Description of the dilution measures taken in this transaction and the dilution measures taken
Yunnan Xiyi Industrial Co.Ltd(002265) (hereinafter referred to as the "company" or "listed company") intends to issue shares and pay cash to China Ordnance Equipment Group Co., Ltd. (hereinafter referred to as the "Ordnance Equipment Group" or "counterparty") to purchase 100% equity of Chongqing construction industry (Group) Co., Ltd. (hereinafter referred to as "construction industry" or "target company") (hereinafter referred to as "target assets"), Meanwhile, supporting funds are raised (hereinafter referred to as "this transaction").
1、 Diluted immediate return of this transaction
According to the audit report on simulated merger and parent company's financial statements of Chongqing construction industry (Group) Co., Ltd. (zhongxinghua zhuanzi (2022) No. 010357) and the review report on Yunnan Xiyi Industrial Co.Ltd(002265) pro forma financial statements (zhongxinghua yuezi (2022) No. 010011) issued by zhongxinghua Certified Public Accountants (special general partnership), the raising of supporting funds is not considered. Before and after this transaction, The comparison of changes in earnings per share of listed companies is as follows:
Unit: 10000 yuan
January March 2022 / March 31, 2022 year 2021 / December 31, 2021
Increase before and after project transaction increase before and after transaction
(preparation) (preparation)
Operating income 21743558767252659289678447464519810837353362
Operating profit 238.94727900704006 66.1431113663104752
Net profit 67.53663111656358 609.2928670912806162
Attributable to the parent company 58.42664216658374 623.0928684072806097
Net profit of shareholders
Basic earnings per share 0.00 0.07 0.07 0.02 0.30 0.28
(yuan / share)
Diluted earnings per share 0.00 0.07 0.07 0.02 0.30 0.28
(yuan / share)
This transaction is conducive to thickening the earnings per share of listed companies and improving the shareholder return of listed companies. However, if the relevant promised performance does not fully meet the expectations, this transaction may dilute the earnings per share of the listed company.
2、 Necessity and rationality of this transaction
(I) the State Council encourages the improvement of the quality of listed companies and supports listed companies to become better and stronger through mergers and acquisitions
The 14th meeting of the Central Committee for comprehensively deepening reform held on June 30, 2020 considered and adopted the three-year action plan for the reform of state-owned enterprises (20202022). The key tasks of the three-year action of state-owned enterprise reform include improving the modern enterprise system with Chinese characteristics, promoting the optimization and structural adjustment of the layout of the state-owned economy, actively and steadily deepening the reform of mixed ownership, and improving the market-oriented operation mechanism. On October 5, 2020, the State Council issued the opinions of the State Council on further improving the quality of listed companies (GF [2020] No. 14), which clearly put forward that improving the quality of listed companies is an internal requirement to promote the healthy development of the capital market and an important content to accelerate the improvement of the socialist market economic system in the new era. It is required to continuously improve the governance level of listed companies and promote listed companies to be better and stronger.
In recent years, the State Council has continued to vigorously promote the restructuring and listing of central enterprises, actively support the overall listing of enterprises with excellent assets or main business assets, and encourage state-owned holding companies to inject high-quality main business assets into subordinate listed companies. This transaction is a practical measure for ordnance equipment group to implement the relevant policy spirit of actively promoting the reform, merger and reorganization of state-owned enterprises, optimize and adjust the industrial layout and asset structure through market-oriented means, and promote the transformation, upgrading and high-quality development of its listed companies.
(II) promoting the deepening reform of military enterprises is in line with the national strategy
In recent years, the Central Military Commission and relevant ministries and commissions have actively promoted the deepening reform of military enterprises, proposed to further promote the joint-stock transformation of military enterprises through asset restructuring and listing, and encouraged to enhance the business vitality and resource allocation ability of military enterprises through the platform of listed companies. In this context, all military industrial groups, combined with their own characteristics and advantages, continue to extend their layout in the field of "military to civilian and civilian participation in the army", so as to realize the coordinated development of military and civilian products business. This transaction is to further promote the deepening reform of military enterprises with the help of the platform of listed companies and market-oriented means, and promote the in-depth combination of military and civilian industry, technology and management with the help of capital market.
(III) the original business market of listed companies is highly competitive, and the profitability needs to be improved
At present, listed companies are mainly engaged in the R & D, production and sales of automobile engine connecting rods, other industrial products and other products. In recent years, affected by the rise of raw materials and logistics costs, the slow recovery of some automobile supporting markets, the decline of exports of other industrial products of listed companies and the further intensification of industrial competition, the performance of listed companies is poor. Listed companies need to adjust the product structure, promote industrial transformation and upgrading, and realize sustainable and stable operation.
(IV) increase the securitization rate of military assets and strengthen the support capacity of weapons and equipment
According to China's military strategic principles and the strategic requirements of reforming and strengthening the military under the new situation, and against the background of the complexity of security issues in China's surrounding countries, as the core force of China's national defense science and technology industry and a strategic enterprise in China's national defense construction and national economic construction, the mission of ensuring national defense and national security and strengthening the military is becoming more and more important, and the task of weapon and equipment support is becoming more and more urgent. To this end, Ordnance Equipment Group aims to use the capital operation function of listed companies to provide financial support for military construction tasks by using the platform of listed companies on the basis of improving the securitization rate of military assets of the group, continuously improve the R & D and manufacturing level of light weapons and continuously enhance the ability to strengthen the military.
(V) promote the strategic transformation of listed companies and focus on the military industry
After the completion of this transaction, the listed company will complete the strategic transformation at the business level, and the military products business will become the core business of the listed company, bringing new profit growth points to the listed company. In recent years, the military industry has been supported by national policies and maintained a high prosperity of the industry.
This transaction will help listed companies improve their industry status, enhance the ability of industrial chain integration and resource allocation, and enhance their core competitiveness.
(VI) improve the profitability of listed companies and safeguard the interests of shareholders of listed companies
Before this transaction, the listed company was mainly engaged in the R & D, production and sales of automobile engine connecting rods, other industrial products and other products. The existing main business volume is relatively small and the performance is poor. The target company has strong core competitive advantages and high industry position in the field of firearms and light weapons equipment. This transaction is conducive to improving the profitability and anti risk ability of listed companies and optimizing the industrial layout of listed companies.
After the completion of this transaction, the listed company will seize the development opportunities of the industry, use the capital market to consolidate and deepen the specialization ability, and consolidate and improve the market share and industry position. At the same time, this reorganization will help to improve the return on investment of shareholders of listed companies, which is in line with the interests of listed companies and all shareholders.
3、 Measures taken by the listed company to prevent the dilution of immediate return and improve the ability of future return in this transaction
In order to fully protect the interests of the company's public shareholders, especially the minority shareholders, the company has formulated the following measures to fill the return in accordance with the requirements of the guiding opinions on matters related to initial public offering, refinancing, major asset restructuring and dilution of immediate return issued by the CSRC:
(I) strengthen the operation and management ability and improve the operation efficiency of the company
At present, listed companies have formulated a relatively perfect and sound operation and management system to ensure the normal and orderly operation of various business activities of listed companies. In the next few years, listed companies will further improve their operation and management level, optimize their governance structure, institutional setting, internal control system and business processes, improve their overall decision-making level and risk control ability, and comprehensively and effectively improve their operation efficiency.
(II) strictly implement the profit distribution policy and strengthen the return mechanism for investors
After the completion of this reorganization, the listed company will strictly implement laws and regulations and the articles of association, continue to implement sustainable, stable and active profit distribution policies, listen to the opinions and suggestions of independent directors, minority shareholders and other investors in combination with the actual situation of the listed company and the wishes of investors, improve the dividend distribution policy, increase the transparency of the implementation of the distribution policy, and strengthen the protection mechanism for the rights and interests of minority investors, Give investors a reasonable return.
(III) the commitment of the controlling shareholders, actual controllers and persons acting in concert of the listed company and all directors and senior managers to take filling measures for the diluted immediate return of the company's reorganization
In order to ensure that the company's measures to fill the diluted immediate return can be effectively implemented, the actual controller of human weapons equipment group, the controlling shareholder of listed company Nanfang assets and the person acting in concert of the actual controller Changjiang optoelectronics make the following commitments:
"1. Promise not to interfere with the operation and management activities of listed companies beyond their authority and not to encroach on the interests of listed companies.
2. Undertake to earnestly fulfill the relevant measures for filling returns formulated by the listed company and any commitments made by the company on filling returns. If the company violates such commitments and causes losses to the listed company or investors, the company is willing to bear the liability for compensation to the listed company or investors according to law.
3. In order to protect the interests of investors, the company will take a variety of measures to effectively prevent the risk of dilution of immediate return and improve the return ability of listed companies to shareholders. The measures include adhering to technological innovation, enhancing the core competitiveness of listed companies, further improving profit distribution policies, optimizing investment return mechanism, improving the governance of listed companies, and providing institutional guarantee for the development of listed companies. The company promises not to interfere with the operation and management activities of listed companies beyond its authority and not to encroach on the interests of listed companies, so as to ensure the implementation of relevant measures. "
In order to ensure the effective implementation of the company's measures to fill the diluted immediate return, all directors and senior managers of the listed company make the following commitments:
"1. I promise to faithfully and diligently perform my duties and safeguard the legitimate rights and interests of the company and all shareholders;
2. I promise not to transfer benefits to other units or individuals free of charge or under unfair conditions, nor to damage the interests of the company in other ways;
3. I promise to restrict my post consumption behavior;
4. I promise not to use the company's assets to engage in investment and consumption activities unrelated to the performance of my duties;
5. I promise to make every effort to link the remuneration system formulated by the board of directors or the nomination and Remuneration Committee with the implementation of the company's compensation measures within the scope of my responsibilities and authorities, and vote in favor of the relevant proposals considered by the board of directors and the general meeting of shareholders (if I have the right to vote);
6. If the company plans to implement equity incentive, I promise to make every effort to link the exercise conditions of equity incentive to be announced by the company with the implementation of the company's filling return measures within the scope of my responsibilities and authorities, and vote in favor of the relevant proposals considered by the board of directors and the general meeting of shareholders (if any);
7. As one of the responsible subjects related to the filling return measures, I promise to strictly fulfill the above commitments I have made to ensure that the company's filling return measures can be effectively implemented.
If I violate the above commitments or refuse to fulfill the above commitments, I agree to accept the relevant penalties or regulatory measures imposed on me by the securities regulatory authorities such as China Securities Regulatory Commission and Shenzhen Stock Exchange in accordance with the relevant regulations and rules formulated or issued by them. Those who violate their commitments and cause losses to the company or shareholders shall be liable for compensation according to law. "
4、 Review procedures for diluting the immediate return, taking filling measures and commitments of this transaction
The board of directors' analysis of the company's diluted immediate return on this transaction and the measures to fill the immediate return and the commitments of relevant commitment subjects have been deliberated and approved at the second interim board meeting of the company in 2022 and will be submitted to the general meeting of shareholders of the company for deliberation.
It is hereby explained.
(no text below)
(there is no text on this page, which is the seal page of the instructions of Yunnan Xiyi Industrial Co.Ltd(002265) board of directors on diluting the immediate return of this transaction and taking filling measures)
Yunnan Xiyi Industrial Co.Ltd(002265) May 23, 2022
