JQH passed the Audit of China Securities Regulatory Commission

On July 3, 2020, the application for non-publicissuance of A-shares by Shenzhen JingQuanHua Electronics Co., Ltd. (JQH forshort) was approved at the 99th Meeting of the 18th Issuance Audit Committee of China Securities Regulatory Commission in 2020.

        The total amount of funds to be raised in thenon-public offering of the company is no more than 366 million CNY, including 194 million CNY for the project of new energy vehicle magnetic components production and construction, 72.5574 million CNY for the project of 5G communication magnetic components automation production and construction, and the rest for liquidity funds.

①Seize the opportunities of new energy vehicles and 5G industry development, expand and strengthen the core business and enhance the market competitiveness.

JQH focuses on electronic components industry, mainly engages in the research and development, production and sales of magnetic components, power supply and special transformers. Benefited from the accelerated development of new energy vehicles and 5G communication, the market demand for magnetic components and power supply, the company's core products, increased rapidly. In order to seize the industry growth opportunities and meet the needs of market development, JQH has set up the new energy vehicle magnetic components business unit and the 5G communication magnetic components research center to enhance the R&D ability. The raised investment will be used to invest in automation production line to improve JQH's production and manufacturing capacity of electronic components, as well as its the profitability, market share and competitiveness.

②Optimize, upgrade and enrich the product structure, enhance the added value of products and enhance the profitability of the company.

The funds raised from the non-public offering are invested in the automobile field (focusing on the new energy vehicle field) and 5G communication field. The project has a high technical threshold. After being completed and put into operation, it can further optimize the product structure, increase the product technology content and enhance the added value of the company's products. While enhancing the overall profitability of the company, it helps to further consolidate and enhance the company's position in the field of new energy vehicles. Relying on advanced technology, reliable product quality and high-quality customer resources, JQH will overcome the new challenges through transformation and upgrading of products. On this basis, JQH's overall competitiveness and profitability will be enhanced, rapidly expanding the market share of new energy vehicles, and enhancing the industry status and brand awareness.

③ Improve the JQH's asset structure and financial situation, and enhance its solvency and capital strength.

Part of the funds raised in this non-public offering will be used to supplement the company's working capital, so as to further optimize the capital structure, reduce financial and operational risks, and improve the company's solvency. It will increase JQH's capital strength, improve its operational efficiency and comprehensive competitiveness, enhance the company's long-term sustainable development ability, and win the advantages in the market competition.

④ Optimize shareholder structure and improve corporate governance

JQH plans to introduce securities investment fund management companies, securities companies, trust and investment companies, financial companies, insurance institution investors, qualified foreign institution investors, other legal persons, natural persons or other institutional investors that meet the requirements of the CSRC. It will bring in external investors more funds and resources, improve the company's shareholder structure, make business decisions more reasonable and scientific, and contribute to the steady improvement of market competitiveness and shareholder returns.

The implementation of the fund-raising investment project conforms both to the national policy guidance and market development direction, and to the company's overall development strategy and goal planning.