Road Environment Technology Co.Ltd(688156) 1 securities code: 688156 securities abbreviation: Road Environment Technology Co.Ltd(688156) Announcement No.: 2022-006 Road Environment Technology Co.Ltd(688156) announcement on foreign investment and establishment of wholly-owned subsidiaries 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 in accordance with the law. Important content note: the name of the proposed wholly-owned subsidiary: Luther bio environmental protection technology (Huichuan) Co., Ltd. (tentative name, subject to the name approved by the local administrative department for Industry and Commerce) (hereinafter referred to as the “wholly-owned subsidiary”). The scale and source of investment to be invested: Road Environment Technology Co.Ltd(688156) (hereinafter referred to as “company”) intends to invest in Guizhou, Zunyi, Huichuan District, with a total investment of about 150 million yuan (of which the auction is about 30 million yuan, the land infrastructure is about 60 million yuan, the purchase of production equipment is about 40 million yuan, and the reserved fund is about 20 million yuan), and the construction of an annual output of 80 thousand tons of Baijiu fermented feed is made. It is planned to be constructed in two phases, with an investment of about 100 million yuan in the first phase and a product scale of 50000 tons / year. It is expected to be completed and put into operation in December 2022; The investment of phase II is about 50 million yuan, and the product scale is 30000 tons / year. It is expected to be completed and put into operation in December 2023. The land area is about 90 mu of industrial land (subject to the transfer announcement area), which is planned to be obtained through public bidding, auction and listing. The source of funds is the company’s own funds or other self raised funds (including the investment of self owned funds of about 50 million yuan and the loan within the bank credit line of about 100 million yuan). This foreign investment does not constitute a connected transaction, nor does it constitute a major asset reorganization as stipulated in the measures for the administration of major asset reorganization of listed companies. Relevant risk tips: the establishment of a wholly-owned subsidiary by this foreign investment still needs the approval of the local administrative department for Industry and Commerce and other relevant examination and approval authorities. There is uncertainty about whether it can pass the relevant approval and the time of approval. In addition, after the establishment of a wholly-owned subsidiary, it may face uncertain factors such as macroeconomic and industrial policy changes in the future operation process, and there are certain market risks and operation risks. The company will strengthen the fund management and foreign project investment management control of wholly-owned subsidiaries, strengthen the risk prevention mechanism, and try its best to reduce the project investment risk. I. outline of foreign investment (I) Road Environment Technology Co.Ltd(688156) 2 Road Environment Technology Co.Ltd(688156) , the basic situation of foreign investment, according to the current strategic development, we should make full use of the advantages of distiller’s grains resources in Guizhou Baijiu industry, expand the microbial fermented feed business sector, enhance the competitive edge of the market, and enhance the company’s sustainable development ability and profitability. The company intends to sign the investment agreement on Baijiu distiller’s grains recycling project in Jingkai District of Guizhou with the Zunyi economic and Technological Development Zone Management Committee. The total investment is about 150 million yuan (of which the auction land is about 30 million yuan, the land infrastructure is about 60 million yuan, the purchase of production equipment is about 40 million yuan, and the reserved funds are about 20 million yuan), and the construction of an annual output of 80 thousand tons of biological fermented feed project is also discussed. The company plans to invest in Zunyi. It is planned to be constructed in two phases, with an investment of about 100 million yuan in the first phase and a product scale of 50000 tons / year. It is expected to be completed and put into operation in December 2022; The investment of phase II is about 50 million yuan, and the product scale is 30000 tons / year. It is expected to be completed and put into operation in December 2023. The land area is about 90 mu of industrial land (subject to the transfer announcement area), which is planned to be obtained through public bidding, auction and listing. The source of funds is the company’s own funds or other self raised funds (including the investment of its own funds of about 50 million yuan and the loan within the bank credit line of about 100 million yuan). The company plans to establish a wholly-owned subsidiary, Luther bio environmental protection technology (Huichuan) Co., Ltd. (tentative name, subject to the name approved by the local administrative department for Industry and Commerce), to be responsible for the construction of the project with an annual output of 80000 tons of bio fermented feed. (II) decision making and approval procedures for foreign investment the company held the 20th meeting of the third board of directors on January 18, 2022 and deliberated and adopted the proposal on foreign investment and establishment of wholly-owned subsidiaries. According to the provisions of the articles of association and the Listing Rules of Shanghai Stock Exchange, the matter shall be submitted to the general meeting of shareholders for deliberation. (III) this investment does not constitute a connected transaction, nor does it constitute a major asset reorganization as stipulated in the measures for the administration of major asset reorganization of listed companies and the special provisions on major asset reorganization of listed companies on the science and innovation board. Two. The basic situation of the Baijiu company. The company’s name is: Lu De biological environmental protection technology (HC) Limited registered address: Huichuan District, Zunyi, Guizhou: registered capital: RMB 50 million yuan legal representative: Ji Guangming business scope: single feed (yeast distiller’s yeast distiller’s yeast, yeast culture) production and marketing, biotechnology promotion services. Environmental protection science and technology exchange and promotion services (for projects subject to approval according to law, business activities can only be carried out with the approval of relevant departments) company nature: limited liability company contribution method: the company’s own capital Road Environment Technology Co.Ltd(688156) 3 equity structure: the company holds 100% equity, and the proposed wholly-owned subsidiary has not completed the industrial and commercial registration procedures, The above matters shall finally be subject to the registration and filing approved by the local administrative department for Industry and commerce. Three. The basic situation of the proposed investment project (1) project description: project address: Huichuan District, Zunyi, Guizhou (location specific project block red line map) project nature and scale: new year production Baijiu distiller’s grains, biological fermentation feed 80 thousand tons project investment scale: total investment plan is about 150 million yuan, project area: about 90 Mu project construction content: raw material warehouse, production workshop, Background of the production facilities and the living area of the Office (II) project, Huichuan District, Zunyi, is the important sauce production base in Guizhou Province, and is also one of the three major gold producing areas in China Baijiu flavor liquor. According to the “Huichuan District Zunyi Huichuan District liquor industry promotion program”, the Baijiu Baijiu district has achieved 125 thousand tons of liquor output and reached more than 40 billion yuan by 2025. Meanwhile, a large amount of Baijiu lees will also be produced. Due to the environmental protection requirements, the demand for Baijiu lees treatment is huge. The comprehensive disposal and utilization of distiller’s grains is a key and difficult problem for environmental management, ecological balance maintenance, Baijiu Baijiu industrial chain and ecological civilization demonstration. In order to realize the industrial chain of Baijiu ecological cycle, scientific and effective comprehensive treatment and disposal has been an important factor to promote the development of Huichuan District’s industry in Zunyi, aiming at complex, large quantity and difficult to completely dispose of Baijiu. The comprehensive treatment and utilization of Baijiu lees has become an inevitable way to ensure the stable, healthy, sustainable and coordinated development of Baijiu brewing industry, and to solve the problems of land resources and avoid environmental risks. The necessity of this project is to establish a wholly owned subsidiary of this investment. The company is based on the current development strategy, making full use of the advantages of distiller’s grains resources in Guizhou Baijiu industry, and speeding up the layout of microbial fermented feed business segments, enhancing the market competitive advantage, thereby enhancing the company’s sustainable development ability and profitability. Meanwhile, Baijiu Baijiu in Huichuan District of Zunyi has a huge demand for resource recovery. The comprehensive disposal and utilization of distiller’s grains will open up the industrial chain of Baijiu ecological cycle, maintain the ecological balance and promote the healthy development of Zunyi’s Huichuan District industry. (IV) products and advantages bio fermented feed technology is the focus of research and development all over the world. It is the main means to produce green, organic and other high-end Road Environment Technology Co.Ltd(688156) 4 livestock and poultry products. Compared with conventional feed, Baijiu distilled grain fermented feed has the function of improving the palatability of feed, stimulating the intake of livestock and poultry, improving the digestibility and utilization rate of nutrients in feed. It is beneficial to the intestinal health of livestock and poultry, enhance animal immunity and improve animal health level; Antibacterial peptides produced by fermentation of Baijiu distillers’ grains can inhibit the reproduction and growth of E. coli and Salmonella in the digestive tract, and reduce the use of drugs.
The development and utilization of fermented feed from Baijiu can help save grain, slow down competition between livestock and livestock, and reduce dependence on imported feed. Meanwhile, the application of Baijiu fermented feed can reduce the use of antibiotics and other feed additives, and meet the requirements of the national “limited resistance, no resistance, no resistance” culture development. Baijiu distilled grains can produce animal products with superior quality, safety, flavor and taste. In addition, fermented feed made from Baijiu can reduce the excretion of nitrogen and fecal phosphorus in livestock manure, thereby greatly reducing the environmental pollution caused by the breeding industry. (V) the product technology scheme, which uses proprietary technology of proprietary intellectual property rights, produces animal fermented feed from Baijiu grains through the modern microorganism technology, such as yeast solid high density culture, anaerobic metabolism, yeast autolysis, and so on, and maximizes the elimination of anti nutritional factors in distillers’ grains. It can comprehensively regulate the physiological metabolism process of animals and activate the immune system activity of the body. Enhance animal immunity, reduce disease risk, improve animal production performance, and have obvious feeding effects on dairy cows, beef cattle, aquatic products, pigs and chickens. (VI) the main customer groups of the company’s products are large-scale feed enterprises and large-scale breeding groups. Through the “beipeptide” Saccharomyces cerevisiae culture brand created by Luther bio environmental protection technology (Gulin) Co., Ltd., after more than 6 years of market promotion and publicity, it has established extensive sales channels and stable customer groups, which can effectively ensure the market share of products, realize the balance between production and marketing of Huichuan new project and ensure the stable operation of production. Four, the impact of the establishment of wholly owned subsidiary on listed companies. The establishment of wholly owned subsidiary by this external investment is a prudent decision made by the company to make full use of the advantages of distiller’s grains resources in Guizhou Baijiu industry, expand the microbial fermented feed business sector, enhance the competitive edge of the market, and enhance the sustainable development ability and profitability of the company. The company’s own funds or other self raised funds (including the investment of self owned funds of about 50 million yuan and the loan within the bank credit line of about 100 million yuan) will not have an adverse impact on the company’s financial and operating conditions. The consolidated balance sheet of the third quarter report of 2021 publicly disclosed in the latest issue of the company shows that the company’s asset liability ratio is 16.30%, The company has sufficient solvency. There is no situation that damages the interests of the company and its shareholders, especially the minority shareholders. Road Environment Technology Co.Ltd(688156) 5 this foreign investment to establish a wholly-owned subsidiary will lead to changes in the scope of the company’s consolidated statements. After the establishment of the wholly-owned subsidiary, it will be included in the scope of the company’s consolidated statements. 5、 Foreign investment risk analysis after the establishment of a wholly-owned subsidiary, it may face uncertain factors such as macroeconomic and industrial policy changes in the future operation and management process, and there are certain market risks and operation risks. The company will pay close attention to the follow-up progress of subsidiaries, strengthen the fund management, safety and quality management of wholly-owned subsidiaries, strengthen the risk prevention mechanism, and improve the management ability and operation efficiency based on the management experience accumulated in the early stage, so as to constantly adapt to business requirements and market changes. The company will timely perform the obligation of information disclosure in strict accordance with the requirements of relevant laws, regulations and normative documents. Please invest rationally and pay attention to investment risks. It is hereby announced. Road Environment Technology Co.Ltd(688156) board of directors January 19, 2022
