Shanxi Installation Group Co., Ltd. (2520) announced the signing of a cooperation agreement with Shanxi Sanjian Group Co., Ltd. and Huaneng Power International, Inc., aiming to form a jointly invested company named Shanxi Jianhua Energy Co., Ltd. (final name subject to regulatory registration). The joint venture’s registered capital is RMB100 million, to be contributed by Shanxi Sanjian (65%), Huaneng Power (25%), and Shanxi Installation Group (10%).

According to the announcement, the new entity will serve as a project company for the Shanxi Qinshui Pumped Storage Power Station Project, with a business term of 50 years. Shanxi Installation Group will finance its RMB10 million share of the capital internally. The joint venture will not become a subsidiary of Shanxi Installation Group, and its financial results will not be consolidated into the group’s statements.

The company disclosed that the pumped storage power station is expected to provide long-term and stable returns by optimizing electricity use. Additionally, participation in this new energy infrastructure is viewed as an opportunity to broaden business scope, combine construction expertise with emerging technology, and potentially enhance market presence and brand influence.

The board of the new venture will comprise five directors: two from Shanxi Sanjian, one from Huaneng Power, one from Shanxi Installation Group, and one employee director. Senior management will include one general manager (nominated by Huaneng Power), alongside nominees for deputy general managers, and a chief financial officer (nominated by Shanxi Sanjian). Profit distribution will be based on actual paid-up capital contributions.

Shanxi Sanjian is a wholly owned subsidiary of Shanxi Construction Investment Group, which is the controlling shareholder of Shanxi Installation Group. As a result, this transaction falls under connected transaction rules. Since at least one applicable percentage ratio is above 0.1% but below 5%, the formation of the joint venture requires reporting, announcement, and annual review but does not require a circular or independent shareholders’ approval under Chapter 14A of the Listing Rules.