△Source: Enterprise prospectus
On December 15, 2021, the 96th review meeting of the Shanghai Stock Exchange Science and Technology Innovation Board Listing Committee in 2021 was held, and the review result of China Gang Luonai Technology Co., Ltd. (hereinafter referred to as China Gang Luonai) was: suspended for review.
Zhonggang Luonie was founded in 1958. It was formerly the Luoyang Refractory Materials Factory of the Ministry of Metallurgical Industry. It is the first large-scale state-owned refractory materials manufacturer designed and built by itself during the "First Five-Year Plan" of New China. Its products are widely used in high-temperature industries such as steel, nonferrous, building materials, and chemicals.
Zhonggang Luonai's core business is the research and development, manufacturing, sales and services of mid-to-high-end refractory materials. It currently has 8 series of silicone series, magnesium series, high-aluminum series, composite series, high-purity oxide products, functional material products, amorphous and prefabricated products, and more than 200 varieties of refractory products. It is widely used in many high-temperature fields such as steel, non-ferrous metals, petroleum and coal chemical industry, ceramics, cement, glass, electricity, environmental protection, national defense and military industry, and is an indispensable supporting material for the development of high-temperature industry.
The new shares issued by Zhonggang Luonai this time will not exceed 20% of the total share capital after this issuance. It is expected that 600 million yuan will be raised for new refractory materials projects with an annual output of 90,000 tons, new materials R&D center construction projects, 10,000 tons of special silicon carbide new materials projects, and 10,000 tons of metal composite new refractory materials projects.
2018, 2019, 2020 and January-June 2021 (hereinafter referred to as the reporting period), China Steel Lonay's operating income was RMB 1.641 billion, RMB 1.82 billion, RMB 2.018 billion and RMB 1.412 billion, RMB 1.05 billion, RMB 144 million, RMB 209 million and RMB 145 million respectively; net profit attributable to shareholders in each period was RMB 97 million, RMB 135 million, RMB 197 million and RMB 134 million respectively; net profit attributable to shareholders in each period was RMB 68 million, RMB 62 million, RMB 139 million and RMB 105 million respectively.
During the reporting period, the government subsidies included in the current profit and loss of Zhonggang Luonai were RMB 49.8208 million, RMB 33.9546 million, RMB 18.5914 million and RMB 16.539 million, respectively, accounting for 43.49%, 21.18%, 8.10% and 10.17%, respectively, which had a great impact on the company's operating performance; during the reporting period, the impact of Zhonggang Luonai's tax preferential on profits was RMB 10.9108 million, RMB 10.5507 million, RMB 25.0956 million and RMB 16.0093 million, respectively, accounting for 9.53%, 6.58%, 10.94% and 9.84% of the company's total profits, respectively.
Zhonggang Luonai's raw materials are mainly silicon carbide, chromium oxide, corundum, high-quality electric fuses, metal silicon, alumina, magnesium sand and other raw materials. During the reporting period, the amount of China Steel Lonai purchased goods and received services from related parties was RMB 148 million, RMB 168 million, RMB 279 million and RMB 200 million, respectively, accounting for 12.29%, 12.50%, 17.98% and 18.22% of operating costs, respectively. During the reporting period, the related sales of China Steel Luonai were mainly related sales to Luoyang Luonai Xilike New Materials Co., Ltd., China Steel Group Jilin Mechanical and Electrical Equipment Co., Ltd., China Steel Group Xingtai Machinery Roller Co., Ltd. and China Steel Equipment Co., Ltd., accounting for 90.49%, 97.26%, 89.52% and 96.77% of the total related sales, respectively.
At the end of each reporting period, the book value of accounts receivable by China Steel Lonai (including warranty funds such as contract assets) was RMB 583 million, RMB 504 million, RMB 660 million and RMB 775 million, respectively, showing an upward trend overall; the proportion of current operating income was 35.52%, 27.67%, 32.70% and 27.45% (annualized), respectively, with fluctuations. However, if the financial status of the company's main customers deteriorates, or there are major adverse changes in the industry, operating conditions and commercial credit, the possibility of bad debts in the company's accounts receivable will increase, which will have an adverse impact on the company's production and operation.
During the reporting period, Zhonggang Luonai's accounts receivable turnover rates were 2.4, 2.84, 2.97 and 3.43, respectively, which were lower than the comparable peer averages of 2.88, 3.22, 3.51 and 3.57.
In addition, at the end of each period of the reporting period, Zhonggang Luonai Company's inventory balance was relatively large. From the end of 2018 to the end of June 2021, the company's inventory book value was 409 million yuan, 385 million yuan, 402 million yuan and 349 million yuan respectively.
Due to the debt crisis of China Steel Group since 2014, after negotiations, from 2016 to 2018, China Steel Lona signed debt restructuring agreements with Industrial and Commercial Bank of China, Pudong Development Bank, Bank of Communications, Luoyang Bank, Minsheng Bank, etc., mainly China Steel Holdings Co., Ltd. assumes the guarantee liability. Among them, some bank loans are mortgaged by China Steel Lona to real estate land or margin pledge. As of the end of June 2021, the long-term loan principal for Sinosteel Lonay's debt restructuring reached 506.4811 million yuan, and the principal needs to be repaid in 2023 and 2024 according to the loan agreement. Therefore, Sinosteel Lonay faces certain debt restructuring risks in the future.
In response to this, the Listing Committee also inquired about this issue at the meeting and proposed matters that need to be implemented.
△Source: Shanghai Stock Exchange Listing Committee Meeting Results Announcement
Zhonggang Luonai also has many major litigation and arbitration matters
On July 3, 2019, Zhonggang Luonai (Defendant) and Inner Mongolia Yiwei Glass Fiber Manufacturing Co., Ltd. (Plaintiff) signed the "Test Contract for New Products of Glass Kiln Integrated Melt Pool", Zhonggang Luonai provided the plaintiff with 198.63 tons of test retardants of four grades including GLJ-30, with a total amount of 4,543,690 yuan. Later in 2019. On October 22 and 23, 2019, 3 tons of chromium aluminum ramming materials and 2.13 tons of GLJ-30 chromium aluminum spinel bricks were added on the basis of the original contract, with a total payment of 127,560 yuan. Later, Inner Mongolia Yiwei Glass Fiber Manufacturing Co., Ltd. and Zhonggang Luonai had a dispute over whether the refractory materials provided by the issuer comply with the contract agreement. The plaintiff filed a lawsuit with the Chifeng Intermediate People's Court on August 10, 2020, requesting that the defendant (Zhonggang Luonai) be ordered to compensate the losses of 37,818,228.21 yuan, and ordered the defendant to bear the litigation fees, preservation fees and appraisal fees.
Zhonggang Luonai filed a jurisdiction objection after receiving the complaint after the plaintiff filed a lawsuit. On October 26, 2020, Zhonggang Luonai received a civil ruling from the Chifeng Intermediate People's Court to reject the company's jurisdiction objection application, and he immediately filed an appeal against jurisdiction objection to the Inner Mongolia Higher People's Court.
On February 8, 2021, Zhonggang Luonai received a civil ruling from the Inner Mongolia Higher People's Court to reject the objection to the company's jurisdiction. The Inner Mongolia Higher People's Court finally ruled that the jurisdiction was in the Chifeng Intermediate People's Court. On May 12, 2021, Zhonggang Luonai Company submitted a judicial appraisal application and a civil counterclaim to the Chifeng Intermediate People's Court. The case is being promoted in accordance with the procedures and has not yet entered the substantive trial and has not yet been made.
The greatest legal liability that Zhonggang Luonai may bear in this lawsuit is to bear the 37.8182 million yuan claimed by the plaintiff, and the issuer was unable to recover the plaintiff's 3.7725 million yuan payment.
Another major litigation matter, Zhonggang Luonai (plaintiff) and Chizhou Guanhua Gold Smelting Co., Ltd. (defendant) have had business transactions since 2013. As of October 2017, the defendant should pay the remaining payment for Zhonggang Luonai but has not paid yet. Zhonggang Luonai filed a lawsuit with the People's Court of Guichi District, Chizhou City, Anhui Province in October 2017, requesting that the defendant be ordered to repay the arrears of RMB 8,916,340.07 and overdue interest, and the defendant shall bear the case costs.
On December 20, 2017, the People's Court of Guichi District, Chizhou City, Anhui Province issued a "Civil Judgment", ordering the defendant to pay the remaining payment of 8,916,340.07 yuan and overdue interest to Zhonggang Luona within 30 days from the date of the effectiveness of the judgment.
As of the end of August 2021, China Steel Luonai has recovered 5.3023 million yuan in payment of goods, returned the product to the warehouse and wrote off 74,100 yuan in accounts receivable, and made 2.617 million yuan in bad debt provisions, and there is still a possibility that 922,900 yuan cannot be recovered.
China's refractory materials industry has a relatively scattered production scale, and overall it is in a state of complete competition, and the market competition is relatively fierce. The integration of my country's domestic refractory materials industry is accelerating. At the same time, with the continuous improvement of global economic integration, many international refractory materials manufacturers have entered China to participate in the competition in the Chinese refractory materials market, and competition in the refractory materials market has intensified.In the future, if China Steel Lonay cannot accurately grasp the industry development trend or cannot quickly respond to changes in market competition conditions, its competitive advantage may be weakened and face the risk of declining existing market share and profitability.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-