Guanglian Aviation Industry Co.Ltd(300900) : Announcement on investment in the construction of Chengdu Hangxin aviation industry processing and manufacturing base project

Securities code: Guanglian Aviation Industry Co.Ltd(300900) securities abbreviation: Guanglian Aviation Industry Co.Ltd(300900) Announcement No.: 2022038 Guanglian Aviation Industry Co.Ltd(300900)

Announcement on investment in the construction of Chengdu Hangxin aviation industry processing and manufacturing base project

The company and all members of the board of directors guarantee that the contents of the announcement are true, accurate and complete, and there are no false records, misleading statements or major omissions.

Guanglian Aviation Industry Co.Ltd(300900) (hereinafter referred to as the company) held the second meeting of the third board of directors on March 18, 2022, deliberated and adopted the proposal on investment in the construction of Chengdu Hangxin aviation industry processing and manufacturing base project. The relevant matters are explained as follows:

1、 Investment overview

With the rapid development of China’s aviation industry, aerospace industry and other high-end manufacturing industries, the demand of the manufacturing market in aviation, aerospace and other fields continues to upgrade and grow. With the in-depth promotion of the national strategy in the high-end manufacturing industry, the proportion of private enterprises directly participating in major projects and tasks has increased year by year. In order to further expand the company’s market influence and meet the market demand, the company urgently needs to improve the production capacity of aerospace tooling and parts products, Seize market opportunities and increase market share. According to the relevant provisions of laws and regulations such as the Shenzhen Stock Exchange GEM Listing Rules, normative documents and Guanglian Aviation Industry Co.Ltd(300900) foreign investment management system, this investment is within the approval authority of the board of directors of the company and does not need to be submitted to the general meeting of shareholders for deliberation.

The project has yet to obtain the project approval filing document of the national development and Reform Commission and the environmental impact assessment document of the competent environmental protection department.

This investment does not constitute a connected transaction, nor does it constitute a major asset reorganization stipulated in the administrative measures for major asset reorganization of listed companies.

2、 Basic information of the project

The investment in the construction of “Chengdu Hangxin aviation industry processing and manufacturing base project” is expected to have a total investment of no more than 200 million yuan through self financing. Through the establishment of new metal parts rapid development center, aviation tooling business department and composite products business department, the product development and batch production zoning processing of each center of the company are realized. On the one hand, the production capacity resources of the existing intelligent production lines and lean production units in Xindu Aviation Industrial Park are released and used for the subsequent batch production tasks of a key model of aircraft. Through value-added efficiency improvement, it is ensured that the completion of batch production tasks of a key project will not be affected by development, and the annual business objectives of the company will increase year by year; On the other hand, comprehensively improve the rapid development ability of metal and composite parts of new projects, so that the development work has relatively independent ability and resource guarantee, can quickly respond to the needs of market customers, and win the first opportunity for the company’s sustainable development and seizing the market, so as to achieve a high degree of consistency with the main engine factory in strategy.

1. Project Name: aviation industry processing and manufacturing base project of Chengdu Hangxin Aviation Equipment Technology Co., Ltd. 2. Project construction location: No. 588 Shimu Road, high tech Industrial Park, Xindu District, Chengdu, Sichuan Province

3. Source of project funds: self raised funds

4. Project implementation subject: Chengdu Hangxin Aviation Equipment Technology Co., Ltd. (hereinafter referred to as Chengdu Hangxin) 5. Unified social credit Code: 91510114ma61rpdb75

6. Legal representative: Cui Zhaolin

7. Type: other limited liability companies

8. Address: No. 8, Shunfei Road, Shibantan Town, Xindu District, Chengdu

9. Registered capital: twenty million yuan only

10. Business scope: mechanical automation technology development; Computer software and hardware development; Aircraft equipment (Tooling) aerospace related equipment design and manufacturing (excluding engine); Development, production and sales of aircraft parts, aircraft interior decoration and ground accompanying equipment; machining; Aircraft parts manufacturing; Business information consultation (excluding investment consultation); Import and export of goods; Technology import and export. (the project can only be carried out with the approval of relevant departments according to law).

10. Main financial data: as of December 31, 2021, Chengdu Hangxin had total assets of 1261484 million yuan and net assets of 208255 million yuan. In 2021, the company realized a total operating income of 638116 million yuan and a net profit of 119194 million yuan..

3、 Necessity and feasibility of project construction

1. Necessity analysis

In recent years, with the development and approval of national major projects, the industry competition is not only the traditional factors such as technical indicators, manufacturing cost and manufacturing quality, but also pay more and more attention to the development cycle of the project, supply chain maturity and other factors. Some main engine plants even regard supply chain construction and supply chain management as the core competitiveness and key business of the enterprise, requiring suppliers to be highly consistent with the main engine plant strategically and participate in the development and management of enterprise projects The whole process of development, trial production and batch production.

(1) Increase the scale of production capacity and actively respond to the expanding market demand

Aviation parts are an important part of the whole aircraft. The increase of the output of the whole aircraft will bring a huge market demand for aviation parts The Pacific Securities Co.Ltd(601099) Securities Research Report shows that there are more than 50000 structural and system parts and nearly 1.2 million standard parts in ag600, and 98% of the structural and system parts are provided by Chinese suppliers. With the gradual advancement of the industrialization process of China’s domestic military and civil aircraft and the vigorous development of international subcontracting business, the demand for aviation parts in China continues to increase. According to the current market forecast, the company’s production capacity can no longer meet the market demand, so it is urgent to further expand the scale of production capacity. Chengdu Hangxin aviation industry processing and manufacturing base project can improve the production capacity of the company’s composite materials and metal parts business to meet the rapidly growing market demand.

(2) Consolidate and enhance the company’s industry position in the field of aviation tooling

With the steady progress of China’s national defense modernization and the strong support of the state for the aviation industry, the development and production of more new models have formed a strong demand for aviation supporting products. In order to consolidate and enhance the company’s position in the aviation tooling industry, the company will actively develop the aviation tooling business with outstanding advantages through the implementation of this project, timely respond to the needs of downstream customers, meet the synchronous development needs of customers in the pre research stage and production stage, enhance customer stickiness and stabilize customer relations, so as to further lead the sustainable and rapid development of the industry. The implementation of this project is necessary.

2. Feasibility analysis

(1) Sichuan aviation manufacturing industry has complete supporting facilities

Sichuan is one of the provinces with the most complete supporting facilities for military and civil aviation industry in China. It has a complete aircraft overall design and Research Institute and aircraft assembly manufacturing enterprise, aviation engine, aviation instrument and electronics, gas turbine and many other majors, a number of high-level aviation research institutes and test bases, and has the national first-class aviation whole machine R & D capability in the design, development and It is at the leading level in China in terms of test and production, and has the conditions and experience in international cooperative development of military aircraft and subcontracting production of civil aircraft. It has formed an aviation equipment industry system with Chengdu Tianfu New Area as the core, Mianyang, Deyang, Yibin and Luzhou as the support, and the whole machine, engine, important parts, avionics and maintenance services as the support.

(2) The company has a stable customer base

After years of operation, the company has accumulated high-quality and stable customer groups. At present, the company has established cooperative relations with key host manufacturers in China, as well as a military research institute, Aerospace Research Institute and other key scientific research institutions in China’s aviation field.

Aviation industry supporting products and services have high customer stickiness. After selecting suppliers, host manufacturers and aviation scientific research institutions generally will not easily change suppliers. At present, the company has formed a relatively stable customer group, which provides a solid customer guarantee for the smooth implementation of investment projects. In order to further expand and deepen the aviation metal and composite parts business, conditions are formed to continuously improve customer satisfaction, continue to deepen cooperation with old customers, continue to expand cooperation with new customers, reduce costs, seize market opportunities and increase market share. Through the project construction, Chengdu Hangxin aviation industry processing and manufacturing base is promoted to be 1 hour away from customers and seize market opportunities, so as to form preconceived advantages in participating in customers’ key aircraft business, further create new development opportunities and growth points, and contribute new strength to the development of China’s national defense construction. 4、 Existing risks

1. During the implementation of the project, there may still be risks such as project delay, less than expected implementation and less than expected income after production due to the influence of changing factors such as market environment, national and industrial policies, operation and management, intensified market competition and product market sales, so that there is a certain difference between the final income of the project and the expected value. Therefore, the company will comprehensively strengthen operation and management, improve management efficiency, strengthen and implement effective internal control and risk prevention mechanism, actively pay attention to the market environment, national and industrial policies, strengthen market research and judgment, and give full play to the advantages of cost control, so as to prevent and reduce relevant risks.

2. The total investment, construction period and other data involved in this investment project are estimated. The specific situation shall prevail, and the estimated number may be adjusted. There is certain uncertainty whether the implementation of the project can achieve the expected purpose and effect, which does not represent the company’s prediction of future performance, nor does it constitute a performance commitment to investors, nor does it constitute a commitment to the amount of investment. The company will fulfill the obligation of information disclosure in time according to the follow-up progress of the project. Please invest rationally and pay attention to investment risks.

5、 Impact on the company

The implementation of Chengdu Hangxin aviation industry processing and manufacturing base project is conducive to further improve the production capacity, effectively promote the iterative upgrading of aerospace tooling, parts and composite products, improve the company’s comprehensive benefits and the company’s competitive strength, continue to rapidly expand the company’s business in Southwest China, and lay a foundation for the company’s future business expansion and long-term development.

6、 Document for future reference 1. The resolution of the second meeting of Guanglian Aviation Industry Co.Ltd(300900) the third board of directors is hereby announced.

Guanglian Aviation Industry Co.Ltd(300900) board of directors March 19, 2022

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