Securities code: Shandong Longquan Pipeline Engineering Co.Ltd(002671) securities abbreviation: Shandong Longquan Pipeline Engineering Co.Ltd(002671) Announcement No.: 2022033
Shandong Longquan Pipeline Engineering Co.Ltd(002671)
Notice on the risk of some production bases affected by the epidemic
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
Due to the recent multiple outbreaks in China, some production bases of Shandong Longquan Pipeline Engineering Co.Ltd(002671) (hereinafter referred to as “the company” or ” Shandong Longquan Pipeline Engineering Co.Ltd(002671) “) have been adversely affected in varying degrees in terms of raw material supply and finished product logistics and transportation. The company has taken a series of measures to actively respond. The specific impact of the epidemic on the company’s operating performance cannot be predicted, and the specific impact degree is subject to the audited financial report of 2022. The relevant information is disclosed as follows:
1、 Specific situation of the epidemic and its impact on the company
(I) impact on Henan Longquan Pipe Industry Co., Ltd. Shandong Longquan Pipeline Engineering Co.Ltd(002671) Henan Branch
In order to actively respond to and implement the relevant epidemic prevention and control policies of government departments, according to the notice on traffic control of aviation port area (No. 1) recently issued by covid-19 pneumonia epidemic prevention and control headquarters in Zhengzhou airport experimental area, the transportation of raw materials and finished products of Henan Longquan Pipe Co., Ltd. (hereinafter referred to as “Henan Longquan”) and Henan Branch of the company, a wholly-owned subsidiary of the company, cannot be carried out normally, A temporary shutdown has been implemented recently to fully cooperate with the government in epidemic prevention and control. The time for the resumption of normal production and operation in Longquan, Henan Province is uncertain, and corresponding arrangements will be made according to the requirements of the local government for epidemic control.
In 2021, the operating revenue of Henan Longquan and Henan Branch of the company accounted for about 10.72% of the company’s latest audited operating revenue. This temporary shutdown will have a certain impact on the production and delivery of some customers’ products.
(II) impact on other production bases
Affected by the multi-point spread of the recent epidemic in China, the company’s concrete pipeline production base in Zibo, Shandong, Changzhou, Jiangsu and Fuyang, Anhui and the metal pipe fitting production base in Wuxi, Jiangsu have been affected by different degrees in terms of logistics and transportation of raw materials and finished products.
To sum up, the recent epidemic has had a comprehensive adverse impact on the supply of raw materials, product delivery, logistics cost, labor cost and epidemic prevention expenditure of some production bases of the company. The company has taken measures to coordinate resources to ensure that the procurement and delivery related to the company’s production and operation are met in time as far as possible.
2、 Countermeasures
In order to minimize negative impacts, control risks and effectively protect the interests of all shareholders, the company will take the following countermeasures:
1. Strictly implement the epidemic prevention and control measures in accordance with the government’s epidemic prevention and control requirements, actively cooperate with relevant departments to carry out prevention and control work, and prevent the risk of epidemic spread;
2. The company actively communicates with customers, optimizes production capacity arrangement and strives to achieve product delivery;
3. On the premise of strictly complying with the requirements of epidemic prevention and control, the affected production bases should make preparations for resumption of work and production in advance, and strive to resume normal production and operation as soon as possible to reduce losses;
4. Strengthen communication with the government, actively coordinate logistics resources, enable alternative transport capacity and schemes, and minimize the impact of logistics obstruction;
5. All production bases of the company further do a good job in epidemic prevention and control, and appropriately reserve epidemic prevention materials and production materials in advance.
3、 Risk tips
Considering the recent development of the epidemic situation in various regions, the company actively cooperates with the epidemic prevention work. The temporary shutdown of some production bases is a short-term response measure for epidemic prevention, which will have a certain adverse impact on the company’s production in the short term, but will not have an adverse impact on the company’s long-term development.
The company will pay close attention to the epidemic development and prevention and control policies of each production base, and timely perform the obligation of information disclosure in accordance with relevant regulations. Please pay attention to the investment risks.
It is hereby announced.
Shandong Longquan Pipeline Engineering Co.Ltd(002671)
Board of directors
April 18, 2022
