CHINA ENV RES (01130) announced the termination of a previously signed memorandum of understanding (MOU) regarding potential cooperation on rare earth projects and ancillary business opportunities in China. On December 12, 2025 (after trading hours), the company entered into a termination agreement with Goldwin Century, mutually agreeing to end the MOU with immediate effect.
The MOU initially provided a framework for due diligence on Sichuan Yuanlaishun and its operations to explore potential collaboration. However, further commercial negotiations revealed that a direct acquisition of Sichuan Yuanlaishun Renewable Resources Co., Ltd. (the target company), a key operating subsidiary of Sichuan Yuanlaishun, would better align with the group’s strategic focus on metal recycling. This shift follows CHINA ENV RES’s exit from Hong Kong’s metal recycling sector while continuing to seek similar opportunities elsewhere.
The acquisition enables the group to gain direct control and full integration of the target company’s operations, enhancing synergies and growth prospects in the rare earth materials market. Consequently, the parties agreed to terminate the MOU, which had served its preliminary purpose, and proceed with the acquisition under a definitive agreement.
On December 12, 2025, CHINA ENV RES, through its wholly-owned subsidiary, signed a share transfer agreement with Sichuan Yuanlaishun to acquire a 90% equity stake in the target company for RMB9 million. The target company primarily engages in recycling renewable and recyclable resources in China, specializing in reusable copper, aluminum, rubber, and rare earth permanent magnets derived from components of new energy motorcycle tires, among other ancillary business opportunities. Prior to the acquisition, the target company was wholly owned by Sichuan Yuanlaishun.
The board believes the acquisition represents a strategic opportunity to strengthen and expand the group’s metal recycling business by entering the high-value niche of rare earth material recycling—a sector with significant global growth potential. The move allows the group to secure high-quality rare earth magnetic materials and gain a competitive edge in fast-growing markets such as electric vehicles and green technology.
Directors view the acquisition as enabling the group to meet rising demand for advanced materials and innovative solutions across its diversified business segments, including metal recycling and green market applications.