On October 16, Suzhou Shiming Technology Co., Ltd. issued the "2024 Plan for Issuing A Shares to Specific Targets", "Demonstration and Analysis Report on the Plan for Issuing A Shares to Specific Targets in 2024", and "Feasibility Analysis Report on the Use of Funds Raised by Issuing A Shares to Specific Targets".
According to the announcement, the plan to issue shares to specific objects has been deliberated and approved by the tenth meeting of the fifth board of directors, and it needs to be approved by the company's general meeting of shareholders, approved by the Shenzhen Stock Exchange and approved by the China Securities Regulatory Commission before it can be implemented. The issuance object is Jiangsu Fenghui, and the issuance object subscribes for the issuance of shares to specific objects in cash. The number of shares to be issued at the tenth meeting of the fifth board of directors of the company was not more than about 32.94 million shares (including the number of shares), which did not exceed 30% of the company's total share capital before the issuance. The issue price is 9.41 yuan per share.
According to the announcement, the issuance intends to raise no more than 310 million yuan, and the raised funds will be used for the following purposes: an annual output of 5,000 tons of nano pigment dispersion project for LCD display photoresist, with a total investment of 260 million yuan, and a total investment of 230 million yuan, and a total investment of 80 million yuan to supplement working capital and repay bank loans, with a total investment of 80 million yuan, and 80 million yuan to be invested in raising funds.
In order to ensure the smooth progress of the raised funds investment project and protect the interests of all shareholders of the company, before the funds raised in this issuance are in place, the company can invest in advance with self-raised funds according to the implementation progress and actual situation of the raised funds investment project, and then replace them after the raised funds are in place. If the actual amount of funds raised (after deducting the issuance costs) is less than the total amount of funds to be invested in the above-mentioned projects, the company will adjust and finally decide on the specific investment projects, priorities and specific investment amounts of each project according to the actual amount of funds raised, according to the priority of the project, etc., and the insufficient part of the raised funds will be solved by the company itself.
The nano pigment dispersion project for LCD display photoresist is undertaken by Changshu Shiming Chemical Technology Co., Ltd., a wholly-owned subsidiary, and the main investment and construction content of the project includes workshop transformation, warehouse, production line platform, automation transformation and public auxiliary facilities and other building facilities, the purchase of production equipment, testing instruments and public auxiliary equipment, etc., in order to improve the overall production efficiency and provide necessary conditions for the implementation of the project. The project will be constructed in two phases, the first phase will build a nano pigment dispersion production line with an annual output of 1,000 tons of LCD display photoresist; The second phase will build a production line with an annual output of 4,000 tons of nanopigment dispersion for LCD display photoresist. Among them: the first phase of the construction period is expected to be completed by the end of December 2025; The second phase of construction is expected to be completed by the end of December 2027.
The construction time of this project is expected to be completed before December 31, 2027. After the project is fully put into production, it is expected to achieve an annual revenue of RMB 105,000 and an annual net profit of RMB 145.04 million. compute
During the period, the internal rate of return of the project is about 24.48% (after tax), the after-tax static payback period is 5.02 years (including the construction period), and the average annual total profit and tax generated by the project is expected to reach 118.47 million yuan.
The announcement said that the core raw materials of mainland photoresist have been monopolized by foreign manufacturers for a long time, and one of the investment projects of Shiming Technology this time, "an annual output of 5,000 tons of nano pigment dispersion project for LCD display photoresist", is a positive response to the independent and controllable strategic needs of the national electronic product industry chain. The project combines the company's long-term technology accumulation in key technical fields such as pigment ultra-fine dispersion, nano-scale pigment paste preparation, and ultra-fine processing.
Through this important layout, Shiming Technology aims to optimize the existing product structure, improve the technical content and added value of products, and meet the growing demand of downstream customers for high-performance materials. This project will not only help the company consolidate its leading position in the field of fine chemicals, but also further promote the company's in-depth development in the nano pigment dispersion market for LCD display photoresist and enhance the company's core competitiveness.
Through the implementation of this project, Shiming Technology will further enrich the product line, improve the technical content and market competitiveness of the products, lay a solid foundation for the sustainable development of the company, and also contribute to the independent controllability and industrial upgrading of the mainland electronic product industry chain.
Photoresist is a key material in the photolithography process, which is currently widely used in semiconductors, flat panel displays, PCBs and other key fields related to national economy and industrial development. In order to promote the transformation and upgrading of the photoresist terminal application industry and promote the development of China's national economy, the state has issued a number of policies in recent years to vigorously support the development of the photoresist and its key materials industry.
The development of domestic photoresist started late, and is currently mainly concentrated in the fields of PCB photoresist and LCD photoresist. Among them, LCD photoresist subdivision color photoresist industry technical barriers are high, Japan, Korea, Taiwan is the main production area of color photoresist, the main manufacturers are JSR, LG Chem, CHEIL, TOYOINK, Sumitomo Chemical, Chimei, Mitsubishi Chemical, the total output of the above manufacturers accounted for more than 75% of global output. The color photoresist required by domestic TFT-LCD manufacturers is mainly imported from Korea and Japan. According to the data of the China Electronic Materials Industry Association (CEMIA), the overall localization rate of color photoresist in 2023 is only 15%, and there is still a large localization market space.
With the support of relevant active policies, the localization rate of downstream LCD display photoresist is expected to be further improved, and the development prospect of photoresist and its raw materials is good.
The products produced by the raised funds investment project are the core materials of color photoresist, which are widely used in LCD display applications. With the gradual transfer of LCD panel production capacity to China, the requirements of the industrial chain have increased the domestic demand for LCD photoresist and key raw materials. In 2023, China's LCD display panels will account for 73% of global production, and according to the forecast of the Toubao Research Institute, China's LCD panel production will increase from 208 million square meters in 2023 to 244 million square meters in 2028, with an average annual compound growth rate of 3.2%.
According to data from the China Electronic Materials Industry Association (CEMIA), the global TFT-LCD photoresist market size is expected to increase from 9.714 billion yuan in 2023 to 10.596 billion yuan in 2025, with a large market space. In the context of the acceleration of the localization process of display panels and the urgent demand for independent and controllable industrial chains, the nano pigment dispersion for LCD display color photoresist, as a key upstream material, shows an obvious trend of import substitution and ushers in development opportunities.
The successful development of this product can not only improve the TFT-LCD liquid crystal display industry chain and break the monopoly, but also reduce the manufacturing cost of TFT-LCD and further enhance the global competitiveness of the mainland panel industry. Color photoresist is an important material in the manufacturing process of TFT-LCD liquid crystal display, and the use of color nanopigment dispersion is the core upstream raw material for the preparation of color filters, and is the key raw material affecting the brightness, contrast and color expressiveness of photoresist. At present, almost all the nanopigment dispersions for TFT-LCD display photoresist are monopolized by Japanese and Korean companies, which is one of the main technical bottlenecks restricting the localization of color filters.
This fundraising project is intended to be used to build a nano pigment dispersion project with an annual output of 5,000 tons of LCD display photoresist, which can break the monopoly, reduce the manufacturing cost of TFT-LCD, improve the company's profitability, consolidate the company's competitive advantage in the core business area, and then improve the company's core competitiveness and create value for shareholders.