Wuhan Youji Holdings Ltd. (Stock Code: 2881) disclosed plans to terminate its 2024 Xinkang Framework Agreement and enter into a new 2026 Xinkang Framework Agreement with Xinkang Chemical. The revised arrangement, covering 1 January 2026 through 31 December 2028, updates the annual procurement cap and establishes terms for the supply of equipment, pipes, and fittings, as well as installation and maintenance services.

Under the new agreement, the annual cap for each of the three years ending 31 December 2026, 2027, and 2028 has been set at RMB110 million, representing an increase from the current RMB63.4 million cap in 2026. Historical fees paid by Wuhan Youji Holdings Ltd. to Xinkang Chemical amounted to RMB25.7 million, RMB59.6 million, and RMB62.3 million for the years ended 31 December 2023, 2024, and 2025 respectively.

The proposed increase reflects expectations for business expansion, including construction and upgrade projects such as large-scale new production facilities and overseas installations. Xinkang Chemical’s proximity to Wuhan Youji Holdings Ltd.’s key facilities is noted as providing logistical and technical advantages, with coordinated delivery and ongoing maintenance services.

Because Xinkang Chemical is majority-owned by a non-executive director and controlling shareholder of Wuhan Youji Holdings Ltd., the proposed agreement qualifies as a continuing connected transaction. One applicable percentage ratio under the Listing Rules exceeds 5%, and therefore the transaction requires the approval of independent shareholders. The independent board committee of Wuhan Youji Holdings Ltd. has been formed to review the arrangement, and an extraordinary general meeting is planned to seek requisite approvals. SBI China Capital Hong Kong Securities Limited serves as independent financial adviser on the matter.

A circular containing more details on this arrangement, the independent board committee’s recommendation, and the financial adviser’s opinion is expected to be released on or before 30 April 2026, prior to the scheduled vote on the agreement.