**Abstract**
Stock Code: 300080
Securities Abbreviation: Xinda New Materials
Announcement No.: 2013-084
**Announcement by Henan Xinda New Materials Co., Ltd. on the Sale of Pingdingshan Yicheng New Energy Co., Ltd. and Related Party Transactions**
The company and all members of the board of directors guarantee the accuracy, completeness, and truthfulness of the information disclosed. There are no false records, misleading statements, or material omissions in this announcement.
**I. Overview of Related Party Transactions**
In August 2012, Pingdingshan Yicheng New Materials Co., Ltd. ("Yicheng New Material") and Jiangxi LDK Solar High-Tech Co., Ltd. ("Saiwei LDK") jointly invested RMB 20 million to establish Pingdingshan Yicheng New Energy Co., Ltd. In this joint venture, Yicheng New Material contributed RMB 13.6 million, representing 68% of the registered capital, while Saiwei LDK contributed RMB 6.4 million, accounting for 32%. The project was aimed at building a 12.5MW photovoltaic grid-connected power generation system for China Pingmei Shenma Energy Chemical Group Co., Ltd. ("China Pingmei Shenma Group").
As of June 2013, the first phase of the 5MW project had been completed and successfully connected to the grid. The second phase, consisting of 7.5MW, was also completed and under commissioning. Given that the project utilizes the idle rooftops of China Pingmei Shenma Group, the company plans to supply the generated electricity to its units.
To facilitate the transaction, the company intends to acquire LDK’s 32% equity in Pingdingshan Yicheng New Energy Co., Ltd. through debt restructuring. Following this, the company will sell 100% of the equity in Pingdingshan Yicheng New Energy Co., Ltd. to China Pingmei Shenma Group. The pricing will be based on the asset valuation report issued by an appraisal institution qualified to handle securities and futures-related businesses. Once the asset evaluation is completed, the company will disclose the progress of subsequent work.
This related party transaction does not constitute a material transaction or a major asset restructuring as defined by the regulations governing listed companies. To date, the company has not provided any guarantees, entrusted financial management, or offered funds to Pingdingshan Yicheng New Energy Co., Ltd.
**II. Introduction of Related Parties and Their Relationships**
(1) **Basic Information of Related Parties**
1. **Pingdingshan Yicheng New Energy Co., Ltd.**
- **Company Type:** Other limited liability company
- **Registered Address:** No. 631, East Section of Jianshe Road, Pingdingshan City
- **Legal Representative:** Sun Bo
- **Registered Capital:** RMB 20 million
- **Business Scope:** Development, design, installation, and maintenance of solar power plant components; solar power generation; development and application of lithium iron phosphate vanadium projects; sales of solar panels, inverters, brackets, and related distribution facilities; wind energy, geothermal energy, and other projects (excluding prohibited items).
- **Key Financial Data (2012):** Total assets: RMB 79,049,758.37; Net assets: RMB 5,932,347.70; Net profit: RMB -67,652.30
- **First Half of 2013 (Unaudited):** Total assets: RMB 98,481,790.09; Net assets: RMB 5,665,434.76; Net profit: RMB -266,912.94
2. **China Pingmei Shenma Energy Chemical Group Co., Ltd.**
- **Type:** State-owned holding company
- **Registered Address:** No. 21, Miner Middle Road, Pingdingshan City, Henan Province
- **Legal Representative:** Liang Tieshan
- **Registered Capital:** RMB 1,849,272,000
- **Business Scope:** Coal trading, industrial silk, carpet wire, plastics, chemicals, construction, equipment leasing, and import/export activities (excluding restricted goods).
- **Key Financial Data (2012):** Total assets: RMB 105,159,609,628.60; Main business income: RMB 96,150,815,778.25; Net assets: RMB 28,016,901,545.51; Net profit: RMB -539,308,061.24
- **First Half of 2013 (Unaudited):** Total assets: RMB 120,131,910,031.47; Main business income: RMB 46,875,075,283.05; Net assets: RMB 31,166,019,880.58; Net profit: RMB -125,348,931.39
(2) **Relationship with Listed Companies**
On April 23, 2013, the company's asset restructuring was approved by the China Securities Regulatory Commission. On April 27, 2013, Yicheng New Materials became a wholly-owned subsidiary of the company. After the non-public offering of shares, China Pingmei Shenma Group held 97,663,326 shares, representing 19.42% of the total shares. This made China Pingmei Shenma Group the largest shareholder, and the Henan Provincial State-owned Assets Supervision and Administration Commission became the actual controller of the company. As such, the transaction involving Pingdingshan Yicheng New Energy Co., Ltd. and China Pingmei Shenma Group qualifies as a related party transaction.
**III. Main Content of the Related Transactions**
Given the use of China Pingmei Shenma Group's idle rooftops, the company plans to supply power to its units. It intends to acquire LDK’s 32% equity in Pingdingshan Yicheng New Energy Co., Ltd. through debt restructuring and then sell 100% of the equity to China Pingmei Shenma Group. The price will be determined based on the asset valuation report from a qualified appraisal institution.
**IV. Purpose of the Related Transactions and Impact on the Listed Company**
(1) **Necessity of the Transaction**
Pingdingshan Yicheng New Energy Co., Ltd. focuses on developing and constructing solar power stations. Its 12.5MW project for China Pingmei Shenma Group has been largely completed. By selling the power station to China Pingmei Shenma Group, the company can generate revenue and recover investment.
(2) **Fairness of the Transaction**
The transaction follows market fair value principles, using the asset valuation as the pricing basis. Since it involves a related party, the proposal must be submitted to the shareholders' meeting for approval before implementation.
**V. Supporting Documents**
(1) Resolutions of the 28th Meeting of the Second Board of Directors
(2) Resolutions of the 21st Meeting of the Second Board of Supervisors
**Henan Xinda New Materials Co., Ltd. Board of Directors**
October 9, 2013
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