Jiangsu Lopal Tech. Group (02465) plans to increase its investment in Changzhou Lithium Source by 1.4 billion yuan.

Jiangsu Lopal Tech. Group (02465) announced that on August 18, 2026, the company, Changzhou Lithium Source (a non-wholly-owned subsidiary of the company), and the shareholders of Changzhou Lithium Source entered into a capital increase agreement. According to the capital increase agreement, the company has agreed to invest RMB 1.4 billion in Changzhou Lithium Source to subscribe for approximately RMB 195 million of the new registered capital of Changzhou Lithium Source, accounting for 17.86% of the total registered capital of Changzhou Lithium Source after the capital increase. The remaining portion will be included in the capital reserve of Changzhou Lithium Source, and the shareholders of Changzhou Lithium Source have agreed to waive their preferential rights to subscribe for the capital increase. Upon the completion of the capital increase, considering the dilution effect of the companys existing shareholding ratio in Changzhou Lithium Source, the net change in the company's holding ratio in Changzhou Lithium Source will be approximately 6.81%, thus increasing the holding ratio from approximately 61.88% to 68.69%. Therefore, after the completion of the capital increase, Changzhou Lithium Source will continue to be a subsidiary of the company, and its financial performance will continue to be consolidated into the companys financial statements. The board of directors believes that entering into the capital increase agreement aligns with the overall strategic development plan and long-term interests of the group, and will enable the group to utilize the net proceeds from the issuance of A-shares to specified targets as disclosed in the announcement and circular. After the capital increase is completed, the financial status and competitiveness of Changzhou Lithium Source will be strengthened. Changzhou Lithium Source will be more conducive to supporting the groups business plans related to (i) an 110,000-ton cathode material project (which involves the construction of a new high-performance phosphate-based cathode material production line with a capacity of 110,000 tons) and (ii) an 85,000-ton cathode material project (which involves the construction of a new high-performance phosphate-based cathode material production line with a capacity of 85,000 tons). The company focuses on core materials for green new energy and implements a dual-track industrial layout of new energy and traditional businesses. Its main products include automotive specialty chemicals and lithium iron phosphate cathode materials, and the cathode material production lines will further enhance the group's production capacity, thereby increasing the groups market share. Thus, these two cathode projects closely align with the company's main business, comply with national industrial policies, follow industry development trends, and fit into the companys overall development strategy, and are expected to generate good economic and social benefits. Therefore, the company's provision of further financial support for these cathode projects in the form of a capital increase will align with the overall interests of the company and its shareholders.