Established housing enterprises plan to participate in the lithium extraction project of Mount Qomolangma Salt Lake in Tibet with 1.6 billion yuan in advance for the purchase of equipment.

On the evening of March 13th, Songdu shares (600077), a veteran housing company, announced that its holding subsidiary Song du Like signed a consortium agreement with Qidi Qingyuan. Jointly participate in the implementation of the "Argentine Lithium potassium Co., Ltd. annual capacity of 50, 000 tons of lithium carbonate lake lithium extraction construction project equipment, operation and technical services" of Mount Everest (600338) in Tibet, and signed a "cooperation agreement" with Mount Qomolangma in Tibet.

It is reported that Songdu shares was founded in 1984 and listed in 2011, mainly engaged in real estate operation and sales. The company expects the net profit and loss attributed to shareholders last year to be 300 million yuan to 400 million yuan, from profit to loss compared with the same period last year; the net profit loss belonging to the shareholders of the company after deducting non-recurrent profits and losses is 270 million yuan to 380 million yuan.

The announcement shows that at present, the Songdu joint stock side does not directly have the professional knowledge reserve, technology, and personnel of the lithium carbonate construction project of Argentina Lithium potassium Co., Ltd. with an annual output of 50,000 tons, and the actual operation of the project also depends on the other side of the consortium to enlighten Qingyuan. Song du Like is mainly responsible for accepting the instructions of the owners, and is responsible for the advance, supply and operation of the project, while enlightening Qingyuan is mainly responsible for the technical support of the contract, design, supply of core equipment and related technical services.

The amount of equipment purchased under the relevant contract is 1.6 billion yuan, and Song du Like will advance all the contract equipment. For the full advance of the contract equipment and the corresponding interest, Mount Qomolangma in Tibet shall be repaid in three early instalments within three years after the completion and acceptance of the membrane process section of the project or within three years from March 31, 2024 (including March 31, 2024). At the same time, during the cooperative operation period, Mount Qomolangma in Tibet shall calculate the product handling fee and operation incentive fee and pay it to the consortium every month in accordance with the agreement.

In addition, as the project is located in Argentina, the company is temporarily unable to conduct a field visit due to the epidemic. At present, the cooperative parties have provided proof documents of the mining rights of the project, the credit report of Party A, the (EPC) framework agreement for the mining construction design, procurement and construction of the project, and other relevant ownership, qualifications and other supporting documents.

It is worth noting that during the deliberation of the board of directors, the three independent directors of Songdu shares abstained from voting on the above proposal because: the company's diversification can spread risks, but at the same time entering unfamiliar areas increases certain unknown risks. the company should conduct detailed due diligence in the light of the company's own cash flow, taking into account the current international situation and future trends, economic risks and industry research. Make prudent decisions.

In addition, the advance of 1.6 billion yuan accounted for 33.93% of the audited net assets of Songdu shares in the latest period. Song du shares said that the move will have a certain impact on its current cash flow expenditure.

In this regard, the Shanghai Stock Exchange quickly issued an inquiry letter, requiring Songdu shares to verify and disclose the project's decision-making and commercial rationality, related risks and sources of funds.

The SSE also requires Songdu shares to explain the specific conditions of Qingyuan and related teams, including, but not limited to, operational experience in project-related fields, project scale and profitability of pre-operation, technology patents and applications obtained, etc. Clearly enlighten Qingyuan whether it has all the relevant technology, personnel and experience needed for the project, and whether it needs outsourcing, external procurement, or obtaining technical permission from other parties, and explains the benefit distribution mechanism of Songdu shares and enlightening Qingyuan in cost settlement, cost sharing, income distribution and so on.