Anxin Securities Co., Ltd
About Zhejiang Ssaw Boutique Hotels Co.Ltd(301073)
Verification opinions on changing the purpose of funds raised from partial initial public offering of shares Anxin Securities Co., Ltd. (hereinafter referred to as “Anxin securities” or “sponsor”) acts as the sponsor of Zhejiang Ssaw Boutique Hotels Co.Ltd(301073) (hereinafter referred to as ” Zhejiang Ssaw Boutique Hotels Co.Ltd(301073) ” or “company”) initial public offering of shares, In accordance with the provisions of relevant normative documents such as the measures for the administration of securities issuance and listing recommendation business, the Listing Rules of Shenzhen Stock Exchange on the gem, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of listed companies on the gem, and the regulatory guidelines for listed companies No. 2 – regulatory requirements for the management and use of raised funds of listed companies, The purpose of the funds raised by Zhejiang Ssaw Boutique Hotels Co.Ltd(301073) proposed to change part of the initial public offering was verified, and the details are as follows:
1、 Description of the project invested by the original raised funds
(I) basic information of raised funds
With the consent of the reply on Approving the registration of Zhejiang Ssaw Boutique Hotels Co.Ltd(301073) initial public offering (zjxk [2021] No. 2686) of China Securities Regulatory Commission and the notice on the listing of Zhejiang Ssaw Boutique Hotels Co.Ltd(301073) RMB common shares on the gem (SZS [2021] No. 961) of Shenzhen Stock Exchange, the company issued 2013.5 million RMB common shares (A shares) for the first time, The par value of each share is RMB 1, and the issue price of each share is RMB 12.24. The total amount of funds raised in this issue is RMB 246452400, after deducting the issue expenses of RMB 57.699 million (excluding tax), the actual net amount of funds raised is RMB 188753400. Zhongshen Zhonghuan Certified Public Accountants (special general partnership) verified the availability of funds for the company’s initial public offering of shares, and issued the capital verification report (Zhong Huan Yan Zi (2021) No. 0210033) on September 24, 2021. After the above raised funds are received, the company has managed the deposit and use of the raised funds in a special account, and has signed the tripartite supervision agreement on raised funds with the sponsor and the commercial bank storing the raised funds.
(II) use of raised funds
The funds raised from the company’s initial public offering of shares are intended to be used for the following projects. As of December 31, 2021, the details of the projects are as follows:
Unit: 10000 yuan
Project name total investment amount of the project raised funds committed investment amount accumulated investment amount
Middle and high end hotel design development project 32352.00 18458.26 1529.08
Comprehensive management platform construction 2038.00 417.08 11.09 project
Total 34390.00 18875.34 1540.17
Note: the committed investment amount of raised funds is the net amount of raised funds actually in place after deducting the issuance expenses.
2、 Description of the proposed change in the purpose of some raised funds
As of December 31, 2021, the balance of fund-raising account of “medium and high-end hotel design and development project” is 172.8901 million yuan (including interest income). In order to better comply with the company’s development strategy, improve the expansion efficiency of regional market business and reduce business risks, taking into account the market environment, regulatory policies, project cycle, profitability and other factors, Further improve the use efficiency of the raised funds and protect the shareholders’ rights and interests. The company plans to change the purpose of some of the raised funds in the “medium and high-end hotel design and development project” for the acquisition of 79% equity of Zhejiang Junlan Hotel Management Co., Ltd., 70% equity of Jinglan Hotel Investment Management Co., Ltd. and “Junlan” series trademarks. The company intends to pay the consideration of this transaction with the raised funds. After changing the purpose of some raised funds, the investment projects of the company’s raised funds are as follows:
Unit: 10000 yuan
Before and after the change of the raised funds
Project name proposed use of raised funds project name proposed use of raised funds
Design and development of medium and high-end hotels 4458.26
project
Medium and high end hotels acquire Zhejiang Junlan Hotel Management
Design and development item 18458.26 14000.00 Li Co., Ltd. 79% shares
Project right, Jinglan hotel investment management 14000.00
70% equity of Li Co., Ltd
And “Junlan” series merchants
Subject item
Total 14000.00 – 18458.26
Note: the above change amount does not include interest income, and the actual change amount shall be subject to the balance of the special account at the time of transfer.
This transaction does not involve related party transactions and does not constitute a major asset restructuring. The sixth meeting of the third board of directors and the fifth meeting of the third board of supervisors of the company deliberated and adopted the proposal on changing the use of part of the raised funds for the acquisition of the company’s equity and trademark, and the relevant matters need to be submitted to the company’s extraordinary general meeting for deliberation.
3、 Reasons for changing raised investment projects
(I) original project plan and actual investment
1. Original raised investment project plan
The original fund-raising investment project “medium and high-end hotel design and development project” is planned to set up subsidiaries as the implementation subject, rent hotel properties suitable for operation, upgrade and transform in Shanghai, Hangzhou, Nanjing and other cities deemed appropriate by the management, and carry out personalized design according to the characteristics of the surrounding natural environment and cultural environment in the next two years, Build Junting characteristic hotel with market competitiveness.
The total planned investment of the original project is 323.52 million yuan, and the specific investment estimate is as follows:
Unit: 10000 yuan
Share of No. project funds
I. construction investment 32140 99.34%
1 project cost 27081 83.71%
1.1 decoration cost 23976 74.11%
1.2 purchase cost of hardware equipment 3105 9.60%
2. Other construction expenses 3434 10.61%
2.1 hotel property rental fee 3254 10.06%
2.2 other preliminary expenses 180 0.56%
3. Reserve fund 1625 5.02%
2. Initial working capital 212 0.66%
III. total investment 32352 100.00%
2. Actual investment of the original raised investment project
As of December 31, 2021, the original raised funds investment project “medium and high end hotel design and development project” has used a total of 15.2908 million yuan of raised funds. The balance of the special account for raised funds of the project is 172.8901 million yuan (including accumulated interest income). In the future, the company will formulate a reasonable investment plan in combination with the actual market situation, and continue to implement the original raised investment projects with self raised funds.
(II) reasons for changing the investment project with raised funds
1. Improve the use efficiency of raised funds
The planned construction period of the original fund-raising investment project “medium and high-end hotel design and development project” is 24 months. In view of the relatively long construction and return cycle of the original raised investment project, in order to further improve the use efficiency of the raised funds, improve the company’s anti risk ability and quickly adapt to the complex and changeable market demand, the company plans to change the purpose of some raised funds in the “medium and high-end hotel design and development project” to acquire 79% equity of Zhejiang Junlan Hotel Management Co., Ltd Jinglan Hotel Investment Management Co., Ltd. 70% equity project and “Junlan” series trademarks. The acquisition will greatly enhance the national layout of the company.
2. The implementation of new raised investment projects conforms to the company’s development strategy and is conducive to improving the company’s market competitive position and brand influence
From the perspective of industry development trend, the company’s competitive position and brand influence still have great development space. In the context of the rapid development of medium and high-end hotel industry, the market competitive position and brand influence with core competitive advantages will greatly improve the development speed and quality of the company. The acquisition of 79% equity of Zhejiang Junlan Hotel Management Co., Ltd., 70% equity of Jinglan Hotel Investment Management Co., Ltd. and “Junlan” series trademarks. Among them, Junlan’s brand management performance covers 23 provinces and cities in China, including Zhejiang, Jiangsu, Hainan, Shaanxi, Shandong, Shanxi, Hunan, Hubei, Hebei, Henan, Jiangxi, Anhui, Fujian, Jilin, Guangdong, Guangxi, Sichuan, Guizhou, Yunnan, Shanghai, Beijing, Gansu and Heilongjiang, with a cumulative investment and management of more than 180 hotels. The management performance of Jinglan Hotel Investment Management Co., Ltd. covers 13 provinces and cities such as Zhejiang, Hainan, Jilin, Fujian, Sichuan, Hebei, Shandong, Guizhou, Jiangxi, Hunan and Jiangsu, with a total of 75 hotels invested and managed. “Junlan” brand has also received good social evaluation and industry recognition. It has won the “national brand pioneer in China’s hotel industry” for five consecutive years, and won many awards such as “China’s top ten brand hotel groups”, “China’s best resort hotel”, “China’s best hotel management group Starlight Award” and so on. Through this acquisition, the company’s regional layout will be broader, the hotel product level will be more perfect, the brand connotation will be more deepened, and the market competitiveness will be greatly improved. This acquisition is an important layout to promote the company’s development strategy. After the acquisition, the company will further improve the national market share, reach more than 300 hotels, and become a leading enterprise of medium and high-end hotels in China, especially high-end hotels, which is of great strategic significance.
3. Improve the company’s business scale and profitability
After the completion of this transaction, the listed company directly controls 79% equity of Zhejiang Junlan Hotel Management Co., Ltd. and 70% equity of Jinglan Hotel Investment Management Co., Ltd. and owns “Junlan” series trademarks. Zhejiang Junlan Hotel Management Co., Ltd. and Jinglan Hotel Investment Management Co., Ltd. are included in the consolidated statements of the listed company. This transaction will help to improve the business scale and profitability of the listed company and protect the interests of shareholders of the listed company. In conclusion, the company’s plan to change the purpose of part of the raised funds in the “medium and high-end hotel design and development project” for equity and trademark acquisition is a prudent decision made in combination with the actual situation of the raised funds investment project and the business development environment, which is in line with the company’s development strategy and is conducive to improving the use efficiency of the raised funds and the return on the investment of the raised funds.
4、 Description of new raised investment projects
(I) basic information and investment plan of the project
Project Name: 79% equity of Zhejiang Junlan Hotel Management Co., Ltd., 70% equity of Jinglan Hotel Investment Management Co., Ltd. and “Junlan” series trademark project
The company plans to acquire 79% equity of Zhejiang Junlan Hotel Management Co., Ltd., 70% equity of Jinglan Hotel Investment Management Co., Ltd. and “Junlan” series trademarks with 140 million yuan, of which 140 million yuan is planned to be invested.
1. Transaction overview
Company and Junlan Hotel Collection
