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On June 13, Danhua Technology (600844) issued an evening announcement stating that the company plans to issue A-share shares at a price of 3.66 yuan per share to Shenghong Petrochemical Group Co., Ltd. (referred to as “Shenghong Petrochemical”), Lianyungang Bohong Industrial Co., Ltd. (referred to as “Bohong Industrial”), CCB Financial Assets Investment Co., Ltd. (referred to as “CCB Investment”), and BOC Financial Assets Investment Co., Ltd. (referred to as “BOC Assets”), in order to acquire 100% of the equity held by Jiangsu Sierbang Petrochemical Co., Ltd. (referred to as “Sierbang”). This transaction constitutes a major asset restructuring, a related-party transaction, and a restructuring-led listing. Upon application to the Shanghai Stock Exchange, the company’s shares will resume trading starting from the market opening on June 14. According to the announcement, through friendly negotiations among the parties involved in the transaction, with December 31, 2018, as the benchmark date, the estimated value of the assets subject to this transaction was 10 billion yuan. Considering that an additional 1 billion yuan was invested in these assets after the benchmark date, the estimated transaction price for the assets in question is 11 billion yuan. Based on the price of 3.66 yuan per share for this share issuance to acquire assets, Danhua Technology plans to issue 3.005 billion shares to all shareholders of Sierbang. Of these, 2.432 billion shares will be issued to Shenghong Petrochemical, 1.37 billion shares to Bohong Industry, 2.73 billion shares to CCB Investment, and 1.64 billion shares to BOC Asset. Following the completion of this transaction, the company’s total share capital will increase to 4.022 billion shares. Shenghong Petrochemical and its affiliated party Bohong Industry will hold approximately 63.86% of the company’s shares, making Shenghong Petrochemical the controlling shareholder of the listed company. The actual controllers of the company will then be Mr. Miao Hangan and Ms. Zhu Hongmei. In addition, CCB Investment will hold approximately 6.79% of the company’s shares, becoming a shareholder holding more than 5% of the outstanding shares of the listed company. It is worth noting that Shenghong Petrochemical and Bohong Industry have pledged that Sierbang’s net profit attributable to the parent company, after deducting non-recurring gains and losses, shall be no less than 2.85 billion yuan in the years 2019, 2020, and 2021. If Sierbang’s actual net profit falls short of these pledged figures, Shenghong Petrochemical and Bohong Industry will be obligated to provide performance compensation to the listed company. Danhua Technology stated that prior to this transaction, the company was mainly engaged in coal chemical-related industries; its product portfolio was relatively limited, and its net profit after deducting non-recurring items fluctuated significantly. Through this transaction, the company will acquire chemical assets with strong profitability. Its core business will include the research, development, production, and sales of high-value-added olefin derivatives, and its product portfolio will further encompass a range of polymeric petrochemicals and fine chemicals such as acrylonitrile, MMA, EVA, EO, and their derivatives. This will lead to a significant improvement in profitability, enabling the company to become a firm with strong competitive strength in the market.