Cec Environmental Protection Co.Ltd(300172) : Announcement on signing a contract of 120 million yuan for Suzhou distributed water purification project

Securities code: Cec Environmental Protection Co.Ltd(300172) securities abbreviation: Cec Environmental Protection Co.Ltd(300172) Announcement No.: 2021005 Cec Environmental Protection Co.Ltd(300172)

Announcement on signing a contract of 120 million yuan for Suzhou distributed water purification project

The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete,

There are no false records, misleading statements or major omissions.

1、 Contract signing overview

Cec Environmental Protection Co.Ltd(300172) (hereinafter referred to as “the company” and ” Cec Environmental Protection Co.Ltd(300172) “) participated in the public bidding for the project of water purification emergency treatment service (Hong’an station, Qizhuang station and Xinan station) in Shengze Town issued by Suzhou Wujiang Shengze water treatment development Co., Ltd. (hereinafter referred to as “Shengze development”).

On March 4, 2022, the company signed a contract with Shengze development for the project of water purification emergency treatment service (Hong’an station, Qizhuang station and Xinan station) in Shengze Town. The treatment unit price is 3.7 yuan / ton, the design treatment scale is 24500 tons / day, the construction period is 90 days and the service period is three years, The total contract amount is RMB 84.44 million (estimated according to the minimum water volume agreed in the contract, which shall be subject to the actual treatment water volume settlement). In addition, in February 2022, the company signed a contract with Shengze development for the project of water purification emergency treatment service (Asia Pacific wood station) in Shengze Town, with a total contract amount of 36.02 million yuan (Note: it fails to meet the company’s disclosure and announcement standard, see Section II. 9 (2) below for details).

The relevant contents are hereby announced as follows:

2、 Counterparty

1. Company name: Wujiang Shengze water treatment development Co., Ltd

2. Date of establishment: September 25, 2002

3. Registered address: Shengze Town

4. Legal representative: Wang Zhenghua

5. Registered capital: 205 million yuan

6. Main business: production and domestic sewage treatment; Maintenance of sewage treatment pipe network; Water supply and drainage services; Environmental protection technology consulting services; Property management (operating with qualification). (for projects subject to approval according to law, business activities can be carried out only after approval by relevant departments).

7. Shengze development has no relationship with the company.

8. In the last three fiscal years, the company has no business dealings with Shengze development and recognized revenue. 9. Within 12 consecutive months before the disclosure date of this announcement, the contract signed by the company with Shengze development and its subsidiaries:

(1) From October 2021 to December 2021, the company and Shengze development signed a contract for water purification emergency treatment service project in Shengze Town, with a total contract amount of 146.77 million yuan. For details, see the announcement disclosed by the company on December 31, 2021 (Announcement No.: 2021053).

(2) In February 2022, the company signed a contract with Shengze development for water purification emergency treatment service (Asia Pacific wood station) project in Shengze Town. The unit price of treatment is 2.90 yuan / ton, the design treatment scale is 15000 tons / day, the operation period is 3 years, and the total contract amount is 36.02 million yuan (according to the estimation of minimum water volume agreed in the contract, the specific settlement shall be subject to the actual treatment water volume).

As of the date of this announcement, the total contract amount signed between the company and Shengze development and its subsidiaries is 26723 million yuan, accounting for less than 50% of the company’s audited main business income or total assets in 2020. Among them, the contract amount signed in 2021 is 146.77 million yuan (see (1) above for details), and the contract amount signed this year is 120.46 million yuan (see (2) above and the contract amount announced this time).

10. Analysis of performance capacity: the actual controller of Shengze development is the collective asset management company in Shengze Town, Wujiang City. It is the most important water company in Shengze. It owns and manages sewage treatment plants and sewage treatment stations, with a total treatment scale of nearly 500000 tons / day. The company has good credit standing and strong performance ability.

3、 Main contents of the contract

1. Contract content: the high-efficiency air flotation three-phase enhanced biological reaction membrane coupling technology is adopted to mainly treat the jet loom wastewater of textile enterprises in Suzhou Shengze textile park, with a design treatment scale of 24500 tons / day. The company is responsible for the design, investment, construction, operation and maintenance of the project, and adopts the government purchase service mode.

2. Contract amount: the treatment unit price is 3.7 yuan / ton, and the total contract amount is estimated to be 84.44 million yuan (estimated according to the minimum water volume agreed in the contract, subject to the actual treatment water settlement).

3. Operation period: 3 years.

4. Price payment: Shengze development will pay the corresponding amount on a monthly basis according to the processing capacity and assessment.

5. Liability for breach of contract: the rights and obligations of all parties, liability for breach of contract and compensation, dispute resolution, etc. have been clearly stipulated in the contract terms.

6. Effective conditions: representatives of both parties sign and affix official seals (or contract seals) and take effect after Shengze development receives the performance security or bank guarantee submitted by the company.

4、 The impact of contracts on Listed Companies

1. The distributed water purification characteristic business of the company adopts the idea of “source sewage interception, local purification, combined distribution and replenishment of clean water”, applies the self-developed high-efficiency air flotation three-phase enhanced biological reaction membrane coupling technology and sewage modular device (CBS), and is set nearby the black and smelly river, the forebay of pump station and the sewage collection area, With the advantages of “modular equipment, flexible layout, short construction period, high effluent quality, measurable and intelligent operation”, several high-quality demonstration projects have been successfully implemented, especially the Nanjing distributed intelligent water purification Island demonstration project (60000 tons / day), which has guaranteed the water quality of national and provincial sections to meet the standards, and realized energy conservation, emission reduction and green resource circulation. The project will further expand the market application prospect of the business in the field of urban water environment, enhance brand awareness, promote the development of the business, and provide support for improving the company’s ecological environment governance ability.

2. The construction and operation of the project will increase the company’s income, which is expected to have a positive impact on the company’s future operating performance (subject to the settlement of the actual treated water volume), and will not affect the independence of the company’s business. 5、 Risk tips

1. During the performance period of this contract, there is a risk that the gross profit margin will decrease due to the increase of equipment, raw material prices, implementation labor costs and other factors.

2. The contract has made clear provisions on the breach of contract and disputes between both parties, but there may be the risk of failure to perform on schedule or in full due to force majeure during the performance of the agreement.

Please pay attention to investment risks.

6、 Contract review procedure

The above contract belongs to the company’s daily operation contract. According to the Shenzhen Stock Exchange GEM Listing Rules, the articles of association and other relevant provisions, it is not necessary to submit it to the board of directors or the general meeting of shareholders for deliberation, nor is it necessary for independent directors to express their opinions.

7、 Other relevant instructions

The company will disclose the performance in the regular report according to the follow-up progress of the contract in accordance with the Shenzhen Stock Exchange GEM Listing Rules, Shenzhen Stock Exchange GEM listed companies’ standardized operation guidelines and other relevant provisions.

8、 Documents for future reference

The contract of Shengze Town water purification emergency treatment service (Hong’an station, Qizhuang station and Xinan station) signed by the company and Shengze development.

It is hereby announced.

Cec Environmental Protection Co.Ltd(300172) board of directors March 6, 2022

- Advertisment -