One, Use of Proceeds Plan
The total amount of funds to be raised from the issuance of convertible corporate bonds to non-specific objects is planned not to exceed RMB 118,000.00 million (including the principal amount). After deducting issuance expenses, the net proceeds will be invested in the following projects:
| No. | Project Name | Total Investment (RMB million) | Amount to be Invested from Raised Funds (RMB million) |
|---|---|---|---|
| 1 | New Energy Intelligent Manufacturing Flexible Electric Connection System Project | 118,420.49 | 90,000.00 |
| 2 | Supplement Working Capital | 30,000.00 | 28,000.00 |
| Total | 148,420.49 | 118,000.00 |
Note: The amount to be invested from raised funds in the table above has deducted RMB 2,000.00 million of financial investment newly made within six months prior to the resolution of the 23rd meeting of the Fifth Board of Directors and before the issuance.
Before the raised funds from the issuance of convertible bonds to non-specific objects are in place, the company will use its own funds for advance investment based on project needs. Once the raised funds are in place, the advance investment will be replaced in accordance with relevant laws, regulations, and procedures.
If the net proceeds from the issuance of convertible bonds to non-specific objects after deducting issuance expenses are less than the total investment amount for the projects, the company may adjust the investment amount for the projects based on their actual needs and in accordance with relevant legal procedures. The shortfall will be covered by the company's own funds.
Two, Feasibility Analysis of Projects to be Funded by Raised Capital
(1) New Energy Intelligent Manufacturing Flexible Electric Connection System Project
1. Project Overview
The New Energy Intelligent Manufacturing Flexible Electric Connection System Project (hereinafter referred to as "the Project") has a total investment of RMB 118,420.49 million. It is planned to use RMB 90,000.00 million from the raised funds. The company plans to build a new production base in Liyang City, Changzhou City, Jiangsu Province. The project construction will effectively enhance the company's ability to respond quickly to customer demands, improve supply chain synergy, and enhance overall cost competitiveness. Upon completion and reaching full production capacity, the project will form an annual production capacity of approximately 45 million units of new flexible electric connection components. This will further consolidate the stable cooperative relationships with well-known domestic and international new energy vehicle and energy storage manufacturers, improve the company's technical capabilities and industrial scale, provide higher quality services to downstream customers, enhance customer loyalty, seize market opportunities, and improve market competitiveness.
2. Analysis of the Necessity of Project Implementation
(1) Responding to Downstream Market Growth, Arranging Core Production Capacity, Ensuring Order Delivery and Market Share
The core product of this fundraising project is Flexible Printed Circuit (FPC). The FPC-related products of the company mainly serve the new energy vehicle and energy storage industries, which are in a period of rapid development, and the order demand brought by the continuous expansion of terminal customer production capacity is relatively clear. Among them, Xiaopeng Motors, Dongfeng Nissan, Changan Automobile, Geely Automobile, Volkswagen, Great Wall Motor, and other vehicle manufacturers have been using the company's FPC products in large quantities. Energy storage customers such as Sungrow Power Supply and Huabao New Energy have also put forward clear demands for increased FPC product volume based on the improvement of industry prosperity and their own rapid business growth. In addition, international customers, represented by a leading new energy vehicle company, have put forward clear requirements for the supplier's production capacity and delivery assurance capabilities. If the company cannot expand its FPC manufacturing capacity in a timely manner, it will face the risk of losing important strategic projects.