Shenjian Co., Ltd. has shut down multiple inefficient production lines and is planning to build a 100,000-ton polyester resin production capacity.

Ma'anshan Shenjian: Shut down NPG production line and convert to launch a 100,000-ton polyester resin project

According to the announcement, Ma'anshan Shenjian will shut down its neopentyl glycol (NPG) production line and convert in-situ to build a 100,000-ton annual polyester resin project. At present, the domestic NPG production capacity tends to be saturated, and integrated substantial factories have prominent cost advantages. The NPG production line of Ma'anshan Shenjian has high production costs and continuous losses, which does not conform to the company's strategic direction.

Ma'anshan is located in the core demand area of powder coatings in East China, with good park supporting facilities and port logistics conditions, and the project conforms to regional manufacturing policies. The total investment of the transformation project is 180 million yuan, of which the fixed asset investment is 160 million yuan, and the capital comes from self-raised funds of the enterprise. The construction period is 24 months. The project will revitalize the original plant assets. The company estimates that this transformation is not expected to have a significant impact on the 2026 performance, and after the project is put into operation, it will consolidate the company's competitiveness in the powder coating products polyester resin track.

Lihuayi Shenjian: Shut down NPG production line and develop cooperation to assets externally

Lihuayi Shenjian will shut down the neopentyl glycol production line simultaneously. The company explained that this production line has high process costs, serious equipment aging, substantial technological transformation investment and limited subsequent development space. The book assets of Lihuayi Shenjian are mainly buildings, with low book value. The company plans to find transferees and partners to relevant assets and businesses. According to the calculation, this shutdown has a limited impact on the 2026 performance.

Shenjian Yuchang rail transit production line shut down, business transferred to Jiaye Aviation

Shenjian Yuchang production line will be shut down simultaneously. In recent years, the domestic high-speed railway and urban rail transit market has turned to the stock stage, with slowdown in new investment. Coupled with the small business volume and insufficient development space of Shenjian Yuchang, the company decided to divest this production line. The original rail transit related business will be transferred to Jiaye Aviation as a whole, and customer order delivery and after-sales support will not be affected. Its land and plant will be retained, and some equipment can be allocated to Jiaye Aviation to continue using. It is also expected not to significantly drag down the performance of this year.

Purpose and possible risks of manufacturing adjustment

The company stated that this centralized shutdown of inefficient production lines aims to optimize the manufacturing structure, revitalize inefficient assets, concentrate resources on the main business of polyester resin, and increase the production capacity of the powder coating products material sector, which is beneficial to the competitiveness of the main business in the long run.

At the same time, the announcement reminds of risks: the continuous expansion of sector production capacity, greater market competition pressure and profit pressure. After the new project is launched, the company needs to continue investing in R&D, develop high value-added differentiated items and enhance operation level to realize the project benefits. On the whole, this production line adjustment will not have a significant adverse impact on the company's sustainable operation ability.