Securities code: Beijing Bayi Space Lcd Technology Co.Ltd(688181) securities abbreviation: Beijing Bayi Space Lcd Technology Co.Ltd(688181) Announcement No.: 2022022 Beijing Bayi Space Lcd Technology Co.Ltd(688181)
About the investment of a wholly-owned subsidiary in the construction of “1351t / a advanced
Announcement on the “project of pharmaceutical intermediates and API with an annual output of 30 tons”
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.
Important content tips:
Investment project: the project with an annual output of 1351 tons of advanced pharmaceutical intermediates and 30 tons of API (hereinafter referred to as “the project” or “the project”)
Capital source and method: the project is constructed by Hebei Beijing Bayi Space Lcd Technology Co.Ltd(688181) (hereinafter referred to as “the company”) Pharmaceutical Co., Ltd. (hereinafter referred to as “Hebei 800 million pharmaceutical”) which is a wholly-owned subsidiary of Beijing Bayi Space Lcd Technology Co.Ltd(688181) (hereinafter referred to as “Hebei 800 million pharmaceutical”), with an estimated total investment of about 497537 million yuan (the final total investment is subject to the actual investment). The capital comes from the company’s own funds and self raised funds.
This investment does not constitute a related party transaction or a major asset reorganization.
Relevant risk tips:
There may be market risk, R & D risk, API review and approval risk, raw material supply risk, financial risk, technology and production risk during the implementation of the project.
1、 Overview of investment projects
According to the company’s development strategy, in order to enrich the company’s product types, establish and form new growth points as soon as possible, combined with the market demand and the company’s own advantages in chemical synthesis, the company plans to invest in the project with an annual output of 1351 tons of advanced medical intermediates and 30 tons of API in the east zone of Cangzhou Lingang Economic and Technological Development Zone, using the process technology independently developed by the enterprise, Realize the efficient production of a series of pharmaceutical intermediates and API products. Hebei 800 million Pharmaceutical Co., Ltd., a wholly-owned subsidiary of the company, is responsible for the implementation and construction of the project. The total investment is expected to be about 497537 million yuan (the final total investment is subject to the actual investment). The funds come from the company’s own funds and self raised funds. On April 19, 2022, the company held the 14th meeting of the 4th board of directors and the 12th meeting of the 4th board of supervisors, deliberated and approved the proposal on the investment and construction of 1351 tons of advanced pharmaceutical intermediates and 30 tons of API projects by wholly-owned subsidiaries. This investment does not need to be submitted to the general meeting of shareholders for deliberation. According to the relevant provisions of relevant laws, regulations, departmental rules and normative documents such as the Listing Rules of Shanghai Stock Exchange science and innovation board, this investment does not constitute a related party transaction, nor does it constitute a major asset reorganization as stipulated in the administrative measures for major asset reorganization of listed companies.
2、 Basic information of implementation subject
1. Name of subsidiary: Hebei Beijing Bayi Space Lcd Technology Co.Ltd(688181) Pharmaceutical Co., Ltd
2. Type of subsidiary: limited liability company
3. Registered address: room 519, circular economy promotion center, Lingang Economic and Technological Development Zone, Bohai new area, Cangzhou
4. Legal representative: Zhao Lei
5. Registered capital: 40 million yuan
6. Date of establishment: July 21, 2021
7. Business scope: manufacturing of chemical drugs and APIs; Drug production and sales; R & D, production, sales, technical consultation and technical services of pharmaceuticals, chemical products (excluding hazardous chemicals), chemical materials, electronic materials and plant extracts, as well as self-supporting and agent import and export business of various commodities and technologies. (for projects subject to approval according to law, business activities can be carried out only after approval by relevant departments)
8. Shareholding ratio of the company: 100%
3、 Basic information of investment projects
1. Project overview
The project plans to purchase about 212.54 mu of land in the east area of Cangzhou Lingang Economic and Technological Development Zone, with a total building (structure) area of about 137000 square meters. The project mainly includes production workshop, power workshop, warehouse, complex building and other supporting facilities. After the completion of the project, it is expected to achieve an annual production capacity of 1351 tons of advanced pharmaceutical intermediates and 30 tons of APIs. The advanced pharmaceutical intermediates involved in this project are mainly new psychiatric and cardio cerebrovascular pharmaceutical intermediates, and the bulk drug is mainly drugs for nuclear magnetic resonance imaging. Subsequently, the company will adjust some product types according to market conditions. After the project is completed, the annual sales revenue is expected to be about 1 billion yuan.
2. Project implementation subject
The project is implemented by Hebei Beijing Bayi Space Lcd Technology Co.Ltd(688181) Pharmaceutical Co., Ltd., a wholly-owned subsidiary.
3. Project construction site
The project is implemented in the east zone of Cangzhou Lingang Economic and Technological Development Zone.
4. Project construction cycle
The construction period of the project is 36 months, and the actual construction situation shall prevail.
5. Project investment estimation
The total investment of the project is 497537 million yuan (the final total investment is subject to the actual investment), including 413.2 million yuan of construction investment, 71.589 million yuan of working capital and 12.748 million yuan of interest during the construction period.
See the following table for the specific construction content and specific investment estimate of the project:
Ratio of project cost (10000 yuan) to total investment (%)
1、 Construction investment 4132000 83.05
1. Fixed assets 3620000 72.76
2. Intangible assets 291000 5.85
3. Other assets 400.00 0.80
4. Reserve fund 181000 3.64
2、 Working capital 715890 14.39
3、 Interest during construction period 127480 2.56
Total 4975370 100.00
The company will strictly control all costs and expenses, which shall be subject to the actual settlement in the future.
6. Source of funds:
Self owned and self raised funds of the company.
7. Necessity of building new projects
(1) The market prospect of advanced pharmaceutical intermediates and APIs is broad
Due to population growth, accelerated aging process, continuous improvement of medical insurance system, enhancement of residents’ ability to pay, and gradual release of people’s increasing health demand, China has become one of the regions with the fastest growth rate of drug consumption in the world. The advanced pharmaceutical intermediates involved in this project are mainly new psychiatric and cardio cerebrovascular pharmaceutical intermediates, and the API is mainly drugs for nuclear magnetic resonance imaging, which has a good market prospect. Carrying out this project can help the company explore the market and create new profit growth points, with remarkable social and economic benefits.
(2) The product structure of new projects is more reasonable and market risks are dispersed
At present, the company’s main products are high-performance thin-film transistors, TFTs and other mixed liquid crystal materials. The product structure is relatively single and the anti risk ability is low. The production of pharmaceutical intermediates and APIs and the production of liquid crystal monomers belong to the fine chemical industry, and have commonalities in technical principles, detection and analysis, environmental protection treatment, quality control, clean production and so on. The company uses the existing technology to develop new markets and make the product structure more reasonable and rich, which can help the company disperse market risks, broaden business channels, expand market share, further adapt to the needs of market economy and enhance the overall strength of the company.
(3) The synergy and scale benefits of new projects are remarkable
The project is market-oriented, gives full play to its own industry advantages, and fully relies on a variety of favorable conditions such as geographical location advantages and port resources. After the successful implementation of the project, it is conducive to make full use of the company’s existing fine chemical technology and experience, enhance the mutual compatibility and synergy of the company’s products, stimulate the company’s technological innovation ability, realize large-scale benefits, and further improve the company’s ability to resist market risks, In line with the company’s strategic development objectives.
(4) It conforms to the company’s strategic development objectives and is conducive to the realization of the company’s industrial layout
The strategic development goal of the company in the next few years will be positioned in the development layout of industrial channels. While ensuring the smooth completion and operation of key projects, the company will continue to expand the production scale and profitability of existing products; At the same time, the company will establish a business model suitable for the development law of high-tech business, vigorously promote the investment concept of operating value-added services, and fully implement the operation upgrading and high-tech development strategy. The development of the project is formulated by the company according to the industrial supporting needs and the characteristics of industrial development and market regional layout, which is in line with the company’s strategic development objectives and conducive to the realization of the company’s industrial layout.
8. Feasibility of building new projects
(1) Conform to the industrial layout of national and local governments
Cangzhou Bohai New Area Lingang Economic and Technological Development Zone is the location of the “Beijing Cangzhou Bohai New Area biomedical industrial park” that implements the remote extension supervision of drug production. There are a large number of high-tech pharmaceutical enterprises such as China Resources Double-Crane Pharmaceutical Co.Ltd(600062) pharmaceutical, Beijing Xiehe pharmaceutical and Shijiazhuang No. 4 pharmaceutical in the park, focusing on building an industrial development gathering place represented by high-tech pharmaceutical materials such as APIs and pharmaceutical intermediates. The project has high technical content and high added value, which is in line with the industrial development orientation and development direction of the park and the modern industrial development concept of “environment-friendly, resource-saving, distinctive characteristics and obvious agglomeration effect” advocated by the park. Therefore, the project conforms to the national principle of improving the comprehensive utilization level of resources, the policy requirements of the coordinated development of national environment and economy, the construction site conforms to the industrial layout of national and local governments, and the implementation of the project has the advantages of highly concentrated industrial resources and environment.
(2) Rely on the existing technical force to realize the mutual support between products
From basic chemical raw materials to chemical agents, it needs to go through complex chemical and physical processes. The production of chemical APIs and intermediates focuses on the main synthetic processes and technical links, which is the premise and important guarantee for the development of chemical pharmaceutical industry. The company’s main business is the R & D, production and sales of liquid crystal display materials. After more than ten years of efforts, the company has formed a complete proprietary core technology system in intermediate preparation, single crystal synthesis and purification, detection and other links. The production of pharmaceutical intermediates, APIs and liquid crystal monomers belongs to the fine chemical industry, and has commonalities in technical principles, detection and analysis, environmental protection treatment, quality control, clean production and so on. The company has advanced chemical production, organic experiment, analysis and testing equipment, perfect management system, advanced technical research and development ability in chemical synthesis, and has achieved a number of research results.
4、 Impact of this investment on the company
The project is a prudent decision made based on the company’s development strategy. On the premise of doing a good job in the normal production and operation of the plant in the Petrochemical new material science and technology industrial base in Fangshan District, Beijing, the company invests in the construction of the project, which will help to consolidate the company’s industrial foundation, broaden the company’s business channels and stimulate the company’s technological innovation ability. This project expenditure, however, has a positive impact on the company’s business layout and operating performance in the long run, meets the needs of the company’s future business development and market expansion, and conforms to the company’s development strategy.
The investment is planned to use the company’s own and self raised funds. The project investment will be implemented in stages, which will not affect the company’s normal production and operation, and the impact on the company’s financial and operating conditions is controllable. There is no damage to the interests of the company and its shareholders, especially small and medium-sized shareholders. It will play a positive role in the company’s overall operating performance in the future and is in line with the interests of the company and all shareholders.
5、 Risk analysis
There may be market risk, R & D risk, API review and approval risk, raw material supply risk, financial risk, technology and production risk during the implementation of the project.
1. Market risk
Facing the limitation of market capacity and the demand for product renewal, the project may face the price reduction of similar products outside China after completion, resulting in market risks affecting the company’s profits. The company will resist market risks by improving the technical content of products, timely adjusting the direction of products, forming economies of scale and reducing costs.
2. R & D risk
The company has accumulated rich technical experience in fine chemical industry. The company has established an experienced pharmaceutical team to research and develop advanced pharmaceutical intermediates and API products. In the subsequent project design process, the company will also hire professional technicians to demonstrate the functional layout and control the R & D risk. After the completion of the project, it is expected to reach the advanced level of China. However, the development of pharmaceutical intermediates and APIs is still uncertain. At present, the company’s products are still in the R & D stage, and there are risks of R & D failure and registration failure.
3. Risk of API review and approval
Before the API is put on the market, it is necessary to further study and register the quality standard and stability, arrange the production certification and audit according to the requirements of the target market and drug regulatory authorities, and produce and sell it after obtaining the production license. There may be the risk of failure in the application of API projects, and there is uncertainty whether commercial production can be realized.
The company will establish a professional drug administration and quality management team, supplemented by the rich experience of the third-party professional application unit, to ensure that the API review, approval and audit are passed.
4. Raw material supply risk
The project has high requirements for the quality of raw materials. If the supply of raw materials and product quality are unstable, the production capacity and quality of products may be affected. The company will investigate and review the comprehensive strength of suppliers through multiple channels, select suppliers with many years of production experience and long-term cooperation for raw material procurement, and sign cooperation agreements and orders with suppliers to ensure the stability of raw material supply and quality.
5. Financial risk
Since the investment is funded by self owned funds and self raised funds, it may
