Yankuang Energy Group (01171) and Xinkuang Group plan to jointly increase their investment in Xinjiang Energy Chemical by a total of 6 billion yuan in cash according to their respective shareholding ratios.

Yankuang Energy Group (01171) announced that on March 27, 2026, after approval by the Board of Directors, the company intends to jointly invest RMB 6 billion with Xin Kuang Group in Xinjiang Nenghua in cash, based on their respective shareholding ratios. The company plans to contribute RMB 3.06 billion, while Xin Kuang Group plans to contribute RMB 2.94 billion. The company and Xin Kuang Group will make the capital contributions in installments according to their shareholding ratios and sign separate special capital increase agreements. On March 27, 2026, the company, Xin Kuang Group, and Xinjiang Nenghua signed the first phase capital increase agreement. The company and Xin Kuang Group agreed to jointly invest RMB 1 billion in Xinjiang Nenghua in cash, based on their respective shareholding ratios. The company will subscribe RMB 510 million, and Xin Kuang Group will subscribe RMB 490 million. The first phase of capital increase will not involve any changes in the ownership of Xinjiang Nenghua. After the first phase capital increase, the company and Xin Kuang Group will still hold 51% and 49% of Xinjiang Nenghua's shares, respectively. Xinjiang Nenghua is responsible for the construction of the Wucailan No.4 open-pit mine project and the supporting 800,000 tons/year coal-to-olefin project in Xinjiang. These projects are a core part of the company's strategic layout in Xinjiang. The long construction period and large funding requirements make the capital increase essential to ensure the projects progress smoothly according to the approved plan and to avoid delays due to insufficient funds. Increasing the registered capital can also directly increase Xinjiang Nenghua's owner's equity, effectively reduce the asset-liability ratio, and enhance its risk resistance and financing capabilities. Therefore, the directors (including independent non-executive directors) believe that, although the first-phase capital increase is not part of the company's daily operations, it is conducted on general commercial terms, and the terms of the agreement are fair and reasonable, and in the overall interests of the company and shareholders.