CHUANGXIN IND (02788) announces RMB1.53 billion connected deals to fully own Shandong Chuangyuan and Tongliao Smart Mining

Chuangxin Industries Holdings Limited (“CHUANGXIN IND”, 02788) disclosed two equity transfer agreements totalling RMB1.53 billion on 17 March 2026. Both transactions are with related party Shandong Innovation Group Co., Ltd. (“Innovation Group”) and will be submitted to independent shareholders for approval at an extraordinary general meeting.

Key transaction terms

1. Remaining 41.5% of Shandong Chuangyuan New Material Technology Co., Ltd. • Consideration: RMB525.53 million, to be settled in three tranches (40 % / 40 % / 20 %). • Post-deal structure: CHUANGXIN IND’s indirect stake rises from 58.5% to 100%. • Valuation basis: asset-based appraisal by Shandong Huayong Assets Appraisal; appraised net assets of RMB1.27 billion, implying 0.62 % asset impairment.

2. 100% of Tongliao Smart Mining Co., Ltd. • Consideration: RMB1.00 billion, also payable in 40 % / 40 % / 20 % installments. • Post-deal structure: Tongliao Smart Mining will become a wholly-owned subsidiary. • Valuation basis: asset-based appraisal by China United Assets Appraisal; appraised net assets of RMB1.00 billion, reflecting 0.01 % appreciation.

Financial profiles of target companies

• Shandong Chuangyuan (Alumina producer) – FY 2025 unaudited revenue not disclosed; profit after tax: RMB269.65 million (-82.46 % YoY). – Total assets: RMB6.46 billion; net assets: RMB1.31 billion as at 31 December 2025.

• Tongliao Smart Mining (Coal exploration rights holder) – FY 2025 unaudited profit after tax: RMB0.52 million (turnaround from a small loss in 2024). – Total assets: RMB2.92 billion; net assets: RMB1.00 billion as at 31 December 2025. – Holds exploration rights for Huolinhe No. 4 coalfield with 962 million tonnes of resources and planned annual capacity of 6 million tonnes.

Strategic rationale

Management expects full control of Shandong Chuangyuan to secure alumina supply, stabilise production costs and streamline decision-making in the aluminium value chain. Acquiring Tongliao Smart Mining is aimed at integrating upstream coal resources to ensure stable power supply for the group’s aluminium smelting operations and to mitigate coal price volatility.

Regulatory and shareholder implications

Aggregated, the transactions exceed 5 % but are below 25 % of the applicable percentage ratios under Hong Kong Listing Rules, classifying them as discloseable transactions. Because Innovation Group is 71.82 % owned by non-executive director and controlling shareholder Mr. Cui Lixin, the deals are also connected transactions requiring independent shareholders’ approval, an independent board committee recommendation, and an independent financial adviser’s opinion.

Funding

Payments will be met through Inner Mongolia Chuangyuan Metal Co., Ltd.—the purchasing subsidiary’s—internal resources and external borrowings; listing proceeds will not be used.

Next steps

CHUANGXIN IND will issue a circular by around 15 April 2026 and convene an EGM, with voting conducted by poll. Completion of each acquisition is subject to customary regulatory and shareholder approvals.