Source: Chinanews.com Finance and Economics
Chinanews.com, Sept. 22. Chinanews.com Finance and Economics learned that Ganzhou Tengyuan Cobalt New Materials Co., Ltd. (hereinafter referred to as "Tengyuan Cobalt Industry") replied to the gem implementation letter.
Tengyuan Cobalt once declared the Shenzhen main board in 2017, but it was rejected at the review meeting in January 2018. On September 9 this year, Tengyuan Cobalt's initial application was approved by the gem listing Committee and will be listed on the gem of the Shenzhen Stock Exchange.
According to public data, Tengyuan Cobalt Industry was founded in 2004, headquartered in Ganzhou City, Jiangxi Province, mainly engaged in the research and development, production and sales of cobalt and copper products, and is one of the leading cobalt salt production enterprises in China. The company's core products are cobalt chloride, cobalt sulfate and other cobalt salts and copper electrowinning.
From January to September from 2018 to 2020, the operating income of Tengyuan Cobalt Industry was about 1.671 billion yuan, 1.739 billion yuan and 1.309 billion yuan respectively, which increased year by year, and the net profit after deduction was about 182 million yuan, 114 million yuan and 260 million yuan respectively, which fluctuated greatly.
The "reply to the letter of implementation of the opinions of the listing Committee of Ganzhou Tengyuan Cobalt New Materials Co., Ltd. on its initial public offering and listing on the gem" published on the website of the CSRC on September 22 disclosed the main questions. In the gem inquiry, the Shenzhen Stock Exchange mainly focused on two issues: the overseas subsidiary Congo Tengyuan purchased large amounts of cash from natural person suppliers, and the impact of market changes in the downstream power battery industry on the company's business since 2021.
Why overseas subsidiaries purchase large amounts of cash from natural person suppliers
The Shenzhen Stock Exchange requires additional disclosure in the prospectus of the reasons and necessity for overseas subsidiary Congo Tengyuan to purchase large amounts of cash from natural person suppliers. Tengyuan Cobalt replied that the company's cash procurement mainly exists in the Congo Tengyuan copper and cobalt ore procurement business. At present, Congo Tengyuan has no exploitable mine resources and needs to purchase copper and cobalt ores for production. Due to the backwardness of the financial, economic and commercial bank settlement systems of the Democratic Republic of the Congo (DRC), local cash transactions are more common. Affected by the local business environment and trading habits and other factors, there are cash transactions in Tengyuan, Congo, cash transactions are necessary and reasonable, and companies in the same industry also have cash transactions in the local area.
In order to guard against the risk of cash procurement, Congo Tengyuan implements the system of dispatch of managers and regular rotation. Middle-level managers are dispatched by Tengyuan Cobalt Industry and rotate regularly. At the same time, the daily report control system will be implemented, and the management department will prepare the payment plan for next month at the end of each month according to the accounts payable. After the finance department initially checks the payment plan of the operation department, it will be reviewed by the person in charge of the finance department and finally approved by the general manager. Since June 2020, the whole process of cash payment will be filmed and the video will be kept on file for reference.
The impact of changes in the power battery industry on the company's business is required to be disclosed.
With regard to the market changes in the downstream power battery industry since 2021, the Shenzhen Stock Exchange requires additional disclosure of the impact on the company's business in the prospectus. Tengyuan cobalt industry replied that since 2021, the market changes of power battery industry mainly include the rapid growth of market share of lithium iron phosphate battery, the production line of nickel lithium manganate battery of honeycomb energy and the era of Ningde.Release the first generation of sodium ion batteries.
Benefiting from the acceleration of the production of new energy vehicles and the improvement of the carrying capacity of single cars, the rapid growth of cobalt demand in the field of power batteries has become the main driver of cobalt demand growth and led to a substantial increase in the company's performance in the first half of 2021. From January to June of 2021, the operating income of the issuer was 1.811105 billion yuan, an increase of 138.29% over the same period last year; the net profit was 499.5401 million yuan, an increase of 370.08% over the same period last year, mainly due to an increase in the sales price and quantity of cobalt and copper products over the same period last year. Since 2021, driven by the strong demand for downstream new energy vehicles, although the increase in market share of lithium iron phosphate batteries and the mass production and release of power batteries based on new technology routes may have a certain potential impact on the battery industry and the company's operations, however, it will not have a significant adverse impact on the company's business operations in the short term.