Feasibility analysis report on the use of funds raised by non-public offering in 2022
January, 2002
Hongbo Co.Ltd(002229) (hereinafter referred to as “the company”) intends to raise funds by non-public offering of shares. The feasibility analysis of the company’s board of directors on the use of funds raised by this non-public offering of shares is as follows:
1、 Use plan of raised funds
The total amount of funds raised in this issuance does not exceed 300 million yuan. The net amount of funds raised after deducting the issuance expenses will be used to supplement the working capital, so as to meet the working capital needs brought by the continuous growth of business scale and the diversified expansion of business in the future, and further improve the overall profitability of the company.
(Note: the amount of raised funds to be invested has been deducted, and the new investment and financial investment to be invested from six months before the resolution date of the board of directors of the company to this issuance shall not exceed 150 million yuan.)
2、 Necessity and feasibility of this fund raising
(I) necessity of raising funds
1. Optimize the ownership structure and ensure the stable and sustainable development of the company
In December 2020, the actual controller of the company was changed to Mao Wei. In order to effectively safeguard the interests of investors and enhance investor confidence, based on the judgment of the company’s value and confidence in future development, the actual controller of the company plans to subscribe for the shares of this non-public offering through Henan Lujie Electronic Technology Center (limited partnership) (hereinafter referred to as “Lujie Electronics”) to stabilize the company’s equity structure, Lay a solid governance foundation for the sustainable and healthy development of the company.
Before this non-public offering, Mao Wei was the actual controller. Mao Wei indirectly holds 111263785 shares of the issuer through Huiyi trading and Jutai holdings, the person acting in concert, accounting for 22.33% of the total share capital. After the completion of this non-public offering, Mao Wei has 168081966 voting shares, accounting for 30.28% of the total share capital after the issuance.
2. Enhance financial strength, provide financial support for the realization of the company’s development strategy and maximize the interests of shareholders
This non-public offering will provide important financial support for the realization of the company’s development strategy, promote the company’s asset scale and ownership structure to be more suitable for the development needs of the industry, and further improve the company’s financial situation, which will help to enhance the company’s follow-up development and profitability, enhance the development potential and maximize the interests of shareholders.
3. Improve the company’s anti risk ability
The company faces various risk factors such as macroeconomic fluctuation risk, market competition risk and covid-19 epidemic uncertainty. When risk factors adversely affect the company’s production and operation, maintaining a certain level of working capital can improve the company’s anti risk ability. When the market environment is favorable, maintaining a certain level of working capital will help the company seize the market opportunity and avoid losing development opportunities due to capital shortage.
(II) feasibility of the raised funds
1. The use of the funds raised in this non-public offering complies with the provisions of laws and regulations
The use of the funds raised by the company’s non-public offering complies with relevant policies, laws and regulations and is feasible. After this non-public offering, the company’s total assets and net assets will increase accordingly, and the company’s capital strength, anti risk ability and subsequent debt financing ability will be improved, laying the foundation for the sustainable and healthy development of the company’s business. 2. The issuer of this non-public offering has standardized governance and improved internal control
According to the governance standards of listed companies, the company has established a modern enterprise system with the corporate governance structure as the core, and formed a more standardized corporate governance system and a perfect internal control environment through continuous improvement and perfection.
In terms of the management of raised funds, the company has established the measures for the management of raised funds in accordance with the regulatory requirements, and made clear provisions on the storage, use, investment direction and supervision of raised funds. After the funds raised from this non-public offering are in place, the board of directors of the company will continue to supervise the company’s storage and use of the raised funds, so as to ensure the standardized and reasonable use of the raised funds and prevent the use risk of the raised funds.
3、 The impact of this issuance on the company’s operation, management and financial status
(I) impact of this issuance on the company’s operation and management
After deducting the relevant issuance expenses, all the funds raised in this issuance will be used to supplement the working capital. The use of the raised funds is in line with the company’s overall development strategy in the future. After the raised funds are in place and implemented, the company’s capital will be further enriched, which is conducive to market development and business expansion, improve the company’s financial situation and capital structure, promote the sustainable and healthy development of the company’s business, and improve the company’s competitiveness and profitability.
(II) impact of this issuance on the company’s financial position
After the completion of this non-public offering, the company’s total assets and net assets will increase, the company’s capital structure will be effectively improved, the company’s financial risk will be further reduced, and the company’s comprehensive competitiveness, sustainable profitability and anti risk ability will be enhanced. At the same time, after raising funds to supplement working capital, the company’s working capital is better supplemented, which is conducive to the further expansion of the company’s business scale and lays a solid foundation for the company’s long-term sustainable development, so as to improve the company’s competitiveness and sustainable profitability..
4、 Feasibility conclusion of this non-public offering
To sum up, after careful analysis and demonstration, the board of directors of the company believes that the use plan of the funds raised by this non-public offering is necessary and feasible in line with relevant policies, laws and regulations and the overall strategic development plan of the company in the future. The availability and use of the raised funds will help to improve the profitability and overall competitiveness of the company, enhance the sustainable development ability and anti risk ability of the company, and provide important support and guarantee for the subsequent development of the company. Therefore, the use of the funds raised in this non-public offering is reasonable and in line with the interests of the company and all shareholders.
Hongbo Co.Ltd(002229) board of directors January 24, 2002
