Securities code: 688065 securities abbreviation: Cathay Biotech Inc(688065) Announcement No.: 2022-004
Announcement on receiving the inquiry letter from Shanghai Stock Exchange
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 liabilities for the authenticity, accuracy and integrity of its contents according to law.
Cathay Biotech Inc(688065) (hereinafter referred to as “the company”) received the inquiry letter on the change of some raised investment projects of Cathay Biotech Inc(688065) issued by Shanghai Stock Exchange (SSE Kechuang Gong Han [2022] No. 0003) (hereinafter referred to as “the inquiry letter”) on January 11, 2022. The specific contents of the inquiry letter are as follows: ” Cathay Biotech Inc(688065) :
On January 12, 2022, your company disclosed the announcement on changing part of the investment projects with raised funds, which intends to reduce the investment amount of “40000 t / a biological sebacic acid construction project” (hereinafter referred to as sebacic acid project), and add “500000 T / a biological glutaric diamine and 900000 t / a biological polyamide project” (hereinafter referred to as glutaric diamine and polyamide project). Our department also noticed that your company disclosed the announcement on changing the implementation subject and implementation location of some raised investment projects on December 1, 2020, which is called changing the implementation subject of sebacic acid project. After the post audit, according to article 14.1.1 of the Listing Rules of shares on the science and Innovation Board of Shanghai Stock Exchange, your company is requested to verify and supplement the disclosure of the following information.
1、 Relevant announcements disclosed that the total investment of sebacic acid project is 171.102 million yuan, and the company plans to adjust the amount of raised funds from 171.102 million yuan to 501.25 million yuan. The implementation subject will be changed from Kaisai (Jinxiang) biomaterials Co., Ltd., a wholly-owned subsidiary of the company, to Kaisai (Taiyuan) Biotechnology Co., Ltd. (hereinafter referred to as Taiyuan Technology). Taiyuan technology is 50.125% owned by your company and 49.875% owned by Shanxi transformation Industrial Park Group Co., Ltd. (hereinafter referred to as Shanxi industrial group). The company and Shanxi industrial group invested 1 billion yuan in the project construction according to the shareholding ratio. The remaining deficiency is solved by the self financing of the implementation subject. Except for the above adjustment, the rest of the sebacic acid project remains unchanged. Please further explain: (1) the reason, necessity and rationality of the company’s change of the implementation subject of the raised investment project, and whether the change of the implementation subject in the early stage and the reduction of the investment amount belong to a package deal or arrangement; (2) Up to now, the actual contribution of all parties, the project capital investment and the follow-up fund-raising plan; (3) In view of the close shareholding ratio of Taiyuan Technology between your company and Shanxi industrial group, further explain how your company realizes the control of Taiyuan Technology; (4) Combined with the business decisions and income distribution arrangements of both parties of the raised investment project, analyze whether the change of the implementation subject of the raised investment project can fully protect the interests of the company and small and medium-sized investors and the measures to be taken by the company.
2、 According to the announcement, the total investment of pentanediamine and polyamide project is 138373330 yuan. The main body of the project is Kaisai (Taiyuan) biomaterials Co., Ltd. (hereinafter referred to as Taiyuan materials). Your company holds 50.125% of Taiyuan materials and Shanxi industrial group holds 49.875%. Both parties contribute 4.6 billion yuan to the project construction according to the shareholding ratio, The remaining insufficient part shall be solved by the implementation subject with self raised funds. Please further explain your company: (1) up to now, the actual capital contribution of all parties and the capital investment of the project; (2) In addition to the contributions of both parties, the project still needs a construction fund of 9237.6733 million yuan. How the company and relevant parties plan to obtain the funds required for the smooth progress of the project and how to ensure the safety and recoverability of the invested funds; (3) Whether the company has prepared a capital demand schedule, whether the capital demand of new projects affects the use of funds required by the company’s main business, and how to ensure that the company’s daily operation is not affected; (4) Combined with the business decisions and income distribution arrangements of both parties of the raised and invested projects, this paper analyzes how the company can realize the control over the project implementation subject and fully protect the interests of the listed company when the shareholding ratio is close. 3、 The announcement disclosed that bio amyl diamine and polyamide have been industrialized and become new products of the company. Please further explain: (1) the relevance between the bio amyl diamine and polyamide project and the company’s main business, and analyze the scientific and innovative attributes of the project; (2) Correlation between new products and the company’s existing main products in technical path, R & D, production and sales; (3) The company’s reserves of technology, talents and funds in the raised investment project; (4) The time of industrialization of new products, the current sales situation, the application status and Prospect of relevant technologies; (5) After the project is completed and put into operation, the company’s product line and capacity expansion. Analyze whether there is capacity digestion risk in the raised investment project in combination with market space, competition pattern, competitive advantages and disadvantages of the issuer’s products and orders on hand; (6) Combined with capacity layout and future planning, analyze the impact of raised investment projects on the company’s financial situation and existing business.
4、 According to the semi annual report of 2021, the investment progress of “bio Based Polyamide Engineering Technology Research Center Project” is 0, and the investment progress of “Kaisai (Wusu) Biotechnology Co., Ltd. with an annual output of 30000 tons of long-chain dicarboxylic acid and 20000 tons of long-chain polyamide project” is 16.4%. It is not disclosed that the two projects have reached the scheduled usable state date. Please make supplementary disclosure: (1) up to now, the progress and capital investment of all raised investment projects. Evaluate and clearly list the expected commencement time, expected construction period and expected production time of the raised investment project, and explain whether there will be major delays in the above projects; (2) Deposit and income of idle funds of raised investment projects.
The independent directors of your company are requested to express their opinions one by one, and the sponsor is requested to check and express their opinions one by one. Please reply to the above questions by your company and the sponsor before January 20, 2022. “
According to the requirements of Shanghai Stock Exchange, the company will actively organize all parties to reply to the questions involved in the inquiry letter and timely fulfill the corresponding information disclosure obligations. Please pay attention to the company’s announcement and pay attention to investment risks.
It is hereby announced.
Cathay Biotech Inc(688065) board of directors
January 12, 2022
