Guangdong Great River Smarter Logistics Co.Ltd(002930) : reply report on the inquiry letter on the restructuring of Guangdong Great River Smarter Logistics Co.Ltd(002930) issued by Shenzhen Stock Exchange

Guangdong Great River Smarter Logistics Co.Ltd(002930)

About Shenzhen Stock Exchange

Inquiry letter on restructuring of Guangdong Great River Smarter Logistics Co.Ltd(002930)

Reply Report

February, 2002

Shenzhen Stock Exchange:

On January 28, 2022, Guangdong Great River Smarter Logistics Co.Ltd(002930) (hereinafter referred to as “the company”) received the inquiry letter on the reorganization of Guangdong Great River Smarter Logistics Co.Ltd(002930) from the second Department of management of listed companies of your exchange (inquiry letter on non licensed reorganization [2022] No. 2) (hereinafter referred to as “the inquiry letter”). The company and relevant intermediaries have carefully analyzed the relevant issues and revised and supplemented the report on the purchase of Guangdong Great River Smarter Logistics Co.Ltd(002930) major assets (Draft) (hereinafter referred to as the “draft”). The answers to the questions mentioned in the inquiry letter are as follows:

Unless otherwise specified, the words or abbreviations mentioned in this reply have the same meanings as those defined in the interpretation in the draft.

1、 According to the restructuring report, the largest customer of the target company is Celanese (Nanjing) Chemical Co., Ltd. (hereinafter referred to as “Celanese”), and the sales revenue of the target company accounted for 85.79%, 85.35% and 88.08% of the operating revenue in 2019, 2020 and January September 2021, respectively. According to the phase II business contract signed between the target company and Celanese, the annual fixed charge corresponding to the wharf storage service charge is lower than that of the phase I contract. Please add: (1) the basic operation of Celanese, the main terms of the second phase contract renewed, the specific reasons for the subsequent implementation of the decrease in income, and the specific calculation basis and process of the expected decrease in amount. (2) Combined with the rights and obligations of both parties to the contract, analyze and explain whether this transaction will affect the actual implementation and effectiveness of phase II contract in the future. The independent financial advisor is requested to check and give clear opinions.

reply:

(I) relevant information description

1. The basic business situation of Celanese, the main terms of the second phase contract renewed this time, the specific reasons for the subsequent implementation of the decrease in income, and the specific calculation basis and process of the expected decrease in amount.

(1) Basic business situation of Celanese

The basic situation of Celanese is as follows:

Name: Celanese (Nanjing) Chemical Co., Ltd

Type: limited liability company (foreign investment, non sole proprietorship)

Address: No. 66, Fangshui West Road, Jiangbei new material science and Technology Park, Nanjing

Legal representative: Liao Jun

The registered capital is 359199600 US dollars

Unified social credit code 91320100745391181h

Produce acetic acid [content > 80%], acetaldehyde [by-product] and propionic acid [by-product], industrial ethanol, ethyl acetate, acetic anhydride, vinyl acetate [inhibited], acetaldehyde and acetic acid solution [content > 10% – 80%], sell self-produced products, engage in research and development of related products, and provide technology, post-sale services and other related services; 1. Commission for wholesale of flammable gas (excluding auction) Import and export and related supporting services (the above does not include urban gas, the place of business is prohibited from releasing dangerous chemicals, and the storage place of Nanjing Longxiang liquid chemical storage and transportation wharf Co., Ltd. is leased for the storage of dangerous chemicals only within the period of validity) (the above projects are operated with a license). Production of special functional high-tech business scope: production of composite materials, long glass fiber reinforced thermoplastic, high performance engineering plastics (ultra high molecular polyethylene), vinyl acetate monomer and high performance emulsion (polyvinyl acetate emulsion, vinyl acetate ethylene copolymer emulsion) project. Sell self-produced products and provide relevant after-sales services and other relevant services; Engage in the research and development of new products and high and new technologies (excluding production and sales), transfer their research results, and provide corresponding technical services; Wholesale of basic chemicals, fine chemicals, engineering plastics and synthetic fibers, commission agency (except auction), import and export of the above commodities and related supporting services (if it does not involve state-owned trade management commodities, if it involves license management commodities, it shall apply in accordance with the relevant provisions of the state). (for projects subject to approval according to law, relevant

Business activities can only be carried out after approval by the Department)

Date of establishment: February 21, 2003

Business term: February 21, 2003 to February 20, 2053

Celanese is a wholly-owned business entity of Celanese Corporation in China. Located in Nanjing Chemical Industrial Park, Celanese mainly produces acetic acid, vinyl acetate, acetic anhydride and other chemical products. Celanese Corporation, headquartered in Dallas, Texas, is a manufacturer of chemical and special materials. It mainly produces high-performance engineering polymers. It is one of the world’s leading manufacturers of acetyl products. It has business sites in North America, Europe and Asia. Celanese Corporation was listed on the New York Stock Exchange in 2005 with the stock code CE. According to public information disclosure, Celanese Corporation had total assets of US $11.975 billion as of December 31, 2021, operating revenue of US $8.537 billion and net profit of US $1.890 billion in 2021. (2) Main terms of this renewal of phase II contract

1) Price terms and calculation basis of estimated income reduction

The business contract fee signed between Nanjing Longxiang and Celanese mainly includes fixed fee and operation fee. Among them, the fixed fee is mainly the charge corresponding to the storage tank capacity reserved by Nanjing Longxiang for Celanese to provide wharf storage services, which will remain unchanged in each year within the validity of the contract; The operation fee is mainly the charge corresponding to the loading and unloading service provided by Nanjing Longxiang for Celanese, which is mainly charged according to the throughput and the loading and unloading unit price of each operation type.

For the fixed expenses, according to the amount directly listed in the phase I contract, the total annual fixed expenses paid by Celanese for various storage varieties during the validity of the phase I contract is 103.4859 million yuan; According to the amount directly listed in the phase II contract, the total annual fixed fee paid by Celanese for various storage varieties during the validity of the phase II contract is 64.4859 million yuan.

The decline in fixed costs is mainly the result of commercial negotiations between the two sides. During the pricing of phase I contract, both parties considered the depreciation of production equipment invested by Nanjing Longxiang based on negotiation, and the fixed cost is relatively high. As a large proportion of the corresponding production equipment has been depreciated during the term of phase I contract, Celanese took this factor into account in the negotiation during the pricing of phase II contract, so the amount of fixed expenses in phase II contract after negotiation has been reduced. Therefore, assuming that all other factors remain unchanged, the amount of fixed fees paid by Celanese to Nanjing Longxiang will decrease by 39 million yuan compared with the phase I contract after the phase II contract comes into force.

For the part of operating expenses, the pricing of operating expenses in phase I and phase II of Celanese contract shall be consistent in principle, and the actual amount of charges will be determined according to the actual throughput after the execution of phase II contract.

2) Other main terms

Other main contract terms of the second phase contract renewed between Nanjing Longxiang and Celanese also include service scope, payment arrangement, order processing, inventory management, measurement method, contract term, termination and renewal arrangement, confidentiality clause, indemnity clause, etc.

2. In combination with the rights and obligations of both parties, analyze and explain whether this transaction will affect the actual implementation and effectiveness of phase II contract in the future

(1) Rights and obligations of both parties agreed in the phase II contract

According to the phase II contract, Celanese and Nanjing Longxiang have made the following agreements on the terms related to the termination of the contract:

1) Major breach of contract: if either party of Celanese and Nanjing Longxiang has a major breach of contract agreed in the phase II contract and fails to correct or cannot correct within the specified time limit, the other party has the right to terminate the contract by written notice.

2) Insolvency: in case of major financial crisis or insolvency in Nanjing Longxiang, Celanese has the right to directly operate or appoint a third party to operate the storage tank facilities provided by Celanese without further damaging the operation of Nanjing Longxiang and after both parties confirm the importance of the normal operation of the storage tank facilities to Celanese.

3) Preemptive right of assignment: if the phase II contract is terminated for any reason and Nanjing Longxiang plans to sell the storage tank facilities providing services for Celanese to an independent third party in the open market, Celanese may submit a written notice to Nanjing Longxiang to purchase such assets at the same price within 14 days after the final price is determined, and give priority to the assignment of relevant assets at that price.

4) Early termination of the contract: without affecting other terms of the contract and notifying Nanjing Longxiang in advance according to the time agreed in the contract, Celanese has the right to terminate one or more storage variety agreements in advance. Meanwhile, Celanese shall pay a certain proportion of termination fee to Nanjing Longxiang according to the contract every month during the remaining term of phase II contract.

5) Reduce the rental tank capacity: if the throughput of Celanese’s products or raw materials is lower than expected, Celanese can request Nanjing Longxiang to permanently reduce the rental tank capacity of one variety and reduce the fixed cost accordingly, but Nanjing Longxiang can unilaterally refuse Celanese’s request after reasonable consideration.

(2) The impact of this transaction on the actual execution and effectiveness of phase II contract in the future

On October 8, 2021, Hongchuan Hong Kong and the target company jointly issued an announcement on this transaction to all shareholders of the target company in accordance with Article 3.5 of the acquisition code. As of the signing date of this inquiry reply, Celanese has not raised any objection to this transaction.

Nanjing Longxiang has signed the phase II business contract with Celanese. According to the contract terms, the change of control of the subject company will not trigger the contract termination terms, and this transaction will not affect the actual implementation or effectiveness of the phase II contract. After the acquisition, the listed company will maintain the stability of the existing core team of the target company, well maintain the relationship with suppliers and customers, ensure the continuity and reliability of procurement and sales channels, and will not adversely affect the business implementation of Nanjing Longxiang due to the subsequent integration of this transaction.

(II) supplementary disclosure

The listed company has supplemented and disclosed the above relevant contents in “v. main business development in the last three years” (VI) production and sales of main products “and” 4. Top five customers of the target company during the reporting period “of” section IV basic information of the transaction object “(Revised Version) of the report on major asset purchase (Draft).

(III) verification opinions of intermediary institutions

After verification, the independent financial adviser believes that:

According to the business contract signed between Nanjing Longxiang and Celanese, Celanese paid a total annual fixed fee of 103.4859 million yuan for various storage varieties during the validity of phase I contract and 64.4859 million yuan for various storage varieties during the validity of phase II contract. Therefore, assuming that all other factors remain unchanged, the amount of fixed fees paid by Celanese to Nanjing Longxiang will decrease by 39 million yuan compared with the phase I contract after the phase II contract comes into force.

Nanjing Longxiang has signed the phase II business contract with Celanese. According to the contract terms, the change of control of the subject company will not trigger the contract termination terms, and this transaction will not affect the actual implementation or effectiveness of the phase II contract. After the acquisition, the listed company will maintain the stability of the existing core team of the target company, well maintain the relationship with suppliers and customers, ensure the continuity and reliability of procurement and sales channels, and will not adversely affect the business implementation of Nanjing Longxiang due to the subsequent integration of this transaction.

2、 The restructuring report shows that the hazardous chemicals business license held by Nanjing Longxiang liquid chemical storage and Transportation Terminal Co., Ltd. has expired on January 19, 2022; The certificate of safety production standardization construction level (Level II) of transportation enterprises held by Weifang sendami liquefied products terminal Co., Ltd. (hereinafter referred to as “Weifang sendami”) has expired on December 16, 2021. Please explain whether there are major obstacles in the application for renewal of relevant licenses, the specific reasons for not applying for renewal in time, and whether the expiration of licenses affects the normal production and operation of the company. Independent financial advisers and lawyers are invited to check and comment on the above matters.

reply:

(I) relevant information description

Whether there are major obstacles in the application for renewal of relevant licenses, the specific reasons for not applying for renewal in time, whether the expiration of licenses affects the normal production and operation of the company, etc.

1. Nanjing Longxiang hazardous chemicals business license

As of the signing date of this inquiry reply, the business license for hazardous chemicals held by Nanjing Longxiang has been renewed. The details are as follows:

Serial certificate name certificate No. issuing authority certificate validity to No. subject date

1 Nanjing hazardous chemicals by Su (ning) hazardous chemical by word Nanjing Jiangbei new area management January 2022 January 2025 longxiangying permit (Jiangbei) 01012 Committee Emergency Management Bureau 14 13

2. Weifang sendamei “certificate of safety production standardization construction level of transportation enterprises”

(1) Relevant provisions on the application for grade certificate of safety production standardization construction of transportation enterprises

According to the administrative measures for the evaluation of the construction of safety production standardization in transportation enterprises issued by the Ministry of transport on July 28, 2016, the evaluation organization is responsible for the organization and implementation of the evaluation activities of the construction of safety production standardization in transportation enterprises and the issuance of the evaluation grade certificate, and the transportation enterprises shall comply with the law

- Advertisment -