HC ENV TECH (02265) plans to acquire 100% equity of Laizhou Jinxing Chemical Co., Ltd. for RMB 71.17 million.

HC ENV TECH (02265) announced that on January 26, 2026, the buyer Shandong Jinjia Environmental Protection Co., Ltd. (an indirect wholly-owned subsidiary of the Company) entered into a sales agreement with the sellers (Mr. Sheng Yunti and Ms. Sheng Wenfeng), under which the buyer conditionally agreed to acquire, and the sellers conditionally agreed to sell the equity (equivalent to all the equity of Lai Zhou Jinxing Chemical Co., Ltd., the target company), for a total consideration of RMB 71.17 million. As of the date of this announcement, the target company is held by Seller A and Seller B holding 96% and 4% respectively. Upon completion, the buyer will hold all the equity of the target company, which will become an indirect wholly-owned subsidiary of the Company, and as such, the financial performance of the target company will be consolidated into the Group's financial statements. As of the date of this announcement, the main assets of the target company include the land use rights of an industrial land located in the Yinhai Chemical Industry Park in Laizhou City, Shandong Province, China, with a total area of approximately 175,200 square meters, due to expire in June 2072; properties under construction, including factories, buildings, and warehouses, with a current construction area of approximately 125,100 square meters, and other infrastructure, production lines, and machinery. The main assets of the target company include the land use rights of an industrial land located in the Yinhai Chemical Industry Park in Laizhou City, Shandong Province, China. The location is adjacent to the Group's existing factory, which is also located in the same industrial park. After the acquisition, the Group will continue the construction and handle the necessary administrative procedures. According to the Board's best estimate, upon obtaining the relevant authorities' approval, the main assets of the target company are expected to operate as the Group's new production facility, no later than the third quarter of 2026. By integrating operations within the same industrial park, it is expected to enhance management efficiency, streamline logistics, and achieve resource sharing between the two production bases. The Group currently has a factory dedicated to processing sulfur concentrates to produce sulfuric acid, with production volumes reaching approximately 219,300 tons in 2024 and 224,200 tons in 2025, with utilization rates of 91.4% and 93.4% of total capacity respectively. After the target company is fully operational, an additional capacity of approximately 200,000 tons of sulfuric acid produced through processing sulfur concentrates is expected to be provided. This will significantly increase the Group's overall capacity, allowing it to capture a larger market share and meet the growing demands of customers. The Board believes that the acquisition will allow the Group to acquire land, infrastructure, and production facilities that are already under construction, as opposed to building new facilities from scratch. It is expected that this will reduce development risks and time costs, allowing for more timely production to begin. In addition, the main assets of the target company include production lines for aminosulfonic acid and magnesium sulfate, downstream products of sulfuric acid. Therefore, it is expected that the acquisition will accelerate the diversification of the Group's product supply, generate new sources of revenue, and further strengthen its business portfolio.