Reply to the second round of examination and inquiry letter on Shanghai Titan Scientific Co.Ltd(688133) application documents for issuing shares to specific objects
Sponsor (lead underwriter)
Shanghai Stock Exchange, North block of excellence Times Plaza (phase II), No. 8, Zhongxin Third Road, Futian District, Shenzhen, Guangdong:
We have received the second round of examination and inquiry letter on Shanghai Titan Scientific Co.Ltd(688133) application documents for issuing shares to specific objects (hereinafter referred to as the “inquiry letter”) issued by your exchange on November 25, 2021, Shanghai Titan Scientific Co.Ltd(688133) (hereinafter referred to as ” Shanghai Titan Scientific Co.Ltd(688133) “, “issuer” and “company”) Citic Securities Company Limited(600030) (hereinafter referred to as “sponsor”, Citic Securities Company Limited(600030) ), Daxin Certified Public Accountants (special general partnership) (hereinafter referred to as “accountant” and “reporting accountant”), Beijing Deheng Law Firm and other relevant parties have implemented and verified the problems listed in the inquiry letter item by item. Now, the reply to the questions in the inquiry letter is as follows, please review. Unless otherwise specified, the abbreviations or terms in the reply report of this inquiry letter shall have the same meanings as those in the prospectus (draft declaration). explain:
1、 Unless otherwise specified, the abbreviations or terms in the reply report of this inquiry letter shall have the same meanings as those in the prospectus (draft declaration).
2、 The font in this reply report represents the following meanings:
Bold (not bold): the questions listed in the inquiry letter
Arial (not bold): reply to the questions listed in the inquiry letter
Regular script (BOLD): modification and supplement to the prospectus and other application documents; Amendments and supplements to this round of inquiry letters
Italics (not bold): references to the prospectus and other application documents
catalogue
1. About the functional platform for R & D and transformation of scientific services 32. About financial investment 263. With regard to replenishing working capital 454. Others fifty-five
1. Functional platform for R & D and transformation of scientific services
According to the first round of inquiry reply, (1) the high-end scientific research instruments and components and high-end reagents sold by the issuer during the reporting period are divided into independent brand and third-party brand products. Among them, independent brands are produced by OEM, and third-party brands do not involve company or OEM production; (2) The platform adopts independent production mode for some high-end products and forms complementarity and synergy with the existing OEM production mode; The sales model is consistent with the company’s existing products, mainly direct sales.
The issuer is requested to supplement and disclose the estimated production capacity, production planning and capacity digestion arrangement of the raised investment project in the prospectus.
The issuer is requested to explain: (1) further analyze the rationality of the new capacity of high-end instruments, key components and high-end reagents in combination with the differences between the raised products and similar products on sale, the production and sales quantity of independent brands of similar products during the reporting period, on-hand orders or intentional contracts; (2) Specific measures to ensure the sales of products invested by raising funds under the condition that the expected production capacity of high-end instruments, key components and high-end reagents invested by raising funds is significantly higher than that of similar products in the reporting period.
reply:
1.1 supplementary disclosure by the issuer
With regard to the estimated production capacity, production planning and capacity digestion arrangement of the raised investment project, the company supplemented and disclosed the following in “I. Basic information of the project invested by the raised funds” in “Chapter III feasibility analysis of the use of the raised funds” of the prospectus:
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(VI) capacity of functional platform for R & D and transformation of scientific services
1. Estimated capacity and capacity planning
“Scientific service R & D transformation functional platform” will realize the R & D and manufacturing of scientific research reagents and scientific research instruments, and provide analysis and detection services. The first and second years are the period of platform engineering construction, equipment purchase, installation and commissioning. The output reaches 30% in the third year, 65% in the fourth year and 100% in the fifth year.
The estimated production capacity and production planning of scientific research instruments are as follows:
New capacity per unit of product series of product categories
T+1 T+2 T+3 T+4 T+5
Mass spectrometer set 0 0 6 13 20
High performance chromatograph 0 0 12 26 40
Spectrometer station 0 0 12 26 40
Pretreatment equipment
(microwave digester set 0 0 480 1040 1600, etc.)
Scientific research instruments high-end biological instruments
(Digital PCR station 0 0 6 13 20, etc.)
High speed centrifuge set 0 6900 14950 23000
High vacuum diaphragm pump set 0 0 1590 3445 5300
High precision constant temperature setting 0 0 3000 6500 10000 standby
Total – set 0 0 12006 26013 40020
Yield — 0% 0% 30% 65% 100%
Sales revenue – 10000 yuan 0.00 0.00 4359.00 9444.50 14530.00
The estimated production capacity and production planning of scientific research reagent products are as follows:
New capacity of large product order
Category product series bit
T+1 T+2 T+3 T+4 T+5
New medium bottle 0 90000 195000 300000 columns
Special serum series bottle 0 0 27000 58500 90000
Transfection reagent / immune bottle 0 0 1800 3900 6000 magnetic beads, etc
Biochemical reagent bottle 0 0 39000 84500 130000
Scientific research trial biological reagent (Kit) ea 0 19200 41600 64000 doses of biological enzyme / protein/
Antibody series branch 0 0 21300 46150 71000
Deuterated reagent bottle 0 0 169200 366600 564000
Various standards / high bottle 0 0 77520 167960 258400 pure compound
Spectral mass spectrometry and color bottle 0 0 129000 279500 430000 spectral reagent
Total — 0 574020 1243710 1913400
Yield — 30% 65% 100%
Income – RMB 10000 0.00 13856.88 30023.24 46189.60
Analysis and detection services include providing customers with impurity detection, drug crystal analysis, etc. the estimated production capacity and production planning are as follows:
Project t + 1 T + 2 T + 3 T + 4 T + 5
Expected yield – 30% 65% 100%
Number (Times) 0 0 300 650 1000
Income (10000 yuan) 0 1500.00 3250.00 5000.00
2. Capacity digestion arrangement
From 2018 to 2020, the sales types of the company’s instruments and reagents were 62719, 69854 and 84410 respectively, and the types were constantly enriched; The existing sales revenue of products with the same category as the current raised investment project was 6.4666 million yuan, 12.5898 million yuan and 36.8128 million yuan respectively, with a compound growth rate of 138.60%.
In recent years, the company’s overall sales situation is good, showing a high growth rate, which provides a certain sales data support for the digestion of the new capacity of the raised investment project.
In addition, based on the rapid growth trend of the scientific service industry, the company’s existing customer resources and customer expansion plan, it is expected that the capacity of the “scientific service R & D and transformation functional platform” can be digested.
(1) The market demand of the scientific service industry continues to grow, and the products of the project have broad market prospects
Scientific and technological innovation ability has become an important indicator of comprehensive national strength. In recent years, with the rapid development of global science and technology, major economies have accelerated the strategic deployment of science and technology development and continuously increased R & D investment and expenditure. China is also increasing its investment in scientific research. According to the data of the National Bureau of statistics, in 2020, China’s investment in research and experimental development has reached 2.44 trillion yuan, an increase of nearly 24 times over 2001, and the compound growth rate in 20 years has reached 18.1%.
Scientific service industry is a supporting industry that closely follows the synchronous development of scientific R & D. With the continuous growth of R & D funds of global governments, enterprises and scientific research institutions, the market scale of scientific service industry also continues to expand. Taking analytical instruments as an example, according to the data of strategic directions international, Inc. (SDI), an American market research company, from 2015 to 2020, the compound annual growth rate of the global analytical instrument market was 4.4%, and the global market scale reached US $63.752 billion in 2020; The compound annual growth rate of the Chinese market is as high as 6.8%, becoming the fastest growing market for analytical instruments in the world. The market scale will reach US $7.453 billion in 2020.
In the future, with the continuous development of global scientific and technological innovation, the upgrading of key industrial technologies and the continuous growth of scientific and technological R & D investment, the demand growth of the scientific service industry still has a strong driving force, providing a broad market space for the sales of relevant products of the project.
(2) The company has abundant customer resources to support capacity digestion
Relying on its rich product system and good service capability, the company has served more than 50000 customers and 1 million scientific researchers, and supported the R & D of many enterprises in the fields of biomedicine, new materials, new energy, energy conservation and environmental protection, high-end equipment manufacturing and so on. Among the company’s customers, more than 150 are among the world’s top 500. China’s 985 and 211 Engineering Colleges and universities have achieved full coverage, and basically covered various subordinate institutes such as the Chinese Academy of Sciences, the Chinese Academy of Agricultural Sciences and the China Meheco Group Co.Ltd(600056) Industrial Research Institute. The coverage of Biomedical enterprises with R & D and innovation as the core in China has reached more than 80%. The customer resources accumulated by the company provide important support for the digestion of project capacity. (3) The company continues to carry out regional and market development to improve its capacity and digestion capacity
At present, the company’s business is mainly in East China and carries out the “doubling plan” for key customers. During the reporting period, the sales revenue in East China maintained a sustained high growth, and achieved rapid growth in typical customers of biomedicine and new materials, such as Hengrui pharmaceutical, Zhengda Tianqing, jinsirui, Yili, Xinda biology, Wanhua Chemical Group Co.Ltd(600309) . In the first three quarters of 2021, East China
