According to the announcement from Yunnan Lincang Xinyuan Germanium Industry (002428.SZ) on Zhitong Finance APP, the board of directors of the company reviewed and approved the proposal on capital increase through holding subsidiary's equity to Yunnan Xin Yao Semiconductors Materials Co., Ltd., agreeing that the company's holding subsidiary Yunnan Zhongke Xinyuan Crystal Materials Co., Ltd. (referred to as "Zhongke Xinyuan")'s all shareholders shall price the entire equity of Zhongke Xinyuan at the audited net assets of 0.228 billion yuan (as of August 31, 2024) to increase the capital of the holding subsidiary Yunnan Xin Yao Semiconductors Materials Co., Ltd. (referred to as "Xin Yao Company"). The company agrees to price the 97.6155% equity holdings of Zhongke Xinyuan (corresponding to a registered capital of 0.221 billion yuan) at 0.222 billion yuan to subscribe for Xin Yao Company's additional registered capital of 0.191 billion yuan; and agrees that Mr. Huifeng shall price the 2.3845% equity holdings of Zhongke Xinyuan (corresponding to a registered capital of 5.4 million yuan) at 5.4257 million yuan to subscribe for Xin Yao Company's additional registered capital of 4.6628 million yuan.

After the capital increase, Xin Yao Company will acquire 100% equity of Zhongke Xinyuan. The company will hold 84.5294% equity of Xin Yao Company. The company's control over Xin Yao Company and Zhongke Xinyuan remains unchanged, and there will be no changes to the company's consolidated financial statements.

The announcement stated that the processing procedures of Xin Yao Company and Zhongke Xinyuan's related products are highly synergistic. The integration of Xin Yao Company and Zhongke Xinyuan will facilitate the efficient integration of relevant production elements and better achieve internal resource sharing, improving management efficiency.