Yunnan Energy New Material Co., Ltd. 2022 Annual Report
Announcement No. 2023-022
Yunnan Energy New Material Co., Ltd.
2022Annual Report
March 2022
Yunnan Energy New Material Co., Ltd. 2022 Annual Report
2022Annual Report
Section 1 Important Notes, Contents and Definitions
The Board of Directors and its members, the Supervisory Committee and its members and the senior management warrant that the
contents of the Annual Report are truthful, accurate and complete, without any false statement, misrepresentation or major omission, and
that they are jointly and severally liable for them.
Paul Xiaoming Lee (the Company’s person in charge), Li Jian (the person in charge of finance) and Deng Jinhuan (the person in charge
of the accounting department) hereby declare and warrant that the contents of the financial statements in this Annual Report are truthful,
accurate and complete.
All Directors were present at the Board meeting to review thisAnnual Report.
The future plans, development strategies and other forward-looking descriptions in this report do not constitute material commitments
of the Company to investors. Investors and related persons should be fully aware of the risks in connection therewith and should understand
the difference between plan, forecast and commitment. Investors are advised to pay attention to investment risks.
For details, please refer to the “3. Risks the Company May Face” under the “XI. Outlook for the Company’s Future Prospects” in the
Section 3 “Management Discussion andAnalysis” of this report.
1.Risks of China’s policies on the regulating lithium battery separator
In recent years, various countries have intensively introduced industry policies to support the development of new energy vehicle
industry. Benefiting from policy support, the production value of new energy vehicle industry rapidly increased, driving the rapid
development of the upstream lithium battery industry. If there are significant adverse changes in carbon emissions, renewable energy
application and other relevant industry policies in the future, the relevant policies may have a negative impact on the development of the
whole industry chain of new energy vehicle, thus having an adverse impact on the upstream lithium battery separator industry and the
Company’s operation results.
2.Risks of fiercemarket competition
The rapid growth of the new energy vehicle industry has driven the fast development of lithium-ion battery separator in the upstream
part. With the high gross profit margin of lithium-ion battery separator, many domestic enterprises are attracted to invest in this segment.
Massive investment funds are driving the rapid increase in production capacity, and this segment is currently becoming increasingly
competitive. The increasingly fierce competition will have an adverse impact on the results of the Company if it can’t deeply understand the
law of industrial development and make constant efforts for technological innovation and operational management improvement to improve
product quality and reduceproduction costs.
3.Risks of price fluctuation in key raw materials
The key raw materials used by the Company are subjected to price fluctuation to some extent, especially polypropylene and polyethylene,
whose prices are affected by the strong fluctuations in the international crude oil price. The results of the Company may be adversely
affected by the gross profit margin which may be affected to some extent if the prices of key raw materials fluctuate sharply due to the
macroeconomic developments, the demand and supply relation for enterprises in the upstream and downstream parts and other factors.
4.Risks relating to construction in progress
The Company needs a great amount of investment funds for the under-construction projects in the production bases, such as Jiangxi
Enpo, Chongqing Energy, Jiangsu Energy, Hubei Energy, Jiangsu Ruijie and Hungary Energy. If the Company fails to raise sufficient funds
in time, or complete the projects and put into operation on schedule, the production, operation and profitability will be adversely affected.
5.Risks of technology leakage and talent outflow
An enterprise engaging in lithium battery separator requires advanced technology and process, rich management experience and deep
understanding of the industry. To ensure the ability of constant innovation and the steady growth of business, the Company should have
teams consisting of steady high-quality employees in scientific research, management and sales. The Company constantly improves the
mechanisms for talent cultivation, incentive, promotion and restriction, but there is still the possibility of the outflow of core employees from
the Company. In case
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