Huayi Group: Intends to carry out asset exchange with the controlling shareholder to acquire 51% equity of Guangxi Nenghua.

The Huayi Group announced that it plans to carry out asset exchange and related transactions with its controlling shareholder, Shanghai Huayi. The assets to be disposed of include the 100% equity of Shanghai Neng'hua held by the company and the equity of eight controlled/associated companies held by it; the assets to be acquired include the 51% equity of Guangxi Neng'hua held by Shanghai Huayi. The transaction price will be negotiated based on the recorded or approved appraisal value, with any difference to be paid in cash. This transaction constitutes a related party transaction and is not expected to constitute a major asset restructuring. After the completion of the transaction, Guangxi Neng'hua will become a subsidiary of the company, and Shanghai Neng'hua will no longer be included in the consolidated financial statements. Currently, the transaction is still in the planning stage, no agreement has been signed, and relevant decision approval procedures need to be followed, creating uncertainty. Guangxi Neng'hua is currently profitable and has met the performance conditions. After the completion of this asset exchange, Guangxi Neng'hua will be included in the company's consolidation scope, which will fundamentally solve the issue of industry competition and reduce the scale of related transactions.