GAC Group Subsidiary UPOWER Energy Sells 12% Stake in Kunlun Blue Diamond to Parent GAIG for RMB 1.92 Billion

Guangzhou Automobile Group Co., Ltd. (GAC Group, 02238) disclosed that its wholly owned unit UPOWER Energy Technology (Guangzhou) will transfer a 12% equity interest in Xinjiang Kunlun Blue Diamond Mining Development Co., Ltd. to controlling shareholder Guangzhou Automobile Industry Group (GAIG) for approximately RMB 1.92 billion.

The consideration equals the appraised value of the stake, derived from an asset-based valuation that placed Kunlun Blue Diamond’s total shareholders’ equity at RMB 16.02 billion as of 31 December 2025—more than five times its book value of RMB 3.13 billion. GAIG will pay 51% of the price (about RMB 0.98 billion) by 15 April 2026 and the remaining RMB 0.94 billion within 12 months.

Post-transaction, GAIG will hold 12% of Kunlun Blue Diamond directly, while GAC Group’s indirect interest will fall from 20% to 8%. UPOWER Energy will cease to nominate directors or senior management at the mining company, and the remaining 8% interest will be reclassified as a financial asset at fair value.

Financial impact • GAC Group expects an after-tax gain of roughly RMB 0.89 billion to be recognised in its 2026 consolidated statements. • Proceeds will be used as general working capital.

Kunlun Blue Diamond performance • FY 2025 net profit after tax: RMB 373.24 million (FY 2024: RMB 46.01 million). • FY 2025 net profit before tax: RMB 448.17 million (FY 2024: RMB 71.80 million).

Regulatory context Because GAIG is GAC Group’s controlling shareholder (holding 54.02%), the disposal is classified as a connected transaction under Hong Kong Listing Rule 14A. With the highest applicable percentage ratio below 5%, the deal requires disclosure but is exempt from independent shareholders’ approval and circular requirements.

Strategic rationale Management stated that divesting part of this non-core mining asset will optimise the group’s portfolio, release capital and sharpen focus on core automobile manufacturing, while still allowing GAC Group to participate in the mining company’s future growth through its remaining 8% stake.