Transaction Overview - The company’s wholly-owned subsidiary, Daya Wood Industry (Nanning) Co., Ltd., signed a lease agreement with Nanning Overseas Chinese Investment Zone Huasheng Asset Management Co., Ltd. for a particleboard production plant and equipment located at No. 18, Ningwu Road, Guangxi-ASEAN Economic and Technological Development Zone, with an annual rent of 17 million RMB for a lease term of 3 years and 4 months, including a 4-month rent-free period [1][4][6] Parties Involved - Daya Wood Industry (Nanning) Co., Ltd. is a limited liability company with a registered capital of 30 million RMB, established on June 19, 2025, focusing on the manufacturing and sales of engineered wood products [2][3] - Nanning Overseas Chinese Investment Zone Huasheng Asset Management Co., Ltd. is a state-owned enterprise with a registered capital of approximately 520.29 million RMB, established on April 7, 2004, involved in asset operation and capital management [2][3] Contract Details - The lease includes a total area of 55,970 square meters for the plant and equipment, with the total contract value amounting to 51 million RMB [4][6] - The lessee is required to pay a security deposit of 5 million RMB within 10 working days of signing the contract, which can be used to cover any unpaid dues or damages [5][7] - The lessee is granted a rent-free period for production preparation and equipment installation from July 18, 2025, to October 17, 2025, during which they must still pay property fees and utility costs [6][7] Impact on the Company - The lease aims to efficiently integrate and leverage the company's established production, operational, and core technological advantages in the engineered wood sector, facilitating the brand's penetration into the South China market [9][10] - The Nanning region offers a complete upstream and downstream industrial support system and significant regional cost advantages, which will enhance operational efficiency and reduce overall costs, thereby improving the market competitiveness of the company's products [9][10]

Core Viewpoint - The Chinese flame-retardant board industry is experiencing continuous technological innovation and product upgrades, driven by increasing fire safety requirements in various sectors such as public spaces and high-rise buildings [1][6]. Group 1: Industry Definition and Classification - Flame-retardant boards are specialized boards made by adding flame retardants to engineered wood boards, enhancing their fire resistance while maintaining basic properties of engineered wood [2][10]. - They can be classified into several types based on the base materials, including wood-based, gypsum, metal composite, plastic, and mineral wool boards [2][3]. Group 2: Industry Development Status - In 2023, China's engineered wood board production reached 33,598 million cubic meters, with projections of approximately 35,000 million cubic meters by 2025 [4][6]. - From 2019 to 2024, a total of 2,761 flame-retardant board patents were filed in China, with over 400 patents filed annually from 2020 to 2022, peaking at 482 in 2021 [1][6]. Group 3: Industry Chain - The flame-retardant board industry chain includes upstream raw materials (wood, gypsum, metals, plastics, mineral wool), midstream production, and downstream applications in construction, transportation, electronics, and furniture [10][11]. - The industry is driven by policy standards, fire safety demands, and environmental trends, with future growth expected due to rising building safety requirements and advancements in green manufacturing [10][11]. Group 4: Competitive Landscape - The flame-retardant board industry in China features a competitive landscape dominated by large building material groups, supplemented by regional companies and foreign brands [12][14]. - Major companies include Daya Saint, Rabbit Baby, Fenglin Group, Qiannianzhou, Beixin Building Materials, Huayuan Holdings, CIMC, Kingfa Technology, and Plit [12][14]. Group 5: Representative Companies - Beixin Building Materials is a leading player with a focus on gypsum boards and has a production capacity exceeding 3.5 billion square meters, generating revenue of 13.107 billion yuan in 2024 [14][16]. - Fenglin Group is recognized for its environmentally friendly flame-retardant boards used in significant public buildings and has a production volume of 1.5314 million cubic meters in 2024, with revenue of 1.908 billion yuan [16][17]. Group 6: Industry Development Trends - The demand for flame-retardant materials is steadily increasing due to urbanization and safety regulations, with the industry undergoing technological upgrades and policy-driven transformations towards eco-friendliness, high performance, and globalization [19].

Financial Performance - The company reported a basic earnings per share of -0.0311 yuan for Q1 2025, a significant decrease of 15450% compared to -0.0002 yuan in Q1 2024 [1] - The total revenue for Q1 2025 was 3.2 billion yuan, down 19.8% from 3.99 billion yuan in Q1 2024 [1] - The net profit for Q1 2025 was -0.35 billion yuan, compared to a net profit of 0 billion yuan in Q1 2024 [1] - The return on equity was -1.35% in Q1 2025, a drastic decline from -0.01% in Q1 2024 [1] Shareholder Structure - The top ten unrestricted shareholders hold a total of 53,911.25 million shares, accounting for 48.09% of the circulating shares, with an increase of 592.87 million shares from the previous period [1] - FENGLIN INTERNATIONAL LIMITED remains the largest shareholder with 45,894.60 million shares, representing 40.94% of the total share capital, unchanged from the previous report [2] - New entrants among the top shareholders include Zhejiang Wanguan Investment Management Co., Ltd. with 703.70 million shares [2] Dividend Policy - The company has announced that it will not distribute dividends or transfer shares this time [3]