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CompanyNotice
Public Announcement on Outward Investment
Date:January 01,1970
The Board of the Company and all directors commit that there are no false record, misleading statement or omission of material importance of the public announcement, and will bear joint responsibility for the authenticity, accuracy and integrity of its co

Important Prompt:

Ÿ  Investment object: the Company’s controlled subsidiary, SYP Kangqiao Autoglass Co., Ltd. invested to establish an auto door glass processing center in Changshu.

Ÿ  Total investment amount: 90 million yuan


I.   Outward investment overview

1.  Basic information of the outward investment

Auto glass business of the Company boosted based on product mix adjustment, innovation, intensive management, lean operation and regional layout for auto glass segment. In the near future, door glass capacity will not catch up with sales orders increase, considering the customer demand, auto business development as well as integration strategy of upstream and downstream, the Company agreed with its controlled subsidiary SYP Kangqiao Autoglass Co., Ltd. (“SYPKA”) to develop auto glass business, SYPKA will invest 90 million yuan to establish a door glass processing center by using idle plant in Changshu site.

2.  Decision-making procedure

(1)   The Board of Directors

The 13th Meeting of the 8th Board of Directors approved the Proposal on Production Line Construction of Door Glass in Changshu Site on 20 Sep 2016 with 7 affirmative votes, 0 dissenting vote and 0 abstention vote.

(2)   The proposal is not required to be approved at the shareholders’ general meeting.

3.  The proposal did not involve any connected transaction or major assets restructuring.


II.  Basic information of the investor

SYPKA is the Company’s controlled subsidiary, the Company holds 50.26% of SYPKA equity, Shanghai Building Materials (Group) Co., Ltd. and its wholly-owned subsidiary Hong Kong Haijian Industrial Co., Ltd. hold 49.74% of SYPKA equity. SYPKA was established in Aug 2002 with registered capital of USD 115.5671 million, its registered address at No. 611 Kangliu Road, Pudong New Area, Shanghai, legal representative is Eddie Chai. Its main business is producing and selling varieties of windshield glass, door glass, side triangle glass and rear windshield glass, its main customers are Shanghai GM, Shanghai VW, SAIV, Dongfeng Yueda Kia, NAC, Soueast Auto, GM Australia, Ford Australia and PSA Peugeot Citroen Group. Currently, SYPKA has three plants in Shanghai Kangqiao, Jingsu Yizheng and Hubei Wuhan respectively. SYPKA had total assets of 1111 million yuan and net assets of 719 million yuan by 30 Jun 2016, and achieved operating revenue of 345.6939 million yuan and net profit of 18.252 million yuan (unaudited) from Jan to Jun 2016.


III.  Basic information of the invested project

SYPKA will totally invest 90 million yuan to Changshu door glass processing center by own capital and bank loan, construction period plans to take one year. Considering the market analysis, customer development as well as economic and technical capability, it is calculated to newly increase capacity of 8.1 million pieces based on capacity utilization of 78% and sales revenue of 137 million yuan annually, achieve IRR of 29.53% and static payback time of 4.05 years after the project is put into operation.


IV. Influence on the listed company

There are three favorable factors for SYPKA to establish door glass processing center in Changshu idle plant, firstly, it will further enhance door glass capacity to meet the requirement of increasing orders; secondly, it will optimize industrial value chain and improve competitiveness through integration of upstream and downstream; thirdly, it can take advantage benefit of stock assets of idle plant. The project is in line with the interests of the Company and shareholders.


V.  Risk analysis

The project feasibility report is stipulated based on current market status, considering the uncertainty of automobile market, auto glass supply and demand as well as raw material price, the Company will strengthen market supervision and analysis, consolidate the cooperation with OEM, improve internal operation management, reduce product cost and enhance competitiveness.


Shanghai Yaohua Pilkington Glass Group Co., Ltd.

21 September 2016

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