HXTL (01085) Subsidiary Xinkeixin Signs Guarantee Contract

HXTL (01085) announces that on June 18, 2026, Xinkexin (an indirect wholly-owned subsidiary of the Company) (as the guarantor) entered into a guarantee contract with a bank as the beneficiary. Xinkexin has agreed to provide a guarantee for the borrower Tianjin Jizhi Xinke Technology to properly fulfill the repayment obligations according to the loan contract to the bank. Currently, Xinkexin and its wholly-owned subsidiary Nanjing Zhangyu are facing difficulties in obtaining financing from financial institutions. The borrower's 5% equity is held by a state-owned enterprise, providing a certain level of implicit government support and enhancing its overall credit rating. The arrangement under the guarantee contract allows Xinkexin and Nanjing Zhangyu to access and ensure external financing based on the borrower's existing credit limit. In addition, the borrower does not charge any fees to the Company or Xinkexin (as the guarantor) during the financing process. Given the above circumstances, the financing structure proposed under the guarantee contract is beneficial for the continued operation and development of Xinkexin and Nanjing Zhangyu, thereby expected to enhance the Group's profitability and financial stability, and benefit the Group's other two main business segments (i.e., (i) integrated circuits and digital technology business segment; and (ii) new energy and services business segment) for sustained growth. Furthermore, as Nanjing Zhangyu's technology is crucial for the borrower's business development, the borrower allows its credit rating to support Nanjing Zhangyu and Xinkexin, further strengthening the strategic cooperation between the Group and the borrower and is expected to bring long-term synergies and value to the Company and shareholders. The bank has agreed to provide a loan financing to the borrower. The loan principal under the loan contract is RMB 50 million, which is the first loan disbursed to the borrower. Since the guarantee contract is a maximum guarantee contract, after utilizing the initial RMB 50 million loan, the bank can issue another loan of up to RMB 50 million to the borrower under the same guarantee contract without the need for additional guarantees. Therefore, the maximum principal amount guaranteed by the guarantee contract is RMB 100 million. As such, Xinkexin will provide a guarantee of up to RMB 120 million, equivalent to 120% of the maximum loan principal amount (i.e., RMB 100 million), with the additional 20% covering any related interest, default interest, fines, and enforcement costs that may arise under the guarantee contract. Considering the above circumstances, and taking appropriate security and control measures through monitoring the use of funds received by the borrower according to the loan contract and any future loan contracts (including arrangements to monitor the use of repayment funds held in specified repayment accounts by the Company under relevant contracts), the risks borne by the Group can be managed. The Board of Directors believes that the guarantee contract is negotiated on normal commercial terms or better terms, is fair and reasonable, and is in the overall interests of the Company and shareholders.