Financing for New Path + Production Capacity Expansion! Meilian New Material Invests 2.7 Billion to Increase High-Polymer Materials

A major strategic move has been made in the polymer materials sector! Recently, Meilian New Materials (300586.SZ), a leading domestic masterbatch company, issued a series of announcements, declaring the termination of its original convertible bond issuance plan. Instead, the company will raise 1 billion yuan through a private placement to focus on core project construction. The core of these actions points to the "Meilian New Energy and Polymer Materials Industrialization Project (Phase I)" with a total investment of 2.767 billion yuan, demonstrating the company's firm determination to deepen its presence in the polymer materials field and build an integrated industrial chain.

The advancement of this 2.7 billion yuan polymer material project is first accompanied by an optimization and adjustment of the financing strategy. According to the announcement, Meilian New Materials has decided to terminate its 2023 plan to issue convertible corporate bonds to unspecified objects, while simultaneously disclosing a 2024 preliminary plan to issue A-shares to specific objects. Compared to the dual purpose of "project construction + supplementary working capital" in the original convertible bond plan, the capital allocation of the new private placement scheme is more concentrated—the total funds raised will not exceed 1 billion yuan (inclusive), which, after deducting issuance expenses, will be fully utilized for the first phase of the polymer material project.

The private placement details show that the number of subscribers will not exceed 35, the issue price will not be lower than 80% of the average price of the 20 trading days before the benchmark date, and the issuance volume will not exceed 30% of the total share capital before issuance (i.e., 213 million shares). This adjustment better fits the project's funding needs, enhances financing efficiency, and solidifies the capital foundation. The remaining funds will be self-raised by the company.

As the core of the company's strategic layout, this additional investment of 2.767 billion yuan in the polymer materials project has a clear and large-scale production capacity plan. According to the proposal, the main construction content of the project covers multiple production lines for polymer materials and related products, including an annual output of 300,000 tons of full-process masterbatch (including a 200,000 tons/year titanium dioxide production unit), 600,000 tons of ferrous sulfate, 100,000 tons of water treatment agents, and 800,000 tons of sulfuric acid (including a 50,000 tons/year reagent sulfuric acid) units. In addition, supporting public auxiliary facilities such as a 110kv substation, waste heat power generation from sulfuric acid, dilute acid concentration, demineralized water preparation, and a sewage treatment plant will be constructed.

Notably, the project's implementing entity is Meilian New Material (Sichuan) Co., Ltd., a wholly-owned subsidiary of Meilian New Material, and it is located in the Puguang Chemical Industrial Park in Xuanhan County, Dazhou City, Sichuan Province. It is currently under construction and is expected to be completed and put into operation by 2026. Upon completion, the project will form a complete production chain of "basic chemical raw materials - core intermediates - terminal polymer products." This will not only significantly increase the company's production capacity of high-end white masterbatches, but also expand market space through a diversified product matrix, and is expected to become the largest integrated masterbatch production base in China.

Meixin Materials' current layout of the polymer materials project accurately leverages the core resource advantages of the project location, laying the foundation for building a cost barrier. Xuanhan County, backed by the Puguang gas field—a major gas source for the national "Sichuan-to-East Gas Transmission" project—has proven natural gas reserves of approximately 434.9 billion cubic meters. It is also Asia's largest liquid sulfur production base, rich in mineral resources such as sulfur, potassium sulfate, and iron. This unique "gas and sulfur" resource endowment provides ample and inexpensive raw material guarantees for the production of polymer materials.