On March 27, Shangfeng Cement said that since the company formulated and issued a five-year plan in 2019, the board of directors has clearly defined the direction and path of transformation, upgrading and development based on the main industry of building materials, and through the steady layout of equity investment in emerging industries and the accumulation of resources, the company has made a series of efforts to promote the transformation, upgrading and development of building materials industry. Gradually clarify the development direction of the second growth curve business. Over the past
six years, the company has maintained a leading cost-efficiency competitiveness in the building materials cornerstone business, and has continuously maintained a leading position in the return on equity industry. Gross profit margin maintained the first place among listed companies in the industry for five consecutive years: equity investment business focused on the semiconductor industry chain, and successively laid out Hefei Jinghe, Changxin Storage, Guangzhou Yuexin, Shenghe Jingwei, Xinhua Semiconductor, Xinfeng Technology and other science and technology enterprises. The target enterprises with more than 60% investment have been listed or issued, and have accumulated deep resources in the semiconductor industry chain. In the new five-year plan released by the
Company in 2025, the unique business structure of the "Troika" was further clarified: cement building materials cornerstone business, equity investment capital business, and new material growth business. The Company is committed to the steady development and growth of the three businesses. Three specific business situations:
(I) Building Materials Cornerstone Business Performance-Compared with the listed companies in the same industry, the
company's building materials business performance continues to maintain an obvious level of high quality. In the past five years, the company has always maintained the leading position in the cement industry in terms of gross profit margin, average return on equity, per capita operating profit and return on total assets, which on the one hand reflects the professional operation and management capabilities of Shangfeng Cement. Strong resilience has been maintained in the cyclical fluctuations: on the one hand, based on the unique and non-replicable barrier advantages of Shangfeng Cement: the advantages of market regional layout with excellent logistics conditions, sufficient mine resource reserves, and the advantages of mixed ownership mechanism combining high efficiency with standardization and stability, the sustained stability of high profitability has been built.
The company's long-term stable and high-quality performance and cash flow have created good returns for shareholders. In terms of dividend distribution, in 2013, the company was listed in the form of reorganization and did not raise funds from the market. Since then, the company has implemented 11 equity distribution plans without financing from the capital market. Accumulated dividend amount of RMB3.819 billion (including repurchase): In 2024, the Company will distribute a cash dividend of RMB6.30 (tax inclusive) for every 10 shares, totaling RMB600 million (tax inclusive), accounting for 95.73% of the net profit attributable to the parent company (consolidated statement) for the year.
(2) Steady and high-quality equity investment- "people without me"
The company's equity investment is oriented by cultivating and accumulating the second growth curve business ecological resources, focusing on strategic emerging industries such as semiconductors and new materials, and focusing on the core technological innovation areas advocated by the state, after years of careful layout, the company's equity investment has been established. The company has invested in many high-quality enterprises, such as Jinghe Integration, Guangzhou Yuexin, Changxin Storage, Pioneer Electrical Science, Onruiwei, Zhongrun Solar Energy, Shanghai Super Silicon, Shenghejing Microchip Yaohui, Yineng Science and Technology, Xinhua Semiconductor, Xi'an Yicai, Xinfeng Science and Technology, to support the whole semiconductor industry chain of "Design-Manufacturing-Seal-Testing-Material". The total scale of the company's new economic equity investment is 2.065 billion yuan, totaling 29 projects, including 3 projects that have been issued and listed, 8 projects that have been accepted for listing, 2 projects for merger and acquisition of listed companies, 3 projects for guidance and filing, and 4 projects for repurchase or transfer. According to the strategic plan, the total scale of equity investment is planned to be about 3 billion yuan, the annual quota is strictly controlled, the risk is strictly controlled, and the annual capital of about 300 to 500 million yuan is maintained to continue to invest in the innovative economic industry equity encouraged by the state.
(3) Business Situation of New Materials I. Accelerating the Cultivation
of New Materials The company signed a strategic cooperation agreement with Shenzhen Zhijin in Hangzhou on March 16, 2026. Meiqi Circuit (Jiangmen) Co., Ltd. (Hereinafter referred to as "Meiqi Circuit") held by Shenzhen Zhijin Electronics Co., Ltd. (Hereinafter referred to as "Shenzhen Zhijin") is acquired and increased by the company through its holding subsidiary. After the completion of the transaction, the company will hold 75% of the total equity of Meiqi Circuit, thus formally entering the semiconductor packaging substrate business.
(4) Brief description
of the basic situation of Meiqi Circuit 1. Meiqi Circuit's main business
Meiqi Circuit specializes in the production of semiconductor packaging substrates. The main business model is to purchase raw materials such as gold salt, copper sheet, dry film, ink, chemicals, copper foil, prepreg and other raw materials from suppliers to complete the manufacture of IC packaging substrates.
2. The IC packaging substrate (IC Package Substrate) in the industry
is the signal carrier connecting the bare chip (DIE) and the printed circuit board (PCB), which undertakes the three core functions of signal transmission, chip support and heat dissipation protection. It is in the packaging link of the semiconductor chip industry chain. In the Catalogue of Guidance for Industrial Structure Adjustment (2024 edition) of the National Development and Reform Commission, "rigid printed circuit boards and packaging carriers" are listed as encouraged industries.
3. At present, the operating income and total assets of Meiqi Circuit account for less than 1% of the company's operating income and total assets, accounting for a relatively small proportion, which has little impact on the company's business scale and financial situation in the short term. However, the packaging substrate business of Meiqi Circuit is inconsistent with the business direction of the second growth curve of the company's strategic development, which matches the accumulation of resources in the semiconductor industry chain invested by equity, and the company can provide stable capital support and channel resources for the semiconductor industry chain for Meiqi Circuit. It also promotes the competitiveness of new business and the growth of scale strength with an efficient and standardized lean management system. The
Company will implement and promote the "troika" to maintain steady development in accordance with the five-year planning guidelines formulated and issued by the Board of Directors.
Building materials cornerstone business is based on "excellence", intensive cultivation, cost reduction and efficiency enhancement, maintaining leading market competitiveness, and providing stable cash flow investment guarantee for the growth and development of new quality business such as semiconductor packaging substrates. Equity investment business is based on "stability", strictly controlling the quota and risk, and continuing to focus on the emerging pillar industries encouraged by the state. The Company appropriately laid out the future science and technology industry advocated and supported by the state, and maintained the total amount and asset proportion of the strategic planning target; the semiconductor packaging material business with the packaging substrate as the entry point currently focuses on "fast", increases investment, builds a high-standard professional operation management and R & D team, and rapidly improves the strength, scale and comprehensive competitiveness of the new quality business.
The company will make every effort to promote the coordinated development of the "Troika" and maintain the overall pattern of steady growth and development.
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