Hunan lingpaidazhi Technology Co., Ltd. (hereinafter referred to as “the company”) is a company listed on the gem of Shenzhen Stock Exchange. The total amount of capital to be issued by the company to be listed on the gem is estimated to be RMB 3.48 million according to the provisions of the law of the people’s Republic of China on the standardization of the company’s registered capital and the relevant laws and regulations, and the total amount of capital to be issued to the specific objects of the company is expected to increase by about RMB 9.9 million according to the provisions of the law of the people’s Republic of China on the listing of shares and the relevant laws and regulations, The net amount of the raised funds after deducting the issuance expenses will be fully invested in the following projects: unit: 10000 yuan serial number project name project investment amount proposed to use the raised funds investment amount 1 lithium ion power battery (2.4gwh) construction project 50623450002 to supplement the working capital and repay the loan 3500035000, totaling 8562380000. As of the date of this board meeting, the company has not invested in the investment projects with raised funds, After the meeting of the board of directors and before the funds raised in this offering are in place, if the company carries out the construction of the above-mentioned projects with raised funds, the relevant construction investment shall be replaced in accordance with the provisions of relevant laws and regulations after the raised funds are in place. The total investment of the project invested by the raised funds – lithium ion power battery (2.4gwh) construction project is 506.23 million yuan, of which the equipment purchase expenditure is the main project investment expenditure of the project, and the equipment purchase expenditure is 350 million yuan. It is proposed to use the raised funds to invest 45 million yuan in the project. The raised funds will first be used to meet the equipment purchase expenses, and the balance will be used for other engineering construction expenses of the project. The difference between the total investment and the amount invested by the raised funds is mainly the initial working capital and reserve expenses of the project, and the difference will be raised and solved by the company itself. (unless otherwise specified in this report, the relevant terms have the same meaning as the interpretation in the 2021 plan of Hunan Lingpai Dazhi Technology Co., Ltd. for issuing shares to specific objects (the second revision) 2 I. background and purpose of this issuance (I) background of this issuance 1. The new energy vehicle industry is booming in the global market and strongly supported by the policies of many governments, Drive the rapid development of the power battery industry. With the global energy crisis and environmental pollution becoming increasingly prominent, the development of energy-saving and environmental protection related industries has been highly valued. The development of new energy vehicles has formed a consensus all over the world. Not only governments have announced the timetable for banning the sale of fuel vehicles, but also major international vehicle enterprises have successively issued new energy vehicle strategies. In recent years, many ministries, commissions and government departments in China have successively issued a number of policies to guide, support, encourage and vigorously promote the development of the new energy vehicle industry: in October 2010, the State Council issued the decision of the State Council on accelerating the cultivation and development of strategic emerging industries (GF [2010] No. 32), which pointed out that the new energy vehicle industry should strive to break through the key core technologies in the fields of power batteries, drive motors and electronic control, Promote the popularization, application and industrialization of plug-in hybrid electric vehicles and pure electric vehicles. In April 2015, the Ministry of Finance and other four ministries and commissions jointly issued the notice on financial support policies for the promotion and application of new energy vehicles in 20162020 (CJ [2015] No. 134), which made it clear that the subsidy policy for the promotion and application of new energy vehicles will be implemented in 20162020. At the end of March 2020, the executive meeting of the State Council decided to extend the two preferential policies of new energy vehicle purchase subsidy and vehicle purchase tax exemption for two years to the end of 2022. In February 2017, the Ministry of industry and information technology and other four ministries and commissions jointly issued the action plan for promoting the development of automobile power battery industry (MIIT Lianzhuang [2017] No. 29), proposing to vigorously promote the research and development and industrialization of new lithium-ion power batteries, accelerate the improvement of the development capacity and level of China’s automobile power battery industry, and promote the healthy and sustainable development of new energy vehicle industry. In March 2020, the national development and Reform Commission issued the opinions on accelerating the establishment of green production and consumption laws and policies, encouraging qualified places to give appropriate support to consumers in purchasing energy-saving new energy vehicles, and encouraging new and updated vehicles in public transport, sanitation, leasing, commuting, urban postal express operation, urban logistics and other fields to adopt new and clean energy vehicles. In November 2020, the general office of the State Council issued the development plan of new energy vehicle industry (20212035), 3 pointing out that battery technology breakthrough is a key technology research project of new energy vehicles. It is necessary to carry out key core technology research, strengthen technology research, and accelerate the research, development and industrialization of solid-state power batteries. By 2025, the sales of new energy vehicles will account for about 20%. The 14th five year plan for national economic and social development of the people’s Republic of China and the outline of long-term objectives for 2035 issued in March 2021 pointed out the need to develop strategic emerging industries and focus on strategic emerging industries such as new energy vehicles. On July 30, 2021, the meeting of the Political Bureau of the CPC Central Committee requested to tap the potential of the Chinese market and support the accelerated development of new energy vehicles. With the strong support of policies, China Shanxi Guoxin Energy Corporation Limited(600617) automobile industry has developed rapidly, leading the transformation of automobile industry with remarkable effect, and there is room for sustained and substantial development. According to the economic operation of automobile industry in December 2020 released by the Ministry of industry and information technology, the sales volume of Shanxi Guoxin Energy Corporation Limited(600617) automobiles reached 1367000 in 2020, a record high. There is a huge space for the sustainable development of new energy vehicles in the future. The strong demand of the new energy vehicle terminal market will drive the rapid development of the power battery industry, and the power battery industry is also facing unprecedented development opportunities. 2. Comply with the vigorous development of the new energy vehicle industry and improve the technical level of power batteries and the development capacity of new products. In China, lithium-ion power batteries are high-tech products subordinate to the field of new energy and energy conservation recognized by the Ministry of science and technology of the people’s Republic of China and encouraged products in the Guiding Catalogue for industrial structure adjustment (2019 version) of the national development and Reform Commission, High performance lithium-ion batteries are also the products that are mainly supported by the “high tech fields supported by the state”. In the context of a new round of scientific and technological revolution, the innovative development of new energy vehicles has become a symbol of the transformation and upgrading of the global automotive industry. Power batteries are a link with high technical content and added value in the new energy vehicle industry chain. The continuous breakthroughs and improvements of key performance such as endurance, fast charging capacity, service life, safety and stability comply with the market demand of new energy vehicles and have the ability of R & D Companies with advanced technology will gain significant opportunities for industry development. In October 2020, the energy saving and new energy vehicle technology roadmap 2.0 (hereinafter referred to as “roadmap 2.0”) was released under the guidance of the Ministry of industry and information technology and organized and revised by China Society of automotive engineering. According to the plan of roadmap 2.0, by 2035, the automotive industry will realize the transformation of electrification, and the sales 4 volume of energy-saving vehicles and new energy vehicles will account for 50% respectively. Roadmap 2.0 requires power batteries to cover three major technical directions: energy type, energy power balance type and power type. 3. The company has arranged and carried out new energy battery business. On January 2, 2020, the listed company signed the equity gift agreement on Sichuan xinminya Battery Technology Co., Ltd. and Hunan xinminya New Energy Technology Co., Ltd. with Shanghai Lingpa. The listed company received 80% of the equity of Hunan Lingpai and Sichuan Lingpai held by Shanghai Lingpa free of charge. On February 18, 2020, the relevant industrial and commercial change procedures were completed.
On April 28, 2020, the listed company signed the equity transfer agreement on Sichuan xinminya Battery Technology Co., Ltd. and Hunan xinminya New Energy Technology Co., Ltd. with Shanghai Lingpa, and the listed company transferred 20% equity of Hunan Lingpai and Sichuan Lingpai respectively. At present, the equity change procedures of Hunan Lingpai and Sichuan Lingpai have been completed, and the above two companies have become wholly-owned subsidiaries of listed companies. Hunan Lingpai and Sichuan Lingpai are mainly engaged in the R & D, production and sales of new energy power batteries. The company has expanded the new energy battery business by acquiring Hunan Lingpai and Sichuan Lingpai. Since 2020, the company has gradually promoted the development of new energy battery business through the business accumulation of Hunan Lingpai, Sichuan Lingpai and Suzhou Lingpai in the field of new energy. The first 1.8gwh power battery production line was put into operation in the fourth quarter of 2021, and batch delivery was realized. The raised investment project is positioned as a lfp54173206 size product. At present, this size of battery is suitable for customers such as SAIC GM Wuling, Hengtian bus, histron, Haiguo hydrocarbon and so on. The above customers will also be the target customer group of the project development. The company has conducted preliminary contact and product demand discussion with several large automobile enterprises in China, signed product development agreements with some target customers, delivered samples to two of them, and received the fixed-point notice of “supply of lithium iron phosphate power battery products for SAIC GM Wuling E50 project”. At the same time, it will continue to enhance its popularity in the industry and expand its market by participating in industry forums, professional exhibitions and other diversified ways in the future. (II) purpose of this issuance 1. Implement the development strategy of new energy battery business and improve the comprehensive competitiveness of the company. At present, the main business income of the company is mainly surface engineering chemicals business, including coating additives business and coating intermediates business. The market scale of this segment is relatively limited, the degree of marketization is high, the competition is fierce, and the long-term high-speed growth faces certain challenges. In order to seek new profit growth points and maximize shareholder value, the company reached the first 1.8gwh power battery production line in the fourth quarter of 2021, and realized batch delivery. The investment in the construction of lithium-ion power battery (2.4gwh) project is a measure for the company to implement the development strategy of new energy battery business and improve the company’s comprehensive competitiveness, which is conducive to enhancing the company’s long-term sustainable development ability and improving the company’s business anti risk ability and profitability. 2. Seizing the development opportunities of the industry, the “lithium-ion power battery (2.4gwh) construction project” of the fund-raising investment project of fali new energy battery business company will build a new lithium-ion power battery production line, which will reach the annual production capacity of 2.4gwh of lithium-ion power battery after it is completed and put into operation. The company’s implementation of the above-mentioned strategic layout of new energy and the company’s share of the battery industry will be in line with the national strategy, which will be conducive to further strengthening the company’s overall development of new energy and the company’s market share. 3. Optimize the capital structure and promote sustainable development. The lithium-ion power battery industry is a technology and capital intensive industry. The company expects that the new energy battery business will be in a large-scale investment period in the future. At that time, it will be difficult to meet the requirements of the company’s rapid development only by relying on existing funds and bank loans. Part of the raised funds are used to supplement working capital and repay loans, which can optimize the capital structure and provide strong support for the sustainable development of the company. 2、 The necessity of this issue of securities and its variety selection (I) the variety selected for this issue of securities. The variety selected by the company for this issue of securities is to issue shares to specific objects. The type of shares issued this time is domestic listed RMB ordinary shares (A shares), with a par value of RMB 1.00 per share. (II) the necessity of selecting the types of securities issued this time. 1. Meet the capital needs of the investment projects funded by the raised funds. The total amount to be invested in the lithium ion power battery (2.4gwh) construction project, supplementary working capital and loan repayment is 856.23 million yuan. As of December 31, 2021, the balance of monetary funds of the company is 210387300 yuan, the balance of current assets is 3758135 million yuan and the balance of current liabilities is 730367 million yuan. In order to ensure the smooth implementation of the raised investment project, and taking into account the company’s future new capital expenditure and the need 6 to optimize the capital structure, the company considers equity financing. 2. Equity financing is a financing method suitable for the company’s business model. As of December 31, 2021, the company’s consolidated asset liability ratio was 89.76%. The choice of equity financing is conducive to optimizing the capital structure, reducing the asset liability ratio, easing the capital pressure and reducing the financial risk. The use plan of the funds raised in this issuance has been analyzed and demonstrated in detail by the management, which is conducive to further enhancing the core competitiveness of the company. In the future, with the gradual implementation of fund-raising projects, the company will accelerate the industrial layout in the field of new energy power batteries, form new profit growth points, further enhance the competitiveness of the company and further enhance its sustainable development ability. 3、 Appropriateness of the selection scope, quantity and standard of this issuance object (I) appropriateness of the selection scope of this issuance object according to the stock issuance plan to specific objects deliberated and approved at the fourth meeting of the Fifth Board of directors of the company, the issuance object of this issuance is the controlling shareholder Hunan hengpa power partnership (limited partnership). The selection scope of this offering object complies with the relevant provisions of laws and regulations such as the measures for the administration of securities issuance and registration of companies listed on the gem (for Trial Implementation), and the selection scope is appropriate. (II) appropriateness of the number of objects to be issued this time. The final object of the issuance of shares this time is Hunan hengpa power partnership (limited partnership), which complies with the provisions of relevant laws and regulations. Specific objects are subscribed in cash. The number of objects to be issued this time complies with the relevant provisions of laws and regulations such as the measures for the administration of securities issuance and registration of companies listed on the gem (for Trial Implementation), and the number of objects to be issued is appropriate. (III) appropriateness of the standards for the object of this issuance. The object of this issuance is the controlling shareholder Hunan hengpa power partnership (limited partnership), which has certain risk identification ability and risk-taking ability, and has corresponding financial strength. The standards of the objects of this offering comply with the relevant provisions of laws and regulations such as the measures for the administration of securities issuance and registration of companies listed on the gem (for Trial Implementation), and the standards of the objects of this offering are appropriate. 7 IV. rationality of the pricing principle, basis, method and procedure of this issuance (I) the pricing principle and basis of this issuance. The benchmark date of the pricing of this issuance is the announcement date of the resolution of the fourth meeting of the Fifth Board of directors of the company. The issue price is 22.86 yuan / share, which is no less than 80% of the average trading price of the company’s shares 20 trading days before the pricing benchmark date (the average trading price of the shares 20 trading days before the pricing benchmark date = the shares 20 trading days before the pricing benchmark date)
