On March 26, the Yichun Municipal Ecological Environment Bureau released a public notice of the proposed acceptance of the environmental impact assessment documents for the expansion project of Mingguan New Materials Co., Ltd.'s 120 million square meters per year POE film used in photovoltaic module encapsulation (significant changes).

In June 2021, Mingguan New Material Co., Ltd. entrusted Yichun Yixin Environmental Protection Technology Co., Ltd. to complete the "Environmental Impact Report Form for the Expansion Project of Mingguan New Material Co., Ltd. to Produce 120 Million Square Meters of POE Encapsulation Film for Photovoltaic Modules Annually". On December 15, 2021, it received the "Approval of the Environmental Impact Report Form for the Expansion Project of Mingguan New Material Co., Ltd. to Produce 120 Million Square Meters of POE Encapsulation Film for Photovoltaic Modules Annually" (Yi District Environmental Assessment [2021] No. 28) issued by the Yichun Economic and Technological Development Zone Branch of Yichun Ecological Environment Bureau. Currently, the project is under construction, and some equipment has been installed.

During the actual construction process of the project, there were changes compared to the original environmental impact assessment and approval content. The specific changes are as follows:

(1) The construction site of the project has changed. The original environmental impact assessment (EIA) approval was for the construction site located at No. 32 Jingfa Avenue, Yichun Economic and Technological Development Zone, with geographic coordinates E114°23′53.498″, N27°52′13.163″. It has been changed to No. 666 Chunchao Road, Yichun Economic and Technological Development Zone, Jiangxi Province, with geographic coordinates E114°23′45.928″, N27°52′22.510″. The new plant location is 20 meters north of the original plant site.

(2) Adjustments to the production process: the main production process remains unchanged, and a new crushing process for edge scraps is added. After crushing, the edge scraps will be returned to the feeding process for reuse.

(3) Adjust and optimize part of the production equipment for the project, adding 2 slitter rewinders and 3 crushers;

(4) Due to the change in construction site, the production layout will be adjusted accordingly;

(5) A new broken waste gas emission outlet is added. According to the "Technical Specification for Application and Issuance of Pollution Discharge Permit Rubber and Plastic Products Industry" (HJ1122-2020) 5.1.5.2.5 Emission outlet type: The waste gas emission outlets of simplified management discharge units are all general emission outlets. The project is C2921 plastic film manufacturing. According to the "Classification Management List of Pollution Discharge Permit for Fixed Pollution Sources" (2019 Edition), it belongs to the simplified management discharge unit, so the newly added broken waste gas emission outlet is a general emission outlet.

First Adjustment: In March 2021, Mingguan New Materials announced a change to part of its raised funds investment projects. The original fundraising projects, "Expansion Project of 30 Million Square Meters of Solar Cell Backsheet Annually" and "Expansion Project of 10 Million Square Meters of Lithium Battery Aluminum Plastic Film Annually," due to reduced prices of purchased production equipment and improved production equipment technology, will have surplus funds under the condition of maintaining the original project capacities. The saved excess funds are intended for the construction of an additional "Expansion Project of 120 Million Square Meters of POE Encapsulation Film for Photovoltaic Modules Annually." The POE film project investment is approximately 194 million yuan.

At the time, analysis indicated that the solar cell encapsulation film market, where POE film is located, had a high concentration and significant head effect. The existing and under-construction capacities of the major companies were essentially aligned with market demand. During the reporting period, Mingguan New Materials' solar cell encapsulation film business had a relatively small revenue scale, with a product gross margin of only 2.13%, and there were instances of returned and substandard inventory.

The second adjustment: In April 2022, Mingguan New Materials released a public offering announcement: This time, it plans to raise 2 billion yuan to invest in the construction of the "Mingguan Lithofilm Company's 200 million square meters per year aluminum塑film project," "Mingguan Lithofilm Company's 100 million square meters per year aluminum塑film project," "Jiaming Film Company's 100 million square meters per year fluorine-free backsheet project," as well as补充working capital. This expansion project is precisely the aluminum塑film project that was reduced the previous year.

Project Extension: On December 14, 2022, Mingguang New Material Co., Ltd. issued an announcement regarding the extension of some fundraising project schedules.

The reason for the delay is that the fundraising investment project "Expansion Project for Annual Production of 1.2 Billion Square Meters of POE Encapsulant Film for Photovoltaic Modules" has been postponed mainly due to the impact of the COVID-19 pandemic. Strict epidemic prevention and control measures have been implemented in various regions, leading to restricted logistics and personnel mobility. This has affected the procurement of materials, logistics transportation, and has also delayed the progress of construction work due to restricted mobility of construction personnel and daily epidemic prevention efforts.

Photovoltaic film is a key encapsulant material in the solar industry, serving as an auxiliary material in the manufacturing of photovoltaic modules. It plays a protective and efficiency-enhancing role for photovoltaic cells, belonging to the photovoltaic industry chain. Its protective function is primarily reflected in minimizing the impact of external environmental factors on the cells during the operation of photovoltaic modules, thereby extending their service life and improving their power generation efficiency. In other words, photovoltaic film is a critical material for ensuring the quality and longevity of photovoltaic modules.

The production of photovoltaic encapsulants typically uses resins (EVA, POE) as the main material, with cross-linking agents, thickeners, antioxidants, and light stabilizers added. The process involves melting and extruding, then casting to form the film into its final product. Currently, there are four main types of photovoltaic encapsulants on the market: transparent EVA encapsulant, white EVA encapsulant, POE encapsulant, and co-extruded POE composite film (EPE, EVA-POE-EVA) encapsulant.