Jindan Technology: 10,000 tons of PLA project expanded to 75,000 tons

Henan Jindan Lactic Acid Technology Co.
, Ltd.
(hereinafter referred to as "Jindan Technology" or the "Company") held the 23rd meeting of the 4th Board of Directors and the 17th meeting of the 4th Board of Supervisors on July 25, 2022.
The "Proposal on Expanding Production Capacity, Adjusting the Investment Amount and Changing the Implementation Subject of Some Raised Investment Projects" was reviewed and approved, and it was agreed that some raised investment projects would expand production capacity, adjust the investment amount and change the implementation entity.
This matter still needs to be submitted to the company's general meeting of shareholders for deliberation
.

The details are announced as follows:

Changes and progress of investment projects with raised funds

The company's initial public offering of stocks to raise funds for investment projects is "annual production of 50,000 tons of high-light pure L-lactic acid project", "annual production of 10,000 tons of polylactic acid biodegradable new material project" and "supplementary working capital"
.
As reviewed and approved at the 8th meeting of the 4th Board of Directors, the 7th meeting of the 4th Board of Supervisors and the 1st Extraordinary General Meeting of Shareholders in 2021, among the above-mentioned fundraising projects, "annual production of 50,000 tons of high-purity L-lactic acid project" It has been converted into fixed assets in November 2021; based on the company's development strategy planning and production and operation, it was decided to postpone the implementation of the "annual production of 10,000 tons of polylactic acid biodegradable new material project"
.
The changes in the above-mentioned raised funds investment projects and the investment progress as of June 30, 2022 are as follows:

The specific situation of "annual production of 10,000 tons of polylactic acid biodegradable new material project" to expand production capacity, adjust investment amount and change the implementation entity

Based on the development strategy planning, production and operation situation, and the development prospects of the biodegradable material industry, the company decided to change the "annual production of 10,000 tons of polylactic acid biodegradable new materials project" to "annual production of 75,000 tons of polylactic acid" after analysis and demonstration.
Lactic acid biodegradable new material project”, the company’s change of some of the raised funds investment projects this time does not constitute a connected transaction, nor does it constitute a major asset reorganization stipulated in the “Administrative Measures for Major Asset Restructuring of Listed Companies”
.
The specific changes are as follows:

(1) Changes in the subject and location of the project implementation The company's original "annual production of 10,000 tons of polylactic acid biodegradable new material project" was implemented by Jindan Technology.
After the change, the "annual production of 75,000 tons of polylactic acid biodegradable new material project" The main body of implementation is the subsidiary Jindan Biological New Materials Co.
,
Ltd.
Correspondingly changed the project implementation site to "East of Fuqiang North Road and South of Jianye Avenue in Dancheng County Industrial Zone", covering an area of ​​about 109 mu.
At present, Jindan Biological New Materials Co.
, Ltd.
has obtained the "Yu (2017) Dancheng County Real Estate Property No.
1" 0001562" land use rights
.

(2) Before and after the change of project construction and investment scale, the annual design production capacity of polylactic acid in this project will be expanded from 10,000 tons to 75,000 tons, and the total investment of the project will be adjusted accordingly.
The details are as follows:

After the change, the specific content of the "annual production of 75,000 tons of polylactic acid biodegradable new material project" was raised

(1) Project Overview

In this project, high-purity lactic acid is used as raw material, and crude lactide is obtained after oligomerization dehydration, cracking and cyclization, and polylactic acid is obtained by ring-opening polymerization of crude lactide after purification
.
The main product of this project is polylactic acid, which will have an annual production capacity of 75,000 tons of polylactic acid after it is completed and put into production
.

(2) Project construction period and implementation progress

The construction period of this project is 24 months

(3) Estimated economic benefits of the project

According to the forecast and analysis, after the project is completed and put into production, according to the annual production capacity of 75,000 tons of polylactic acid, it is estimated that the average annual sales income will be 1,380,895,300 yuan, the average annual net profit will be 153,484,700 yuan, and the after-tax financial internal rate of return will be 20.
71%.
The after-tax static financial investment payback period is 6.
12 years (including the construction period), and the project has good economic benefits
.