Zhongchuang Environmental Protection plans to increase the control of 500 million yuan, and Hu Yucheng, co-founder of iFLYTEK, will become the actual controller

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Yangtze River Business Daily News ● Yangtze River Business Daily reporter Huang Cong

Under the improvement of performance in the first half of the year, Zhongchuang Environmental Protection (300056. SZ) plans to implement a fixed increase, and the company's control will also change.

On the evening of October 7, Zhongchuang Environmental Protection released a fixed increase plan showing that the total amount of funds raised in this issuance is not more than 500 million yuan (including this number), which will be used to supplement liquidity and repay bank loans after deducting issuance costs.

After the completion of the above matters, Xiaofan Technology will hold 77,639,800 shares of Zhongchuang Environmental Protection, accounting for 16.76% of the company's total share capital after the issuance, Xiaofan Technology will become the controlling shareholder of the company, and Hu Yu, the actual controller of Xiaofan Technology, will become the actual controller of the company.

It is worth mentioning that Hu Yu is the co-founder of iFLYTEK and served as the rotating president/CEO of iFLYTEK.

It should be noted that from 2021 to 2023, the net profit of Zhongchuang Environmental Protection will have a cumulative loss of 672 million yuan in three years.

However, in 2024, the profitability of Zhongchuang Environmental Protection will begin to pick up, and the company's net profit in the first half of the year will reach 3.0293 million yuan, turning losses into profits.

Some industry insiders said, "As an industry leader, Zhongchuang Environmental Protection is expected to continue to recover with the injection of new capital."

Xiaofan Technology will become the controlling shareholder

Zhongchuang Environmental Protection, which is in the state of no controlling shareholder, will usher in the actual controller.

Founded in 2001, the company was formerly known as Xiamen Sanwei Silk Environmental Protection Co., Ltd., the company focuses on industrial high-temperature flue gas dust removal, integrating R&D, production, sales and service of high-performance high-temperature dust removal filter materials, and is the first listed enterprise in China for high-temperature bag filter dust removal.

On the evening of October 7, Zhongchuang Environmental Protection released the 2024 annual plan for issuing A-shares to specific objects, showing that the total amount of funds raised in this issuance will not exceed 500 million yuan (including the principal), which will be used to supplement liquidity and repay bank loans after deducting issuance costs.

According to the announcement, the issuance object of Zhongchuang Environmental Protection to specific objects this time is Xingtai Xiaofan Technology Co., Ltd. (hereinafter referred to as "Xiaofan Technology"). The price of the issued shares is 6.44 yuan per share, which is not less than 80% of the average trading price of the company's shares in the 20 trading days before the pricing benchmark date.

As of the close of trading on September 30, 2024, the share price of Zhongchuang Environmental Protection is 11.94 yuan per share, with a total market value of 4.603 billion yuan.

According to the data, Xiaofan Technology is a newly established company, established on September 24, 2024, with a registered capital of 500 million yuan, the legal representative and actual controller are Hu Yu, and its business scope covers artificial intelligence application software development, artificial intelligence basic resources and technology platforms, artificial intelligence hardware sales and new energy vehicle accessories sales, photovoltaic equipment and components sales, solar power generation technical services, etc.

In August 2024, the shares of Zhongchuang Environmental Protection held by Zhongchuang Lingxing were completed by judicial auction and transferred, and the shareholding ratio was passively reduced from 10.26% to 7.40%.

On September 29, 2024, Zhongchuang Environmental Protection and Xiaofan Technology signed the "Conditional Effective Share Subscription Agreement", Xiaofan Technology intends to subscribe for no more than 77,639,800 shares (including the number of shares) issued by the company to specific objects, and the number of shares to be issued does not exceed 30% of the company's total share capital before the issuance, and the final number of shares approved by the China Securities Regulatory Commission shall prevail.

After the completion of the above matters, according to the upper limit of the number of issuances, Xiaofan Technology will hold 77,639,800 shares of Zhongchuang Environmental Protection, accounting for 16.76% of the company's total share capital after the issuance, Xiaofan Technology will become the controlling shareholder of the company, and Hu Yu, the actual controller of Xiaofan Technology, will become the actual controller of the company.

Zhongchuang Environmental Protection said that relying on the core technology of independent research and development, the listed company has successfully built three major business segments: non-ferrous metal materials, filter materials and environmental treatment (flue gas treatment engineering, hazardous waste disposal, urban and rural sanitation integration, and sewage treatment), and has strong research and development capabilities and good technical advantages. After the issuance, the company can obtain the support of the issuer in terms of capital, management, market, etc., to further enhance the comprehensive competitiveness of the listed company and effectively promote the long-term and healthy development of the listed company.

Turnaround in the first half of the year

It is worth mentioning that Hu Yu is the co-founder of iFLYTEK and served as the rotating president/CEO of iFLYTEK.

According to the data, Hu Yu was born in May 1978, has a doctoral degree in electronic engineering from the University of Science and Technology of China, is a senior engineer, and lives in Hefei City, Anhui Province.

Since 1997, Hu Yu has been engaged in the research of core technologies of intelligent speech and the construction of voice databases, and has participated in the research and development of a number of major projects such as the National "863", the Natural Science Foundation of China, Anhui Province, and the Ministry of Ministerial.

Since September 2021, Hu Yu has served as an executive director and director of South China Brain Control (Guangdong) Intelligent Technology Co., Ltd., Olin Optical Technology (Suzhou) Co., Ltd., Anhui Lingsi Intelligent Technology Co., Ltd., Anhui Xunfei Zhiyue Technology Co., Ltd., Shanghai Lingxin Technology Co., Ltd., Beijing Mainline Technology Co., Ltd., Shenzhen Senhe Innovation Technology Co., Ltd., Shenzhen Siaotuo Technology Co., Ltd. and other companies.

In recent years, the performance of Zhongchuang environmental protection is not ideal.

From 2021 to 2023, the operating income of Zhongchuang Environmental Protection will be 1.142 billion yuan, 1.007 billion yuan and 515 million yuan respectively, a year-on-year decrease of 37.95%, 11.81% and 48.85% respectively, and it has declined for three consecutive years; The net profit was -429 million yuan, -82.9358 million yuan and -160 million yuan, an increase of -3363.32%, 80.66% and -93.11% year-on-year respectively, and it has been losing money for three consecutive years, with a cumulative loss of 672 million yuan.

For the performance in 2023, Zhongchuang Environmental Protection said that during the reporting period, the operating income decreased significantly due to the disposal of its subsidiary Jiangsu Zhongchuang Enterprising Environmental Protection Technology Co., Ltd. in 2022. At the same time, during the reporting period, the company's important subsidiaries in the hazardous waste sector were limited in production capacity and insufficient operating rate during the reporting period due to technical transformation and production shutdown, resulting in losses in the hazardous waste sector.

However, entering 2024, the profitability of Zhongchuang Environmental Protection began to pick up, and the company's operating income in the first half of the year was 186 million yuan, a year-on-year decrease of 2.92%; The net profit was 3.0293 million yuan, turning losses into profits.

When introducing the driving factors of the performance in the first half of the year, Zhongchuang Environmental Protection said that the company vigorously improved the market share of filter materials in the domestic industry, and achieved a big breakthrough in the steel industry on the basis of the five major power enterprises, and the cement industry developed steadily. At the same time, with the help of the company's technology accumulation and advantages in the field of filter materials, we strive to expand the scope of use of filter media products.

At the same time, Zhongchuang Environmental Protection introduced that the company continues to improve the core competitiveness of flue gas treatment projects, and uses Xiamen Bairuifu to accumulate more than 10 years of experience in flue gas treatment projects to provide financial and technical support to quickly expand the market. Vigorously expand the integration of urban and rural sanitation services, and follow up on key projects on the basis of the breakthroughs achieved last year.

According to the data, as of June 30, 2024, the asset-liability ratio of Zhongchuang Environmental Protection was 71.33%, and the asset-liability ratio was at a high level.

Some industry insiders said that in the future, the mainland's energy structure will be cleaner, low-carbon transformation will be further strengthened, providing strong policy support for the rapid development of the industry, "as an industry leader, Zhongchuang Environmental Protection is expected to continue to recover under the injection of new capital."