3 Billion 144 Million! The Company, Which Produces 18 Billion Protective Gloves Annually, Has Expanded Its Production Capacity By 6 Billion Branches.

LAN fan medical Limited by Share Ltd (hereinafter referred to as "Lan fan medical") recently announced that the company received the China Securities Regulatory Commission issued the "approved blue sail medical Limited by Share Ltd public issuance of Switching Company bonds approved", former permitted company issued to the public value of 3 billion 144 million yuan bonds, 6 years.

According to the company's convertible bond plan, the total amount of funds raised by the company is not more than 3 billion 144 million yuan, which is used for the annual production of 2 billion new gloves projects, the annual output of 4 billion PVC gloves projects and the acquisition of Wuhan Kell's equity project. The priority date for placing the original shareholders of the convertible bonds and the online subscription date are May 28th.

Note:

1, the total amount of the transaction consideration of the project is about 178 million euros, and the investment amount converted into RMB is based on the middle price of the RMB exchange rate of the people's Bank of China in June 30, 2019, which is about 1 billion 391 million 420 thousand yuan (the total amount of the final transaction is actually paid foreign currency and the exchange rate as the final payment, and the excess part is raised by self financing).

2, the purchase price of the project is US $63 million 531 thousand and 700, and the investment amount converted into RMB is based on the central parity of RMB exchange rate between the US dollar and the RMB of the people's Bank of China in June 30, 2019, which is about RMB 436 million 760 thousand yuan.

The acquisition of NVTAG100% shares and supplementary working capital projects of the aortic valve company, a minority stake in the acquisition of CBCHII6.63% and the acquisition of 100% stake in Wuhan Kell are all subject to the approval of the China Securities Regulatory Commission and the raising of funds. After the offering is financed, the company will use the proceeds to acquire the assets.

If the issuance can raise the net amount of the actual net proceeds of Switching Company bonds less than the total amount of funds raised by the above projects, the insufficient funds raised by the company shall be raised by the company itself. If the issuance of Switching Company bonds is not consistent with the timing of the implementation of the project, the company can invest in other funds in accordance with the actual needs and replace it with the funds raised.

Prior to this year, the annual production of 4 billion PVC health protection gloves of LAN fan medical care Co., Ltd. has 2 billion 500 million PVC health protection gloves per year, which has been successfully put into operation in April 28th.

The industry believes that the convertible bond investment fund in addition to the acquisition of Baisheng international surplus stake, the expansion of 4 billion health protection gloves and other items, will also be used to buy all the shares of Swiss interventional aortic valve NVTAG company, the company's core product is TAVR (transcatheter aortic valve replacement) implantation device, commonly used in cardiac aortic valve replacement, technical difficulty Higher demand and greater room for growth are expected to complement existing cardiovascular and cerebrovascular products. However, it is noteworthy that this transaction did not set a performance commitment, NVTAG is still in a loss stage, subsequent business integration, marketing still need time, there is a certain uncertainty, and the transaction reverse separation rate is higher (10.34%). In addition, the previous acquisition formed 6 billion 484 million yuan goodwill, which accounted for a high proportion of assets, and the expansion of business scale led to increased financial pressure.

In the afternoon of May 27th, the convertible bond online roadshow, Liu Wenjing, chairman of LAN fan medical treatment, said that at present, some old customers have locked orders for medical and protective gloves next year, and the company has also communicated and arranged for this. From the current situation, the number of orders next year is more optimistic, and the order price will follow the market.

It is reported that since the outbreak of the epidemic, the protective products such as glove medical gloves have been rising in volume and price, and further enhanced the consumption habits of public standing protective products.

According to the financial report, in the first quarter of 2020, the business revenue of LAN fan medical business was 897 million yuan, an increase of 7.33% over the same period last year. The net profit attributable to shareholders of listed companies was 145 million yuan, an increase of 50.73% over the same period last year. The net profit attributable to shareholders of listed companies after deducting non recurring gains and losses was 133 million yuan, an increase of 63.94% over the same period last year, and the basic earnings per share were 0.15 yuan.

According to the insiders, the demand for gloves, masks and so on in the first quarter was affected by the domestic epidemic. Meanwhile, the price of gloves increased gradually after hitting the bottom in 2019, and the performance increased rapidly. At the same time, the sales of China's support business in Baisheng International were affected by the epidemic. Besides acute patients, stent implantation was limited, and the epidemic began to slow down in the two quarter. At present, the solution has been resumed. As a result of the significant increase in the glove ratio of the low gross profit rate in the income structure, the gross profit margin was 41.30%, down 1.05pp from the same period last year, and the cost rate was 21.85%, down by 6.56pp compared with the same period last year. The rate of financial expense dropped much, mainly due to the increase in exchange earnings. The overall net interest rate of the company was 16.58%, an increase of 4.47pp compared with the same period last year, and the profitability increased significantly.

At present, with the spread of overseas epidemic, the price of PVC and nitrile gloves continues to rise. At the same time, the 2 billion 500 million year / year PVC gloves of blue sail medical company have been successfully put into operation at the end of April. 1 billion 500 million / year PVC gloves and 2 billion / year nitrile gloves are expected to be formally put into operation in the four quarter of 2020.

At present, the consumption of disposable health protection gloves is mainly concentrated in developed countries such as the United States, Europe and Japan. The United States has the largest consumption of disposable health gloves in the world, accounting for 42% of the world's market. The disposable gloves of the United States mainly rely on imports, while the blue sail medical industry is the leading enterprise in the domestic health protection gloves industry, and its products are mainly concentrated on high-end disposable (medical grade) PVC gloves. Sales volume is similar to the overall trend of the industry. After a period of rapid growth, sales reached a bottleneck. Sales began to maintain around 15 billion in 2016.

In order to inject new growth momentum into the blue fan's medical achievements, in recent years, LAN fan has actively arranged nitrile gloves and promoted the upgrading of products. In 2016, the company planned to invest 825 million of the new nitrile glove production project. The project is divided into two phases. The first phase of production capacity is 2 billion yuan / year, and 275 million of the investment has been put into production. From 2018 onwards, production capacity is gradually increasing; the second stage production capacity is 4 billion yuan / year, and is put into operation in the second half of 2018, and it is expected to be full production in 2020.

According to the financial report, in 2019, the business revenue of LAN fan medical business was 3 billion 475 million yuan, an increase of 31% over the same period last year, and the net profit attributable to shareholders of listed companies was 490 million yuan, an increase of 41.41% over the same period last year.

In the protection business sector, in 2019, the blue river medical and health protection gloves product achieved a business income of 1 billion 678 million yuan, accounting for 48.28% of the total revenue of the company, and maintained a stable development trend. Through independent research and innovation, the company constantly realizes the upgrading of existing products and the introduction of new products, and continuously expands the market share at home and abroad. The total production capacity of health protection gloves has exceeded 18 billion branches / years.

The sales network of LAN fan medical products has covered more than 130 countries in 5 continents, and the market share of PVC gloves continues to rank first in the world. While consolidating the mature market, we will actively open up emerging markets such as Europe, the Middle East, Asia and South America, and add more than 100 new customers in fiscal year 2019 to further consolidate the international market share and achieve good economic results.

LAN fan medical actively promotes the upgrading of capacity products and expands the performance gains of the protection industry. The convertible bond project, which is being promoted, has nearly 600 million yuan invested in the health protection gloves project for the third phase of the annual output of 2 billion health protection (new gloves) projects and the annual production of 4 billion PVC health protection gloves. After the implementation of these two projects, LAN fan medical care will increase the production capacity of 6 billion / year health protection gloves, and expand the production capacity of CPE gloves and household gloves.

In addition, LAN fan medical will buy 100% stake in Wuhan Kell. Wuhan Kell and its subsidiaries are committed to R & D, production and sale of all kinds of emergency rescue products and disposable health protection products. It has formed long-term strategic cooperation with world-famous car companies such as Tesla, Mercedes Benz, BMW, Audi and Renault, and actively expanded the hospital and industrial market. Among them, cooperation with Tesla is the exclusive partnership of the whole family. Wuhan Kell will produce more than 1000 first-aid kits, which will be sold to many countries around the world, ranking first in Asia.

Public information shows that Lan fan medical care was established in Zibo, Shandong in 2002. It mainly produces and sells medical protective products such as PVC medical gloves, nitrile gloves and medical dressings. Among them, PVC gloves are the main products of the company. It has the annual capacity of 15 billion PVC gloves, occupying 22% of the world's market share. It is the first in the world, and downstream dealers and end users include Kendall group and American medical company. Famous customers such as hospital group. In 2018, the company acquired 93.37% stake in Baisheng international and extended its overall business to high value medical consumables. Baisheng international is mainly engaged in R & D and sales of heart stent and interventional cardiac surgery instruments. The global market share is fourth. China's market implantation is ranked second only to minimally invasive medical care and Le Pu medical care, and its comprehensive strength is strong.