According to a supplemental joint announcement from Xinyi Glass Holdings Limited (00868), Xinyi Electric Storage Holdings Limited (08328), Xinyi Energy Holdings Limited (03868), and Xinyi Solar Holdings Limited (00968), the companies have provided additional details regarding the sale and purchase of equity interests in Jinzhai Wind Power, originally disclosed on 23 December 2025. The transaction involves a connected transaction under the relevant listing rules.
The supplemental information focuses on the valuation basis and methodologies used to determine the consideration for the equity interest. An independent professional valuer employed a discounted cash flow (DCF) method under the income approach to arrive at an appraised value for Jinzhai Wind Power as of 31 October 2025. The valuer applied a weighted average cost of capital of 9.23%, incorporating a risk-free rate of 1.63% and an additional country risk premium, resulting in a cost of equity of 16.09%. The calculation also included a discount for lack of marketability (DLOM) of 20.40%.
Management’s financial projections indicate that Jinzhai Wind Power’s base-year revenue for 2026 is anticipated to be around RMB69,035,000, reflecting revenue from electricity generation and government subsidies. Forecasted profit margins from 2021 through 2024 ranged between 36.12% and 48.22%, while management projects profit margins of 30.76% to 50.64% over the DCF forecast period. Projected expenses consist primarily of operating and maintenance costs, depreciation and amortization, and income tax.
Under the valuation model, the present value of future cash flows (about RMB384,117,000) was adjusted by net debts, non-operating assets, a declared dividend, and the DLOM, resulting in a final appraised value of approximately RMB62,000,000 for the equity interest. Sensitivity analyses on the discount rate, electricity sales, and operating expenses indicated that changes in these assumptions would produce variations in the final appraised value.
Ernst & Young, as the auditor of the companies, reviewed the arithmetical accuracy of the calculations used in the DCF method and confirmed they were properly compiled according to the adopted assumptions. The letter from Ernst & Young and corresponding confirmations from the boards have been included in the supplemental announcement to fulfill the relevant disclosure requirements under the listing rules.