Guangdong Chaohua Technology Co.Ltd(002288)
Feasibility analysis report on the use of funds raised by non-public issuance of A-Shares in 2021
December, 2001
1、 Use plan of the raised funds
The total amount of funds raised in this non-public offering is no more than 722 million yuan, which will be used to repay bank loans and supplement working capital after deducting the issuance expenses.
2、 Necessity and feasibility analysis of the investment of the raised funds
(i) Necessity of investment of the raised funds
1. Enhance the company’s capital strength
The company is mainly engaged in the R & D, production and sales of high-precision electronic copper foil, all kinds of copper clad laminates and other electronic substrates and printed circuit boards. In recent years, the company adheres to the development strategy of “vertical integration” industrial chain and continues to expand to the upstream raw material industry. At present, the company has provided copper foil substrate, copper foil, semi cured sheet, single / double-sided copper clad laminate, single-sided printed circuit board, double-sided multilayer printed circuit board, wood pulp paper for copper clad laminate Production and service capacity of the whole industrial chain product line including drilling and pressing processing. According to the development trend of the industry and the business scale of the company, it is expected that the company will be in the stage of rapid development in the next few years. Market expansion, R & D investment, daily operation and other links have increased demand for working capital, and there is a certain gap in the company’s working capital.
The funds raised from this non-public offering of shares are used to supplement working capital, which is conducive to enhancing the company’s capital strength, alleviating the pressure on the company’s working capital, providing financial support for the development of the company’s business activities and enhancing the company’s anti risk ability.
2. Reduce the asset liability ratio, optimize the capital structure and enhance the ability to resist risks
As of September 30, 2021, the asset liability ratio of the company was 52.91%, and the total amount of interest bearing liabilities such as short-term loans, long-term loans and non current liabilities due within one year reached RMB 1211643200. The high asset liability ratio restricts the company’s financing ability, new product growth and the expansion of revenue scale. After this non-public offering of shares to raise funds, it can reduce the company’s asset liability ratio and effectively alleviate the debt repayment risk. The company’s solvency has been enhanced, the capital structure has been optimized, the company’s anti risk ability has been enhanced, and the foundation has been laid for the healthy and stable development of the company.
（2） Feasibility analysis on the use of raised funds
1. The use of the funds raised in this non-public offering complies with the provisions of laws and regulations
The funds raised by the company’s non-public offering are used for the company to repay bank loans and supplement working capital, which is in line with the provisions of relevant policies, laws and regulations, the current actual development of the company and feasible. After the funds raised from this non-public offering are in place, bank loans are repaid and working capital is supplemented, it is conducive to alleviate the company’s cash flow pressure, reduce the company’s financial expenses, optimize the company’s financial structure, improve the company’s anti risk ability, and enhance the company’s core competitiveness and sustainable development ability.
2. The use of the funds raised by this non-public offering has the implementation subject of standardized governance and perfect internal control
According to the governance standards of listed companies, the company has established a modern enterprise system with the corporate governance structure as the core, and formed a more standardized and standard corporate governance system and a perfect internal control environment through continuous improvement and improvement. After the funds raised in this non-public offering are in place, The company will strictly implement the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds by listed companies (CSRC announcement [2012] No. 44), the measures for the management of raised funds by listed companies of Shenzhen Stock Exchange and the measures for the management of raised funds of the company To ensure the reasonable and standardized storage and use of the raised funds and prevent the use risks of the raised funds.
3、 Impact of this non-public offering on the company’s operation, management and financial status
(i) Impact of this non-public offering on the company’s operation and management
After deducting the issuance expenses, the funds raised in this non-public offering will be used to repay bank loans and supplement working capital. The use of the raised funds complies with relevant national industrial policies, industrial development plans and the company’s overall development strategy in the future. Through this non-public offering, the company’s capital strength and asset scale will be improved, and its anti risk ability will be enhanced, which will help to improve the company’s comprehensive competitiveness and market position and promote the company’s long-term sustainable development. Therefore, this non-public offering is of positive significance to the operation and management of the company and is in line with the interests of the company and all shareholders.
（2） Impact of this non-public offering on the company’s financial position
After the issuance, the total assets and net assets of the company will increase at the same time, and the working capital will be further enriched. By supplementing working capital and repaying bank loans, the financial structure of the company will be further optimized and the asset liability structure will become more reasonable; At the same time, this non-public offering is conducive to enhancing the company’s ability to resist financial risks, further optimizing the asset structure, reducing financial costs and financial risks, and enhancing the ability of sustainable operation in the future.
4、 Matters involved in the investment project of the raised funds for approval
The funds raised in this issuance are intended to supplement working capital, and do not involve the need to perform project filing, environmental impact assessment and other related approval matters, nor the use of construction land.
5、 Conclusion of feasibility analysis
To sum up, after careful analysis and demonstration, the board of directors of the company believes that the use plan of the funds raised by the non-public offering is necessary and feasible in accordance with relevant policies, laws and regulations and the overall strategic development plan of the company in the future. The availability and use of the raised funds will help to improve the company’s profitability and overall competitiveness, enhance the company’s sustainable development ability and anti risk ability, and improve the company’s capital structure, so as to provide important support and guarantee for the company’s subsequent development. Therefore, the use of the funds raised in this non-public offering is reasonable and in line with the interests of the company and all shareholders.
Guangdong Chaohua Technology Co.Ltd(002288) board of directors December 14, 2001
