Verification Opinion of Zhongyuan Securities Co., Ltd. on the Postponement of Certain Fundraising Projects of Hunan Hualian Ceramics Co., Ltd.
Zhongyuan Securities Co., Ltd. (hereinafter referred to as "Zhongyuan Securities" or "the Sponsor") is the sponsor during the continuous supervision phase of Hunan Hualian Ceramics Co., Ltd. (hereinafter referred to as "Hualian Ceramics" or "the Company") for its initial public offering (IPO). In accordance with relevant laws, regulations, and normative documents such as the "Regulations on the Supervision of Fundraising by Listed Companies," "Shenzhen Stock Exchange Stock Listing Rules," and "Self-Regulatory Guidelines No. 1 for Listed Companies on the Main Board," the Company has conducted a verification of the postponement of certain fundraising projects. The verification results are as follows:
1. Basic Situation of Fundraising
According to the China Securities Regulatory Commission's approval document (Zheng Jian Xu Ke [2021] No. 2802), the Company publicly issued 62,966,700 shares of ordinary shares (A shares), raising a total of RMB 589,997,979.00. After deducting related issuance costs of RMB 57,318,867.92 (excluding VAT), the actual net amount raised was RMB 532,679,111.08. The status of the raised funds has been verified by Tianjian Certified Public Accountants (Special General Partnership) under verification report Tianjian Yan Zi [2021] No. 2-40. The Company has opened a special account for the raised funds, implementing dedicated storage and signing a "Tripartite Supervision Agreement" and a "Quadripartite Supervision Agreement" with the bank and sponsor.
According to the Company's IPO prospectus, the construction progress of the fundraising investment projects (hereinafter referred to as "fundraising projects") is prioritized as follows:
| No. | Project Name | Total Investment | Proposed Fundraising Amount |
|---|---|---|---|
| 1 | Daily Ceramic Production Line Technical Renovation Project | 35,530.00 | 27,530.00 |
| 2 | Engineering Technology Center Construction Project | 14,670.00 | 14,670.00 |
| 3 | New Ceramic Materials Production Line Project | 6,150.00 | 2,067.91 |
| 4 | Supplementing Working Capital | 9,000.00 | 9,000.00 |
| Total | 65,350.00 | 53,267.91 |
On November 30, 2021, the Company held the 16th meeting of the 4th Board of Directors and the 13th meeting of the 4th Supervisory Board, approving the proposal to adjust the content of certain fundraising investment projects and the proposed amount of funds to be invested. This was also approved by the third extraordinary general meeting of shareholders in 2021, adjusting the specific technical renovation project content and amount in the Daily Ceramic Production Line Technical Renovation Project.
On August 18, 2022, the Company held the 3rd meeting of the 5th Board of Directors and the 2nd meeting of the 5th Supervisory Board, approving the proposal to change part of the fundraising purposes and the proposal to use surplus fundraising for new technical renovation projects, which was also approved by the first extraordinary general meeting of shareholders in 2022. The Company planned to change the surplus fundraising for the "New Ceramic Materials Production Line Project" and the "Daily Ceramic Production Line Technical Renovation Project" sub-project "Yuxiang No. 1 Factory Technical Renovation Project" to invest in the Yibaili Ceramics Energy Comprehensive Utilization and Energy Saving Carbon Reduction Renovation Project.