Tanaka Precision Machinery plans to raise 350 million yuan to build and expand a high-end intelligent equipment production base.

On the evening of August 16, Tanaka Seiki announced a plan to issue shares to specific objects. The number of shares issued this time will be determined by dividing the total amount of funds raised by the issue price. At the same time, the number of shares issued to specific objects this time will not exceed 25 million shares.

The total amount of funds raised from this issuance to specific objects will not exceed 350 million yuan. After deducting the issuance expenses, 241 million yuan will be used for the renovation and expansion project of the high-end intelligent equipment production base, 49 million yuan will be used for the new energy intelligent manufacturing equipment innovation center project, and 60 million yuan will be used to supplement working capital.

Regarding the purpose of this issuance, Tanaka Seiki said that it is mainly: through the construction of the high-end intelligent equipment production base renovation and expansion project, the company can expand the production site, expand production equipment, recruit technical talents, and effectively improve the company's production capacity, thereby enhancing the company's coverage of downstream customers, and consolidating the company's market position in the intelligent equipment manufacturing industry and expanding its existing competitive advantages. Against the background of the rapid development of the intelligent equipment manufacturing industry, this project will enable the company to further enhance its comprehensive strength, increase its market share, enhance profitability, and ensure the long-term sustainable development of the company's main business in the future.

It is reported that Tanaka Precision Machinery has been deeply involved in the field of intelligent equipment manufacturing for many years and is a leader in the field of precision winding equipment in China. On the basis of the original CNC standard machines, the company has completed the extension to the equipment for the pre- and post-winding processes, as well as non-standard machines and special machines that meet the specific needs of customers, which can meet the needs of customers for differentiation, refinement and automation of the entire industrial chain. The company's customers are mainly concentrated in the fields of consumer electronics manufacturing and automotive electronics manufacturing. Faced with a complex and competitive market environment, in order to maintain the company's sustainable development, the company needs to work hard to open up new business areas while steadily developing its existing business, strengthen investment in research and development of new technologies and new products, and create new profit growth points.

Tanaka Seiki said that in combination with the company's medium- and long-term development strategy and the development trend of the industry it is in, the company plans to seize the market opportunities of the rapid development of new energy vehicles and lithium battery industries, build a new energy intelligent manufacturing equipment innovation center, and form the company's technical research and development capabilities in the fields of new energy vehicle electric drive, lithium battery and other fields of intelligent manufacturing equipment, and promote the industrialization of related products to enrich the company's product line, optimize the product structure, and achieve the company's leapfrog development.

Tanaka Seiki said that at the end of 2018, the end of 2019, the end of 2020 and the end of March 2021, the company's asset-liability ratio was 75.54%, 97.63%, 74.05% and 67.42%, respectively. As of the end of March 2021, the company's net assets were 170.2643 million yuan and its undistributed profits were -141.2178 million yuan. The company's high asset-liability ratio and small net asset scale have limited the company's financing channels, which is not conducive to the company's future production and operation, and also affects the implementation of the company's development strategy. The company needs to use equity financing methods to optimize the company's capital structure, reduce the asset-liability ratio, and enhance the company's risk resistance. At the same time, through the rational use of raised funds, the company can achieve the expansion of production and operation scale, implement and promote the company's development strategy, and ensure the company's future long-term sustainable development, which is in line with the long-term interests of the company's shareholders.

Regarding the expansion and reconstruction project of the high-end intelligent equipment production base, Tanaka Seiki pointed out that based on the existing production capacity and future development strategy, the company plans to invest 252.9175 million yuan to purchase advanced production and processing and inspection and testing equipment to build a high-end intelligent equipment production base, and at the same time, carry out technical transformation of the existing production line to improve the intelligence and automation level of the production line. After the completion of the project, it is expected to form an annual production capacity of 330 CNC automation non-standard machines and 70 CNC automation special machines, effectively improving the company's production capacity in the field of intelligent equipment manufacturing, optimizing the company's production process, enhancing the market competitiveness of the company's products, and consolidating and improving the company's industry position.

Regarding the new energy intelligent manufacturing equipment innovation center project, Tanaka Seiki stated that the company plans to build a new energy intelligent manufacturing equipment innovation center. By purchasing advanced R&D equipment and R&D software systems, introducing excellent R&D teams and senior technical talents, it is committed to the research and development and innovation of forward-looking technologies and products such as lithium battery intelligent manufacturing equipment and new energy vehicle electric drive intelligent manufacturing equipment in the new energy field, creating new profit growth points for the company and further enhancing its overall competitiveness.

In addition, Tanaka Precision Machinery plans to use RMB 60 million of the funds raised to supplement working capital to meet the company's working capital needs, alleviate operating capital pressure, and enhance the company's risk resistance and sustainable development capabilities.