Gansu Shangfeng Cement (000672.SZ) plans to increase capital for its holding subsidiary Ningbo Shangfeng and acquire assets externally.

Gansu Shangfeng Cement (000672.SZ) announced that in order to implement strategic development planning and production operation needs, and fully leverage the advantages of clinker production capacity, promote the transformation of surplus clinker into cement grinding, actively explore the market in the eastern region, promote local and regional economic development, the company's wholly-owned subsidiary Zhejiang Shangfeng Building Materials Co., Ltd. (referred to as "Shangfeng Building Materials") and joint venture partner Ningbo Economic and Technological Development Zone Kaiyuan Development Investment Co., Ltd. (referred to as "Ningbo Kaiyuan") have jointly invested to establish Ningbo Gansu Shangfeng Cement Co., Ltd. (referred to as "Ningbo Shangfeng") in October 2024, with a registered capital of 20 million yuan. Shangfeng Building Materials and Ningbo Kaiyuan hold 51% and 49% of the shares respectively. It is planned to lease the 5000-ton multi-purpose wharf and some supporting facilities of Yongxin Harbor Port Development Co., Ltd. in Ningbo Daxie Development Zone, and use the vacant land behind the wharf to relocate and rebuild a cement grinding production line with a designed annual output of 1.2 million tons. Currently, the preliminary administrative approval work of the Ningbo Shangfeng project has been basically completed, and Yongxin Harbor Port has been leased with a 5000-ton multi-purpose wharf and some supporting facilities. In order to prudently promote project investment and construction, fully leverage the advantages of wharf resources, develop and layout market channel resources, and continuously enhance the brand image and influence of Shangfeng, Shangfeng Building Materials and Ningbo Kaiyuan intend to increase the investment in Ningbo Shangfeng by a total of 40 million yuan in cash according to the investment ratio. After the capital increase, the registered capital of Ningbo Shangfeng will increase from 20 million yuan before the capital increase to 60 million yuan. The capital raised this time will mainly be used for the technical transformation project of Yongxin Harbor Port, the acquisition of the annual production capacity target of 1.2 million tons of cement grinding and the annual transfer and storage project of 600,000 tons of ultrafine powder and its supporting equipment and facilities, assets of Ningbo Daxie Wanhua Thermoelectric Building Materials Co., Ltd. The total acquisition amount of the above-mentioned assets is approximately 72.03 million yuan. The implementation of this transaction is beneficial to fully leverage the existing advantages of the wharf location and resources, increase the benefits of stock assets through trading in cement, mineral powder, fly ash, and coal, enhance market competitiveness, achieve good economic benefits, deepen the development and layout of regional market channels, and strengthen the brand image and market influence of Shangfeng, laying a good market foundation for the future cement grinding project construction, and conforming to the company's strategic development planning.