Chongqing Iron (01053) plans to increase its capital by using its 1.61% equity stake in Baowu Water as payment to Baowu Environment.

Chongqing Iron (01053) announced that on May 27, 2026, the board of directors approved the capital increase agreement between the company and Baowu Environment, China Baowu, and its affiliates. According to the capital increase agreement, the existing 16 shareholders of Baowu Water will act as investors to increase the capital of Baowu Environment based on their respective shareholding in Baowu Water. The company plans to increase capital in Baowu Environment by using its 1.61% shareholding in Baowu Water as consideration. After the capital increase, the company will hold a 0.53% stake in Baowu Environment and will no longer hold shares in Baowu Water. After this capital increase, the registered capital of Baowu Environment will increase from RMB 711.55 million to RMB 1,044.215 million; except for Xinjiang Bayi Iron & Steel, the existing shareholders of Baowu Water will all become shareholders of Baowu Environment. Baowu Environment will hold 96.48% of Baowu Water's shares, while Xinjiang Bayi Iron & Steel will hold the remaining 3.52% of Baowu Water's shares. Through this asset integration, Baowu Environment will build a "1+X" business layout, creating a green industrial platform for integrated environmental management of solid waste, wastewater, and exhaust gas. This will help to enhance the value of the company's shareholding in Baowu Environment in the future, as well as further reduce the comprehensive environmental management costs. The company will increase its shareholding in Baowu Environment by using its shareholding in Baowu Water, and will cease to account for its financial assets in Baowu Water at fair value with changes recorded in other comprehensive income, continuing to account for its shareholding in Baowu Environment at fair value with changes recorded in other comprehensive income; after this capital increase, there will be no change in the company's consolidated financial statements. The company will use its shareholding in Baowu Water as consideration for this capital increase to acquire the shares of Baowu Environment, therefore, this capital increase does not involve the receipt of cash proceeds by the company, and there will be no gains or losses recorded for this capital increase. The industry to which this capital increase belongs is greatly affected by macroeconomic policy adjustments. If industrial policies are tightened in the future or regulatory requirements increase, it may have a negative impact on the operation and investment returns of the target company.