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Arrow Homes, Lens Homes Two Major Companies Filed Prospectuses

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On July 1, the official website of the Securities and Futures Commission disclosed two prospectuses, “Arrow Home Group Co., Ltd. initial public offering of stock prospectus” and “Zhongshan Lens Home Co., Ltd. initial public offering of stock prospectus”. According to the disclosed information, Arrow Home Co. with a revenue of over 6.5 billion yuan in 2020 and Zhongshan Lens Home Co. with a revenue of over 750 million yuan in 2020 both applied to be listed on the main board of the Shenzhen Stock Exchange.

 

Arrow Home.

Revenue of more than 6.5 billion yuan in 2020, net profit of more than 500 million

On July 1, “Arrow Home Group Co., Ltd. initial public offering prospectus” was disclosed on the official website of the Securities Regulatory Commission. Information shows that Arrow Home intends to be listed on the main board of the Shenzhen Stock Exchange. The number of shares to be issued will not exceed 9,899.6717 million shares, not less than 10% of the total share capital after the issue, with a par value of 1 yuan per share. No public offering of shares will be made by the original shareholders, and the total share capital after the issue will not exceed 96,800.00 million shares.

During the reporting period, the operating revenues of Arrow Home Group Co., Ltd. were RMB6,810,477,100, RMB6,657,949,900 and RMB650,238,700 respectively. The revenue from main business was RMB6,759,257,400, RMB6,616,308,500 and RMB6,477,680,400, respectively. The fluctuation of the company’s operating income was mainly affected by the superposition of factors such as changes in the sales structure of the company’s products, changes in consumer preferences, increased market competition and the impact of the new crown epidemic.

(ii) Key figures in the consolidated income statement

Unit: million yuan

Projects Year 2020 Year 2019 Year 2018
Operating income 650,238.07 665,794.99 681,047.71
Operating profit 69,779.13 70,292.18 32,265.04
Total profit 66,852.36 69,810.70 32,468.95
Attributable to shareholders of the parent company Net profit 58,851.48 55,624.51 19,708.79
Net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses 53,347.03 50,692.57 6,744.09

As disclosed in the prospectus: Arrow Home Group Co., Ltd. mainly sells its products to the public through the distribution model. The proportion of revenue under the distribution model to the main business revenue for each period of the reporting period was 94.77%, 95.98% and 94.39% respectively. The distribution model is conducive to the rapid expansion of the marketing network with the advantage of regional resources of distributors, the rapid expansion of brand awareness in all levels of the market and the increase of market share of products. As of December 31, 2020, the Company had a total of 1,746 dealers with a total of 6,197 distributors and a total of 10,239 terminal store outlets.

Unit: pcs

Type December 31, 2020 December 31, 2019 December 31, 2018
Dealers Distributors Dealers Distributors Dealers Distributors
Total 1,746 6,197 1,677 5,140 1,623 4,239

In addition, Arrow Home Group Co., Ltd. said that as a large home furnishing group company integrating R&D, production and manufacturing, the company has always regarded technological R&D as the driving force of its own development. It continues to conduct in-depth research in product design, formula formulation, material application and process improvement, and has solid technical process capabilities, thus gaining general recognition from end consumers and downstream real estate developers. The proceeds, after deducting issuance expenses, will be used entirely for projects related to the company’s main business.

Unit: million yuan

No. Project Name Total investment Proposed use of proceeds
1 Intelligent home products production capacity technical transformation project 48,192.30 48,192.30
2 Annual production capacity of 10 million sets of faucets, 3 million sets of shower project 68,000.00 46,025.57
3 Intelligent home R & D testing center technology transformation project 17,364.00 17,364.00
4 Digital intelligence upgrade technology transformation project 9,054.75 9,054.75
5 Marketing service network upgrade and brand construction project based on new retail mode 26,310.38 26,310.38
6 Supplementary working capital 34,000.00 34,000.00
Total 202,921.44 180,947.00

 

Lens Home

Revenue exceeding 750 million and net profit exceeding 66 million in 2020

On July 1, the official website of the Securities and Futures Commission also disclosed the “initial public offering prospectus of Zhongshan Lens Home Co. Information shows that Zhongshan Lens Home Co., Ltd. intends to be listed on the main board of the Shenzhen Stock Exchange. According to the prospectus, the number of shares to be publicly issued does not exceed 12,700,000 shares (subject to the number of shares approved by the China Securities Regulatory Commission), accounting for not less than 25% of the total share capital after the issue. The par value of each share is RMB 1 yuan, all new shares will be issued, and no public offering of shares by shareholders will be involved.

According to the prospectus, the operating revenues of Zhongshan Lens Home Co., Ltd. during the reporting period were RMB 75,446.41 million, RMB 694,720.80 million and RMB 533,780.70 million, respectively. Net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses was RMB 66,857,800, RMB 64,819,000 and RMB 59,620,500 respectively.

(ii) Key data of the consolidated income statement

Unit: million yuan

Projects Year 2020 Year 2019 Year 2018
Operating income 75,446.41 69,472.80 53,378.07
Operating profit 8,029.47 7,412.24 6J59.74
Total profit 8,339.17 7,556.68 6,145.38
Net profit 6,885.02 6,263.40 5,178.80
Net profit attributable to owners of the parent company 6,930.29 6,453.52 5,252.56
Net profit attributable to owners of the parent company after deducting non-recurring gains and losses 6,685.78 6,481.90 5,962.05

Prospectus disclosure: The revenue from bulk business of Zhongshan Lens Home Co. During the reporting period, the revenue from bulk business accounted for 47.61%, 57.39% and 69.34% of the main business revenue respectively, and bulk business is its important source of revenue. The company has established strategic partnerships with famous real estate companies such as Evergrande Group, Poly Group, Time China, Longguang Group, Vanke Property and Sunac China.

For the funds to be raised, Lens said: The Company intends to publicly issue not more than 12.7 million RMB ordinary A shares to the public, which is not less than 25% of the total share capital after the issue. The net amount of the total proceeds after deducting the issuance expenses will be stored and used in a special account in accordance with the Company’s “Management System of Proceeds” and will be invested in the following projects in order of priority.

Unit: million yuan

No. Project Name Total project investment Total amount to be invested with proceeds
1 Zhongshan Lanx production base intelligent upgrade technology transformation project 38,234.50 37,244.50
2 Jiangsu Langs Pizhou R&D Center Construction Project 4,061.11 4,061.11
3 Supplementary working capital project 10,000.00 10,000.00
Total 52,295.61 51,305.61

Note: Zhongshan Langs production base intelligent upgrade technology transformation project in the reserve cost of 9.9 million yuan to be invested with its own funds.

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