Hefei Urban Construction and Changxin Integration signed a project cooperation framework agreement, with quarterly revenue of 255 million

On July 13, Hefei Urban Construction issued an announcement stating that the company recently signed a project cooperation framework agreement with Hefei Changxin Integrated Circuit Co., Ltd. (hereinafter referred to as "Changxin Integrated").

The announcement shows that Hefei Industrial Investment Holding (Group) Co., Ltd. (hereinafter referred to as "Industrial Investment Group") holds 100% of the shares of Hefei Industrial Investment Holding Co., Ltd. (hereinafter referred to as "Industrial Holdings"), the second largest shareholder of Hefei Urban Construction, and Industrial Investment Group holds 99.75% of the shares of Changxin Integration. In addition, Mr. Yuan Fei, the legal representative of Changxin Integration, also serves as a senior manager of Industrial Holdings. According to the provisions of the "Shenzhen Stock Exchange Listing Rules" on related transactions, this transaction constitutes a related transaction; this related transaction does not constitute a major asset reorganization as stipulated in the "Management Measures for Major Asset Restructuring of Listed Companies". Since the framework agreement does not involve a specific amount, it does not need to be submitted to the board of directors and the shareholders' meeting for deliberation.

Changxin Integrated Circuit is located in the Airport Demonstration Zone of Hefei City, Anhui Province. It is mainly involved in the related business of Hefei Changxin Dynamic Random Access Memory Chip (DRAM) project. Hefei Changxin is the first integrated design and manufacturing enterprise in China to independently develop and put into production DRAM. It has built its first 12-inch wafer factory. The designed production capacity of the first phase of the project is 120,000 wafers per month, and the designed production capacity of all three phases is 360,000 wafers per month. DRAM products are widely used in many fields such as mobile terminals, computers, servers, artificial intelligence, virtual reality and the Internet of Things, and are of great strategic significance to breaking foreign monopolies and ensuring national information and industrial security. 

As of March 31, 2020, Changxin Integrated had total assets of 46.351 billion yuan, net assets of 2.783 billion yuan, operating income of 255 million yuan, and a net profit of -97.0886 million yuan.

It was disclosed that the total investment of the Hefei Changxin Integrated Circuit Manufacturing Base project exceeds 220 billion yuan. It is located in the Hefei Airport Economic Demonstration Zone, covers an area of ​​about 15.2 square kilometers, and consists of three areas: Changxin 12-inch memory wafer manufacturing base (hereinafter referred to as the "base"), Airport Integrated Circuit Supporting Industrial Park, and Airport International Town. It mainly arranges upstream and downstream industrial chain supporting facilities around the Changxin storage project, provides life service facilities, and is committed to building a national storage industry base integrating industry and city, and a world-class storage industry cluster.

Among them, Changxin's 12-inch memory wafer manufacturing base project is the first DRAM design and manufacturing integrated project put into mass production in mainland China, and is also the largest single industrial project in Anhui Province, with a total investment of about 150 billion yuan; the Airport Integrated Circuit Supporting Industrial Park is located to the west of the base, with a total investment of more than 20 billion yuan; Hefei Airport International Town is located to the north of the base, with a planned land area of ​​9.2 square kilometers, a planned total construction area of ​​4.2 million square meters, and a total investment of about 50 billion yuan. Hefei Urban Construction has participated in the construction of the Hefei Airport International Town project by indirectly participating in the Hefei Overseas Chinese Town Industrial Development Co., Ltd. on June 21, 2019. The content of this project cooperation framework agreement does not include the Hefei Airport International Town project.

Hefei Urban Construction and Changxin Integration signed a "Project Cooperation Framework Agreement". Hefei Urban Construction and Hefei Gongtou Industrial Technology Development Co., Ltd. (hereinafter referred to as "Industrial Technology"), relying on their rich experience in the real estate field, will provide Changxin Integration with professional project construction services such as factory areas, office areas, and living areas, and are committed to creating a first-class corporate production, work, and living environment.

Hefei Urban Construction stated that the construction agency business involved in this project cooperation framework agreement is an important business segment outside the company's main business of real estate development. The signing of this framework agreement will help enhance the market influence of the company's construction agency business and further expand the scale of the company's construction agency business. It will have no significant impact on the company's production and operation in 2020.