Securities code: Guangdong Orient Zirconic Ind Sci And Tech Co.Ltd(002167) securities abbreviation: Guangdong Orient Zirconic Ind Sci And Tech Co.Ltd(002167) Announcement No.: 2022057 Guangdong Orient Zirconic Ind Sci And Tech Co.Ltd(002167)
With regard to the announcement on the reply to the inquiry letter of the 2021 annual report of Shenzhen Stock Exchange, 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.
Guangdong Orient Zirconic Ind Sci And Tech Co.Ltd(002167) (hereinafter referred to as “the company” or ” Guangdong Orient Zirconic Ind Sci And Tech Co.Ltd(002167) “) recently received the inquiry letter on Guangdong Orient Zirconic Ind Sci And Tech Co.Ltd(002167) 2021 annual report (annual report inquiry letter [2022] No. 210) issued by the management department of listed companies of Shenzhen Stock Exchange. In view of the matters mentioned in the attention letter, the company carefully analyzed the questions raised in the attention letter one by one and made a written reply to Shenzhen Stock Exchange, The answers to specific questions are as follows:
Question 1: in 2021, the total amount of related procurement of your company was 419 million yuan, of which 247 million yuan was purchased from image resources NL. The related sales amount is 362 million yuan. (1) Please explain the reason and rationality of the substantial increase in related party transactions year-on-year, the necessity of related party transactions, and explain whether the pricing of related party transactions is fair in combination with the market reference price.
(2) Please explain whether Chen chaodian, vice chairman of your company, is still a director of image resources NL. If she is still a director, please explain why the transaction with image resources NL is not included in the prediction of daily connected transactions in 2022.
reply:
(1) Please explain the reason and rationality of the substantial increase in related party transactions year-on-year, the necessity of related party transactions, and explain whether the pricing of related party transactions is fair in combination with the market reference price.
In 2021, the company’s related procurement amount was 419077 million yuan, an increase of 47.55% over 2840265 million yuan in 2020; In 2021, the related sales amount of the company was 362034200 yuan, an increase of 312.82% over 87.698 million yuan in 2020. In recent two years, the main counterparties of the company’s related party transactions include Lb Group Co.Ltd(002601) and its controlled subsidiaries (hereinafter referred to as ” Lb Group Co.Ltd(002601) “), Jiaozuo Weina Technology Co., Ltd. (hereinafter referred to as “Weina technology”) and image resources NL (hereinafter referred to as “image”).
The details of the company’s related procurement and related sales in 2020 and 2021 are shown in the table below:
Unit: 10000 yuan;%
Volume of growth rate in 2021 and 2020 in related party procurement
1 image resources NL purchases zirconium ore 24710562339248 5.63% 2 Lb Group Co.Ltd(002601) and its subsidiaries purchase zircon sand 1647774475335 246.66% companies, etc
Purchase Electrofusion
3. Zirconium and structural parts of Jiaozuo Weina Technology Co., Ltd. 719.28 256.70 180.20%
4. Mask 0.12 0.12 0 company purchased by Guangdong Oriental Medical Industry Management Co., Ltd
Total 41907702840265 47.55%
Unit: 10000 yuan;%
Growth rate of related party sales content from 2021 to 2020
number
1 Lb Group Co.Ltd(002601) Co., Ltd. sells 3452958828704 316.67% of the concentrate of the company and its subsidiaries
2 Jiaozuo Weina Technology Co., Ltd. sells zirconium chloride, 106669 475.22 124.46% of the company (note) zirconium, zircon sand, etc
3 Henan Yinke International Chemical Co., Ltd. sells fused zirconium, etc. 607.16
Limited company
4. 7.55 – 100.00% fee for trust of Feng Liming’s horizontal competition
Total 3620342876980 312.82%
Note: the company has completed the acquisition of Wiener technology on June 15, 2021, so the statistical range with Wiener technology is 2020 and January may 2021.
(I) related purchase
1、IMAGE RESOURCES NL
Image is the raw material supplier of the company’s heavy minerals. In 2021, the purchase amount of the company from image was 247105600 yuan, accounting for 58.98% of the total related purchase amount of the whole year, an increase of 5.63% compared with 233924800 yuan in 2020. Although the number of purchases declined in 2021, the main reason for the increase in total purchases was the sharp rise in purchase unit prices. Affected by the supply and demand pattern of upstream raw materials, the market price of heavy minerals rose sharply in 2021. The average purchase price of the company in 2021 was 277191 yuan / ton, up 32.84% from 208666 yuan / ton in 2020.
The transactions between the company and image are heavy mineral products, which are rich in titanium and zirconium oxides. The zircon sand produced after sorting is an important raw material for the company to manufacture various zirconium products.
During the reporting period, the company used the leased Guofu zirconium titanium concentrator to separate the purchased heavy minerals into titanium concentrate and zircon sand. Zircon sand is used as the raw material of various chemical zirconium products of the company to meet the needs of daily operation. Titanium concentrate can be sold externally, and titanium concentrate is also an important raw material of Lb Group Co.Ltd(002601) the major shareholder of the company, with obvious synergistic effect. Zirconium ores worldwide are mainly distributed in Australia and South Africa. Image is an important joint-stock company of the company in Australia. It has rich zirconium ore resources, which is an important layout for the company to strengthen and improve the upstream industrial chain. Mingrui zirconium industry, the holding subsidiary of the company, signed the agreement on the sale of heavy minerals with image in February 2016
A series of underwriting agreements are sold, so it is reasonable to purchase heavy minerals through image.
The market price of heavy minerals in 2021 is shown in the figure below:
In 2021, the comparison between the company’s purchase price from image and the market price is shown in the table below:
Purchase time purchase price market price
202101 titanium: 2.4 dollars / ton degree, zirconium: 14.8 dollars / ton degree, titanium: 2.8 dollars / ton degree, zirconium: 16.5 dollars / ton degree, 202102 titanium: 2.6 dollars / ton degree, zirconium: 14.8 dollars / ton degree, titanium: 2.8 dollars / ton degree, zirconium: 16.5 dollars / ton degree, 202104 titanium: 2.8 dollars / ton degree, zirconium: 15 dollars / ton degree, titanium: 3 dollars / ton degree, zirconium: 16 dollars / ton degree
202106 titanium: 3.5 dollars / ton degree, zirconium: 16.4 dollars / ton degree, titanium: 4 dollars / ton degree, zirconium: 17.2 dollars / ton degree, 202107 titanium: 3.5 dollars / ton degree, zirconium: 16.45 dollars / ton degree, titanium: 4 dollars / ton degree, zirconium: 18.5 dollars / ton degree, 202108 titanium: 4.5 dollars / ton degree, zirconium: 17.50 dollars / ton degree, titanium: 4 dollars / ton degree, zirconium: 18.5 dollars / ton degree, 202109 titanium: 4.5 dollars / ton degree Zirconium: 18.50 US dollars / ton degree, titanium: 5 US dollars / ton degree, zirconium: 20 US dollars / ton degree
202110 titanium: $4.5/ton degree, zirconium: $23.00/ton degree, titanium: $5.5/ton degree, zirconium: $24 / ton degree
The heavy minerals purchased by the company are priced by TZMI market model. The company communicated the purchase intention of the next few months with image in advance and signed the purchase contract after the negotiation. In addition, the shipping time from Australia to China takes about one month. Therefore, there is a certain time difference between the purchase price of zirconium middling and the market price. From the comparison of the above pictures and tables, it can be seen that the transactions between the company and image are priced by the market, and the price of related party transactions is fair. 2. Lb Group Co.Ltd(002601) and its subsidiaries
In 2021, the company purchased 1647774 million yuan from Lb Group Co.Ltd(002601) (and its subsidiaries), a year-on-year increase of 226.61% compared with 475335 million yuan in 2020. The specific procurement comparison between 2020 and 2021 is as follows:
Unit: 10000 yuan;%
Growth rate of related party transactions from 2021 to 2020
Zircon sand 1352634391874 245.17% water, electricity, natural gas, sewage treatment, etc. 200258 834.61 139.94% zirconia 865.27
Others 83.54
Total: 1647774475335 246.66%
It can be seen from the above table that the related party transactions of the company in 2021 mainly increased in the procurement of zircon sand, the procurement of zirconia, and the withholding and payment of water and electricity expenses of some production lines.
(1) Purchase zircon sand
In 2021, the company purchased zircon sand from Lb Group Co.Ltd(002601) (and its subsidiaries), totaling 1352634 million yuan, accounting for 39.32% of the total related procurement in 2021, a year-on-year increase of 245.17% compared with 391874 million yuan in 2020. On the one hand, affected by the supply and demand pattern, the average market price of zircon sand in 2021 is higher than that in 2020; On the other hand, with the recovery of the industry prosperity, the company’s production capacity in 2021 was expanded compared with that in 2020, and the demand for zircon sand increased significantly. At the same time, Lb Group Co.Ltd(002601) based on the commitment to completely solve the horizontal competition, the company disposed of the inventory raw material zircon sand involved in the production line of zirconium products to the company at one time in 2021. Therefore, the related purchase of zircon sand by the company in 2021 increased significantly, which is reasonable and necessary.
In 2021, the market price trend of zircon sand is shown in the figure below:
In 2021, the price of zircon sand purchased by the company from Lb Group Co.Ltd(002601) is compared with the market price trend as shown in the following table:
Purchase time average purchase price market price
202101929040 yuan / ton 902655 yuan / ton
202102911504 yuan / ton 911504 yuan / ton
202103920354 yuan / ton 938053 yuan / ton
202105920354 yuan / ton 1061947 yuan / ton
202107923993 yuan / ton 1238938 yuan / ton
Note: the market price of the current month is calculated by the tax included price of the current month in the market price trend chart of zircon sand.
It can be seen from the above table that the price of zircon sand purchased by the company from Lb Group Co.Ltd(002601) in 2021 is basically consistent with the market price. The company purchases zircon sand from Lb Group Co.Ltd(002601) according to its own production and operation needs. The purchase price of zircon sand between the company and Lb Group Co.Ltd(002601) has always been in accordance with the market price, and the price is fair.
