Huatai United Securities Co., Ltd
About Hunan Zhongke Electric Co.Ltd(300035)
Confirm the verification opinions on the excess of daily related party transactions between the holding subsidiary and Shimian County Jineng new materials Co., Ltd. in 2021 and the expectation of daily related party transactions in 2022
Huatai United Securities Co., Ltd. (hereinafter referred to as “Huatai United Securities”) as a recommendation institution for Hunan Zhongke Electric Co.Ltd(300035) (hereinafter referred to as ” Hunan Zhongke Electric Co.Ltd(300035) ” and “the company”) to continuously supervise the non-public offering of shares in 2018 and a recommendation institution that issues shares to specific objects and is listed on the gem, in accordance with the measures for the administration of securities issuance and listing recommendation business Relevant laws and regulations such as Shenzhen Stock Exchange GEM Listing Rules, Shenzhen Stock Exchange self regulatory guidelines for listed companies No. 2 – standardized operation of GEM listed companies, After Hunan Zhongke Electric Co.Ltd(300035) confirmed that the holding subsidiary Hunan Zhongke Xingcheng graphite Co., Ltd. (hereinafter referred to as “Hunan Zhongke Xingcheng”) and Shimian County Jineng new materials Co., Ltd. (hereinafter referred to as “Jineng new materials”) exceeded the expected part of daily related party transactions in 2021 and the expected events of daily related party transactions in 2022, they made the following opinions:
1、 Basic information of daily connected transactions
(I) confirm the excess of daily related party transactions in 2021
Hunan Zhongke Electric Co.Ltd(300035) the fourth meeting of the Fifth Board of directors held on February 26, 2021 and the first extraordinary general meeting of shareholders held on March 15, 2021 respectively considered and adopted the proposal on the prediction of daily connected transactions between the holding subsidiary and Shimian County Jineng new materials Co., Ltd. in 2021, The company estimates that the amount of daily operating related party transactions between Hunan Zhongke Xingcheng and Jineng new materials in 2021 will not exceed 153 million yuan. The related party transactions include the graphitization process in the production of lithium battery cathode materials in Hunan Zhongke Xingcheng and the entrusted processing of Jineng new materials. In 2021, affected by the growth of downstream demand, the tight supply of graphitization in the industry and the rise of processing unit price, Hunan Zhongke Xingcheng increased the amount of graphitization entrusted processing of new energy gathering materials. The actual amount of graphitization processing was 180057900 yuan, exceeding the expected amount by 27.0579 million yuan. On February 19, 2022, the 10th meeting of the 5th board of directors of the company deliberated and approved the proposal on confirming the exceeding part of the daily connected transactions between the holding subsidiary and Shimian County Jineng new materials Co., Ltd. in 2021. The board of directors of the company additionally confirmed the exceeding part of the daily operating connected transactions between Hunan Zhongke Xingcheng and Jineng new materials in 2021, The part exceeding the estimated amount does not exceed 5% of the company’s latest audited net assets (2020), which does not need to be submitted to the general meeting of shareholders for deliberation and approval.
(II) basic information of daily connected transactions in 2022
1. Overview of daily related party transactions expected in 2022
Since Jineng new material is a joint-stock company of the company, the company holds 37.50% of its equity, and Tao Zhenyou, the director of the company, is also the director of Jineng new material. As Jineng new material is engaged in the graphitization processing business of negative electrode materials and is the supplier of Hunan zhongkexing City, the holding subsidiary of the company, the board of directors of the company recognized the daily operating transactions between Hunan zhongkexing city and Jineng new material as daily related party transactions. It is estimated that in 2022, the transaction amount between Hunan Zhongke Xingcheng and Jineng new materials will not exceed 520 million yuan, accounting for 24.85% of the absolute value of the company’s latest audited net assets (2020).
2. Review procedures for the expected daily performance of related party transactions in 2022
On February 19, 2022, the 10th meeting of the 5th board of directors of the company considered and approved the proposal on the prediction of daily related party transactions between the holding subsidiary and Shimian County Jineng new materials Co., Ltd. in 2022, and agreed that the amount of daily operating related party transactions between Hunan Zhongke Xingcheng and Jineng new materials in 2022 should not exceed 520 million yuan.
In view of the fact that Mr. Tao Zhenyou, the director of the company, is also the director of Jineng new materials, the board of directors has avoided voting when considering this matter, and the proposal was voted by the other eight directors. The independent directors of this related party transaction made prior approval and issued clearly agreed review opinions.
This connected transaction shall also be submitted to the general meeting of shareholders of the company for deliberation.
3. Category and amount of daily related party transactions expected in 2022
Unit: 10000 yuan
Related party transactions related party transactions related party transactions estimated amount of related party transactions incurred in the previous year as of the disclosure date category content pricing principle amount incurred (tax included)
Graphitization and addition to Shimian County
Entrusted processing energy new materials market pricing 52000.00 6770.85 18005.79 Co., Ltd
4. Actual occurrence of daily related party transactions in the previous year
Unit: 10000 yuan
The actual amount of related transactions the actual amount of related transactions the estimated amount of the transaction amount of related parties of the trading category on the disclosure date accounts for the difference between the amount of similar business and the proportion of the expected period and the required content
Entrusted Jineng xinhuajia 18005.79 15300.00 21.32% 17.68% to the 2021 person of graphite in Shimian County. On February 27, the processing materials have the information network of CNKI
In 2021, due to the growth of downstream demand and the tight supply of graphitization in the industry, and the impact of the board of directors of the processing company on the rise of daily related transaction unit price, Hunan Zhongke Xingcheng increased the actual occurrence of graphitization of new energy collection materials and the estimated entrusted processing amount. The actual graphitization processing amount was RMB 180057900, In the description of large differences (if appropriate), the estimated amount exceeds 27.0579 million yuan.
The difference between the daily related party transactions and the estimated value is mainly caused by meeting the market demand and does not harm the interests of the company and all shareholders.
The independent directors of the company have verified the daily connection, The board of directors of the company’s explanation of the difference between the actual situation of the daily transactions of Hunan Zhongke Xingcheng and Jineng new materials in 2021 and the actual situation of the estimated connected transactions is in line with the company’s explanation of the large difference between the actual situation and the expected situation (if appropriate, the daily connected transactions that have occurred in 2021 are fair, reasonable and not available) Where the interests of shareholders of the company and other non related parties are damaged.
2、 Basic information and relationship of related parties
(I) overview of related parties
Related party: Shimian Jineng New Material Co., Ltd
Legal representative: Yu Donglin
Registered capital: RMB 23095701.20
Address: Zhuma Industrial Park, Shimian County
Business scope: graphitization processing of cathode materials for lithium batteries; Sales of lithium battery cathode materials; Wholesale and retail graphite products, carbon products, petroleum coke, calcined coke and other raw and auxiliary materials; Research and development of raw materials, process products and accessories of cathode material precursors for lithium batteries. (for projects subject to approval according to law, business activities can be carried out only after approval by relevant departments)
As of December 31, 2021, the total assets of Jineng new materials are 265614657.95 yuan and the net assets are 238445483.26 yuan; From January to December 2021, Jineng new materials realized an operating revenue of 222952398.24 yuan and a net profit of 79594323.24 yuan (the above financial data were not audited).
(II) relationship with the company
At present, the company holds 37.50% equity of Jineng new materials. Jineng new materials is a joint-stock company of the company, and Hunan Zhongke Xingcheng is the holding subsidiary of the company. Mr. Tao Zhenyou, the director of the company, is also the director of Jineng new materials. Energy new materials and the company constitute a related party relationship, and the transaction between energy new materials and Hunan Zhongke Xingcheng is a related party transaction. (III) performance capability analysis
Jineng new materials, a related party, is a company that exists according to law and operates normally, with good credit and no obstacles to performance.
3、 Main contents of related party transactions
The daily operational related party transactions between the company’s holding subsidiary and energy collection new materials are the graphitization process in the production of lithium-ion battery cathode materials, and the processing of energy collection new materials is entrusted. The relevant transaction pricing is determined through negotiation in accordance with the principle of fairness and reasonableness and the fair price of the market. For specific transactions, a specific single agreement shall be signed before each transaction according to the market conditions at that time to determine the content, transaction price, delivery and other specific matters of related party transactions.
4、 Purpose of related party transactions and its impact on Listed Companies
(I) transaction purpose
At present, the graphitization processing capacity owned by Guizhou Zhongke Xingcheng graphite Co., Ltd., a wholly-owned subsidiary of the company, can not fully meet the needs of the company’s cathode material production. Some graphitization processing processes still need to be entrusted to other graphitization processing suppliers. The new energy collection material is mainly used for graphitization of lithium battery cathode materials, which has the corresponding technical reserves and experience accumulation. At the same time, it has strong market competitiveness by virtue of its regional western policy advantages and power advantages. At the same time, as a joint-stock company of the company, Jineng new materials can provide stable graphitization processing services. In view of this, Hunan Zhongke Xingcheng entrusts Jineng new materials for graphitization processing to meet the needs of graphitization processing and meet the needs of production, operation and sustainable development of Hunan Zhongke Xingcheng.
(II) impact of transaction on the company
The daily operating related party transactions between Hunan zhongkexingcheng and Jineng new material in 2021 exceeded the expectation partly due to the need to ensure supply. Meanwhile, the daily operating related party transactions between Hunan zhongkexingcheng and Jineng new material in 2022 are expected to meet the needs of normal production and operation of Hunan zhongkexingcheng, The transaction between Hunan Zhongke Xingcheng and related parties follows the law of market economy and the principle of market fairness. All parties to the transaction are equal and mutually beneficial, and there is no behavior damaging the interests of the company and all shareholders. In addition, the company appoints Mr. Tao Zhenyou, the director of the company, to concurrently serve as the director of Jineng new materials, which is the company’s participation in the decision-making arrangement of the joint-stock company for the operation of Jineng new materials. Therefore, the independence of the company and Hunan zhongkexing city will not be affected by the transaction between Hunan zhongkexing city and Jineng new materials.
5、 Prior approval opinions and independent opinions of independent directors
(I) prior approval opinions of independent directors
The subsidiary of Hunan Xingji Holding Co., Ltd. and the subsidiary of Hunan Xingji Holding Co., Ltd. are expected to supply more materials than the normal operation needs of the subsidiary of Hunan Xingji Holding Co., Ltd. in 2021. According to the principle of market-oriented transaction, Hunan Zhongke Xingcheng and Jineng new materials provide the basis for formulating the related party transactions of various specific products and services. Therefore, we agree to submit the proposal on confirming the excess of daily related party transactions between the holding subsidiary and Shimian County Jineng new materials Co., Ltd. in 2021 and the proposal on the forecast of daily related party transactions between the holding subsidiary and Shimian County Jineng new materials Co., Ltd. in 2022 to the 10th meeting of the Fifth Board of directors of the company for deliberation.
(II) independent opinions expressed by independent directors
All independent directors of the company have expressed independent opinions on the above-mentioned daily related party transactions as follows: the exceeding part of the daily related party transactions between the holding subsidiary Hunan Zhongke Xingcheng and Jineng new materials in 2021 and the daily related party transactions in 2022 have been approved by us in advance. We believe that the above-mentioned daily related party transactions of the company are reasonable and necessary daily operating transactions between the holding subsidiary and related parties in accordance with the principles of openness, impartiality, equality, voluntariness and mutual benefit. The counterparty is a company existing according to law and operating normally, and there is no obstacle to performance capacity. The explanation of the board of directors of the company on the difference between the actual and expected daily related party transactions of Hunan Zhongke Xingcheng and Jineng new materials in 2021 is consistent with the actual situation of the company. The daily related party transactions that have occurred in 2021 are fair and reasonable, and there is no damage to the interests of the company and other non related party shareholders. The above-mentioned deliberation procedures of the company’s daily connected transactions comply with the company law of the people’s Republic of China, the Listing Rules of Shenzhen Stock Exchange gem shares, the articles of association and other relevant provisions, and there is no situation that damages the interests of listed companies and minority shareholders. In conclusion, we unanimously agree to the proposal on confirming the excess of daily related party transactions between the holding subsidiary and Shimian County Jineng new materials Co., Ltd. in 2021 and the proposal on the prediction of daily related party transactions between the holding subsidiary and Shimian County Jineng new materials Co., Ltd. in 2022, And agreed to submit the proposal on the prediction of daily related party transactions between the holding subsidiary and Shimian County Jineng new materials Co., Ltd. in 2022 to the general meeting of shareholders of the company for deliberation.
6、 Verification opinions of the recommendation institution
After verification, the sponsor
