China Hongqiao Group Limited has agreed to buy 100% of Weiqiao Xinchuang New Energy Technology Co., Ltd. for RMB239.70 million. The consideration matches the independently appraised equity value as of 31 May 2026 and implies a 20.28% premium on Weiqiao Xinchuang’s audited net assets of RMB199.28 million.

Weiqiao Xinchuang is a holding platform whose sole asset is Weiqiao Yanshan New Energy Co., Ltd., an operator of grid-connected photovoltaic (PV) power stations in Wenshan, Yunnan. Because Xinchuang has no operating income, its valuation used an asset-based approach, while Yanshan’s PV operations were appraised under a market approach benchmarked to four listed Chinese solar firms. After adjustments for profitability, leverage, operating efficiency, scale and installed capacity, the valuer applied an average price-to-book multiple of 1.47 and a 21.75% lack-of-marketability discount, arriving at an equity value of RMB4.90 billion for Yanshan. This Figure lifted Xinchuang’s long-term investment value by RMB40.42 million, accounting for the premium over book value.

For 2024 and 2025, Xinchuang recorded net losses while Yanshan’s projects were under construction or in early ramp-up. With full grid connection completed in May 2025, management reports that losses narrowed “significantly” in 1H 2026 and forecasts further improvement in 2H 2026 as utilisation stabilises.

Strategically, the acquisition links Yanshan’s PV capacity with China Hongqiao’s aluminium smelters in the same Yunnan power-consumption zone, supporting local offtake. Management expects: 1) more stable power availability amid regional supply fluctuations; and 2) lower unit electricity costs through market-based trading and medium- to long-term power purchase agreements, enhancing the cost competitiveness of Hongqiao’s aluminium operations.

The board reviewed the valuation methodology, key inputs and assumptions—transaction and open-market settings, going-concern premise, and unchanged policy environment—and considers the purchase price and transaction terms fair and reasonable. Completion will be executed through indirect subsidiary Yunnan Hongqiao.