THE DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” OF THE COVER OF THE DOCUMENT. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
OVERVIEW
We are a leading ready-mixed concrete producer in China with strong research and development capabilities according to the CIC Report. Our history can be traced back to YNJG Concrete, which was established in April 1996 and engaged in the production and sales of commercial concrete and related products. After being merged and absorbed into YNJG as the Commercial Concrete Division through an asset restructuring, YNJG Concrete was deregistered in May 2012. In December 2016, YNJG injected the operating assets of the Commercial Concrete Division and the equity interests of four operating subsidiaries into the Company through a capital increase.
On June 19, 2007, the Company was established as a limited liability company by YNJG Concrete. On December 22, 2017, the Company was converted into a joint stock limited company and renamed “YCIH Green High-Performance Concrete Company Limited.”
MILESTONES
The following table outlines the milestones in our history of development:
Years Events
1996 YNJG Concrete was established, which was engaged in the production and sales of commercial concrete and related products.
2007 The Company was established by YNJG Concrete in Kunming, Yunnan Province as a limited liability company, i.e., YNJG Green High- Performance Concrete Co., Ltd. (雲南建工綠色高性能混凝土有限公司).
2007 YNJG Concrete undertook the project of concrete production and supply for “Kunming University Town (昆明大學城)”, and from 2007 to 2010, it produced and supplied more than 800,000 cubic meters of concrete for this project.
2008 YNJG Concrete became the exclusive producer and supplier of three million cubic meters of concrete for the Kunming Changshui International Airport (昆明長水國際機場) project.
2009 We introduced KMEIC as a shareholder, increased our registered capital to RMB66,000,000, and were renamed “YNJG-KMEIC Green High- Performance Concrete Co., Ltd. (雲南建工經開綠色高性能混凝土有限公 司).”
2011 YNJG Concrete transferred all 51% of its equity interest in the Company to YNJG.
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Years Events
2011 Being injected with the related business and assets of YNJG Concrete, the Commercial Concrete Division successfully won the bid for the relocation project of Suijiang County, Zhaotong (昭通市綏江縣城移民工程) and implemented the model of centralized and unified production and supply of concrete.
2016 We introduced YOIC as a shareholder, increased our registered capital to RMB500,000,000, were renamed as “YCIH Green High-Performance Concrete Co., Ltd. (雲南建投綠色高性能混凝土有限公司)” and changed our place of registration to Zhaotong, Yunnan Province.
2016 YNJG injected the operating assets of the Commercial Concrete Division and the equity interests of four operating subsidiaries into the Company through a capital increase.
2017 Due to YCIH’s merger of YNJG by absorption, YCIH obtained a 73.18% equity interest in our Company.
2017 We were among the first enterprises accredited with the “three-star” rating in the Green Building Materials Star Rating in Yunnan Province.
2017 We were elected 2016 Top Ten Ready-Mixed Concrete Enterprises in China
2017 We were accredited as a High-tech Enterprise.
2017 We were converted into a joint stock limited company and were renamed “YCIH Green High-Performance Concrete Company Limited”.
2018 We were elected 2017 Top Ten Commercial Concrete Enterprises in China.
2018 Our scientific research achievements won the second prize of Yunnan Science and Technology Progress Award.
ESTABLISHMENT OF THE COMPANY AND MAJOR CHANGES IN EQUITY INTERESTS
(1) On June 19, 2007, YNJG Concrete established the Company (i.e. YNJG Green High-Performance Concrete Co., Ltd. (雲南建工綠色高性能混凝土有限公司)) with a registered capital of RMB10,000,000 and with the place of registration in Kunming, Yunnan Province.
–90– THE DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” OF THE COVER OF THE DOCUMENT. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
(2) In December 2009, the Company introduced KMEIC as a shareholder, increased the registered capital to RMB66,000,000 and was renamed “YNJG-KMEIC Green High- Performance Concrete Co., Ltd. (雲南建工經開綠色高性能混凝土有限公司)”. The capital contributions subscribed for by YNJG Concrete and KMEIC accounted for 51% and 49% of the then registered capital of the Company, respectively.
(3) As YNJG Concrete was merged by absorption into YNJG as the Commercial Concrete Division, YNJG Concrete transferred to YNJG all 51% of its equity interest in the Company in September 2011.
(4) In December 2016, the Company carried out a capital increase and introduced YOIC (a wholly-owned subsidiary of YCIH) as a shareholder. The registered capital of the Company was proposed to be increased to RMB500,000,000 and its place of registration was changed to Zhaotong, Yunnan Province.
According to the Agreement on Capital Increase entered into by YNJG, KMEIC, and YOIC, of the RMB434,000,000 intended increase in the registered capital of the Company, YNJG subscribed for RMB332,240,000, KMEIC subscribed for RMB19,410,000 and YOIC subscribed for RMB82,350,000. As part of the capital contribution, YNJG injected the operating assets of the Commercial Concrete Division and the equity interest of four subsidiaries into the Company and paid up RMB194,940,000 through assets in kind, YOIC paid up RMB51,450,000 in cash and KMEIC did not paid up. The total paid-up capital of the shareholders amounted to RMB312,390,000. Upon completion of the above-mentioned capital contributions, YNJG, KMEIC, and YOIC held 73.18%, 10.35%, and 16.47% equity interest in the Company, respectively.
(5) Due to YCIH’s merger of YNJG by absorption, YNJG’s 73.18% equity interest in the Company was transferred to YCIH in March 2017.
(6) On May 26, 2017, the shareholders’ general meeting of the Company unanimously passed the capital reduction plan to reduce the registered capital of the Company from RMB500,000,000 to RMB312,390,000 in accordance with the paid-up registered capital of each shareholder. On July 26, 2017, the Company’s registered capital was reduced from RMB500,000,000 to RMB312,390,000 with the shareholders and their respective shareholding percentages unchanged.
(7) On December 22, 2017, the Company was converted into a joint stock limited company as a whole and renamed “YCIH Green High-Performance Concrete Company Limited.”
As confirmed by our PRC Legal Advisers, the above capital changes and equity transfer of the Company have been legally performed and have been completed in compliance with relevant PRC laws and regulations; and the changes have been duly registered with relevant administration authorities for industry and commerce pursuant to applicable PRC laws and regulations.
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ESTABLISHMENT AND DEVELOPMENT OF OUR SUBSIDIARIES
The Company has the following six subsidiaries as at the Latest Practicable Date.
Baoshan Building Material
Baoshan Building Material is a limited liability company established on January 21, 2015 and carrying out its business in the PRC. It is mainly engaged in the research and development, production, sale, transport and pumping of commercial concrete; and the research and development, production and sales of prefabricated concrete components, new wall materials, admixtures, ready-mixed mortar and other building components, and concrete admixtures. It also provides technical consultation, technology research and development, technology transfer and technology services in the field of concrete. When Baoshan Building Material was established, YNJG held 50% of its equity interest, and Baoshan Yongchang Investment Development Co., Ltd. (保山市永昌投資開發有限公司), the predecessor of Yongchang Investment, held 50% of its equity interest.
On January 22, 2017, YNJG transferred all of the equity interest it held in Baoshan Building Material to the Company as an in-kind capital contribution to the Company.
As at the Latest Practicable Date, the registered capital of Baoshan Building Material was RMB26,000,000. The Company held a 50% equity interest and Yongchang Investment held a 50% equity interest in Baoshan Building Material.
Qujing Building Material
Qujing Building Material is a limited liability company established on August 19, 2014 and carrying out its business in the PRC. It is mainly engaged in the research and development, production, sale, transportation and pumping of commercial concrete; the research and development, production and sales of concrete prefabricated components, wall materials, admixtures, ready-mixed mortar, building components, and concrete admixtures; and the provision of technical consultation, technology research and development, technology transfer and technology services in the field of concrete. When Qujing Building Material was established, YNJG held 50% of its equity interest, Yunnan Zhujiang Seed Industry Co., Ltd. (雲 南珠江種業有限公司) held 30% of its equity interest and Qujing Zhongwei Cement Products Co., Ltd. (曲靖中威水泥製品有限責任公司) held 20% of its equity interest.
On January 19, 2017, YNJG transferred all of the equity interest it held in Qujing Building Material to the Company as an in-kind capital contribution to the Company.
As at the Latest Practicable Date, the registered capital of Qujing Building Material was RMB40,000,000. The Company held a 50% equity interest, Yunnan Zhujiang Seed Industry Co., Ltd. held a 30% equity interest and Qujing Zhongwei Cement Products Co., Ltd. held a 20% equity interest in Qujing Building Material.
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Yuxi Building Material
Yuxi Building Material is a limited liability company established on July 10, 2015 and carrying out its business in the PRC. It is mainly engaged in the research and development, production, sale, transportation and pumping of commercial concrete; the research and development, production and sale of prefabricated concrete components, new wall materials, admixtures, ready-mixed mortar and other building components, and concrete admixtures; and the provision of technical consultation, technology research and development, technology transfer and technology services in the field of concrete. When Yuxi Building Material was established, YNJG held 55% of its equity interest and Yuanjiang Zhikai Materials Industry and Trade Co., Ltd. (元江志開物資工貿有限公司) held 45% of its equity interest.
On January 23, 2017, YNJG transferred all the equity interest it held in Yuxi Building Material to the Company as an in-kind capital contribution to the Company.
As at the Latest Practicable Date, the registered capital of Yuxi Building Materials Company was RMB12,000,000. The Company held a 55% equity interest and Yuanjiang Zhikai Materials Industry and Trade Co., Ltd. held a 45% equity interest in Yuxi Building Material.
Polymer Company
Polymer Company is a limited liability company established on September 3, 2013 and carrying out its business in the PRC. It is mainly engaged in the research and development, production and sale of concrete admixtures. It also provides technical consultation, research and development, technology transfer and technical services in the field of concrete. When Polymer Company was established, YNJG held 100% of its equity interest.
On January 10, 2017, YNJG transferred all the equity interest it held in Polymer Company to the Company as an in-kind capital contribution to the Company.
As at the Latest Practicable Date, Polymer Company was a wholly-owned subsidiary of the Company with a registered capital of RMB33,000,000.
Aggregate Company
Aggregate Company is a limited liability company established on September 30, 1999 and carrying out its business in the PRC. Its business scope includes processing and selling construction sand and stone, as well as the wholesale, retail and commission purchase and sales of construction materials, decorative materials and metal materials.
To further streamline its business structure, on May 31, 2018, YCIH transferred all the equity interest it held in the Aggregate Company to the Company. Based on the evaluation report issued by an independent valuer, the above-mentioned equity interest was valued at RMB18.2154 million. The transfer was settled in cash in June 2018.
As at the Latest Practicable Date, the Aggregate Company was a wholly-owned subsidiary of the Company with a registered capital of RMB23,000,000.
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14th Metallurgical New Material Company
14th Metallurgical New Material Company is a limited liability company established on January 3, 2014 and carrying out its business in the PRC. It is mainly engaged in the research and development, production, sale, transportation and pumping of commercial concrete; the research and development, production and sale of concrete prefabricated components, new wall materials, admixtures, ready-mixed mortar, building components, and concrete admixtures; and the provision of technical consultation, technology research and development, technology transfer and technology services in the field of concrete. When 14th Metallurgical New Material Company was established, 14th Metallurgical Construction Group Yunnan Fifth Construction and Installation Engineering Co., Ltd. (十四冶建設集團雲南第五建築安裝工程有 限公司), a non-wholly-owned subsidiary of YCIH, held 100% of its equity interest.
For the purpose of further streamlining the internal business structure of YCIH, on February 13, 2018, 14th Metallurgical Construction Group Yunnan Fifth Construction and Installation Engineering Co., Ltd. transferred all the equity interest it held in 14th Metallurgical New Material Company to the Aggregate Company (at that time it was a wholly-owned subsidiary of YCIH). On December 5, 2018, the Aggregate Company transferred all the equity interest it held in 14th Metallurgical New Material Company to the Company. Based on the audited net assets in the audit report issued by an independent auditor, the consideration of the transfer of the above-mentioned equity interest was RMB32,647,209.12, which was settled in cash in November 2018.
As at the Latest Practicable Date, 14th Metallurgical New Material Company was a wholly-owned subsidiary of the Company with a registered capital of RMB30,000,000.
As confirmed by the PRC Legal Advisers, the above equity transfers of the subsidiaries have been legally performed and have been completed in compliance with relevant PRC laws and regulations; and the above equity transfers have been duly registered with relevant administration authorities for industry and commerce pursuant to applicable PRC laws and regulations.
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SHAREHOLDING AND CORPORATE STRUCTURE
The following chart sets out the shareholding and corporate structure of the Company immediately prior to the completion of the [REDACTED]:
YCIH(1) KMEIC(3)
100.00%
YOIC(2)
16.47% 73.18% 10.35%
Our Company
55.00% 50.00% 50.00% 100.00% 100.00% 100.00%
14th Yuxi Building Qujing Building Baoshan Building Aggregate Polymer Metallurgical New Material(4) Material(5) Material(6) Company Company Material Company
Notes:
(1) YCIH is a limited liability company established in the PRC on April 19, 2016. Yunnan SASAC holds 90.05% of its equity interest and the Department of Finance of Yunnan Province (雲南省財政廳) holds 9.95% of its equity interest.
(2) YOIC is a limited liability company established in the PRC on November 16, 2009 and a wholly-owned subsidiary of YCIH.
(3) KMEIC is a limited liability company established in the PRC on July 6, 2006. The State-owned Assets Management Committee of Kunming Economic and Technological Development Zone (昆明經濟技術開發區 國有資產管理委員會) holds 100% of its equity interest.
(4) As at the Latest Practicable Date, the Company held a 55% equity interest of Yuxi Building Material and Yuanjiang Zhikai Materials Industry and Trade Co., Ltd., which, except for its equity interest in Yuxi Building Material, has no other connected relationship with the Company, held a 45% equity interest.
(5) As at the Latest Practicable Date, the Company held a 50% equity interest of Qujing Building Material, Yunnan Zhujiang Seed Industry Co., Ltd., which, except for its equity interest in Qujing Building Material, has no other connected relationship with the Company, held a 30% equity interest, and Qujing Zhongwei Cement Products Co., Ltd., which, except for its equity interest in Qujing Building Material, has no other connected relationship with the Company, held a 20% equity interest.
(6) As at the Latest Practicable Date, the Company held a 50% equity interest of Baoshan Building Material, and Yongchang Investment, which, except for its equity interest in Baoshan Building Material, has no other connected relationship with the Company, held a 50% equity interest.
–95– THE DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” OF THE COVER OF THE DOCUMENT. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
The following chart sets out the shareholding and corporate structure of the Company immediately upon the completion of the [REDACTED] (assuming that the [REDACTED]is not exercised):
[REDACTED]
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