Announcement by Zhejiang Juhua Co., Ltd. Regarding the Establishment of a Wholly-Owned Subsidiary and the Implementation of a High-Purity Electronic Gas Project

Stock Abbreviation: Juhua Shares Stock code: 600160 Announcement No.: Lin 2014–71

Zhejiang Juhua Co., Ltd. ( Hereinafter referred to as “ Our company ” or “ Company ”) To adapt to the rapid development trend of the electronic information industry market, accelerate the cultivation of the electronic chemicals business, leverage the synergistic effects of product variety and scale aggregation, foster new profit growth areas, promote transformation and upgrading, and optimize industrial structure, this proposal was reviewed at the 13th meeting of the 6th session of the company’s Board of Directors. ， Agree to the establishment of a wholly-owned subsidiary by the company and its investment. 15,000 Ten thousand yuan invested in a high-purity electronic gas project. ( Phase 1) ( Hereinafter referred to as “ This project ” or “ Project ” ). The announcement is as follows: ：

I. Newly Established Company (hereinafter referred to as) “ New company) ” Basic Information

(1) Company Name: The name approved and registered by the company registration authority shall prevail.

(2) Company Type: Single-Member Limited Liability Company

(3) Out Assets Person: Zhejiang Juhua Co., Ltd. (the Company)

(4) Registered Capital: 8000 Ten thousand RMB

(5) Form of contribution: Cash

(6) Registration Location: Within the High-Tech Industrial Park in Quzhou City, Zhejiang Province

(7) Address: Within the High-Tech Industrial Park, Quzhou City, Zhejiang Province

(8) Business Scope: Establishment of a high-purity gaseous chemical project (subject to the name approved and registered by the company registration authority).

(9) Corporate Governance Structure: The new company will not establish a shareholders’ meeting, a board of directors, or a supervisory board. Instead, it will appoint one executive director, one supervisor, and one general manager. The powers and responsibilities of the executive director, supervisor, and general manager shall be governed by the company’s articles of association.

II. Project Overview

(1) Project Name and Implementing Entity

Project Name: High-Purity Electronic Gas Project (Phase I)

Implementing entity: The new company is responsible for implementation.

(2) Project Content

Newly built 1000t/a Pharmaceutical-grade hydrogen chloride, 1000t/a High-purity hydrogen chloride, 500t/a Production facilities and related supporting infrastructure for a series of high-purity chlorine products.

(3) Process Technology Plan

Using the company’s existing industrial raw materials, we purify and produce high-purity electronic gases such as chlorine gas and hydrogen chloride.

(4) General Layout Arrangement

The proposed company’s production facility will be located within the local jurisdiction, and no land acquisition is required.

(5) Investment Estimation and Fund Raising

The total investment for this project is approximately 15,000 10,000 yuan. The funding comes from the company’s own capital and bank loans.

(6) Economic Benefit Evaluation

After the project reaches full capacity, the estimated average annual total profit is... 5,200 Ten thousand yuan—the pre-tax internal rate of return on financial performance is approximately... 24% The after-tax financial internal rate of return is approximately 20% 。

(7) Project Implementation Plan

Production Facility Plan 2015 Year 4 Construction started in the month, 2015 Year 12 The moon is ready for test drives.

III. Prospects for the Products in This Project

The main products of this project—high-purity hydrogen chloride—is primarily used in the cleaning and epitaxial growth processes during semiconductor chip manufacturing; high-purity chlorine gas is mainly employed in the liquid crystal flat-panel display, optical fiber, and semiconductor industries, where it serves as an etching gas and a dehydrating agent. Hydrogen chloride products of pharmaceutical grade are primarily used as raw materials for pharmaceutical synthesis.

According to 2013 The Revised “National Industrial Structure Adjustment Guidance Catalog” for the Year ( 2011 Yearbook) ， High-purity electronic gases and hydrogen chloride for pharmaceutical use are projects encouraged by the state.

Among the seven major national strategic emerging industries—energy conservation and environmental protection, next-generation information technology, biotechnology, high-end equipment manufacturing, new energy, new materials, and new-energy vehicles—the ones related to high-purity electronic gases include: the semiconductor lighting industry within the energy conservation and environmental protection sector; communication networks, the Internet of Things, triple-play convergence, new flat-panel displays, and high-performance integrated circuits within the next-generation information technology sector; aerospace equipment within the high-end equipment industry; and solar energy within the new-energy sector. .

As global electronic consumption and manufacturing shift toward domestic markets, the supportive policies implemented by the state for downstream industries such as information technology, semiconductors, and integrated circuits are increasingly yielding tangible results. Moreover, given the relatively high difficulty in producing hydrogen chloride of pharmaceutical grade, new pharmaceutical products using pharmaceutical-grade hydrogen chloride as a raw material are continually expanding. Consequently, it is anticipated that the main products of this project will have promising market prospects.

IV. Significance of Project Implementation and Its Impact on the Company

This project is characterized by high technical requirements, a high market entry barrier, and high added value, aligning with the nation’s industrial policy guidelines and the company’s industrial direction. “ New materials, new energy sources, new environmental protection technologies, and new applications. ” The direction of transformation and upgrading, as well as market consumption trends, show promising development prospects.

Implementing this project will accelerate the localization of our project products, creating synergies and scale economies with the company’s existing wet electronic chemicals business in terms of product variety and scale. This will help cultivate new profit growth areas for the company and play a positive role in speeding up the development of the company’s electronic chemicals business, optimizing its industrial structure, and perfecting its supply chain, thereby enabling the company to establish a leading domestic position in the field of electronic chemicals.

The implementation of this project will not have a material impact on the company’s financial position and operating results for the current year.

Hereby announced.

Board of Directors of Zhejiang Juhua Co., Ltd.

2014 Year 11 Moon 19 day