Huasheng (600156): Dongting Hemp Co., Ltd., A Holding Subsidiary, Plans To Stop Production

On April 28th, the company's proposal to suspend production of the company's subsidiary (hereinafter referred to as "suspension of production") was deliberated and passed at the 28th meeting of the board of directors of the company.

Reasons for stopping production:

1. The raw material price of ramie keeps rising, the product price keeps falling, and the production cost remains high, resulting in the negative gross profit of the product, and dongma company has continued to lose money in recent years;

2. The existing production equipment of dongma company is aging, the operation cost is high, and the safety production pressure is high;

3. Dongma company is close to Dongfeng Lake Ecological Park and East Dongting Lake National Nature Reserve in Yueyang City, so it has great environmental protection pressure.

After dongma company stops production, it is estimated that it will not be able to resume production in a short period of time, and the specific impact on the company can not be estimated temporarily. The company will timely fulfill the obligation of information disclosure on the progress of dongma company's shutdown in accordance with relevant regulations.

The company authorizes the management to deal with the specific matters after the production suspension of dongma company, including but not limited to personnel diversion and resettlement, asset management and disposal, timely organization of relocation and production recovery, etc.

This matter still needs to perform the relevant procedures according to law and obtain the approval or consent of the local government departments and trade union organizations, so there is uncertainty. This proposal needs to be deliberated and passed by the general meeting of shareholders.