Changshu Fengfan Co.,Ltd.(SH:601700) Zheng Quan Zhi Xing·2025-07-09 16:24Core Viewpoint - The announcement details a capital increase by the wholly-owned subsidiary of the company, Fengfan Crystal Cherry, in collaboration with its related party, Tang Control Technology, to invest in Chengdu Kanda Jinrui Technology Co., Ltd., a wholly-owned subsidiary of Kanda New Materials, with a total investment of RMB 116.67 million [2][3][12]. Group 1: Investment Overview - The total capital increase amounts to RMB 116.67 million, with Tang Control contributing RMB 66.67 million and Fengfan Crystal Cherry contributing RMB 50 million, resulting in ownership stakes of 40% and 30% respectively in Kanda Jinrui [2][3]. - The registered capital of Kanda Jinrui will increase from RMB 50 million to RMB 166.67 million following this investment [2][3]. - The investment is classified as a related party transaction due to the ownership structure involving the controlling shareholder, Tangshan Industrial Holding Group [2][3]. Group 2: Financial Assessment - As of December 31, 2024, Kanda Jinrui's assessed value was determined to have a premium rate of 40.15% based on the capital increase [2][8]. - The financial health of Kanda Jinrui shows a net asset value of RMB 32.85 million as of the same date, indicating a need for further capital to support its exploration projects [8][12]. - The total budget for exploration projects is estimated to be within RMB 120 million, which the new capital will help fund [3][8]. Group 3: Board Approval and Compliance - The board of directors approved the investment proposal on July 8, 2025, with all related directors abstaining from the vote [12]. - The transaction does not require shareholder approval as it does not exceed the threshold set by the Shanghai Stock Exchange regulations [12]. - The company has engaged independent directors to review the transaction, ensuring compliance with governance standards [12].