Hisun Biotech will start its IPO today and apply for subscription on August 5

On July 28, Zhejiang Hisun Biomaterials Co.
, Ltd.
, referred to as Hisun Biomaterials (688203.
SH), disclosed the prospectus.
The company plans to issue 50,669,517 shares for the first time, accounting for 25% of the total share capital after the issuance.
After the total share capital of 202.
68 million shares
.
Among them, China Securities Investment Co.
, Ltd.
, a subsidiary of the sponsor, will participate in the strategic placement of this issuance, and the initial subscription amount is 5% of the number of shares in the initial public offering, or 2,533,475 shares
.
The initial inquiry date is August 2, 2022, and the subscription date is August 5, 2022
.

As of the signing date of this prospectus, Taizhou Jiaojiang District State-owned Capital Operation Group Co.
, Ltd.
("Jiaojiang State-owned Assets") indirectly holds 43.
64% of the issuer's shares, and controls 51.
68% of the issuer's shares through its subsidiary Hisun Group, which is the company's actual control people
.
In addition, Sinopec Group Capital Co.
, Ltd.
("Sinopec Capital") holds a 10.
32% stake in the company
.

It is reported that the company's net profits attributable to owners of the parent company after deducting non-recurring gains and losses in 2019, 2020 and 2021 were 7.
493 million yuan, 29.
5188 million yuan and 33.
7461 million yuan respectively
.
In addition, it is expected that the operating income from January to June 2022 will be 300 million to 320 million yuan, a year-on-year increase of 12.
97% to 20.
51%; the net profit attributable to shareholders of the issuer is 13 million to 15 million yuan, a year-on-year decrease of 31.
16% to 40.
33%; after deduction The net profit attributable to shareholders of the issuer after non-recurring gains and losses was 10 million to 12 million yuan, a year-on-year decrease of 45.
41% to 54.
51%
.

The announcement explained the reasons for this change in performance as follows:

The company expects a year-on-year increase in revenue from January to June 2022, mainly due to the fact that the polylactic acid production line of its subsidiary Hainuoer has completed the production capacity ramp-up, which has increased compared with the production capacity that is still in the production capacity ramp-up stage from January to June 2021.
While the lactic acid market generally maintains a high boom, the sales volume has also increased, driving the company's revenue growth
.

The company's expected net profit from January to June 2022 will decline year-on-year, mainly due to the dual impact of the sales side and the cost side
.
On the sales side, the domestic new crown epidemic has caused a certain negative impact on the company.
On the one hand, the company and the company's domestic customers are mainly distributed in the Yangtze River Delta and the Pearl River Delta region.
The new crown epidemic not only has a negative impact on the normal production of customers, but also on the The logistics of the company's products and the logistics of downstream customers' sales of plastic products have caused varying degrees of obstacles.
Affected by this, the downstream market demand for the company's products has decreased, and the sales prices of the company's products have decreased
.
On the cost side, in the first half of 2022, the scale of the company's operating costs increased significantly with the increase in the production and sales of polylactic acid
.
Therefore, in the first half of 2022, the sales price of the company's products decreased year-on-year, while the scale of operating costs increased with the increase in production and sales, making the increase in operating income scale lower than the increase in operating costs, resulting in the estimated net profit from January to June 2022 year-on-year drop
.

At present, with the gradual easing of the logistics blockade and economic difficulties caused by the epidemic at home and abroad, and the successful commissioning of the second-phase production line of the company's Hainuoer, it is expected that the company's sales in the second half of 2022 will improve significantly, and the annual revenue and profit levels in 2022 will be improved.
Compared with 2021, there will be a significant improvement
.
In addition, with the gradual stabilization of the cooperative relationship between the company and the lactic acid supplier, it is expected that the purchase price of lactic acid will show a trend of stability and decline, which will promote the reduction of the company's cost
.

After deducting the issuance expenses, the funds raised from this issuance and listing will be used for the following projects: 1,237.
76 million yuan for the polylactic acid project with an annual output of 150,000 tons, and 88.
12 million yuan for the R&D center construction project, with a total of 1,325.
88 million yuan
.