YIP'S CHEMICAL (00408) announced on October 24, 2025, that its buyer, Yip's Qingyuan Management (Shenzhen), an indirect wholly-owned subsidiary of the company, signed a purchase agreement with sellers Mr. Zhang Guorui and Ms. Liu Qing for the acquisition of approximately 60.0% equity in the target company, Beijing Xinuo Haibo Petrochemical Technology, a foreign-owned enterprise. The buyer has conditionally agreed to acquire, and the sellers have conditionally agreed to sell their shares. The initial consideration is set at RMB 288 million. Depending on the fulfillment of performance commitments, the contingent consideration could reach as high as RMB 96 million from the buyer to the seller, or a potential return of up to RMB 33.6 million from the seller to the buyer. Therefore, the maximum total consideration amounts to RMB 384 million, while the minimum is RMB 254.4 million. The initial consideration, any contingent consideration (if applicable), and any returns (if applicable) are to be paid in cash.

The group aims to transform into a refined chemical enterprise and drive future growth by actively seeking opportunities outside its existing core business, particularly focusing on environmentally friendly and new energy-related chemical sectors. Moreover, these explored opportunities must create synergies with the group’s core competencies and promote long-term development. This acquisition allows the group to expand its business footprint into the growing market of managing chemical gas emissions generated during chemical and oil and gas production and transportation processes. With the Chinese government actively promoting industrial emission reduction policies and strengthening environmental regulations, the demand for environmental management solutions is expected to grow steadily, presenting considerable market potential.

The target group is a leading Chinese enterprise in chemical gas emission management, specializing in research and development, design, manufacturing, and providing professional system solutions to manage chemical gas emissions. This can assist customers in converting previously wasted gases into economically valuable resources while adopting more environmentally friendly processes to comply with increasingly strict environmental regulations. The target group's technology has gained industry recognition, and its equipment is widely used across a stable customer base, which includes renowned energy companies, large local and multinational chemical enterprises, as well as state-owned enterprises in China.

The seller, A, is the founder of the target group and brings extensive industry experience. Together with other senior management and R&D teams, the target group has established a strong technical barrier through years of dedication in this field. The target group holds over 10 invention patents and 20 software copyrights and has made progress in the recovery and treatment technology of chemical gases. The group believes that the target group has established a leading position in chemical gas emission management and will continue to grow with the support of the Chinese government's emission reduction policies and environmental regulations. At the same time, the inherent economic benefits of the target group's products and services will continue to attract more customers and expand its customer base. The group will optimize the management system of the target group to enhance operational efficiency, continuously drive business growth, and leverage its existing upstream supplier network to explore new business opportunities and develop overseas markets. Additionally, the group will maintain its investment in R&D resources to expand and strengthen its technological reserves, further solidifying its market position.

This acquisition presents a favorable opportunity for the group to expand into the specialized field of chemical gas emission management, diversifying revenue sources and creating long-term growth and value for shareholders. The board believes that this acquisition strategically aligns with the group’s objectives: enhancing technological capabilities, entering niche markets within the chemical industry, and capturing the increasing demand for environmental solutions driven by stricter environmental regulations.