Yichen Industrial Group Corporation Limited announced a conditional agreement to purchase 86.22% of Hebei Chenxiang Electricity Sales Co., Ltd. (“Target Company”) for RMB135.00 million.

• Transaction structure – Vendors: 26 individual shareholders, including 14 members of Yichen Industrial’s controlling shareholder group and 3 deemed connected persons. – Consideration: RMB108.00 million (first instalment) and RMB27.00 million (second instalment), funded by internal cash and bank loans. – Valuation: Independent valuer appraised the entire Target Group at RMB214.47 million; the 86.22% stake is valued at RMB184.92 million, implying the agreed price carries a discount of about 27%. – On completion, the Target Company and its subsidiaries will become consolidated subsidiaries of Yichen Industrial.

• Target Group profile – Principal businesses: electricity distribution and sales (Hebei Chenteng Electricity Sales Co., Ltd.), and electricity construction (Hebei Chentong Construction Co., Ltd.). – FY25 financials: revenue RMB56.90 million; net loss RMB1.30 million; net assets RMB30.62 million. – FY24 financials: revenue RMB43.30 million; net loss RMB1.81 million. – Chenteng Electricity Sales holds a licence to operate an incremental distribution network in Gaocheng District, Shijiazhuang.

• Strategic rationale – Secures a stable power supply for Yichen Industrial’s manufacturing operations; internal electricity purchases accounted for more than 5% of the Group’s FY24 operating costs. – Estimated annual electricity-cost savings of up to RMB5.90 million once intra-group transactions replace external purchases. – Adds a new income stream; electricity sales to third parties already contributed RMB13.80 million (24.2% of Target Group revenue) in FY25 and are expected to rise after full transfer of customers from the previous network operator. – Positions the Group for integrated energy services through electricity trading, network assets, photovoltaic generation, charging stations and energy-storage facilities.

• Conditions and timetable – First instalment payable after satisfaction of conditions precedent, including Independent Shareholders’ approval; completion targeted by end-April 2026. – Second instalment due after regulatory registration of the equity change. – Extraordinary General Meeting set for 28 May 2026; controlling shareholders will abstain from voting.

The acquisition is classified as both a discloseable transaction and a connected transaction under Hong Kong Listing Rules, triggering announcement, circular, independent financial adviser opinion and minority shareholder approval requirements.