Securities code: Guangdong Leary New Material Technology Co.Ltd(688683) securities abbreviation: Guangdong Leary New Material Technology Co.Ltd(688683) Announcement No.: 2022014 Guangdong Leary New Material Technology Co.Ltd(688683)
Announcement on developing new business of vehicle materials
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear legal responsibility for the authenticity, accuracy and integrity of its contents according to law.
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Guangdong Leary New Material Technology Co.Ltd(688683) (hereinafter referred to as “the company”) held the 10th meeting of the second board of directors on December 21, 2021, deliberated and approved the proposal on adding vehicle materials division and new energy materials division and adjusting the company’s organizational structure. The company plans to establish vehicle materials division and new energy materials division, and authorize the company’s management to implement the relevant matters of this organizational structure adjustment. The details of the company’s new business of vehicle materials are announced as follows:
1、 Basic information of new business
(I) new business type
The company plans to carry out the new business of vehicle materials applied in the automotive aftermarket this time, make full use of the customer resources accumulated by the company in the automotive industry, develop and sell paint protective film, window film, body color changing film, skylight film, star film and other products, and synchronously extend to all categories of vehicle materials; Further promote and expand the layout scope of the company’s new energy vehicle industry chain, better optimize the company’s resource allocation and enhance the company’s core competitiveness.
(II) industry situation of new business
Automobile aftermarket refers to various services in the process of automobile use after automobile sales. It covers all services required by consumers after buying a car. The products involved include automobile paint protective film that plays an anti scratch role on the automobile body, window film that can improve the performance and strength of glass and make it have the functions of heat insulation, energy saving, explosion-proof, beautifying appearance, avoiding privacy and safety protection And vehicle materials such as body color modification film. With the increasing demand for the beauty and protection of cars, more and more attention has been paid to the automotive material products such as paint protective film in the automotive aftermarket.
With the vigorous development of China Shanxi Guoxin Energy Corporation Limited(600617) automobile, the trading volume of China Shanxi Guoxin Energy Corporation Limited(600617) automobile ranks first in the world for five consecutive years, accounting for more than half of the world. The penetration and ownership of new energy vehicles have increased rapidly, which has become a key variable for the stable growth of the automobile industry and brought trillion market opportunities to the automobile aftermarket. In 2020, the scale of China’s automotive aftermarket industry reached 146653 billion yuan, an increase of 133.32 billion yuan compared with 2019, a year-on-year increase of 10.0%, which is an incremental market with great potential.
(III) management of new business
The new business of vehicle materials is implemented through the establishment of a new business division under the Guangdong Leary New Material Technology Co.Ltd(688683) main body, the use of the company’s existing brand resources and management system, the implementation of independent accounting, the introduction of high-end talents with many years of working experience in the vehicle materials industry and professional market development ability, the full play of the synergy between the company’s businesses, the complementarity of advantages between businesses and the expansion of the company’s product market. Therefore, the development of new business will not lead to the change of the actual controller of the company.
(IV) review procedure
The issue of adding vehicle materials division to the existing organizational structure of the company has been deliberated and adopted at the 10th meeting of the second board of directors of the company. This matter does not need to be deliberated by the general meeting of shareholders of the company.
2、 Analysis on the rationality and necessity of developing new business
(I) feasibility of new business industrial policy
The automotive materials industry has a broad market demand space and a good policy environment. The catalogue of high and new technology fields supported by the state 2016 points out that it focuses on supporting the development of “preparation and application technology of new functional polymer materials, preparation technology of new fibers and composites”; The Guiding Catalogue for industrial structure adjustment (2019 version) lists “functional membrane materials” as encouraged development projects; Made in China pointed out that “special metal functional materials, high-performance structural materials, functional polymer materials, special inorganic non-metallic materials and advanced composite materials are the focus of development”; The classification of strategic emerging industries (2018) lists optical film manufacturing and new functional coating material manufacturing as new material industries and listed them as strategic emerging industries.
(II) deepen and promote the strategic layout of the company’s new energy vehicle industry chain
China has the world’s largest auto supplies market, international brands are rushing to the beach, and domestic brands are also emerging. Despite the broad market prospects, behind the prosperity and development, there are still various problems, such as low maturity of the industry, uneven development quality of enterprises, lack of integrity of the industry, and difficult to resolve the trust crisis. Based on the strategic layout of FFC automobile industry, the company will deepen the development of FFC automobile industry and expand the new market based on the existing hot film industry.
(III) measures taken by the company to carry out new business
1. Reserve of new business personnel
The company introduces more than 20 outstanding talents in marketing, brand promotion, channel sales, supply chain procurement, production and other aspects. With the help of the company’s functional coating film R & D platform, the company provides a series of functional support such as R & D, production, procurement and sales, so as to jointly develop a new business of vehicle materials.
2. New business operation
Since the new business was launched in December 2021, as of March 31, 2022, the new business of vehicle materials has realized a total operating revenue of 8.7231 million yuan. The company sells vehicle materials in the distribution mode, and has established strategic cooperation with nearly 20 provincial brand agents such as Guangzhou Weigu international, Wuhan Yuanxin and Shandong Chengze, realizing batch sales.
3. Future business plan of new business
The company’s automotive materials business is positioned in the new space for new energy vehicle services and new consumer owners, focusing on the automotive aftermarket business. Taking automotive materials as a breakthrough, the company launched the automotive aftermarket brand – “Lyle paint protective film” and a series of sub brands. Through multi brand matrix operation, the company broke the traditional market development strategy, embraced the new track of Internet marketing thinking, and actively expanded relevant businesses.
In order to break the consumer’s cognitive stereotype that “almost all Chinese automobile protective films are dominated by foreign brands” and strengthen Chinese consumers’ cognition and understanding of domestic automobile clothing film brands, the automotive materials business department of the company will take brand introduction as the first, provide services through the establishment of industry service standards, upgrading new space in the industry, and supporting pre-sale, in-sale and after-sale demonstration systems, retail inquiry and quotation systems, and dealer store quality assurance systems, Create a Lyle brand with a strong sense of future and experience, and form the first Internet brand in the industry that allows consumers to have quality awareness and trust; Secondly, build the business channel of Lyle automotive materials, develop terminal service stores through the development of dealers, provincial brand operators, 4S group service providers, etc., and quickly seize the market channel with the help of the national investment attraction of the new media platform; Finally, relying on the R & D and manufacturing advantages accumulated by the company in the functional coating film industry, we will continue to improve and strengthen the R & D, production, sales and management team of vehicle materials, create the advantages of the whole industrial chain covering R & D, production and sales for the vehicle materials business department, import products and provide consumers with better quality vehicle protective films.
3、 Impact on Listed Companies
(I) impact on production and operation
The establishment of the business division to carry out new business is a practice of the company’s new energy vehicle industry chain strategy and a prudent decision based on long-term interests. It can give full play to the value of the company’s new material industry platform and explore the development of relevant products in the automotive aftermarket, which will help to further optimize the company’s business structure, improve the layout of the new energy vehicle industry and improve profitability.
(II) impact on the company’s financial situation and operating results
This new business is the need of the company’s strategic development. The capital source of this investment is the company’s own funds. It is an investment decision made on the premise of ensuring the normal development of the company’s main business. It will not cause capital pressure on the development of existing business and affect the normal operation of the company’s production and business activities.
(III) there are no related party transactions and horizontal competition in this new business.
4、 Risk analysis of developing new business
1, despite the rapid development of the Internet plus and the new energy vehicle market, the service enterprises in the post market have new opportunities for development. If the company fails to grasp the development trend of the industry and meet the market demand in the new era, the company will face the risk of failure to obtain orders and loss of customers, resulting in the disadvantage of the company in the market competition.
2. The raw materials of automotive materials products are mainly TPU base materials, adhesives, coatings, etc. it is difficult to predict the price fluctuation range and price trend of raw materials. If the price of raw materials rises sharply and the company fails to adjust the market price of products in time and respond effectively, it may face the risk that the benefits of new business are not as expected.
3. In the future operation and management process, the automotive materials division may face the impact of uncertain factors such as macroeconomic and industrial policy changes and market competition, and there is a risk that the new business expansion is not as expected. The impact of the above businesses on the company’s future performance is uncertain.
4. Due to the continuous development of the production technology of functional coating film, the upgrading and change of industry technology may lead to the slow update and iteration speed of the company’s new business products or the lack of market competitiveness of the products, which will lead to the technical risk of the new business of vehicle materials in the actual development process.
5. The company’s new business of automotive materials is currently in the initial stage of developing the market. With the rapid development of the automotive aftermarket, the competitive environment in the industry will become increasingly fierce. If the company cannot continue to upgrade technology, reduce costs and expand sales channels, the company’s products may lose market competitiveness, which will have a certain impact on the future income of the new business.
The company will pay close attention to the follow-up progress of new business, actively prevent and respond to various risks that may be encountered during the development of new business, and timely perform the obligation of information disclosure in strict accordance with the requirements of relevant laws, regulations and normative documents. Please pay attention to the investment risk!
It is hereby announced.
Guangdong Leary New Material Technology Co.Ltd(688683) board of directors April 13, 2022
