Announcement of Henan Jindan Lactic Acid Technology Co., Ltd. on the investment and construction of a project with an annual output of 60,000 tons of biodegradable polyester and its products

The company and all members of the board of directors guarantee that the information disclosed is true, accurate, and complete, and there are no false records, misleading statements or major omissions.

Henan Jindan Lactic Acid Technology Co., Ltd. (hereinafter referred to as the "Company") in 2021

month

The ninth meeting of the fourth board of directors was held on Japan, and the

Proposal for the project of 10,000 tons of biodegradable polyester and its products." The company intends to invest

Annual output of RMB 100 million

For the project of 10,000 tons of biodegradable polyester and its products, the specific situation is announced as follows:

1. Investment overview

1. As the country continues to upgrade plastic pollution control measures and efforts, the market demand for degradable plastics is growing rapidly. Based on the company's own industrial chain planning and regional economic development ideas, combined with the needs of domestic and foreign markets, the company decided to deploy biodegradable polyester materials and their products in advance to further extend the industrial chain and improve corporate profitability. The company plans to build a project with an annual output of 60,000 tons of biodegradable polyester and its products in the High-tech Industrial Development Zone of Dancheng County, Henan Province, which can produce 60,000 tons of PBAT per year, and blend with PLA, starch and other materials to further produce biodegradable Modified materials and biodegradable products.

2. The company held the ninth meeting of the fourth board of directors on March 24, 2021, and reviewed and approved the "Proposal on the Investment and Construction of a Biodegradable Polyester Project with an Annual Output of 60,000 Tons". According to the "Shenzhen Stock Exchange's Rules for the Listing of Stocks on the Growth Enterprise Market" and other relevant regulations, regulatory documents and other relevant provisions, and the company's "Investment Project Management Measures" and other relevant regulations, this investment matter does not need to be submitted to the shareholders' meeting for review.

3. This investment does not constitute a related party transaction, nor does it constitute a major asset reorganization as prescribed in the Measures for the Administration of Major Asset Reorganizations of Listed Companies.

4. The board of directors authorizes the general manager of the company or his authorized person to sign agreements and documents related to the construction of this project.

2. Project investment

1. Project name: The project of producing 60,000 tons of biodegradable polyester and its products per year.

2. Project location: High-tech Industrial Development Zone, Dancheng County, Henan Province. 3. Total project investment: Estimated RMB 300 million (the final total project investment is subject to actual investment). 4. Funding source: self-raised by the enterprise plus bank loan. 5. Project construction period: 18 months, expected to be completed in September 2022. 6. Project construction scale: The total area of ​​the project is about 99.47 mu, and the specific land area is subject to actual conditions. 7. Project feasibility:

(1) Since 2020, domestic plastic bans and restrictions have been issued frequently. On January 19, 2020, the "Opinions on Further Strengthening the Treatment of Plastic Pollution" was released; on July 10, 2020, the "Notice on Solidly Promoting Plastic Pollution Treatment" was released; on June 2, 2020, Henan Provincial Development and Reform Commission, Ecological The Department of Environment jointly issued the "Action Plan for Accelerating White Pollution Control and Promoting the Construction of Beautiful Henan", setting out a task book and setting out a timetable for speeding up the white pollution control in Henan Province. The National Development and Reform Commission's "Industrial Structure Adjustment Guidance Catalogue (2019)" included degradable polymers in the encouraged category; the "Three-year Action Plan to Enhance the Core Competitiveness of Manufacturing Industry" promulgated in 2017 included special polyesters in the development direction of national new materials. The state continues to upgrade plastic pollution control measures and efforts, and the market demand for degradable plastics is growing rapidly.

(2) The land area of ​​the project construction site is sufficient, and the peripheral supporting public media such as water, electricity, steam, and natural gas are adequately guaranteed.

(3) Adopt the domestic common PBAT process technology, and the technical route is mature.

3. The purpose of the investment and its impact on the company

The company’s investment in the construction of 60,000 tons of biodegradable polyester and its products is conducive to enriching the company’s degradable material product line. It can also use the company’s existing starch products and polylactic acid products after the completion of the fund-raising project to further produce biodegradable products. It is in line with the company’s long-term development plan and development strategy that it extends the company’s industrial chain and has a positive impact on broadening the company’s development space, improving the company’s economic benefits and comprehensive competitiveness. The investment and construction of this project will increase the company's capital expenditure and cash expenditure, but in the long run it will have a positive impact on the company's business layout and operating performance, which is in the interest of all shareholders of the company.

Fourth, the risk reminder of the project

1. Project construction risk

Due to many factors affecting the construction of the project, there is a risk that the construction of the project will not be completed on schedule or the construction cost will be higher than the expected cost.

2. Market risk

After the project is completed, if the market conditions change and market demand falls short of expectations, the project may not be able to achieve the expected benefits as planned, and this will cause certain adverse effects on the company's future operating performance and financial status. The company will pay attention to market changes in a timely manner, while strengthening project management and completing project construction as soon as possible, it will actively do a good job in market cultivation, product promotion, marketing management and sales team building to ensure the realization of the expected benefits of the project. 3. Risk of price fluctuations The fluctuations in the supply prices of raw materials and the sales prices of PBAT products are the main factors affecting the benefit indicators of this project. At present, the raw material PTA is still in a state of surplus, AA and BDO are relatively in short supply with the changes in the PBAT market, and the prices of PBAT, AA and BDO are relatively high. As the production capacity of PBAT continues to grow, there may be an increase in raw material prices and a correction in product prices.

4. Financial risk

The large demand for construction funds for the proposed investment project may have a certain impact on the company's capital liquidity, and the financial expenses and debt repayment risks may also increase in the short term. The company will actively coordinate funds, reasonably determine the financing method and term structure, and carry out fund raising in an orderly and steady manner based on the progress of project implementation, so as to complete project construction as soon as possible and contribute to project revenue.

Investors are requested to invest rationally and pay attention to investment risks. The company's board of directors will actively follow the progress of the project and perform its information disclosure obligations in a timely manner.

Special announcement.

Henan Jindan Lactic Acid Technology Co., Ltd.

March 24, 2021