Tiannai Technology (688116) announced on the evening of September 10 that the company's board of directors reviewed and passed a proposal, agreeing that the company will hold 52.81 of Zhenjiang Xinna Environmental Protection Materials Co., Ltd. (hereinafter referred to as "Xinna Environmental Protection"). Transfer to Dagang shares (002077), the transfer consideration is RMB 0.103 billion. After the completion of the transaction, Tiannai Technology still holds a 15% stake in Xinna Environmental Protection.

Dagang shares announced on the evening of September 8 that it plans to sign an agreement with Tiannai Technology, Zhang Jianyu, Xia Ronghua, Li Yadong and Xiang Jun to acquire a total 77.70 per cent stake in Xinna Environmental Protection with cash of 0.152 billion yuan. The move is to implement the "dual main business" strategy and speed up the strategic layout of the main business of environmental protection resources service.

Xinna environmental protection products are mainly used in lithium battery industry

In October 2018, Tiannai Technology invested in the establishment of a holding subsidiary, Xinna Environmental Protection, whose main business is NMP waste liquid processing and regeneration refining. NMP is the mainstream solvent for lithium-ion battery cathode coating, and Xinna environmental protection NMP products are mainly used in the lithium battery industry.

the announcement previously disclosed by dagang co., ltd. shows that xinna environmental protection has continued to deepen the recycling of NMP since its establishment. the first phase of the 45000-ton/year organic solvent NMP recycling project (36000-ton/year new NMP recycling project) is currently available, and the second phase of the 60000-ton/year organic solvent NMP recycling project (50000-ton/year new NMP recycling project) is planned to be expanded in 2023, after the completion of the project expansion, it is estimated that the total recycling capacity of NMP waste liquid is 105000 tons/year (86000 tons/year of new NMP products). The planned construction period of the second phase of the project is 7-8 months, and it is expected to be put into operation in the second quarter of 2024. Because the first phase of the project already has supporting infrastructure, the second phase of the project only needs to add some distillation tower equipment, so the total investment of the second phase of the project is about 20 million yuan.

there are two main business models for Xinna environmental protection: one is the processing mode, which charges processing fees for customers to purify waste NMP; the other is the purchase and sale mode, which purchases NMP waste from upstream suppliers and sells it to downstream customers after processing and purification. Among them, Tiannai Technology is the largest customer of Xinna Environmental Protection, as of May 31, 2023, Xinna Environmental Protection to Tiannai Technology accounts receivable balance of 13.3587 million yuan.

Tiannai Technology said that it plans to transfer its 52.81 per cent stake in Xinna Environmental Protection to Dagang, mainly to optimize its asset structure, focus on its core business and enhance the company's core competitiveness. The consideration for this transaction is RMB 0.103 billion. After the completion of this transaction, it is expected to increase the total profit of Tiannai Technology by about 79.9493 million yuan. The company still holds a 15% stake in Target Xinna Environmental Protection and will no longer have control.

Dagang shares will hold a 77.7 per cent stake in Xinna Environmental Protection

let's look at the announcement disclosed by dagang shares on the evening of September 8: dagang shares plans to sign an agreement with xinna environmental protection shareholders Tiannai technology, Zhang Jianyu, Xia ronghua, Li yadong and Xiang jun to acquire a total 77.70 per cent stake in xinna environmental protection with cash of 0.152 billion yuan. Upon completion of the transaction, the Company will hold a 77.70 per cent stake in Xinna Environmental, which will become a controlling subsidiary of the Company.

at the same time of the company's acquisition of shares, after Xinna environmental protection shareholder Li Yadong and Shanghai chuang Xi industrial development partnership (limited partnership) reached an agreement through negotiation, Shanghai chuang Xi industrial development partnership (limited partnership) acquired Li Yadong's 1.30 equity interest in Xinna environmental protection for 2.535 million yuan in cash.

Dagang shares said that the acquisition is conducive to the "dual main business" strategy to accelerate. According to the company's plan, the future will build integrated circuits and environmental protection resources services "dual main business" development pattern, environmental protection resources services is one of the core industries of the company's future development, through the acquisition of Xinna environmental protection into the NMP recycling industry, will further expand the environmental protection resources service industry layout.

Dagang's current environmental protection resources service industry involves chemical terminals, warehousing, water supply, hazardous waste disposal, etc., the overall business scale is limited. After the completion of the Xinna Environmental Equity Acquisition, the company can quickly enter the NMP recycling industry, expand the company's business services, access to new business-driven capabilities. The company's existing environmental protection resource service business is mainly concentrated in Zhenjiang New Area New Material Industrial Park, with regional resource service advantages. Xinna Environmental Protection is also an environmental protection service enterprise engaged in resource recycling business in the park. After the completion of this acquisition, it can fully connect the company's existing business resources and provide recycling value-added services for NMP demanders in the new area and surrounding areas.

the announcement also shows that after the completion of the acquisition of xinna environmental protection equity, Dagang shares will quickly enter the field of electronic-grade NMP recycling. the company will take this opportunity to gradually extend to other fields such as micro-grade NMP. micro-grade NMP and electronic-grade NMP have similar technologies in production and recycling, and are mainly used in high-end microelectronics industries such as integrated circuits and liquid crystals. The company will integrate various resources, comprehensively plan the product layout, and continue to expand the NMP-based organic solvent resource recycling industry.