On December 6, 2023, Red Oriental applied for suspension of the review and suspended its public offering** and listing review in accordance with Article 50, Paragraph 1 (5) of the Rules for the Review of Public Offerings and Listings to Unspecified Qualified Investors on the Beijing ** Exchange.
The reason given for the suspension of Red Oriental's listing is that "further implementation is still required due to ** concerns", which is also the first listing project that has been officially announced by the regulator since the opening of the Beijing Stock Exchange on the grounds of "** concerns". 
Henan Red Oriental Chemical Co., Ltd. *** Red Oriental").It is mainly engaged in the research and development, production and sales of pesticide raw materials and preparations, fine chemical products, and the main products are glyphosate original drugs. After years of development, the company has built a complete industrial chain from steam **, fine chemical product production, TC synthesis, to glyphosate preparation and comprehensive utilization of by-product resources, with glyphosate TC as its core business, and has become a glyphosate production enterprise with the advantages of industrial chain integration.
Controlling shareholder and actual controllerRed Oriental Ecology directly holds 37,500,000 shares of the company, accounting for 48% of the company's total share capital before issuance96%, is the controlling shareholder of the company. Han Gensheng and Yu Hongxia directly and indirectly hold a total of 75,124,000 shares of the company, with a total shareholding ratio of 9807%, Han Gensheng and Yu Hongxia are the actual controllers of the company.
Key financial data and financial indicators
From January to June 2023, the company achieved an operating income of 71,193450,000 yuan, down 3784%；Net profit attributable to shareholders of the parent company was 13,684510,000 yuan, down 7048%；Net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses was 12,872200,000 yuan, down 71 from the same period last year95%。
The specific listing criteria selected by the issuer are: the expected market capitalization is not less than 200 million yuan, the net profit in the last two years is not less than 15 million yuan and the weighted average return on equity is not less than 8%, or the net profit in the most recent year is not less than 25 million yuan and the weighted average return on equity is not less than 8%.
Use of raised fundsThe company intends to issue no more than 25,533,334 shares (without considering the over-allotment option), or no more than 29,363,334 shares (under the full exercise of the over-allotment option), and the funds raised in this public offering** will be invested in the following projects after deducting the issuance costs
Previously, Red Oriental raised funds from 12$9.1 billion to $109.1 billion yuan. In this regard, Red Oriental explained that this is based on the consideration of "the company's overall business development strategy".
This year, among the initial listed companies on the Beijing Stock Exchange, Anda Technology raised 6500 million yuan in the first place, according to all the companies currently listed on the Beijing Stock Exchange, Red Oriental will rank second, second only to beiteri. 
Question 5Negative public opinion on environmental protection and over-approved production(1) Environmental compliance. According to the application documents, the issuer's industry is chemical raw materials and chemical products manufacturing (C26), and the pesticide and chemical industry will produce a certain degree of "three wastes" emissions in the production stage of products, which is a heavily polluting industry. In March 2019, the Beijing News, Dahe Daily, People's Daily Online, etc. reported on the yellowing and death of wheat seedlings on more than 2,300 acres of farmland in Jian'an District, Xuchang City.
Please state to the issuer:Whether the issuer has been investigated by the competent authority for the above-mentioned report of "wheat seedlings in more than 2,300 acres of farmland in Jian'an District caused by glyphosate drug damage"**, explaining the specific investigation and investigation conclusions, whether the issuer is the main body responsible for the glyphosate drug damage incident, whether it has been subject to administrative punishment by the competent authority, and whether it constitutes a major violation. The current planting situation of the farmland involved in the public opinion, whether there is a similar ** reported incident again, and whether the issuer has other environmental protection inspections by the competent authority or other negative environmental public opinions.
Whether the issuer's existing projects meet the requirements of the environmental impact assessment documents;Whether the requirements for the reduction and substitution of total pollutants have been implemented;Whether the fund-raising project has obtained the approval of the environmental impact assessment of the competent department of ecology and environment at the corresponding level in accordance with the requirements of the Environmental Impact Assessment Law, as well as the provisions of the Catalogue of Classified Management of Environmental Impact Assessment of Construction Projects and the Catalogue of Construction Projects for Examination and Approval of Environmental Impact Assessment Documents by the Ministry of Ecology and Environment;Whether the issuer's built, under-construction and fund-raising projects are subject to the procedures and performance of the competent authorities, such as approval, approval and filing. Whether the issuer has obtained the pollutant discharge permit in a timely manner in accordance with the regulations, whether the renewal of the pollutant discharge permit and whether there are obstacles to its renewal, whether there is any failure to obtain the pollutant discharge permit or the discharge of pollutants beyond the scope of the pollutant discharge permit, whether it violates the provisions of Article 33 of the Regulations on the Administration of Pollutant Discharge Permits, whether it has completed rectification, and whether it constitutes a major violation.
Whether the issuer has been subject to administrative penalties in the field of environmental protection in the past 36 months, whether it constitutes a major violation, and whether the corrective measures and whether the rectification comply with the provisions of environmental protection laws and regulations. Whether the company has had environmental accidents or major mass environmental protection incidents, and whether there are negative reports on the company's environmental protection situation. Whether the products produced by the issuer are among the products with high pollution and high environmental risks specified in the List of "High Pollution and High Environmental Risk" Products (2017 Edition), and if the products produced by the issuer involve products with high pollution and high environmental risks in the list, please indicate whether the revenue generated by the relevant products and the proportion of the issuer's main business income are the main products produced by the issuer;If the issuer manufactures the relevant products in the list, please specify the future pressure drop plan.
Whether the issuer's projects under construction and fund-raising projects meet the requirements of dual control of energy consumption in the place where the project is located, whether it has obtained the energy conservation review opinion of fixed asset investment projects in accordance with the regulations, the issuer's main energy resource consumption, and whether it meets the regulatory requirements of the local energy conservation authority. (2) During the reporting period, there was an over-approved production situation.
According to the application documents, from 2020 to 2022, the actual output of hydrochloric acid, formaldehyde, chloromethane, sulfuric acid and phosphorous acid produced by-products of the issuer exceeded the permitted output of its "Safety Production License" and "Record Certificate for the Production of Non-pharmaceutical Precursor Chemicals".Please issuersExplain the number and proportion of overproduction of hydrochloric acid, formaldehyde, chloromethane, sulfuric acid and phosphorous acid in each period of the reporting period, the rectification measures and the re-implementation of the environmental impact assessment, safety assessment, energy assessment and re-application of the safety production license and the production record certificate of non-pharmaceutical precursor chemicals, whether environmental accidents or safety accidents have occurred, whether there is a risk of being administratively punished by the competent authority, and whether it constitutes a major violation.
(3) Compliance of production and operation of hazardous chemicalsAccording to the application documents, the raw materials used by the company and the products produced by the company involve hazardous chemicals, due to the inherent characteristics of chemical enterprises, such as the existence of chemical reaction processes, continuous and uninterrupted operations, and some raw materials and products are flammable and explosive chemicals, etc., so the company has certain safety risks in the production operation and transportation process.
Please issuersExplain the name, production and use of hazardous chemicals and the specific links involved in the production and use of hazardous chemicals, the requirements of relevant laws and regulations such as the production, use, operation, purchase and storage of hazardous chemicals, whether the production and operation of hazardous chemicals comply with the provisions of relevant national laws and regulations, whether there have been safety incidents, whether administrative penalties have been imposed, and whether major violations of laws and regulations have been constituted. Explain whether the issuer has established a sound safety production management system, as well as the effectiveness and implementation of the safety production management system.
Explain the issuer's investment in safety production, and whether the issuer's use of safety production fees matches its own scale. Explain whether the issuer's customers and merchants have hazardous chemicals business qualifications, storage conditions, transportation companies responsible for transportation and relevant hazardous chemicals transportation qualifications, such as customers without hazardous chemicals business qualifications, customers without hazardous chemicals business qualifications, and sales revenue, purchase amount and proportion.
(4) Completeness of business qualificationsAccording to the prospectus, China's pesticide supervision and management implements pesticide production licensing system, pesticide business licensing system, pesticide registration system, pesticide product quality standardization management system, etc.
Please issuersCombined with the imminent expiration of the company's pesticide production license, it is explained that the current license renewal situation and whether there is any overdue operation.
Explain the reasons why the issuer's safety production license was obtained on August 3, 2023 and is only valid for six months, and explain whether there is any situation of operating without obtaining a safety production license or exceeding the time limit or beyond the scope of operation based on the historical renewal situation. Whether the issuer has obtained all the necessary licenses, qualifications, certifications and filings for pesticide production and operation, whether it has obtained all the necessary approval and filing documents, whether it meets the necessary national, industry and local standards and specifications, and whether it is legal and valid.
Whether the issuer conducts its business in strict accordance with the requirements of relevant national qualification licenses, certifications, filings and quality standards, whether it has been investigated, notified or punished by the competent authorities, and whether its business operations are legal and compliant. The sponsor and the issuer's lawyer are requested to review the above matters and give a clear opinion. Question 2The main product is the impact of restricted production capacity
According to this prospectus, (1) the sales revenue of the Company's glyphosate products was 48,697350,000 yuan, 94,833500,000 yuan, 166,966$300,000 and $37,601770,000 yuan, accounting for the proportion of main business income respectively. 24% and 9002%。On October 30, 2019, the state issued the "Guiding Catalogue for Industrial Structure Adjustment" (2019 version), which listed "new glyphosate" as a restricted production capacity
(3) In the domestic market, some regions such as Guizhou and Lishui have taken measures to restrict or ban glyphosate, and in the international market, Sri Lanka, France, Germany and other countries or regions have also introduced restrictions or prohibitions on the use of glyphosate. (4) The issuer's prospectus cites more data from 2019 in the "Basic Information of the Industry" section.
Please issuers(1) Combined with the adjustment of the national "Industrial Structure Adjustment Guidance Catalogue", explain the basic situation and future trend of pesticide industry structure adjustment, explain the reasons why some regions at home and abroad have introduced restrictions or prohibitions on the use of glyphosate, and the main user countries have taken protective measures such as anti-dumping investigations on pesticide products exported from ChinaExplain the impact of the above-mentioned industry policies on the market space, competition pattern and production and operation development of the glyphosate industryWhether the issuer operates in an industry that is experiencing cyclical recessions, overcapacity, plummeting market capacity, and stagnant growth.
2) Explain whether the production and operation are in line with the national industrial policy, whether it is included in the corresponding industrial planning and layout, whether the issuer's main production base is located in the chemical park, whether the production and operation and fundraising projects belong to the restricted and eliminated industries in the Guiding Catalogue for Industrial Structure Adjustment (2019 version), and whether they belong to backward production capacity, please classify and explain according to business or product. Combined with the relevant policies of the issuer's main sales regions, explain whether the aforesaid circumstances have a material adverse impact on the issuer's ability to continue operations, whether the issuer complies with the industrial policies of the Beijing Stock Exchange, and make specific material event reminders and risk disclosures on the aforesaid matters。(3) Explain the future development trend or plan of the issuer's products, the response measures and effectiveness of the single risk of product structure in combination with industry policies and changes in the glyphosate market, and fully reveal the risks related to business growth.
4) Explain the main participants, market competition pattern and changes in China's glyphosate market, the issuer's proportion and ranking in terms of market share, production capacity scale, etc., the issuer's market position and advantages and disadvantages compared with its main competitors, and update the market space and competition pattern data of the glyphosate industry in the prospectus. The sponsor is requested to review the above matters and issue a clear opinion on whether the issuer has a material adverse impact on the issuer's ability to continue as an independent and continuing business in the market.
Question 11The necessity and feasibility of the fundraising projectAccording to the application documents, the company intends to raise funds 129.1 billion yuan, of which 1 billion yuan is intended for the comprehensive utilization of industrial by-product salt resources and the production of 2,000 tons of lithium hexafluorophosphate, and it is planned to be used for the construction project of the R&D center9.1 billion yuan, which is intended to be used to supplement liquidity of 200 million yuan.
(1) Feasibility of comprehensive utilization of industrial by-product salt resources and production of 2,000 tons of lithium hexafluorophosphate. Please issuers
Explain the relationship and difference list of the company's existing fine chemical products, analyze the changes of the issuer in terms of main products, core technologies, fixed assets, software and hardware equipment, number and structure of employees, R&D mode, production mode and other aspects before and after the implementation of the fundraising and investment project, and explain whether there have been major changes in the issuer's production and operation after the implementation of the fundraising and investment project, and whether the relevant risks have been fully revealed. Combined with the reserves of personnel, technology, customers, etc., explain the R&D progress, market demand calculation reasonableness, market development and orders in hand of the lithium hexafluorophosphate project, explain whether there is R&D failure or inability to mass produce or overcapacity, the necessity and feasibility of the project, and whether the relevant risks are fully revealed.
Explain whether the relevant procedures for the approval of land use, environmental impact assessment, safety assessment, energy assessment and other projects involved in the fundraising and investment project have been completed, and if not, explain the progress. (2) The necessity of R&D center construction.
Please issuersCombined with the use of existing real estate, future business development plans, and the use of fixed assets of public companies in the same industry, etc., disclose the reasonableness of the scale of new real estate that is necessary to raise funds to build or purchase real estate, and whether there is a risk of idleness in the specific plan for future production and operation.
Combined with the R&D model, expenditure composition, historical R&D investment scale, etc., the rationality of capital demand is calculated. Explain the reasonableness of the proposed R&D project and the selection of R&D projects, the improvement of the R&D results on the issuer's core competitiveness, the scale and salary details of the corresponding researchers of the fundraising project, the comparison with comparable companies in the same industry in the same region, and whether it matches the actual production and operation of the issuer.
(3) The rationality of supplementing liquidity in the context of large dividends. According to the application documents, since 2020, the issuer has paid two cash dividends, with a total dividend amount of 82 billion yuan, as of the end of March 2023, the company's trading financial assets amounted to 41.2 billion yuan. Please issuers
Combined with the situation of book money funds at the end of the reporting period, the dividends of each period of the reporting period, the expenditure of large wealth management products, the production and operation plan, working capital requirements and the calculation process and basis of capital requirements, the necessity and rationality of supplementing liquidity and capital scale are explained. Ask the sponsor to review the above matters and give a clear opinion. According to the latest announcement issued by Red East, the company will raise funds from 12$9.1 billion to $109.1 billion yuan, and at the same time abandon the fund-raising project of "replenishing liquidity". Red Oriental said: "According to the company's overall business development strategy, after careful consideration and research, the company intends to adjust the use of raised funds in the specific plan of the issuance and listing. ”