On August 8, Huida Sanitary Ware Co., Ltd. (hereinafter referred to as "Huida Sanitary Ware") issued an announcement on the progress of providing guarantees for subsidiaries. "Guangxi New Goldman Sachs") provided a guarantee of 40 million yuan.
The announcement shows that in order to meet the operation and business development needs of Huida Sanitary Ware’s secondary subsidiary Guangxi New Goldman Sachs and ensure the smooth progress of its production and operation, Huida Sanitary Ware has recently entered into cooperation with Bank of China Co., Ltd. Beiliu Branch ( (hereinafter referred to as "Bank of China Beiliu Branch") signed the "Maximum Guarantee Contract", stipulating that Huida Sanitary Ware will provide joint liability guarantee for Guangxi New Goldman Sachs' application for a comprehensive bank credit of RMB 40 million from Bank of China Beiliu Branch.
It is worth noting that the announcement pointed out that the asset-liability ratio of Guangxi New Goldman Sachs, the guaranteed party this time, exceeded 70%. As of March 31, 2022, Guangxi New Goldman Sachs' total assets were 237.9027 million yuan, total liabilities were 287.8452 million yuan, and net assets were -49.9425 million yuan. From January to March 2022, Guangxi New Goldman Sachs achieved operating income of 16.3059 million yuan and a net profit of -2.7274 million yuan. (The above data has not been audited)
The announcement shows that there is no counter-guarantee in the guarantee between Huida Sanitary Ware and Guangxi New Goldman Sachs. Huida Sanitary Ware indirectly holds 70.61% of the equity of Guangxi New Goldman Sachs. The independent director of Huida Sanitary Ware said that although other shareholders of the controlling subsidiary did not provide equal proportion guarantees or counter-guarantees in proportion to their capital contribution, the company had actual control over its operations and could effectively supervise and manage it and eliminate financial risks. Within the scope of the company’s effective control.
On August 27, 2021, Huida Sanitary Ware issued the "Announcement on the Progress of Signing the Investment Cooperation Framework Agreement", stating that it will increase its capital in Xinsheng, Beiliu City with 130 million yuan in monetary funds. Xinshengda New Materials Co., Ltd. (hereinafter referred to as "Xinshengda"). After the completion of this transaction, Huida Sanitary Ware directly holds 70.61% of the equity of Xinshengda and becomes its controlling shareholder. Guangxi New Goldman Sachs is 100% owned by Xinshengda. In addition, Xinshengda operates the well-known ceramic sheet and rock slab brand LA'BOBO.
On August 30, 2021, the strategic signing ceremony between Huida Sanitary Ware, New Goldman Sachs and the Beiliu Municipal Government was held at the New Goldman Sachs factory. Huida Sanitary Ware officially acquired New Goldman Sachs. According to Huida Sanitary Ware, New Goldman Sachs has more than ten years of ceramic production experience and standardized factory management. Its low-carbon and environmentally friendly production concepts and strong R&D capabilities have been highly recognized by the industry and society. In the future, Huida plans to invest hundreds of millions of yuan to introduce 5G digital networks, MES management systems, and automation equipment in accordance with Industry 4.0 standards, and build two 5G smart ceramic tile production lines to promote the high-quality development of Huida's ceramic tile sector.
As of the disclosure date of this announcement, Huida Sanitary Ware has actually provided a guarantee balance of RMB 24 million to Guangxi New Goldman Sachs, and the cumulative balance of guarantees provided is RMB 44 million. The cumulative guarantee amount after the implementation of this guarantee is within the 200 million yuan guarantee limit approved by Huida Sanitary Ware's 2021 annual shareholders meeting.
