According to the announcement by Shenma Industrial (600810.SH) on the Zhitong Finance APP, its wholly-owned subsidiary, Henan Shenma Fanglun Technology Development Co., Ltd. (the "target company" or "Fanglun Technology Company"), plans to increase its capital and expand its shares. The specific capital increase plan is as follows: the company's controlling shareholder, China Pingmei Shenma Holdings Group Co., Ltd. ("China Pingmei Shenma Group"), will increase the capital of the target company by a total of RMB 313 million in cash plus evaluated effective assets, and after the capital increase, it will hold 57% equity of the target company; the company's holding subsidiary, Henan Shenma Nilon Chemical Co., Ltd. ("Nilon Chemical"), will increase the target company's capital by evaluated effective assets of RMB 80.5686 million and after the capital increase, it will hold 14.66% equity of the target company; Pingdingshan Nilon City Investment Co., Ltd. ("Nylon City Investment Company") will increase the capital of the target company by cash of RMB 54.968 million, and after the capital increase, it will hold 10% equity of the target company; the company's holding subsidiary, Pingdingshan Shenma Curtain Development Co., Ltd. ("Curtain Development"), will increase the target company's capital by effective assets evaluated at RMB 594,500, and after the capital increase, it will hold 0.11% equity of the target company.

In this capital increase, the company has given up its priority capital increase right, and after the capital increase, the company will hold 18.23% equity of the target company, which will no longer be included in the company's financial statement consolidation scope. This transaction is conducive to the listed company further focusing on the nylon 66 industry chain, concentrating on developing advantageous industries, and improving the company's operational quality.