Jilin Province Chuncheng Heating Company Limited (Chuncheng Heating) has entered into a connected transaction with its controlling shareholder, Changchun Heating Power (Group) Company Limited (Changre Group), to secure fuel for its coal-fired boilers.

On 30 July 2026, both parties executed a Coal Purchase Agreement under which Changre Group will supply 17,116.52 tonnes of coal for a total consideration of RMB7.46 million, equivalent to approximately RMB435.69 per tonne. The pricing was determined through arm’s-length negotiation and benchmarks the Bohai-Rim Steam-Coal Price Index published by the China National Coal Association.

Payment terms stipulate that Chuncheng Heating will settle the full amount upon receipt of an invoice to be issued within five days of contract signing. Delivery of the contracted coal volume is required within 15 days after payment. The company will fund the purchase entirely from existing internal resources.

As Changre Group holds about 69.75 % of Chuncheng Heating’s share capital, the deal is classified as a connected transaction under Chapter 14A of the Hong Kong Listing Rules. All percentage ratios under Rule 14.07 fall between 0.1 % and 5 %, placing the transaction under reporting and announcement requirements while exempting it from circular, independent financial advice and shareholder approval obligations.

Management highlighted that, in addition to market-aligned pricing, proximity between the two entities is expected to reduce transportation costs and wastage, while ensuring coal quality meets production requirements.