SINOHYTEC (02402) announced that the company held its 20th meeting of the third board of directors on December 16, 2024, which approved the "Proposal on Capital Increase in Joint Venture and Related Party Transaction." The board agreed that the company and Toyota would jointly make a proportional capital increase of 1.9 billion yen (JPY 1.9 billion, equivalent to approximately RMB 89.61 million) in their joint venture Huafeng Fuel. SINOHYTEC's portion of the capital increase amounts to 950 million yen (JPY 950 million, equivalent to approximately RMB 44.81 million). The aforementioned capital increase has been completed with industrial and commercial registration changes.

Following the completion of the capital increase, Huafeng Fuel's registered capital increased from 4.5 billion yen to 6.4 billion yen (JPY 6.4 billion, equivalent to approximately RMB 301.86 million). SINOHYTEC's shareholding ratio in Huafeng Fuel remains at fifty percent (50%), and Huafeng Fuel continues to be a joint venture jointly controlled by SINOHYTEC and Toyota.

The company recently signed an "Equity Transfer Agreement" with Toyota to transfer the equity corresponding to the above-mentioned capital increase amount (950 million yen) for which actual capital contribution has not yet been made (hereinafter referred to as "Agreement Equity") at a transfer price of 0 yuan. Upon completion of this transaction, SINOHYTEC's equity ratio in Huafeng Fuel will decrease to 35%, making Huafeng Fuel an associate of the company.

Given the impact of the company's inability to complete the actual capital contribution for the Huafeng Fuel capital increase during the major asset restructuring period, based on overall operational strategic arrangements, the company has the right to repurchase the Agreement Equity under the same conditions before the end of 2025, subject to mutual agreement between both parties.