China Hongqiao Group Limited (CHINAHONGQIAO) has approved a private placement of new A-shares in its 88.99%-owned subsidiary, Shandong Hongqiao Aluminum Industry Holding Company Limited (Hongqiao Holdings). The issuance will target no more than 35 qualified investors and is expected to raise up to RMB12.00 billion (HK$13.86 billion).

The new shares will represent no more than 10% of Hongqiao Holdings’ pre-issuance share capital, potentially diluting China Hongqiao’s indirect ownership to 80.90%. Despite the dilution, Hongqiao Holdings will remain a consolidated subsidiary, and no disposal gain or loss will be recorded in the group’s financial statements.

Proceeds allocation: • Wind power projects: RMB5.65 billion • Photovoltaic projects: RMB2.25 billion • Aluminium deep-processing projects: RMB2.30 billion • Bank loan repayment & working capital: RMB1.80 billion

The subscription price will be set through a market book-building process, at no less than 80% of the average trading price over the 20 trading days preceding pricing. Newly issued shares will be subject to a six-month lock-up.

Completion hinges on approval from Hongqiao Holdings’ shareholders, review by the Shenzhen Stock Exchange, and registration with the China Securities Regulatory Commission.

Hongqiao Holdings’ audited figures for 31 December 2025 show total assets of RMB111.29 billion and net assets of RMB45.56 billion. Net profit after tax reached RMB18.76 billion in 2025, up from RMB18.07 billion in 2024.

Under Hong Kong Listing Rules, the placement constitutes a discloseable transaction as the highest applicable ratio exceeds 5% but is below 25%, requiring public disclosure without shareholder approval.