Zhejiang Jingxin Pharmaceutical Co.Ltd(002020) : Announcement on the acquisition of 100% equity and related party transactions of Guangdong Shaxi Pharmaceutical Co., Ltd

Securities code: 002020 securities abbreviation: Zhejiang Jingxin Pharmaceutical Co.Ltd(002020) Announcement No.: 2021072 Zhejiang Jingxin Pharmaceutical Co.Ltd(002020)

About the acquisition of 100% equity of Guangdong Shaxi Pharmaceutical Co., Ltd

Announcement of related party transactions

The company and all members of the board of directors guarantee that the contents of the announcement are true, accurate and complete without false records, misleading statements or major omissions. Important content tips:

The company plans to acquire 100% equity of Shaxi pharmaceutical with its own capital of 205 million yuan. After the acquisition, Shaxi pharmaceutical will become a wholly-owned subsidiary of the company.

This transaction constitutes a connected transaction, the connected directors have avoided voting, and this transaction needs to be submitted to the general meeting of shareholders for deliberation; This transaction does not constitute a major asset restructuring as stipulated in the measures for the administration of major asset restructuring of listed companies.

As of the disclosure date of this announcement, the acquisition has only completed the signing of the equity transfer agreement, and the industrial and commercial change registration related to equity transfer has not been completed. The specific implementation progress is uncertain. Please pay attention to investment risks.

On December 14, 2021, Zhejiang Jingxin Pharmaceutical Co.Ltd(002020) (hereinafter referred to as ” Zhejiang Jingxin Pharmaceutical Co.Ltd(002020) ” or “the company”) held the 28th meeting of the seventh board of directors, deliberated and approved the proposal on acquiring 100% equity and related party transactions of Guangdong Shaxi Pharmaceutical Co., Ltd., and agreed that the company would acquire Xinchang Yuanjin health industry investment partnership (limited partnership) (hereinafter referred to as “Yuanjin health”) with its own capital of 205 million yuan )The 99% equity of Guangdong Shaxi Pharmaceutical Co., Ltd. (hereinafter referred to as “Shaxi pharmaceutical”) and the 1% equity of Shaxi pharmaceutical held by Jingxin Holding Group Co., Ltd. (hereinafter referred to as “Jingxin holding”) need to be submitted to the general meeting of shareholders of the company for approval after the deliberation of the board of directors. The details are as follows:

1、 Transaction overview

The traditional Chinese medicine business segment is the main sub business of the company in addition to the two core areas of mental nerve and cardio cerebrovascular. Over the years, the performance has been stable and developed well. In recent years, the company has promoted the planning of large products of Kangfuxin Liquid and the construction of new traditional Chinese medicine base in Inner Mongolia in the traditional Chinese medicine segment, effectively supporting the positive development of the traditional Chinese medicine industry. In order to better integrate the existing resources of traditional Chinese medicine industry, strengthen the large varieties and brand influence of traditional Chinese medicine, and promote the healthy development of traditional Chinese medicine business, the company plans to purchase 99% equity of Shaxi pharmaceutical held by Yuanjin health and 1% equity of Shaxi pharmaceutical held by Jingxin holding by cash payment of its own funds. Beijing Guorong Xinghua Assets Appraisal Co., Ltd. (hereinafter referred to as “Guorong Xinghua”) )According to the appraisal, as of June 30, 2021, the appraisal value of all shareholders’ equity of Shaxi pharmaceutical is 213 million yuan after being appraised according to the income method. After negotiation, the transaction price is 205 million yuan. The company has signed the equity transfer agreement with Yuanjin health, Jingxin holding and Shaxi pharmaceutical on December 14, 2021, This Agreement shall not come into force until it is deliberated and approved by the general meeting of shareholders of the company.

The company, Yuanjin health and Jingxin holdings are controlled by the same natural person, Mr. LV Gang, forming a connected relationship. This transaction constitutes a connected transaction.

According to the Listing Rules of Shenzhen Stock Exchange and the articles of association, this transaction needs to be submitted to the general meeting of shareholders for deliberation and approval after being deliberated by the board of directors. According to the measures for the administration of major asset restructuring of listed companies, this connected transaction does not constitute a major asset restructuring.

2、 Basic information of counterparty

(i) Xinchang Yuanjin health industry investment partnership (limited partnership)

1. Unified social credit Code: 91330624ma288f2648

2. Registered capital: RMB 251 million

3. Executive partner: Zhejiang Yuanjin Investment Management Co., Ltd

4. Enterprise type: limited partnership

5. Date of establishment: June 14, 2016

6. Company domicile: Building 1, No. 53, Yulin Road, Yulin street, Xinchang County, Zhejiang Province

7. Business scope: health industry investment, private equity investment, industrial investment and investment consulting services (excluding securities and futures consulting)

8. Partner information

No. name of partner nature of capital contribution proportion

1 Zhejiang Jingxin Pharmaceutical Co.Ltd(002020) limited partner 39.8406%

2. Limited partner of Jingxin Holding Group Co., Ltd. 39.8406%

3. Limited partner of Zhejiang Zheli Investment Management Co., Ltd. 19.9203%

4. Executive partner and general partner of Zhejiang Yuanjin Investment Management Co., Ltd. 0.3984%

Total 100.00%

9. Operating financial situation

As an industrial fund, Yuanjin health holds 99% equity of Shaxi pharmaceutical and 6% equity of Hangzhou Huqing Yutang pharmaceutical Holding Co., Ltd. In 2020, the total assets were 321 million yuan, the net assets were 286 million yuan and the net profit was 14.8632 million yuan; As of September 30, 2021, the company has total assets of 329 million yuan, net assets of 269 million yuan and net profit of 9.416 million yuan.

10. Relationship with listed companies

The company and Yuanjin health are controlled by the same natural person, Mr. LV Gang, forming a related relationship, which is in line with article 10.1 of the stock listing rules of Shenzhen Stock Exchange Under the circumstances specified in Article 3, thus forming a related party with the company.

After relevant inquiry, Yuanjin health does not belong to the dishonest executee. (2) Jingxin Holding Group Co., Ltd

1. Unified social credit Code: 91330624550532095a

2. Registered capital: 100 million yuan

3. Legal representative: LV Gang

4. Date of establishment: January 27, 2010

5. Company domicile: Building 1, No. 53, Yulin Road, Yulin street, Xinchang County, Zhejiang Province

6. Business scope: industrial investment; Enterprise management consulting, investment consulting, technical consulting and financial management consulting; Sales: pharmaceutical chemical intermediates, pharmaceutical chemical raw materials; Import and export of goods.

7. Ownership structure

No. shareholder name shareholding ratio

1 LV steel 51%

2 Zhejiang Jinzhi Investment Co., Ltd. 49%

Total 100%

Mr. LV Gang is the actual controller of Jingxin holdings.

8. Operating financial situation

Jingxin holdings is mainly engaged in foreign equity investment and equity management. In 2020, the total assets were 1.737 billion yuan, the net assets were 316 million yuan and the net profit was 79.2069 million yuan; As of September 30, 2021, the company has total assets of 2.239 billion yuan, net assets of 348 million yuan and net profit of 56.1107 million yuan.

9. Relationship with listed companies

The company and Jingxin holdings are controlled by the same natural person, Mr. LV Gang, forming a related relationship, which is in line with article 10.1 of the stock listing rules of Shenzhen Stock Exchange Under the circumstances specified in Article 3, thus forming a related party with the company.

After relevant inquiry, Jingxin holdings is not a dishonest executee.

3、 Basic information of the transaction object

(i) Basic information

1. Company name: Guangdong Shaxi Pharmaceutical Co., Ltd

2. Unified social credit Code: 914420001980938114

3. Registered capital: 10.21 million yuan

4. Legal representative: Ding shaozheng

5. Date of establishment: April 25, 1986

6. Company domicile: No. 34, Baozhu West Road, Shaxi Town, Zhongshan City, Guangdong Province

7. Business scope: production Sales: Drugs (including tablets, pills, hard capsules, granules, tea preparations, syrups, oral liquids, decoctions, cephalosporins hard capsules and tablets); herbal tea drinks; acquisition of agricultural and sideline products and Chinese herbal medicines for the enterprise’s own use; operation of the export business of the enterprise’s own products and technologies; operation of raw and auxiliary materials, instruments and meters, mechanical equipment, spare parts and technologies required for the enterprise’s production Import and export business (except for commodities restricted by the state and prohibited by the state, and not listed separately).

8. Shaxi pharmaceutical has clear property rights, no mortgage, pledge or other third-party rights, no major disputes, litigation or arbitration involving relevant assets, no external guarantee, financial assistance, no judicial measures such as sealing up and freezing, and is not a dishonest person.

(2) Asset appraisal

The company entrusted Beijing Guorong Xinghua Assets Appraisal Co., Ltd., which is qualified to perform securities and futures related businesses, to evaluate the market value of all shareholders’ equity of Shaxi pharmaceutical on the benchmark date of June 30, 2021. This appraisal adopts the asset-based method and the income method. The appraisal results of the two methods are as follows:

(1) Asset based appraisal conclusion

As of the benchmark date of June 30, 2021, under the condition of continuous operation, the book value of the audited total assets of Shaxi pharmaceutical is 96.0424 million yuan, the appraisal value is 108.9838 million yuan, the appreciation is 12.9414 million yuan, and the appreciation rate is 13.47%; The book value of total liabilities is 65.9166 million yuan, and the appraisal value is 65.9166 million yuan, with no change in increase or decrease in value; The book value of net assets is 30.1256 million yuan, the assessed value of owner’s equity is 43.0672 million yuan, the appreciation is 12.9414 million yuan, and the appreciation rate is 42.96%. See the following table for details:

Summary of assets appraisal results

Monetary unit: 10000 yuan

Increase / decrease rate of project book value evaluation value%

ABC=B-AD=C/A × one hundred

1、 Current assets 15846.386332.71486 three hundred and thirty-eight point three two

2、 Non current assets 23757.854565.67807 eight thousand one hundred and twenty-one point five zero

Fixed assets 3852.00936 2284.229. eighty-eight

Construction in progress 44.654 65–

Intangible assets 51.66730 00728.3443,875.90

Right of use assets 62561.842561.84–

Long term deferred expenses 7152.87152 87–

Deferred income tax assets 835.1630 41-4.75-13.51

Other non current assets 9149.68149 68–

Total assets 109604.2310898.381294.1413 forty-seven

3、 Current liabilities 114094.834094.83–

4、 Non current liabilities 122496.832496.83–

Total liabilities 136591.676591.66–

Owner’s equity

 

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