**Abstract**
Stock Code: 300080
Securities Abbreviation: Xinda New Materials
Announcement No.: 2013-084
**Announcement of 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 guarantee the truthfulness, accuracy, and completeness of the disclosed information, with no false records, misleading statements, or material omissions.
**I. Overview of Related Party Transactions**
In August 2012, Pingdingshan Yicheng New Materials Co., Ltd. ("Yicheng New Materials") and Jiangxi LDK Solar High-Tech Co., Ltd. ("Saiwei LDK") jointly invested RMB 20 million to establish Pingdingshan Yichengxin Energy Co., Ltd. In this joint venture, Yicheng New Materials contributed RMB 13.6 million, representing 68% of the registered capital, while 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, involving 7.5MW, was also completed and undergoing commissioning. Given that the project utilized the idle rooftops of China Pingmei Shenma Group, the company planned to supply electricity generated by the project to its affiliated units.
To optimize asset structure, the company intended to acquire LDK’s 32% equity in Pingdingshan Yicheng New Energy Co., Ltd. through debt restructuring, and subsequently sell 100% of the equity to China Pingmei Shenma Group. The transaction price would be based on the asset valuation report issued by an appraisal agency qualified for securities and futures-related business. The company will disclose further progress after the completion of the asset evaluation.
This related party transaction is not considered a material transaction and does not constitute a major asset restructuring as defined by the regulations on the administration of major asset restructurings of listed companies. To date, the company has not provided any guarantees, entrusted financial management, or extended funds to Pingdingshan Yicheng New Energy Co., Ltd.
**II. Introduction of Related Parties and Their Relationships**
(1) Basic Information of Related Parties
1. **Basic Information of Pingdingshan Yicheng New Energy Co., Ltd.**
- **Company Name**: Pingdingshan Yicheng New Energy Co., Ltd.
- **Nature**: Other limited liability company
- **Registered Address**: No. 631, East Section of Jianshe Road, Pingdingshan City
- **Legal Representative**: Sun Bo
- **Registered Capital**: RMB 20 million
- **Tax Registration Number**: 410403052279154
- **Business Scope**: Development, design, installation, commissioning, 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, raw material development, design, installation, commissioning, and maintenance of geothermal and other projects (excluding prohibited commodities and projects).
- **Major Financial Data (in RMB):**
- Total Assets (2012): 79,049,758.37
- Total Assets (H1 2013): 98,481,790.09
- Main Business Income (2012): 0
- Main Business Income (H1 2013): 0
- Net Assets (2012): 5,932,347.70
- Net Assets (H1 2013): 5,665,434.76
- Net Profit (2012): -67,652.30
- Net Profit (H1 2013): -266,912.94
2. **Basic Information of China Pingmei Shenma Group**
- **Company Name**: China Pingmei Shenma Energy Chemical Group Co., Ltd.
- **Nature**: 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
- **Tax Registration Number**: 41040268317425-2
- **Business Scope**: Wholesale coal and coal washing; cord fabric, industrial and civil silk, carpet wire, plastic and rubber products, chemical products (excluding flammable, explosive, and hazardous chemicals), building materials, machinery, automobiles (commercial vehicles and above nine-seat passenger cars), construction and installation, equipment leasing, house leasing, import and export business (excluding restricted or prohibited goods and technologies).
- **Major Financial Data (in RMB):**
- Total Assets (2012): 105,159,609,628.60
- Total Assets (H1 2013): 120,131,910,031.47
- Main Business Income (2012): 96,150,815,778.25
- Main Business Income (H1 2013): 46,875,075,283.05
- Net Assets (2012): 28,016,901,545.51
- Net Assets (H1 2013): 31,166,019,880.58
- Net Profit (2012): -539,308,061.24
- Net Profit (H1 2013): -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. On May 16, 2013, the newly issued shares were listed on the Shenzhen Stock Exchange. After the non-public offering, China Pingmei Shenma Group held 97,663,326 shares, representing 19.42% of the total shares of the listed company. The actual controller of the company is the Henan Provincial State-owned Assets Supervision and Administration Commission. Therefore, the transaction involving Pingdingshan Yicheng New Energy Co., Ltd., a subsidiary of Yicheng New Materials, and China Pingmei Shenma Group constitutes a related party transaction.
**III. Main Content of Related Transactions**
Due to the use of China Pingmei Shenma Group's idle roofs for the project, the company plans to supply the generated power to the group's affiliated units. The company 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 transaction price will be determined based on the asset valuation report issued by a qualified appraisal agency.
**IV. Purpose of Related Transactions and Impact on Listed Companies**
(1) Necessity of Related Transactions
Pingdingshan Yicheng New Energy Co., Ltd. primarily engages in the development and construction of solar power stations. Its 12.5MW photovoltaic grid-connected power generation project in China Pingmei Shenma Group’s Industrial Park has been largely completed. By supplying power to the group’s units, the company can generate revenue from the project and recover construction costs.
(2) Fair Pricing Principle
The related party transaction follows the principle of fair market pricing, using the asset valuation value as the basis. As this proposal involves a related party transaction with China Pingmei Shenma Group, it still needs to be submitted to the company’s shareholders’ meeting for approval before implementation.
**V. Reference Documents**
(1) Resolutions of the 28th Meeting of the Second Board of Directors of the Company
(2) Resolutions of the 21st Meeting of the Second Board of Supervisors of the Company
**Henan Xinda New Materials Co., Ltd. Board of Directors**
October 9, 2013
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