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United States securities and exchange commission logo
September 21, 2023
Hongliang Li
Chief Executive Officer
Leishen Energy Holding Co., Ltd.
103 Huizhong Li, B Building, Peking Times Square, Unit 15B10
Chaoyang District, Beijing, China
Re: Leishen Energy
Holding Co., Ltd.
Draft Registration
Statement on Form F-1
Submitted August
24, 2023
CIK No. 0001985139
Dear Hongliang Li:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement submitted on August 24, 2023
Cover Page
1. We note from your
disclosure on the cover page that you exclude Hong Kong and Macau
from your definition of
PRC or China for the purpose of your registration statement.
Please revise to remove
the exclusion of Hong Kong and Macau from such definition.
2. Please disclose on the
cover page that Hongliang Li, your Chief Executive Officer and
Director, through his
holding company Polar Energy Company Limited controls a
majority of the voting
power of your outstanding ordinary shares. Please also include a
risk factor that Mr. Li
will be able to influence your management and affairs and all
matters requiring
shareholder approval.
Hongliang Li
FirstName LastNameHongliang Li
Leishen Energy Holding Co., Ltd.
Comapany 21,
September NameLeishen
2023 Energy Holding Co., Ltd.
September
Page 2 21, 2023 Page 2
FirstName LastName
Prospectus Summary, page 4
3. We note your disclosure that the "following diagram illustrates our
corporate structure and
shareholders of each corporate entity listed herein immediately after
completion of the
offering;" however, the diagram is not included here. Please revise.
4. In your summary of risk factors, disclose the risks that your
corporate structure and being
based in or having the majority of the company s operations in China
poses to investors.
In particular, describe the significant regulatory, liquidity, and
enforcement risks with
cross-references to the more detailed discussion of these risks in the
prospectus. For
example, specifically discuss risks arising from the legal system in
China, including risks
and uncertainties regarding the enforcement of laws and that rules and
regulations in
China can change quickly with little advance notice; and the risk that
the Chinese
government may intervene or influence your operations at any time, or
may exert more
control over offerings conducted overseas and/or foreign investment in
China-based
issuers, which could result in a material change in your operations
and/or the value of the
securities you are registering for sale. Acknowledge any risks that
any actions by the
Chinese government to exert more oversight and control over offerings
that are conducted
overseas and/or foreign investment in China-based issuers could
significantly limit or
completely hinder your ability to offer or continue to offer
securities to investors and
cause the value of such securities to significantly decline or be
worthless.
Implications of being an emerging growth company, page 7
5. We note you identify yourself as an emerging growth company, and you
have elected to
use the extended transition period for complying with new or revised
accounting standards
under Section 102(b)(1) of the Act. In this regard, please describe
the risks resulting from
this election, including that your financial statements may not be
comparable to
companies that comply with public company effective dates.
Market and Industry Data, page 8
6. Please disclose the data of the commissioned report published by Frost
& Sullivan from
which you include statistical data and estimates.
Risk Factors, page 16
7. Given the Chinese government s significant oversight and discretion
over the conduct of
your business, please revise to highlight separately the risk that the
Chinese government
may intervene or influence your operations at any time, which could
result in a material
change in your operations and/or the value of the securities you are
registering. Also,
given recent statements by the Chinese government indicating an intent
to exert more
oversight and control over offerings that are conducted overseas
and/or foreign investment
in China-based issuers, acknowledge the risk that any such action
could significantly limit
or completely hinder your ability to offer or continue to offer
securities to investors and
Hongliang Li
Leishen Energy Holding Co., Ltd.
September 21, 2023
Page 3
cause the value of such securities to significantly decline or be
worthless.
Failure to comply with PRC property-related laws. . ., page 33
8. Please describe the location and character of the principal properties
you hold. In each
case describe the material terms of the leases or contracts governing
those properties and
any major encumbrances thereon, including a description of the size
and uses of the
property; productive capacity and extent of utilization of the company
s facilities; how the
assets are held; the products produced; and the location. Describe the
extent to which you
or third parties are responsible for maintenance and other significant
obligations related to
your leased properties. With regard to any material plans to
construct, expand or improve
facilities, describe the nature of and reason for the plan, an
estimate of the amount of
expenditures including the amount of expenditures already paid, a
description of the
method of financing the activity, the estimated dates of start and
completion of the
activity, and the increase of production capacity anticipated after
completion.
Management's discussion and analysis of financial condition and results of
operations, page 46
9. Please disclose whether you utilize any key metrics or financial
measures to evaluate your
business, measure your performance, identify trends affecting your
business, establish
budgets, measure the effectiveness of investments in your technology
and development
and sales and marketing, and assess your operational efficiencies.
Refer to Item 5
Operating and Finance Review and Prospects to Form 20-F.
Factors Affecting Our Results of Operations, page 48
10. Please discuss whether supply chain disruptions materially affect your
outlook or business
goals. Specify whether challenges have materially impacted your
results of operations or
capital resources and quantify, to the extent possible, how your
sales, profits, and/or
liquidity have been impacted. Discuss known trends or uncertainties
resulting from
mitigation efforts undertaken, if any. Explain whether any mitigation
efforts introduce
new material risks, including those related to product quality,
reliability, or regulatory
approval of products.
Revenues, page 51
11. We note your disclosure that the increase in revenue from digitalization
and integration
equipment sales "was contributed to continuously increased requirement
to our
digitalization and integration equipment" and the increase in revenue
from oil and gas
FirstName LastNameHongliang Li
engineering technical services "was contributed to continuously
increased requirement to
Comapany NameLeishen
our compressor Energy
booster Holding
service." Co., Ltd.
Please revise to disclose the
material factors underlying
the changes
September 21, 2023inPage
revenue.
3
FirstName LastName
Hongliang Li
FirstName LastNameHongliang Li
Leishen Energy Holding Co., Ltd.
Comapany 21,
September NameLeishen
2023 Energy Holding Co., Ltd.
September
Page 4 21, 2023 Page 4
FirstName LastName
Liquidity and Capital Resources, page 54
12. Please clearly disclose the minimum funding required remaining in
business for at least
the next 12 months. In addition, revise to disclose the minimum number
of months that
you will be able to conduct your planned operations using currently
available capital
resources. Please refer to Item 5B. Liquidity and Capital Resources to
Form 20-F.
13. Please provide a more informative discussion and analysis of cash
flows from operating
activities, including changes in working capital components, for the
periods presented. In
doing so, explain the underlying reasons and implications of material
changes between
periods to provide investors with an understanding of trends and
variability in cash flows.
Please refer to Item 5B(1) to (3) Liquidity and capital resources. In
addition, please revise
references to cash used in an activity to show that such amounts have
a negative impact on
your cash flows (e.g., mark in parenthesis).
Competitive Landscape of Oilfield Services Market in China, page 77
14. Please revise to define or explain briefly "assemblers in the market"
and why they are
excluded from the market information.
Business, page 87
15. We note your disclosure on page 87 that you serve a large customer
base throughout PRC,
Saudi Arabia, Kazakhstan and Indonesia. To the extent material, please
disclose the
percentage of revenue that you generate from each country for all
periods presented. Refer
to Item 4.B.2. of Form 20-F.
16. Please expand your disclosure in this section to describe the
relationship you have with
your manufacturing partners, including where they are based,
manufacturing capacities,
company oversight, and any existing long-term manufacturing contracts
which you are
substantially dependent upon. Additionally, disclose the extent to
which you manufacture
your own products.
Our Customers, page 110
17. We note that for the year ended September 30, 2022, your four largest
customers
accounted for 61% of your total revenue. Please disclose the terms of
any material
agreements with these customers, including the identity of the
customer, the term of the
agreements and any termination provisions. In addition, please add a
risk factor regarding
your reliance on these customers and any uncertainties regarding your
relationship with
them.
18. On page 102, your disclosure provides that the integrated
pre-splitting device has been
successfully implemented in various of Customer Group B s Northwest
Oilfield projects,
including the Shunbei No. 5 Combined Station and Shunbei No. 1
Treatment Station
Sewage System Expansion Project; however, on page 110, the
Northwest Oilfield
Hongliang Li
Leishen Energy Holding Co., Ltd.
September 21, 2023
Page 5
projects are attributed to Customer Group A. Please reconcile.
Related Party Transactions, page 139
19. We note that you have loans due from Li Hongliang, Chief Executive
Officer and director
of the company, as of September 30, 2022. Exchange Act Section
13(k)(1) prohibits
public companies from extending or maintaining credit in the form of
personal loans to or
for any director or executive officer. Please disclose the business
purpose of the loan and
tell us how you intend to comply with Section 13(k) of the Securities
Exchange Act of
1934 with respect to this loan.
Notes to Consolidated Financial Statements
Revenue recognition, page F-14
20. Please tell us how you considered the guidance in ASC 606-10-55-89
through 55-91
regarding presentation of disaggregated revenues. We note that your
Results of Operations
section in MD&A discusses the percentage change in revenue for each
revenue source.
Please advise or revise to include disclosure of your revenue
disaggregation in your
financial statements footnote.
Income taxes, page F-29
21. Please disclose a description of tax years that remain subject to
examination by major tax
jurisdictions that is required under ASC 740-10-50-15e.
Parent company information (unaudited), page F-33
22. Please confirm that your parent only financial statements will be
audited. Please refer to
Rule 5-04(c) of Regulation S-X.
General
23. Please supplementally provide us with copies of all written
communications, as defined
FirstName LastNameHongliang Li
in Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your
Comapany NameLeishen
behalf, Energy Holding
present to potential investorsCo., Ltd. on Section 5(d) of the
Securities Act,
in reliance
whether
September or notPage
21, 2023 they5retain copies of the communications.
FirstName LastName
Hongliang Li
FirstName LastNameHongliang Li
Leishen Energy Holding Co., Ltd.
Comapany 21,
September NameLeishen
2023 Energy Holding Co., Ltd.
September
Page 6 21, 2023 Page 6
FirstName LastName
You may contact Becky Chow, Senior Staff Accountant, at (202) 551-6524
or Stephen
Krikorian, Accounting Branch Chief, at (202) 551-3488 if you have questions
regarding
comments on the financial statements and related matters. Please contact Marion
Graham, Staff
Attorney, at (202) 551-6521 or Jan Woo, Legal Branch Chief, at (202) 551-3453
with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Technology
cc: David Manno