Yuexiu Transport Infrastructure Limited has announced the signing of a cooperation agreement to establish a joint venture company focused on new energy initiatives. The agreement was entered into by Guangzhou Yuexiu, Guangzhou Yuexiu Capital, and Yuedong New Energy, a wholly-owned subsidiary of Yuexiu Transport Infrastructure. The signing took place on June 11, 2026, after market hours.
Under the terms of the agreement, the three parties will make capital contributions to the joint venture in cash. Guangzhou Yuexiu will invest 348 million yuan, while both Guangzhou Yuexiu Capital and Yuedong New Energy will invest 261 million yuan each. These contributions will translate to shareholding percentages of 40%, 30%, and 30% in the joint venture's registered capital, respectively.
Yuedong New Energy will fund its capital contribution using the group's internal financial resources. Following its establishment, the joint venture is intended to commence operations in the new energy sector. It is important to note that the joint venture will not be classified as a subsidiary of Yuexiu Transport Infrastructure, and consequently, its financial results will not be consolidated into the group's financial statements.
Strategic Context and Rationale
This move aligns with national strategic priorities outlined in China's 15th Five-Year Plan, which identifies new energy as a key strategic emerging industry for development. National policy emphasizes accelerating the construction of a new energy system, increasing the proportion of new energy supply, developing diverse energy sources including wind and solar, vigorously promoting new types of energy storage, and fostering a coordinated development between power sources, grids, loads, and storage to build a new type of power system.
In response to these policy directions and broader economic trends, the Yuexiu Transport Infrastructure group has identified new energy and new infrastructure as one of its key strategic focuses for the 15th Five-Year Plan period. As detailed in the company's annual report for the year ended December 31, 2025, the group has formulated a strategic plan centered on the theme of "Expanding and Innovating." This strategy involves actively seeking opportunities to expand into areas such as roadside economy, smart transportation, artificial intelligence, and green energy infrastructure.
Joint Venture Objectives and Operations
The establishment of the joint venture is viewed as a prudent and suitable pathway for the group to enter the new energy field. It represents a concrete step in participating in new energy business while continuing to grow its core highway operations. The joint venture will serve as a core platform for Guangzhou Yuexiu and the Yuexiu Transport Infrastructure group to develop new energy business, leveraging the combined strengths of the three parties in industry resources, investment capability, financing costs, and operational management to achieve deep synergy between industry and capital.
The planned business scope for the joint venture includes investments in clean energy infrastructure such as wind power and new energy storage, investments in new power system construction projects, investments in integrated source-grid-load-storage projects, and equity investments in new energy manufacturers and technology firms. Given the substantial investment demand for infrastructure like wind power and new energy storage under the national "Dual Carbon" strategy, the initial focus will be on investing in high-quality assets in these areas. The specific investment direction may be reviewed and adjusted later based on market conditions and actual business operations.
Expected Benefits and Conclusion
The group believes that investing in high-quality new energy projects through this joint venture will allow it to effectively capture opportunities in the burgeoning new energy industry. This initiative is expected to optimize the group's asset portfolio, enhance its sustainable development capabilities, broaden its profit sources, and create long-term returns for shareholders.
The establishment of the joint venture and its intended business scope do not constitute competition with the existing business of Yuexiu Capital. The board of directors, including the independent non-executive directors, considers the terms of the cooperation agreement to be fair, reasonable, and concluded on normal commercial terms. While the transaction contemplated under the agreement is not part of the group's ordinary course of business, the board believes that establishing the joint venture is in the overall interests of the company and its shareholders.