Baotai Holding Subsidiary plans to purchase 163 million yuan in assets to improve the overall forging processing capabilities

Baoji Baoti Precision forging Co., Ltd. (hereinafter referred to as "Baoti Precision forging"), a holding subsidiary of Baoji Titanium Co., Ltd. (600456), intends to use its own capital of 163 million yuan to purchase Baoji Topda Titanium Industry Co., Ltd. (hereinafter referred to as "Baoji Topada") and Baoji Ruibang Titanium Industry Co., Ltd. (hereinafter referred to as "Baoji Ruibang") some of the machinery and equipment, buildings and land use rights and other assets.

Prior to the purchase of assets, Baoti had a small amount of commissioned processing business with Baoji Topda, Baoji Topda was entrusted with Baoji Topda to carry out forging business; Baoji Topda and Baoji Ruibang are minority shareholders of Baoji Precision forging (40% and 20%, respectively), with directors and executives in Baoti Precision forging. Baoti precision forging leasing uses Baoji Topda and Baoji Ruibang's plant, equipment and other related facilities (related to forging business). In addition to the above, Baoti shares, Baoti precision forging and Baoji Topda, Baoji Ruibang do not have other property rights, business, assets, creditor's rights and liabilities, personnel and other relations.

Specifically, Baoji precision forging this time to buy SX-45 radial forging units and supporting equipment and facilities, two factories and 45050 mu (equivalent to 67.575 mu) land use rights, the evaluation value (excluding VAT) for 150 million yuan; from Baoji Ruibang to buy 1000 tons of rapid forging press units and supporting equipment and facilities, the quantity is 1 (set), the evaluated value (excluding VAT) is 12.6659 million yuan.

At the beginning of its establishment, in order to achieve the purpose of industrial integration, Baoji Topda and Baoji Ruibang were no longer engaged in forging-related business in the exclusive terms of the Investment Agreement. The assets to be purchased are mainframe and auxiliary equipment related to forging, factory buildings, and these assets are still in the stage of construction or installation in the process of Baoti precision forging. For this reason, the Investment Agreement stipulates that after the main equipment is in stable operation, it can be purchased after consideration and approval by each unit. After more than two years of operation, the assets are in good condition and have the conditions for purchase.

The purchase of assets by Baoti precision forging, on the one hand, can independently enjoy the right of asset management, which is convenient for overall planning, and further enhance the coordination and consistency of forging processing; on the other hand, under the control of Baoti stock quality system and process technology, it can fully achieve the complete control of processing product quality standards and process technology links, which is of great significance to supporting and upgrading Baoti share forging industry chain.

In recent years, due to the increase in forging product orders and insufficient existing production capacity, Baoti precision forging can form fast forging, free forging and radial forging systems with Baoti in the fastest way through the purchase of SX-45 radial forging machine and 1000 ton rapid forging press.

According to the latest announcement, according to the technical process route of Bao Ti Co., Ltd., according to the requirements of the final bar product specifications, the process of free forging, fast forging and radial forging can be reasonably optimized, which will more effectively release the production capacity of Bao Ti Co., Ltd. improve the overall forging processing capacity.

Bao Ti shares said that after this asset purchase, through the integration of mainframe equipment, matching the capacity of auxiliary equipment, rational planning of the types of production products, and effective release of production capacity, it is expected to increase the thermal overcapacity of more than 15000 tons of intermediate billets every year, reduce rent by 15.5577 million yuan per year (including tax), increase output value by 89 million yuan, and increase net profit by 25.8 million yuan.

Baoti Precision forging is a subsidiary of the company's consolidated statements, and the increase in its production capacity and profits will also have a beneficial impact on the company's financial position and operating results. At the same time, this transaction is the completion of the company's forging business plate, which can effectively release the production capacity of related equipment, help to enhance the market competitiveness of the company's forging business, and further expand market channels and product areas. improve the company's overall competitiveness.