Securities code: 600237 Securities abbreviation: Tongfeng Electronic Number: Lin 2020-058

Anhui Tongfeng Electronics Co., LTD
Announcement on investment construction project

The board of directors and all the directors of the Company warrant that there is no false record, misleading statement or material omission in the content of this announcement, and bear individual and joint liability for the authenticity, accuracy and completeness of the content.

l Investment targets: Capacitor Expansion Project for New Energy, Micro SMD Crystal Project for Smart Things, and Coating Equipment Project for Smart Power Grid Products.

l Investment amount: The total investment of the above three projects is estimated to be 132.72 million yuan, which will be gradually invested in batches as planned.

l Special risk tips: The above project products will face market risks such as market demand changes and product price fluctuations, and there may also be risks of uncertainty impact on the realization of economic benefits caused by future market changes. In order to cope with market risks, the company will implement equipment purchase plan in stages according to project progress and market development. The company will also strengthen research and development of new products, improve the manufacturing process and product performance, actively explore emerging markets, and gradually expand the customer base.

I. Overview of investment projects

(1) Basic information about the investment project

Due to the needs of business development, the Company and its holding subsidiaries plan to invest in the construction of Capacitor Production Expansion Project for New Energy, Micro SMD Crystal Project for Combined Use of Smart Things and Coating Equipment Project for Supporting Smart Grid Products. The total investment of the above three projects is estimated to be 132.72 million yuan, which will be gradually invested in phases as planned.

(2) Deliberation by the Board of Directors

On December 11, 2020, the second meeting of the ninth Board of Directors of the Company deliberated and passed the "Motion on Investment Construction Projects" item by item and agreed to invest in the construction of the above projects. At the same time, the board of directors of the company authorizes the management to specifically implement the above projects within the scope of investment budget, and adjust the investment schedule, investment quota, construction schedule and other specific matters according to the progress of the project.

According to the Shanghai Stock Exchange Listing Rules and other laws, regulations, normative documents, the Articles of Association and other relevant provisions, this investment does not exceed the authority of the board of directors for approval and does not need to be submitted to the general meeting of shareholders for deliberation. This investment does not constitute affiliated transactions or material assets reorganization as stipulated in the Administrative Measures for Material Assets Reorganization of Listed Companies.

Ii. Specific information of investment projects

(1) New energy capacitor production expansion project

1. Main contents of the project

This project mainly uses the company's original production plant and public facilities to introduce more than 114 sets (sets) of key equipment and instruments for new energy capacitor production line, forming an annual production capacity of 180-200 million new energy capacitors.

The total investment of the project is expected to be 37.72 million yuan, including the investment in fixed assets of 22.72 million yuan and the working capital of 15 million yuan, which is self-raised by the company. The construction period of this project is 24 months, and it is planned to be implemented in three phases. After the completion of the project, it is expected that the annual output of 180-200 million capacitors for new energy will be achieved, and the sales will reach 50-60 million yuan.

2. Project background

In recent years, under the guidance of the national macro policies, the development prospect of the new energy field is good. The rise of related industries such as power supply, energy storage and inverter has driven the rapid growth of the new energy capacitor market. At the same time, the trend of localization of high-end demand in this market field is obvious.

The current production of AC motor capacitors are mainly used in the traditional white goods industry, such as: air conditioning, refrigerators, washing machines and so on. As AC motor capacitors are no longer used in variable-frequency air conditioners, with the acceleration of variable-frequency air conditioners, the market demand for the original film capacitors used in consumer white appliances decreases sharply, and the market competition becomes increasingly fierce. The company urgently needs to develop new capacitor products and new markets, and upgrade equipment technology, improve automation level, and expand the production scale of film capacitors for new energy in the middle and high-end market.

3. Possible risks and countermeasures

(1) Market development may be difficult to achieve short-term results. Capacitors for new energy projects are targeted at customers in the middle and high-end application fields. Customers have high requirements on the quality level, delivery ability, industrial application and other comprehensive strength of thin-film capacitors suppliers.

(2) The trend of price decline. With the growth of demand in this market area, many peers have shifted their focus to the development of new energy capacitors. In order to compete for the limited market, price war is often the most direct and effective means. As a result, with falling prices, mid-to-low market profitability may fall short of expectations later.

In view of the above risks, the company will integrate and optimize the marketing team to enhance the ability to explore the market for new energy capacitors. At the same time, the company will accelerate the training of relevant technical personnel and the improvement of process technology, actively explore the high-end market, in order to improve the competitiveness of products, improve the level of profit.

4. Influence on the company after the implementation of the project

The implementation of the new energy capacitor production expansion project is the key construction project of the company's capacitor product capacity upgrading and equipment upgrading. The implementation of the project can further optimize the company's capacitor product structure, consolidate the company's market position in the capacitor industry, and improve the company's profitability.

(2) Micro-SMD crystal project for intelligent object combination

1. Main contents of the project

The project is undertaken by Tongling Fenghua Electronics Co., LTD. (hereinafter referred to as "Fenghua Company"), a holding subsidiary of the Company. The construction period of this project is 12 months, and the project is divided into two phases. The project will make use of the company's original water, electricity, gas and other public facilities, introduce more than 38 sets (sets) of SMD quartz crystal resonator production line key equipment and instruments, forming an annual increase of 192 million SMD crystal production capacity. Upon completion of the project, it is expected to increase the monthly capacity of SMD crystals for the use of smart things by 16 million, of which SMD2016 and SMD3225 will each produce 8 million.

The total investment of the project is expected to be 50 million yuan, including 30 million yuan of fixed assets investment and 20 million yuan of working capital, which is self-raised by the company. It is expected to increase annual sales revenue by 50 million yuan after the completion of the project.

2. Project background

Quartz crystal oscillator and resonator referred to as crystal oscillator or crystal, is an essential component of electronic circuit, known as the "heart" of electronic machine. With the continuous expansion of the information industry and electronic industry scale, the application scope of crystal products expands and their market scale grows.

Fenghua company has been committed to research and development, production and sales of quartz crystal resonators, products are widely used in consumer electronics, mobile communications, security monitoring, mobile wear, smart home and other fields, the company has high-quality, stable customer groups. With the excellent performance of the company's products in the fields of security monitoring, PC, Internet of things and so on, the demand of end customers has exceeded the design capacity of the existing SMD resonator production line of Fenghua Company, the company's existing production capacity has been unable to meet the needs of business development, it is urgent to expand the production capacity, in order to ensure the company's competitive advantage in the field of piezoelectric crystal electronic components manufacturing.

3. Possible risks and countermeasures

(1) The product price of SMD3225 of the project tends to decline further, while the unit price of materials such as pedestal tends to rise rather than fall due to market monopoly factors, and the profit margin of the product is likely to shrink continuously.

(2) The market development of miniaturized crystal products is difficult, and it may be difficult to achieve results in the short term. SMD2016 product market is mainly controlled by Japanese and Taiwan enterprises with obvious technological and R&D advantages, and it is difficult to break out in the short term.

In view of the above risks, Fenghua company will deal with the following three aspects: first, strengthen the internal management, further improve the pass-through rate of 3225 products, dig more profit space; Second, the use of existing high-quality customer resources, gradually promote the promotion and application of 2016 micro products; Third, implement the equipment purchase plan in stages according to the project progress and market development.

4. Influence on the company after the implementation of the project

The implementation of this project will help Fenghua Company better meet the growing needs of high-quality end customers, and provide strong production capacity and technical support for the company to develop more large end customers in the future.

(3) Smart power grid product supporting coating equipment project

1. Main contents of the project

This project mainly uses the company's original water, electricity, gas and other public facilities, the introduction of coating machine production line key equipment, auxiliary equipment a total of 6 sets (sets), forming an annual output of 800 tons of metallized film production capacity.

The total investment of this project is expected to be 45 million yuan, including 30 million yuan of fixed assets investment and 15 million yuan of working capital, which is self-raised by the company. The construction period of this project is 30 months, and it is planned to be implemented in two phases. The key equipment produced by world-renowned coating machine manufacturers will be introduced in batches. Through digestion and absorption, the R&D and mass production capacity of the company's coating products in ultra-thin, high square resistance, small specifications and other products will be improved. After the completion of the project, it is expected to produce 800 tons of metallized film annually and achieve an annual sales revenue of 42 million yuan.

2. Project background

Metallized film capacitors are widely used in the fields of household appliances, electric power, clean energy and rail transit for their advantages of large dielectric constant, high insulation resistance, good heat resistance, long life, self-healing and non-inductive characteristics. In recent years, with the continuous improvement of the national emphasis on environmental protection, the development of clean energy is encouraged, which promotes the development of photovoltaic industry, wind power generation, new energy vehicles and other emerging fields, and drives the new demand of the metallized film downstream film capacitor market. These new applications have very strict requirements for capacitor products: one is the miniaturization of the product; Second, the long life requirement of the product; Third, the high reliability of the product. This also requires higher and higher performance of the upstream metallized film.

The company's existing metallized film production line for capacitors has a long average service life, with aging equipment, high energy consumption, high failure rate, unstable quality and other problems, which affect labor productivity and input and output rate, and cannot meet the current customer demand. The implementation of technical upgrading of equipment, the new coating machine is mainly used to produce ultra-thin high square resistance, ultra-thin safety film, ultra-thin small size, antioxidant film and other products, these high value-added products are the company's future product development direction, can use the accumulated years of metallized film evaporation process, technology and related management experience, further improve product quality and professional production capacity, Improve the production capacity of the company's coating products in ultra-thin, high square resistance, small specifications and other types of products. At the same time supporting the company's film production line in the performance of ultra-thin products leading advantages, do a good job in product processing and market development.

3. Possible risks and countermeasures

(1) There may be some deviation between the actual situation of the total supply and demand of metallized film market and the expected situation, especially the deviation between the market demand and the predicted sales volume; Secondly, the actual price of the product may deviate from the predicted price;

(2) Policy support, policy guidance in the field of new energy (such as photovoltaic, wind power, etc.) and changes in product application orientation of downstream capacitor customers are likely to have an impact on the market expectations of metallized film.

In view of the above risks, the company will introduce equipment in two phases. After the introduction of equipment in the first phase, the company will introduce and purchase equipment in the second phase according to the equipment use and market sales. The company will continue to strengthen the research and development of new products, improve the manufacturing process and product performance, actively explore emerging markets, and gradually expand the customer base.

4. Influence on the company after the implementation of the project

The implementation of this project will help the company to better meet the growing demand of domestic and foreign customers for high-quality thin metallized film, provide strong production capacity and technical support for the company to develop more high-quality customers in the future, and at the same time provide equipment support for the future research and development of ultra-high square resistance and ultra-thin metallized film.

Iii. Influence of investment projects on the company

The above projects are in line with national industrial policies, with mature technology, strong market competitiveness, and good economic and social benefits. After the implementation of the above projects, the company's business coordination ability and scale effect will be further enhanced, which is conducive to enhancing the company's market influence and competitiveness, and improving the level of profitability.

Iv. Risk analysis of investment projects

The products of the above projects will face market risks such as changes in market demand and price fluctuations, and there may also be risks of uncertainty impact on the realization of economic benefits caused by changes in future market conditions. In order to cope with market risks, the company will implement equipment purchase plan in stages according to project progress and market development. The company will also strengthen research and development of new products, improve the manufacturing process and product performance, actively explore emerging markets, and gradually expand the customer base.



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