38%. The details are as follows:
Unit: 10000 yuan
Amount of raised funds to be used and proportion of used raised funds
Phase I project of cathode material expansion of vehicle lithium battery 191789779772404 50.95%
Supplementary working capital 72942597270485 99.67%
Total 2647323617042889 64.38%
Note: the used amount includes fruits.
As of December 31, 2021, 50.95% of the raised funds have been used in the first phase of the company’s vehicle lithium battery cathode material expansion project, and the used raised funds are mainly used for engineering costs. The details are as follows:
Unit: 10000 yuan
No. project and cost name the amount of raised funds to be invested and the proportion of raised funds used
1. Project cost 162707078382058 51.52%
No. project and cost name the amount of raised funds to be invested and the proportion of raised funds used
1.1 of which: Construction Engineering 43430242628078 60.51%
1.2 equipment purchase 101413484979609 49.10%
1.3 installation works 1786334774371 43.35%
2. Other expenses of project construction 19949851390346 69.69%
3 reserve fund 913285 – 0.00%
Total 191789779772404 50.95%
As of March 31, 2022, 1779543400 yuan of the company’s previously raised funds had been used, accounting for 67.22%.
The details are as follows:
Unit: 10000 yuan
Amount of raised funds to be used and proportion of used raised funds
Phase I project of cathode material expansion of vehicle lithium battery 1917897710418655 54.32%
Supplementary working capital 72942597376779 101.13%
Total 2647323617795434 67.22%
Note: the used amount includes fruits.
As of March 31, 2022, 54.32% of the raised funds have been used in the first phase of the company’s vehicle lithium battery cathode material expansion project, and the used raised funds are mainly used for engineering costs. The usage is as follows:
Unit: 10000 yuan
No. project and cost name the amount of raised funds to be invested and the proportion of raised funds used
1. Project cost 162707079028309 55.49%
1.1 of which: Construction Engineering 43430242774224 63.88%
1.2 equipment purchase 101413485352889 52.78%
1.3 installation works 1786334901196 50.45%
2. Other expenses of project construction 19949851390346 69.69%
3 reserve fund 913285 – 0.00%
Total 1917897710418655 54.32%
2. The subsequent use plan and expected progress of funds, project construction progress and subsequent construction, and explain whether there is any delay
Up to now, the main works of the company’s phase I project of expanding the production of lithium battery cathode materials for vehicles have been basically completed, and some production lines have entered the trial production state. The decoration and landscaping of buildings such as the inspection building are under way. It is expected that the construction can be normally promoted according to the established progress and reach the production state.
There is a certain accounting period for the payment of engineering construction funds and equipment funds of the company, and generally, the use progress of the raised funds of the company lags behind the project construction progress because the quality assurance deposit involved has an impact on the payment rhythm. As of March 31, 2022, the accounts payable included in phase I project was RMB 2142821 million. On the other hand, based on the factors such as the company’s implementation of refined management and saving project construction expenses in the process of project construction, the company expects that there will be a certain balance of the raised funds after the implementation of phase I project. According to the current phase I project progress and subsequent construction plan, the total amount of the raised funds after the overall completion of the project is expected to be 1.65 billion yuan to 1.7 billion yuan; The balance of raised funds is expected to be 218 million yuan to 268 million yuan. Combined with the above accounts payable amount and the expected balance of raised funds, according to the final expected use of the raised funds of phase I project, the progress of phase I project is between 73.89% and 76.13% as of March 31, 2022.
In conclusion, the use plan of the raised funds of phase I project is in line with the expected progress, and there is no delay.
(II) whether the pre raised project is settled by endorsement and transfer of bills. If so, please explain the amount involved and its impact on the calculation of the investment amount of raised funds and the management of the special account for raised funds.
It is common for enterprises upstream and downstream of the new energy vehicle industry chain to use bill settlement, so the company receives more customer endorsement bills. In order to improve the use efficiency and benefit of the company’s funds, the first phase of the expansion project of vehicle lithium battery cathode materials in the company’s pre raised project is settled by bill endorsement and transfer.
As of March 31, 2022, the amount of the company’s phase I project of expanding the production of automotive lithium battery cathode materials settled by endorsement and transfer of bills was 754939 million yuan, accounting for 72.46% of the amount of raised funds used in the project. The company settles the settlement by endorsement and transfer of bills, which will be replaced by the raised funds in the same month. The company calculates the investment amount of the raised funds based on the flow of the raised funds account. In such cases, the calculation of the investment amount of the raised funds is without deviation.
In order to regulate the management and use of the raised funds and protect the rights and interests of investors, the company shall, in accordance with the company law of the people’s Republic of China, the securities law of the people’s Republic of China and the Listing Rules of shares on the science and Innovation Board of Shanghai Stock exchange
