Core Viewpoint - The company has approved the establishment of a subsidiary, Hubei Xinyao Semiconductor Materials Technology Co., Ltd., to implement a high-quality gallium arsenide chip construction project with a total investment of 27.23 million yuan [5][21]. Group 1: Investment Overview - On November 6, 2025, the company’s board approved the establishment of Hubei Xinyao with a total investment of 50 million yuan, where Yunnan Xinyao will contribute 45 million yuan and Liu Guangzheng will contribute 5 million yuan [5][12]. - The investment does not constitute a related party transaction or a major asset restructuring as per relevant regulations [5][6]. Group 2: Project Details - The project aims to build a production line capable of producing 700,000 pieces of 6-inch high-quality gallium arsenide chips annually and 30,000 sets of semiconductor-grade quartz tubes [21][26]. - The project will be located in the high-tech industrial park in Huanggang, Hubei Province, with a construction period of 18 months [21][22]. Group 3: Financial Aspects - The total investment for the project is 27.23 million yuan, with fixed asset investment of 25.32 million yuan and working capital of 1.91 million yuan [21][23]. - The financial internal rate of return for the project is estimated at 22.56%, with a payback period of 5.76 years [21][23]. Group 4: Strategic Importance - The project is expected to enhance the company’s production capacity and technological level in the gallium arsenide semiconductor market, which is expanding due to rising demand in sectors like 5G communication and artificial intelligence [25][26]. - The establishment of the subsidiary and the project will allow the company to better meet customer demands and improve its core competitiveness and profitability in the semiconductor materials industry [26].