GCL TECH (03800) may acquire approximately 81.91% equity interest in Sichuan GCL Lithium Technology

GCL TECH (03800) announces that on October 19, 2026, the Company entered into a non-legally binding memorandum of understanding with the seller (GCL Group Limited) regarding the proposed acquisition of approximately 81.91% equity interest in Sichuan GCL Lithium Technology Co., Ltd. The preliminary estimated amount of the consideration is approximately RMB2.5 billion. The consideration is proposed to be settled by the Company through a combination of cash and consideration shares to be allotted and issued by the Company to the seller and/or its designated entities, of which approximately RMB650 million is proposed to be settled in cash, and approximately RMB1.85 billion is proposed to be settled through the allotment and issuance of consideration shares. The issue price of the consideration shares shall not be lower than the net asset value per share of the Company of approximately HK$1.3 as at June 30, 2026 (the minimum issue price). Based on the minimum issue price, the total number of consideration shares is expected not to exceed 1.671 billion shares. The target company is principally engaged in the research and development, production, sales and services of lithium iron phosphate cathode materials for new energy batteries in China. The target company is located in the Economic Development Zone of Renshou County, Meishan City, Sichuan Province, and was established to align with the national "dual carbon" strategic deployment, expand into the field of lithium iron phosphate cathode materials, improve the clean energy industry chain, and promote cost reduction and efficiency enhancement in the energy storage industry ecosystem. As at the date of this announcement, the first phase of the target company's production facilities covers a site area of approximately 355 mu, with a total gross floor area of approximately 156,000 square meters, and the overall planned land area is 1,000 mu. Its main facilities include advanced production plants optimally designed for large-scale advanced material manufacturing, with an annual production capacity of 120,000 tonnes of lithium iron phosphate. In view of the surge in market demand for lithium iron phosphate cathode materials, the Directors believe that the proposed acquisition will enable the Group to (i) expand its business into the lithium iron phosphate cathode materials sector, which is supported by the national carbon neutrality policy and benefits from the growing demand for electric vehicles and energy storage systems; (ii) reduce its dependence on the price cycles of polysilicon and wafer products and enhance earnings stability; and (iii) leverage the target company's research and development capabilities, production facilities and customer network to create new growth drivers for the Group.