SHANGHAI PECHEM (00338) announced that its board of directors reviewed and approved on December 16, 2025, a proposed service agreement between the company (as the service provider) and Baling New Materials (as the client). Under the agreement, SHANGHAI PECHEM will provide personnel secondment services to Baling New Materials for a total consideration of approximately RMB 52.72 million (tax inclusive). The contract is expected to be signed by December 31, 2025.

Baling New Materials is a 50-50 joint venture between SHANGHAI PECHEM and Hunan Petrochemical. The personnel secondment arrangement aims to support the construction of the 250,000-ton/year thermoplastic elastomer project, considering factors such as site selection and cost efficiency. This initiative will facilitate the smooth implementation of the project, enabling optimal utilization of the company's existing resources like butadiene while expanding its styrenic thermoplastic elastomer product line.

The move aligns with SHANGHAI PECHEM's strategic shift toward "chemicals + materials" and "basic + high-end" sectors, accelerating its transition from traditional applications to advanced new materials.