Its Customers Cover Almost All Express Delivery Giants — Guangdong Tianyuan Aims to Hit IPO Again

As an enterprise mainly engaged in express packaging printing, Guangdong Tianyuan Industrial Group Co., Ltd. (hereinafter referred to as "Tianyuan Industrial") is backed by numerous "backers" such as SF Express, Yunda and JD.com, and enjoys tremendous advantages in the packaging and logistics industries. However, in January 2018, its IPO (initial public offering) was rejected by the CSRC.

Recently, Tianyuan Industrial is seeking an IPO again, planning to raise RMB 400 million in funds for two major projects: the green packaging consumables manufacturing base for express e-commerce logistics and the construction of an R&D center.

1

Customers cover almost all express delivery giants, with revenue of RMB 478 million in the first half of 2018

With the vigorous development and increasing maturity of e-commerce, online shopping has gradually become the main shopping method for many consumers, and the express delivery industry has achieved rapid development. In particular, since 2011, the scale of the express logistics market has grown rapidly, with an average annual growth rate of more than 50%.

Tianyuan Industrial is a high-tech enterprise mainly engaged in express consumables, logistics equipment, advertising media, supply chain services, and warehousing and distribution, and it has grown and expanded as a result. According to public information, Tianyuan Industrial was founded in 2010 with a registered capital of RMB 132.52 million (13252万元), and has built five major manufacturing bases in South China (two), East China, North China and Central China.

Tianyuan Industrial's customers cover almost all express delivery giants; it serves express giants such as FedEx, UPS, DHL, Royal Mail, SF Holding, Yunda Express, YTO Express, China Postal Express, Best Logistics and Deppon Logistics, and is also a strategic partner of e-commerce platforms such as Alibaba, JD.com, Vipshop and Suning.

With close ties to express delivery companies, its performance is naturally remarkable. In the first half of 2018, Tianyuan Industrial achieved revenue of RMB 478 million, a year-on-year increase of 31.09%; net profit attributable to the parent company was RMB 35.4627 million, a year-on-year increase of 22.03%.

Tianyuan Industrial stated that the rapid growth of the express logistics industry has driven the continuous increase in demand for express logistics packaging printing.

2

Seeking an IPO again, aiming to raise RMB 400 million to invest in green packaging projects and build an R&D center

Despite this, Tianyuan Industrial's IPO journey has not been smooth. In March 2016, Tianyuan Industrial was listed on the New Third Board; on April 17, 2017, Tianyuan Industrial submitted proposed IPO materials to the CSRC, planning to list on the ChiNext board. On January 17, 2018, Tianyuan Industrial attended the review meeting and was rejected by the Public Offering Review Committee.

Among the main issues raised for inquiry at the Public Offering Review Committee meeting, the most closely watched was that in 2015-2016, the mother of the actual controller of Yunda Express and Deppon Investment respectively subscribed to shares issued by the issuer through capital increase.

The Public Offering Review Committee required Tianyuan Group to explain the reasons for the continuous decline in the comprehensive gross profit margin of products sold to Yunda Express and Deppon Logistics after the aforementioned capital increase and shareholding, including the reasons for and reasonableness of the large difference in unit selling prices of label products of the same standard sold to Yunda Express and Best Logistics in 2016 and January-September 2017, among others.

More than a year later, Tianyuan Industrial is seeking an IPO again, but unlike last time, this time it has shifted to the SME board. It is understood that the number of shares publicly issued by Tianyuan Industrial this time shall not exceed 4,420 万股 (44.2 million shares), and shall not be less than 25.00% of the company's total share capital after the offering.

In this offering, Tianyuan Industrial plans to raise RMB 400 million in funds, which after deducting issuance expenses will be used for two major projects: the green packaging consumables manufacturing base for express e-commerce logistics and the construction of an R&D center.

It is believed that with this renewed bid for an IPO, Tianyuan Industrial has made adequate preparations. Here, we wish Tianyuan Industrial success in its IPO on the SME board in 2019!