Zhixin Finance and Economics APP News, Anhui Jiangnan Chemical Industry (002226.SZ) has announced that on August 5, 2024, the company signed with the shareholders' Baotou State-owned Assets Supervision and Administration Commission (“Baotou State-owned Assets Supervision and Administration Commission”) and Baotou Industrial Development Group Co., Ltd. (“Baotou Industrial Development Group”) respectively, a conditional agreement on the transfer of shares of Shaanxi Hongqi Civil Explosive Group Co., Ltd. (“Hongqi Civil Explosive”). The company plans to acquire a total of 35.9721% of Hongqi Civil Explosive's shares held by Baotou State-owned Assets Supervision and Administration Commission and Baotou Industrial Development Group through a cash purchase. After the completion of this transaction, Hongqi Civil Explosive will become a subsidiary controlled by the company.

On October 28, 2024, Anhui Jiangnan Chemical Industry signed a supplemental agreement with Baotou State-owned Assets Supervision and Administration Commission and Baotou Industrial Development Group, clarifying the specific arrangements for the pricing and performance commitments of this transaction. The final transaction price of the target assets in this transaction is based on the income method evaluation result of the “Shaanxi Hongqi Civil Explosive Group Co., Ltd. (Simulated Existence) Shareholder's Total Equity Value Project Assets Appraisal Report (Tianxing Evaluation Report [2024] No. 1039)” issued by Beijing Tianjingxingye Asset Appraisal Co., Ltd. (“Tianjianxingye”) and filed with the authorized unit by the competent state-owned assets supervision and administration agency. The total equity value evaluation of Hongqi Civil Explosive as of December 31, 2023 was 0.979 billion yuan. After unanimous agreement by all parties, the transaction price for 35.9721% of Hongqi Civil Explosive shares was determined to be 0.352 billion yuan.

After this transaction is completed, Anhui Jiangnan Chemical Industry will inherit the seats of appointing and nominating directors in the board of directors of Hongqi Civil Explosive assigned by Baotou State-owned Assets Supervision and Administration Commission and Baotou Industrial Development Group. Hongqi Civil Explosive will be included in the company's consolidated financial statements, which will facilitate further market integration and regional coordinated management of the civil explosive industry of Anhui Jiangnan Chemical Industry. This will enhance the competitive ability of Anhui Jiangnan Chemical Industry's civil explosive business in Shaanxi and the northwest region, making it a major supplier in the northwest civil explosive market and further establishing the radiation capability to the Central Asian market. This will improve the company's net income attributable to the parent, increase the earnings per share, and promote the high-quality development of the company.