China Water Affairs Group Limited (“China Water Affairs,” stock code: 855) and its non-wholly owned subsidiary, Jiangxi Yinli Direct Drinking Equipment Co. Ltd. (“JV Company”), entered into a new Framework Agreement on 9 February 2026 for the supply of pipeline direct drinking system-related equipment and services (“Products”) to the Group. The new agreement will take effect from 1 April 2026 to 31 March 2029, following the expiry of the existing framework agreement on 31 March 2026.

The JV Company is owned by Silver Dragon Water Supply Group Limited (“Silver Dragon,” a wholly owned subsidiary of China Water Affairs) at 55%, Toray Industries, Inc. at 15%, ORIX China Investment Corporation (“ORIX CHINA”) at 20%, and Xinyu Silver Dragon Water Equipment Co. Ltd. at 10%. ORIX CHINA is a subsidiary of ORIX Corporation, a substantial shareholder of China Water Affairs. As a result, the JV Company is a connected subsidiary of China Water Affairs under the Listing Rules.

Under the new Framework Agreement, the JV Company will continue to supply Products for the Group’s pipeline direct drinking water business, with transaction prices determined by calculating production costs plus a profit margin and referencing comparable market products. The maximum annual transaction amounts are set at RMB40,000,000 each for the periods from 1 April 2026 to 31 March 2027, from 1 April 2027 to 31 March 2028, and from 1 April 2028 to 31 March 2029. These caps are based on the actual amount of similar transactions in recent years and the Group’s projected demand in the coming years.

Since relevant percentage ratios under the Listing Rules are below 5%, the transactions are subject to the reporting and announcement requirements but exempt from circular and shareholders’ approval requirements. According to the announcement, the framework arrangement is expected to support the Group’s strategic expansion in its pipeline direct drinking water business by leveraging the JV Company’s water treatment technology.