Holitech (002217) announced on the evening of July 31, the company signed a “cooperation agreement” with the People’s Government of Hanjiang District, Putian City, investing in high-end TFT display module project and COF comprehensive screen display module project in Hanjiang District, Putian City. Flexible OLED display module project and integrated display module.

The total investment of the project is not less than 2.5 billion yuan, of which the total investment of the first phase of the project is 1.5 billion yuan. It is planned to build a high-end flexible display module production line and a high-end TFT liquid crystal display module production line. It is expected to be put into operation before the end of 2019, with a monthly capacity of 10 million pieces. The second phase of the project is planned to be implemented before the end of 2020. The investment or investment in equipment will be no less than 1 billion yuan. The amount needs to be confirmed by a third-party evaluation agency to build 20 high-end display module production lines. It is expected to be put into operation before the end of 2021, with a monthly capacity of 10 million pieces.

After the completion of the project, it will help to enhance the company’s high-end display in small and medium-sized, especially in the flexible display field; it will help to enhance the company’s comprehensive competitiveness in the display field and is of great significance to further enhance the company’s profitability.

According to the announcement, Holitech (Party B) and the People’s Government of Hanjiang District of Putian City (Party A) signed a “Cooperation Agreement”, which will invest in high-end TFT display module project and COF full-screen display module project in Hanjiang District, Putian City. , flexible OLED display module project and integrated display module, the company’s wholly-owned subsidiary Fujian Holitech Technology Co., Ltd. (hereinafter referred to as “Fujian Holitech”) will be used to carry out the joint operation of the joint operation of Litai.

Party A promises that Party A’s designated enterprise will arrange the display module first phase project company within the total investment or financing of RMB 1.5 billion by October 30, 2019, to complete the following matters: land use right for project land; display module project phase one The second phase of the plant, decoration and supporting facilities construction; project production, work, staff living facilities construction; project first phase equipment procurement, installation; to meet the other work and input of the first phase of the display module project. Party B shall provide the designated enterprise with the detailed catalog of the construction plan of the plant, decoration and supporting facilities, the first-phase equipment procurement, and installation, and the designated enterprise of Party A shall construct and purchase according to the catalog of the plan. Construction and procurement shall comply with relevant state regulations, and Party B shall finally accept and put into operation according to the catalog of the plan.

Party A and Party B agree that after completing the work stipulated in the above paragraph of this Agreement, Party A’s designated enterprise will transfer to Party B all the operating rights of the first phase of the Display Module Project Company. Operating rights include, but are not limited to, the business operations and management of the first-stage project company, the formation of the operations team, personnel recruitment and management, financial management, plant and equipment operations and management.

Party B also promised that the display module project (including but not limited to “Display Module Phase I Project Company” and Project Phase II) will be paid to Putian City within the six-year period from the establishment to the acceptance of the investment incentives agreed in this agreement. The total income of the two levels of local financial resources (the place where the enterprises are subject to various taxes and fees) shall not be less than 500 million yuan.

In addition, within the six-year period from the establishment of Fujian Holitech to the acceptance of the investment incentives stipulated in this agreement, the accumulated local financial income of the two levels of Putian City and Hanjiang District shall not be less than RMB 300 million.

At the same time, the content of this cooperation agreement also includes Party A’s consent to give Holitech’s investment incentives.

It is understood that Party A will give Party B an investment incentive of RMB 100 million in cash within 30 days from the date when the project display module project is handed over to Party B. The company will give Party B an operating subsidy of 150 million yuan by cash before June 15, 2020. yuan. Within 30 days from the date when Fujian Holitech first issued the VAT invoice, Party A will give Party B a cash incentive of RMB 150 million in cash; Party A will give Party B an operating subsidy of RMB 150 million by cash before June 15, 2020. The tax payment is not less than 150 million yuan.

Comments: Holitech is a leading one-stop supplier of intelligent terminal core components in China. The company has the advantages of the entire industry chain of materials and modules, and has strong industrial integration and market competitiveness. Relying on the “1+N” customer cooperation model, the product line has been extended to a variety of intelligent terminal core modules such as full-screen module, touch screen module, fingerprint recognition module, and camera module. At present, the flexible panel market is expanding, and the global display focus is also shifting to the domestic market. As a company that comprehensively deploys the smartphone industry chain in the industry, the company continues to upgrade its technical capabilities to meet the needs of first-line brand customers at home and abroad for high-end flexible screen modules. This investment will help the company to further stabilize the position of the display module industry, strengthen the company’s supporting capabilities in high-end flexible display modules, better promote the development of domestic flexible display, meet customer needs, keep up with industry trends, and the company Long-term development has a positive impact.