China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
Stock Code: 000055, 200055 Stock ID: Fangda Group, Fangda B
Announcement No. 2012-12
China Fangda Group Co., Ltd.
Plan for Private Issuing of A-shares 2012
March 2012
China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
Table of Contents
Company Statements ......................................................................................................................... 1
Special Prompts................................................................................................................................. 2
Definitions......................................................................................................................................... 3
Chapter I. Summary of the preplan ................................................................................................... 4
I. Company profiles....................................................................................................................... 4
II. Circumstance and purposes of this private issuing ................................................................... 4
III. The subscriber and way of subscribing ................................................................................. 10
IV. Type of shares to be issued privately, price and pricing rules, amount of shares to issue,
trade limitation period, and arrangement for retained profit ....................................................... 10
V. Investment projects financed by the proceeds ........................................................................ 10
VI. Situation of related transactions ............................................................................................ 11
VII. Whether it will cause change in controlling power over the Company ............................... 11
VIII. Approvals from authorities obtained and to be obtained .................................................... 11
IX. Valid period of the resolutions on the private issuing ........................................................... 11
Chapter II. Profiles of the Subscriber .............................................................................................. 12
I. Basic information about the subscriber.................................................................................... 12
II. Summary of the conditional share subscribing contract ......................................................... 14
Chapter III. Feasibility report of the Board on usages of the proceeds ........................................... 15
I. Application plan of the proceeds ............................................................................................. 15
II. Necessity and feasibility of using the proceeds ...................................................................... 15
III. Influences on the administration and financial situation ....................................................... 15
IV. Filing and approving issues involved .................................................................................... 16
Chapter IV. Analyze of the Board on the influences on the Company ............................................ 16
I. Influences of the issuing on the Company’s business, asset, the Articles of Association,
shareholder structure, senior management, and revenue structure .............................................. 16
II. Change of financial situation, profitability and cash flow situation after the issuing............. 16
III. Business and administrative relationship between the Company and the controlling
shareholder and its related parties, related transactions and horizontal competition .................. 16
IV. Whether there is any adoption of capital by the controlling shareholder or its related parties
upon completion of this issuing, or, whether the Company is providing guarantees to the
controlling shareholder or its related parties ............................................................................... 17
V. Influence of the issuing on the Company’s liability situation ................................................. 17
VI. Statement on risks related to the private issuing ................................................................... 17
China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
Company Statements
The directors, and the Company acknowledge that there isn’t any false record,
misleading statement or significant omission carried in this announcement and will
take individual and joint responsibilities for the truthfulness, accuracy, and
completeness of the announcement.
Upon completion of this private issuing, the Company is responsible for the changes
in business operation and profitability; whereas the investors shall undertake the risks
caused by subscription of the shares issued privately this time.
This plan is a description on the private issuing made by the Board of Directors. Any
statements contrary to this article are false.
Investors shall inquire stock brokers, lawyers, professional accountants or other
professional consultants if have any doubt.
Descriptions in this plan are not suggesting substantial judgment, confirmation,
approval, or verification of the authorities on this private issuing. Issues carried in this
plan are subject to the approval or verification of the relative authorities.
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
Special Prompts
I. The proposal of private issuing of A-shares in 2012 has been examined and passed
at the 8th meeting of the 6th term of Board of China Fangda Group Co., Ltd. The plan
is subject to approval of the shareholders’ meeting.
II. Shenzhen Banglin Technology Development Co., Ltd. – the largest shareholder of
the Company, will be the only subscriber of this private issuing.
III. Proceed from this private issuing will not more than RMB149.45 million, which
will be used to support the working capital of the Company.
IV. Amount of A shares issued privately this time will not be more than 35 million
shares (included), The pricing ex-date will be the day when the announcement of
resolutions of the 8th meeting of the 6th term of Board (March 21, 2012). The price
will be 90% of the average price in 20 days prior to the pricing ex-date, namely
RMB4.27 per share.
IV. Amount of A shares issued privately this time will not be more than 100 million
shares (include), The pricing ex-date will be the day when the announcement of
resolutions of the 6th meeting of the 5th term of Board (March 28, 2009). The price
will not lower than 90% of the average price in 20 days prior to the pricing ex-date,
namely not lower than RMB5.39 per share. In case ex-dividend or ex-interest events
happened during the period from pricing ex-day to issuing day, such as dividend
distribution, bonus shares, or capitalizing of common reserves, the price shall be
adjusted correspondingly. The Shareholders’ Meeting authorizes the Board to finalize
the price upon approval of China Securities Regulatory Commission and consulting to
the organizational investors by the issuer and the sponsor, amount of issuing will be
then decided.
V. This plan of private issuing of A shares is subject to the examination of the
shareholders’ meeting and submit to CSRC for approval.
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
Definitions
The following terms are defined to the meanings in the right, except for specified
otherwise.
The Company, Company,
Refers to China Fangda Group Co., Ltd.
Fangda Group
The Subscriber, Banglin Shenzhen Banglin Technologies Development Co.,
Refers to
Technology Ltd.
this time of issuing, the The action undertaken by China Fangda Group Co.,
Refers to
private issuing Ltd. to issue A-shares privately in 2012
The Plan for Private Issuing of A-shares 2012 made by
This plan Refers to
China Fangda Group Co., Ltd.
The announcement day of the resolutions of the Board
Pricing Ex-date Refers to
meeting regarding this private issuing
CSRC Refers to China Securities Regulatory Commission
SSE Refers to Shenzhen Stock Exchange
RMB Refers to RMB Yuan
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
Chapter I. Summary of the preplan
I. Company profiles
Name in Chinese: 方大集团股份有限公司
In English: CHINA FANGDA GROUP CO., LTD.
Stock Listed in: Shenzhen Stock Exchange
Stock ID: Fangda Group, Fangda B
Stock code: 000055,200055
Registered capital: RMB756909905.00
Legal representative: Mr. Xiong Jianming
Date of incorporation: April 20, 1994
Registered address: Fangda Building, Kejinan 12th Avenue, High-tech Zone,
Shenzhen, PR China.
Secretary of the Board: Zhou Zhigang
Address: Fangda Town, Xili Longjing, Nanshan District, Shenzhen
Post code: 518055
Contact number: 0755-26788571-6622
Fax: 0755-26788353
Email: fd@fangda.com
Website address: www.fangda.com
II. Circumstance and purposes of this private issuing
The national government is currently promoting energy saving, clean production and
sustainable development, especially in construction area and developing of new
energy. A number of national policies were produced to support the development in
these areas.
The Company has engaged mainly in three of the government-facilitated industries –
curtain wall & materials, railroad equipments, and LED lighting products.
The Company’s curtain wall & material business is mainly the production of
energy-saving curtain wall materials, and also energy-saving doors and windows, and
auto-clean nano aluminum plates.
As the first producer of energy saving curtain wall products, the Company is also the
first listed company of this industry. In its 20 years of history, the Company has
accomplished hundreds of large projects in and outside the country. The Company has
been awarded multiple “Top 50 Curtain Wall Producer in China”, and “Luban Award
for Construction Projects” – the highest award in the country, for three times, and
dozens of provincial and ministry awards. “Fangda” brand has gain high reputation in
the industry with strong competition.
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
With its over 100 patents, the Company has been holding leading technology
advantages in the curtain wall industry. We participated in producing of industrial
standard and national standard and are now holding seven industrial records in the
country. Through years of development, the Company has become the pioneer and
leader of energy saving curtain wall industry.
Metro station screen door system is the Company’s leading product in railway
transportation industry. Train cart doors, automatic doors, and special doors are other
products of the Company. Metro station screen door is featured safe, energy-saving,
and environmental protection, and is a high-tech product combined intelligent
controlling technologies and electro-mechanism technologies.
The Company stepped into this area in 1999, and broke the monopoly of overseas
manufacturers in domestic market. Up to present, we have accomplished dozens of
screen door projects in and outside the country, and have good reputation and shown
great technical power in the market.
Through this private issuing of shares, the Company will further reinforce its financial
resources to develop greater competition in curtain wall and PSD industries. It will
support the rapid growth constantly.
(I) Circumstances of the private issuing
1. Government policy
(1) The Curtain Wall Industry
As described in the “Summary of the 12th five-year-plan of PRC”, the government
attaches great importance to construction of a energy-saving and environment-friendly
economy in the whole country. Green building and construction are promoted in the
construction industry, and the newest construction process, material, and information
technologies will be applied to improve the whole industry.
“Instructive opinions on sustainable development of curtain wall industry”
(Zhong-zhuang-xie [2007]005) pointed out the direction of safe, energy saving, water
saving, material saving, land saving, green and intelligent for the development of
curtain wall industry.
In August 2010, the Ministry of Housing and Civil Construction issued the “Notice on
enhancing energy-saving constructions in government buildings and large scale public
facilities”, in which the target was set to reduce the energy consuming by 5% basing
on the standard of 2009. In August 2011, the Ministry of Housing and Civil
Construction issued the “12th five-year-plan of construction industry” and required
the energy consuming to be reduced by 10% in the construction process.
The “Action Plan of Green and Energy-saving Construction” is about to be released
by National Development and Reformation Committee and Ministry of Housing and
Civil Construction. The Plan will facilitate energy-saving reconstruction of 570
million square meters, and new energy-saving construction of 1.1 billion square
meters during the period of the 12th five-year-plan. Green construction standard will
be a requirement for large public constructions over 20 thousand square meters, such
as airports, railway stations, hotels, and shopping malls, since 2014. According to the
national orientation, energy-saving curtain wall is going to be the overall direction of
the curtain wall industry.
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
(2) The PSD Industry
Having issued several industrial policies such as “opinions about domestication of
urban railway transportation equipments ”, “domestication scheme of urban railway
transportation equipments”, “several opinions about accelerating the development of
urban railway equipment industry”, the national government has claimed explicitly
that the average rate of domestication of the railway vehicles and electromechanical
devices shall not be less than 70% in urban railway transportation projects. Also ,the
State Council have pointed out in “several opinions about accelerating the promotion
of equipment manufacturing industry” that “domestication of A-type metro train ” as
the key one of the 16 important technical breakthroughs.
Considering to motivate the infrastructure construction of domestic urban railway
system and promote the development of railway equipment manufacturing
industry, the NDRC (National Development and Reform Committee) issued that
“Ratified regulations about purchasing electromechanical equipments in urban
railway system construction projects(NDRC Office Industry[2005] No.2084)”in
October，2005, in order to push forward the domestication of the urban railway
equipments . The ShenZhen Development and Reform Bureau has listed PSD（metro
platform screen door） among the encouraged projects. The construction of railroad ,
urban railway system and comprehensive transportation hub had been listed as key
points in “the 12th Five-year Plan Synopsis of the People’s Republic of China ”(2011).
2. Industrial Background
(1) The Curtain Wall Industry
Since 1983, China has gradually become the largest manufacturer and consumer of
curtain wall products in the world. At present the country is in a period of accelerated
industrialization and urbanization along with high tense and scale of energy
consuming. Economic growth featured high investment, high consuming, and high
pollution has been making the situation more and more worse.
The recent survey shows that the construction energy consuming has reached up
above 40% of the total consuming. The construction scale is growing by 20% year on
year in the whole country with newly completed area of over 2 billion square meters
per annual, 90% of them are high energy-consuming buildings. All through the
country, 95% of the existing 40 billion square meters are high energy-consuming
constructions. The energy consuming per square meter of China is 2-3 times of the
advanced countries. It is predicted that another 30 billion square meters of building
will be constructed up to 2020. The problem of construction energy saving is
becoming more and more severe.
In 2005, the Ministry of Housing and Construction issued the “Instruction on
developing of energy and land saving civil and public constructions”, which set the
target to reduce energy consuming by 65% with new constructions in large cities in
North China and the costal area up to year 2020, and reconstruction of existing
building shall be mostly completed.
At present, curtain walls (including light roofs) in the whole country are totaled to
over 200 million square meters with 90% of them not energy-saving. According to the
reconstruction plan of the national government, they will be replaced in all before
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
2020. Along with the new construction of 2 billion square meters per annual, the
whole demand on energy-saving curtain wall will be increasing by 10 million square
meters per annual. This is illustrating a giant market on energy-saving curtain wall
products in coming years.
Up to present, there are 210 grade-I curtain wall engineering enterprises, and 246
grade-I curtain wall designing enterprises in the whole country, 122 of them hold both
qualifications. The whole industry is composed of over 4000 production enterprises
and 1000 supporting enterprises. However few of them hold the technologies of
energy-saving curtain wall production of their own.
(2) Metro Platform Screen Door Manufacturing Industry (PSD)
Along with the sustained rapid and sound development of the domestic economy,
the urbanization has speeded up obviously and the city size has expanded
continuously. Now the time there are more than 40 cities containing more than 1
million inhabitants and more than 14 cities containing more than 2 million inhabitants.
The cities, which have reached economics of scale, have submitted metro planning to
the nation. Those urban traffic programming plans that the State Council has
authorized and will still authorize are from 27 cities and need a total investment more
than RMB 1,000 billion.
By the end of 2010, there had been 36 cities having submitted urban traffic
programming plans to the relevant departments of the state and 28 cities having had
their short range plan authorized by the government, in which including 90 railway
lines counted up more than 2,700 km and taking a total investment more than RMB
1,072 billion. In the term of “the 12th Five-year Plan”, 2,500 km urban railway line
will be constructed at an average rate of 500 km each year. And by the end of 2020,
about 7000 km railway in all will be constructed over in the nation. China has become
the biggest urban transportation construction market in the world and the next 10
years will be the development summit of the PSD industry .
3. Background of the Company：Technique and Brand Superiority
(1) The Curtain Wall Industry
Fangda Decoration Co., Ltd. – the fully-owned subsidiary, is the operator of the
Company’s curtain wall business. It was one of the first curtain wall enterprises who
was granted curtain wall engineering and designing qualification band I, and was
appointed the national supported enterprise in this area. It led and participated in
making of multiple national and industrial standard such as “Energy Saving Standard
for Public Constructions”, and is holding over 100 patent technologies leading the
whole industry of curtain wall. It is the first enterprise in the whole country which has
its own technologies in designing, manufacturing, and integrating of energy-saving
curtain wall products.
The company is one of the earliest enterprises who engaged in business of curtain
wall and the company has gained a good deal of prizes in recent 20 years, including
“China Top Ten of Curtain Wall Manufacturing Industry”, “China Top Fifty of Curtain
Wall Manufacturing Industry”, “China Building Engineering LuBan Prize”(4 times),
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
“Zhan Tianyou Civil Engineering Prize”(1 time), “National Architectural Ornament
Prize”(6 times), “Guangdong Province Outstanding Architectural Ornament Prize”(2
times), “Shenzhen Architectural Golden Hawk Prize”(10 times), “Shanghai City
Building Engineering Magnolia Award”(1 time), “Jiangsu Province Architectural
Ornament Zijinbei Prize”(1 time), “Fujian Province Minjiang River Outstanding
Engineering Prize”(3 times), “Xiamen City Outstanding Architectural Ornament Egret
Prize ”(1 time), “Chongqing City Bayubei Outstanding Engineering Prize”(1 time),
etc. Taking the advantage of the “Fangda” brand, the company had performed
hundreds of curtain wall constructions for different companies all over the world.
These construction projects are Beijing Olympic Bicycle Field, China’s Foreign
Ministry Building, Beijing IBM Building, China Certificated Public Account Beijing
Training Basement, Shanghai Central Square, Shanghai Ganghui Square, Shanghai
Jinling Haixin Building, Shanghai Huaxia Financial Square, Shanghai International
Trade Mart, China Unionpay Shanghai Information Centre, Nanjing International
Exhibition Centre, court records building of Nanjing Intermediate People’s Court,
Nanjing China Life Insurance Square, Nanjing Yinhe Building, Nanjing Quanfeng
Headquarter Office Building, Guangzhou Jianlibao Building, Guangzhou Building,
Guangdong Province Police Hall Commanding Center, Guangzhou Heyin Square,
Guangzhou Zhongtai International Square, Guangzhou Huapu Square, Guangzhou
Tianhe East Tower , Guangdong Olympica Sports Centre, Shenzhen Wuzhou Hotel,
Shenzhen 26th University Games Opening Ceremony Gym, Shenzhen 26th
University Games Stadium, Shenzhen Baoan International Airport Terminal,
Shenzhen Baoan International Airport New T3 Terminal, Shenzhen Zhongxin Square,
Shenzhen International Conference and Exhibition Centre, Shenzhen New World
Trade Mart, Shenzhen Green Scene Jiyuan Building, Shenzhen Jiali Construction
Square, Shenzhen News Building, Shenzhen Wuzhou Hotel, Zhengzhou Xuedian
International Airport, Sanya International Airport, Lanzhou Zhongchuan International
Airport, Chengdu Shuangliu International Airport, Hunan News Building, Shenyang
Xingmoer Shopping Square, Dalian International Trade Mart, Dalian Wanda
Mansion, Chongqing Times Square, Chongqing Imperial Square, Guangxi Liuzhou
Wenchang Building, Wuhan New World International Centre, Nannig International
Conference and Exhibition Centre, Xian AsiaEurope Economic Cooperation Forum,
Creative and Natural Hall of Xian Expo Garden, Hohhot Shangrila Hotel, Hangzhou
Yuedu Trade Building, Ningbo ShangriLa Hotel, Xiamen Fuhai Financial Centre,
Xiamen Strait Communication Centre, Xiamen Logistics Centre, Nanchang Red
Valley Building, Nanchang Crown Plaza Hotel, Nanning International Conference and
Exhibition Centre, Liuzhou International Conference and Exhibition Centre, Rwanda
International Airport Terminal (Angola), Macao Science and Technology Museum,
Media Square of Melbourne (Australia), Ulan Bator Shangrila Hotel (Mongolia), etc.
In the field of designing and building energy saving curtain wall, the company has
taken itself to the first place many times. And it’s proud of having performed the
projects listed below. The first energy saving air-managing curtain wall in the
nation--- the Curtain Wall Project of Beijing National Accounting Institute, the first
curtain wall integrated photovoltaics in the nation--- the Photovoltaic Curtain Wall
Project of Shenzhen Fangda Building, the first national grade energy saving building
demonstration project in the nation--- the Tsinghua University Olympic Energy
Saving Demonstration Project, the first colored and energy saving board-made curtain
wall in the nation--- the Curtain Wall Project of Shenzhen News Building, the first
energy saving super highrise residential building demonstration project in the
nation---Hangzhou City Xinyu Curtain Wall Project, the first high performance
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
curtain wall in the nation whose water tightness reaches 1,000 Ph --- Shenzhen
Mangrove West Bank Curtain Wall Project, the biggest cascade spiral dot mode
glassstructure curtain wall in the world--- Shenzhen New World Trade Centre Rugby
Curtain Wall Project, the biggest LED color display curtain wall in the
world---Shanghai Citibank LED Color Display Curtain Wall Project, the first new
type thermal-protective door and window system in the nation--- Tsinghua University
Ultra Low Power Demonstration Project, the first new type polycarbonate facet type
system in the nation--- Shenzhen Stadium for the 26th University Games , etc.
(2) Metro platform screen door manufacturing industry (PSD)
The stock issuer took the lead in manufacturing metro platform screen door since
1999 and broke the monopoly formed by foreign companies. And the stock issuer has
already obtained a qualified ability to afford customers complete set of solution with
complete propriety intellectual property rights for curtain wall construction.
The screen door system which is developed independently by the company had passed
the test of the State Ministry of Construction in 2005 and the “urban metro platform
screen door/safety gate system” test of China Communications and Transportation
Association Urban Railway Transportation Professional Committee . The stock issuer
also took charge of working out the first industrial standard 《metro platform screen
door》 in the nation. The stock issuer obtained a certain technological superiority in
this industry now in the nation, too.
The stock issuer is one of the earliest companies coming into the market and issued
both A stocks and B stocks. The company masters the core techniques of screen door
system and it also is the maker of the national industry standard. In the history, the
company had performed the screen door construction engineering of many projects
such as Shenyang Metro Line 1, Dalian Metro Line 1, Tianjin Metro Line 1, Xian
Metro Line 1, Wuhan Metro Line 1, Nanjing Metro Line 1 , Guangzhou Metro Line 1,
Guangzhou Metro Line 3, Shenzhen Metro Line 1 Extension, Shenzhen Metro Line 2,
Shenzhen Metro Line 4 Extension, Shanghai Metro Line 1 Circus Stop, Hong Kong
Metro Line 1 Nanchang Stop, some stops of Taipei Mass Rapid Transit Line and the
major facilities engineering of Beijing Metro Line 5 half-height screen door project,
etc. The stock issuer possess a great brand superiority nowadays in this industry.
(II) Purpose of the private issuing
1. To enhance the main business operation
PV curtain wall, energy saving curtain wall, and metro screen door are the businesses
supported by the national government. At present, the Company is holding great
competition power with its superior advantages in technologies, manpower, and
market reputation.
Through private issuing of A shares, the Company will gain financial capacity to
develop these advantages to integrate current resources and expand the production of
PV curtain wall, energy saving curtain wall, and metro station screen door system,
further increase the competition power and risk-resistant ability, to realize steady
growth and greater reward to the shareholders.
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
2. Refine financial structure and lift risk-resistance power
The proceeds of the issuing will be mainly used for supporting of working capital. It
will contribute by reinforcing capital operation and refining capital structure and
therefore increase stability and risk-resistant.
III. The subscriber and way of subscribing
Banglin Technology is the largest shareholder of the Company and will be the only
subscriber of this private issuing. As of December 31, 2011, Banglin Technology is
holding 68,774,273 shares of Fangda Group and account for 9.09% of the total capital
shares.
Banglin Technology will subscribe the shares by cash.
IV. Type of shares to be issued privately, price and pricing rules, amount of
shares to issue, trade limitation period, and arrangement for retained profit
(I) Type of shares to be issued
Shares to be issued will be common shares in Renminbi (A-shares) with face value of
RMB1.00
(II) Pricing policy and the issuing price
The pricing ex-date will be the day when the announcement of resolutions of the 8th
meeting of the 6th term of Board (March 21, 2012). The price will be 90% of the
average price in 20 days prior to the pricing ex-date, namely RMB4.27 per share.
In case ex-dividend or ex-interest events happened during the period from pricing
ex-day to issuing day, such as dividend distribution, bonus shares, or capitalizing of
common reserves, the price shall be adjusted correspondingly.
The average price in 20 days prior to the ex-day = Total value of share trading in 20
days prior to the ex-day ?total amount of shares traded in 20 days prior to the ex-day.
(III) Amount of shares to be issued
A-shares issued this time will not be more than 35 million shares (included). If the
Company conducted dividend distribution, bonus share distribution, capitalizing of
common reserves during the period from the pricing ex-date to the issuing date, the
amount to be issued will be adjusted accordingly.
(IV) Arrangement of trade-limitation period
Shares subscribed by Banglin Technology at this private issuing are not allowed to be
transferred in 36 months since the closing day of this private issuing.
(V) Arrangement for retained profits before the private issuing
Upon accomplishing of the issuing, the new shareholders will share the retained profit
of the current year and accumulated from previous years along with the existing
shareholders.
V. Investment projects financed by the proceeds
Proceed raised from this private issuing will not more than RMB149.45 million,
which will be used to support the working capital of the Company.
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
VI. Situation of related transactions
For Banglin Technology is the largest shareholder of the Company and the only
subscriber of this private issuing, it is forming a related transaction. The Company
will follow the procedures about related transactions strictly according to the related
regulations.
VII. Whether it will cause change in controlling power over the Company
As of December 31, 2011, Mr. Xiong Jianming, Chairman of the Board, was holding
99,185,356 shares (13.10% of the total shares) of the Company directly or indirectly.
Upon completion of this private issuing, Mr. Xiong will hold 17.73% of the total
capital shares of the Company provide the amount of shares issued this time is 35
million. Namely it will not cause change in controlling power of the Company.
VIII. Approvals from authorities obtained and to be obtained
This plan of private issuing has been approved at the 8th meeting of the 6th term of
Board on March 20, 2012. It still need to be approved by the Shareholders’ Meeting of
the Company and also by CSRC.
IX. Valid period of the resolutions on the private issuing
The resolution will be effective for 12 months since it was approved by the
Shareholders’ Meeting.
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
Chapter II. Profiles of the Subscriber
I. Basic information about the subscriber
(I) Summary
Name of the subscriber: Shenzhen Banglin Technology Development Co., Ltd.
Date of incorporation: June 7, 2001
Certificate of incorporation: 440301102755972
Registered capital; RMB30 million
Legal representative: Chen Jinwu
Registered address: A707-3 Huaying Building, 97 Nanshang Road, Nanshan,
Shenzhen
Business type: company with limited liability
Business scope: investing in industries (application procedures essential for each
project), developing of electronic products, technical consulting, domestic commerce,
material supplying (excluding special materials under government limitation or
restriction), import and export business.
(II) Chart of relationships among the subscriber, its holding shareholder, and the
substantial holder
Xiong Jianming
is Xiong Xi’s
father
Xiong Jianming Xiong Xi
100% 85% 15%
Shengjiu Investment Ltd. Shenzhen Banglin Technology Development
0.014% 9.09%
1. 64%
China Fangda Group Co., Ltd.
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
(III) Business development of the subscriber
Banglin Technology is mainly engaged in investment businesses. It is not holding any
shares of other companies other than China Fangda Group nor doing any other
businesses.
(IV) Financial Statements of the latest fiscal year of the Subscriber (Note
Audited)
The major financial information of Banglin Technology as of December 31, 2011 (Not
audited):
In RMB10 thousand
Items 2011.12.31
Total of assets 27,605.41
Total of liability 4,627.19
Owners’ equity 22,978.21
Items Year 2011
Turnover -
Total profit -22.97
Net profit -22.97
Items Year 2011
Net amount of cash flow from business operation -6.58
Net amount of cash flow from investment -
Net amount of cash flow from financing operations 9.93
(V) Particulars about any punishment or lawsuit against the Subscriber and its
directors, supervisors, and executives in the latest five years
None of Banglin Technology and its current directors, supervisors, or executives is
involved in any government punishment or criminal lawsuit (other than those which
not related to the securities market), nor any finance-related civil lawsuit or arbitration
issues.
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
(VI) Upon completion of the issuing, whether there will be competition or
associated relationship formed between the Company and the subscriber and its
holding shareholders or substantial holder.
Upon completion of the issuing, there will note be competition or associated relationship formed
between the Company and the subscriber and its holding shareholders or substantial holder.
(VII) Material transactions between the Company and the Subscriber and its
holding shareholder or substantial holder in 24 months before this issuing of
shares
No such material transaction occurred between the Company and the Subscriber
and its holding shareholder or substantial holder in 24 months before this issuing
of shares.
II. Summary of the conditional share subscribing contract
The Company has entered the conditional Share Subscribing Contract with Banglin
Technology with the main contents as:
(I) Parties of the contract: China Fangda Group Co., Ltd., Shenzhen Banglin
Technology Development Co., Ltd.
(II) Amount of shares to be subscribed: not more than 35 million shares (included) to
be subscribed by Banglin Technology.
(III) Way of subscribing: Banglin Technology is about to subscribe the shares issued
by the issuer by cash.
(IV) Price of shares: not lower than 90% of the average of prices in 20 trading days
before the disclosure the resolutions of the Board meeting about this private issue,
namely RMB4.27 per share.
(V) Date and way of payment, and transferring of shares: As soon as the private
issuing was approved by CSRC, Banglin Technology makes full payment to the
special account with the amount and at the date as decided by the sponsoring
organization (the main dealer). Upon completion of account verification, the
sponsoring organization (the main dealer) will transfer the money to the special
account of China Fangda Group Co., Ltd. after deducting of sponsoring fee. Then
Fangda Group shall follow the share registration procedures as soon as possible.
(VI) Trade-limit period: shares subscribed by Banglin Technology shall not be sold in
36 months since closing of the private issuing.
(VII) Default: In any case that any default of agreement, responsibility, obligation,
statement, or guarantee carried in this contract is deemed as defaulting. The defaulting
party shall compensate all of the losses that caused to the other party.
(VIII) Taking effect and terminating of the contract: This contract will take effect as
soon as it is signed by both parties and all of the following conditions are satisfied:
The contract is approved by the Board of Directors of the Issuer; The contract is
approved by the Shareholders’ Meeting of the Issuer; The private issuing is approved
by CSRC. In contrary, if any of these conditions is not satisfied, the contract will
terminate spontaneously.
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
Chapter III. Feasibility report of the Board on usages of the proceeds
I. Application plan of the proceeds
Please see Chapter I – V. Investment projects financed by the proceeds
II. Necessity and feasibility of using the proceeds
(I) Necessity and feasibility of using the proceeds
1. Along with the growth of the curtain wall and PSD market in recent years, the
Company’s business kept growing constantly, and brought greater demand in capital.
Shortness of working capital has been greatly limiting the rapid developing of the
Company’s business. And the market effect has not been fully developed.
2. As the characteristics of the curtain wall and PSD projects, the capital circulation
periods are relatively long. Furthermore, a number of contracting and warranty
deposits have occupied a large amount of working capital. Although the Company has
used all measures to increase the effectiveness of capital operation, but still facing
shortage of working capital.
3. Influenced by the restricting monetary policies of the national government, the
deposit reserve ratio is at the historical high level and the benchmark interest rate has
been rising. The Company is under great pressure of financial expenses and financial
resources.
(II) Feasibility of the usage of proceeds
Benefit from the national policies, the Company’s curtain wall and PSD products are
expecting a good trend in the market. This issuing of shares will support the
Company’s working capital and reinforce the competition. It will greatly help to
empower the business operation and ensure a sustainable development. It is for the
greatest benefit for the shareholders.
III. Influences on the administration and financial situation
(I) Influences on the administration practice
Usage of the proceeds from this private issuing of A-shares is complying with the
national policies and strategy approach. It will bring good perspective and economical
efficiency. Upon completion of the projects, the Company will be further reinforced
for its competition power and leading position in the industry. Greater profitability
will not only contribute to the Company’s growth, but also to the benefits of the
shareholders.
(II) Influences on financial situation
The following calculations are based on the assumption of proceeds amounted to
RMB149.45 million, and the financial data are provide basing on the consolidated
financial statements.
1. Lift the scales of total asset and net asset, increase risk-resistance power
Upon completion of this private issuing, the total asset and net asset will both increase
by RMB149.45 million. As soon as the economical effectiveness has realized, both of
the total asset and net asset will be growing continuously. And the Company’s
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
risk-resistance will be increased simultaneously.
2. Increase business income and profitability
Proceeds of this private issuing will be used to support the working capital. On the
one side, it may satisfy the needs of business development, further reinforce the main
businesses of the Company; on the other side, it will contribute to the achieving of
economy of scale, and lower the costs, as well as increasing the profitability.
IV. Filing and approving issues involved
No land using, environmental issues, or project approval issues involved for the
proceeds of this private issuing will be used as working capital.
Chapter IV. Analyze of the Board on the influences on the Company
I. Influences of the issuing on the Company’s business, asset, the Articles of
Association, shareholder structure, senior management, and revenue structure
No rearrangement for company’s business and asset after this issuing.
After this offering, company constitution has no adjustment except for the adjustment
of registered capital and capital stock.
Upon completion of this private issuing, the shareholding structure will change for the
share portion of Banglin Technology will rise.
After this offering, senior management personnel will not change.
The Company’s main businesses will not change.
II. Change of financial situation, profitability and cash flow situation after the
issuing
Upon available of the proceeds, the current asset, total asset and net asset will increase,
liability on asset ratio will decrease, thus the capital structure will be optimized.
Liquid ratio will be increased to lower financial risks, reduce interest expenses, and
increase overall profitability.
Upon completion of the private issuing, the cash flow from financing activities will
increase. Meanwhile, using of the proceeds as working capital will satisfy the
business growth, improve cash flow situation and lower the financial costs.
III. Business and administrative relationship between the Company and the
controlling shareholder and its related parties, related transactions and
horizontal competition
Upon completion of this private issuing, no change will happen to the business
relationship and management relationship between the Company and the holding
shareholder and its related parties. No horizontal competition will be developed.
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
IV. Whether there is any adoption of capital by the controlling shareholder or its
related parties upon completion of this issuing, or, whether the Company is
providing guarantees to the controlling shareholder or its related parties
There won’t be any adoption of capital by the controlling shareholder or its related
parties upon completion of this issuing, nor the Company is providing guarantees to
the controlling shareholder or its related parties.
V. Influence of the issuing on the Company’s liability situation
As of September 30, 2011, the liability on asset ratio was 44.05% on consolidated
basis. Basing on the liabilities and assets in the Balance Sheet on September 30, 2011,
and provided the proceed from this private issuing was RMB149.45 million, upon
completion of this private issuing, the liability on asset rate will be reduced from
44.05% down to 41.05%, which is on an appropriate level. Thus this private issuing of
shares will benefit the improving of capital cost situation, reduce financial cost
pressure, and increasing of stability and risk-resistance of business operation.
VI. Statement on risks related to the private issuing
(I) Industrial risks
There are a great number of enterprises engaged in the designing and installation of
curtain wall, in which a number of enterprises have great power in aspects of
designing, installation, and management. The scale and standard of the industry will
be upgraded constantly along with the upgrading of designing and installation process
and application of new materials and technologies.
The Company is facing severe competitions against global providers such as
Permasteelisa Gartner along with the implementing of the Company’s overseas
strategy. Therefore there is still certain risks although the Company has its advantages
in market loyalty and technologies.
PSD system industry is in its early stage of development in the country. Foreign
competitors have been participated in the competition of domestic market. Local
suppliers who have no qualifications will also engaged in the market by introducing
foreign competitors. The coming decade will be the highest peak of the PSD market in
the country. The Company will surely face severe market competition.
(II) Administration risks
Curtain wall business has the nature of wide distribution with multiple construction
sites. The Company’s curtain wall projects scatter in main cities all over the country.
This brings great difficulties to administration approach. The Company has
established the internal controlling system covering all operation units from the
headquarter to each project team, though the curtain wall projects have complicated
operation flows and varies greatly one from another. It is crucial to have effective
control over the quality, progress, safety, and capital operation of all the projects.
There is risk of administrative failure in individual projects, which may cause
impairment on the business.
(III) Risks from stock market fluctuation
This private issuing will influence the business operation and financial situation of the
Company. Change in fundamental layer may influence the price of the Company’s
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China Fangda Group Co., Ltd. Plan for Private Issuing of A-shares 2012
shares. On the other hand, change of macro situation and industrial prospects,
adjustment of national policies, movement of investors’ prospects, will all make
influences on the market price of the Company’s shares.
(IV) Risks from approval of the authorities
The private share issuing is subject to approval of the Shareholders’ Meeting as well
as CSRC. There is certain uncertainty in approving procedure and date of approval.
China Fangda Group Co., Ltd.
The Board of Directors
March 21, 2012
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