Sanmei Chemical to guarantee affiliate loan for project growth

Zhejiang Sanmei Chemical Industry Co. (Sanmei Chemical) will hold its first extraordinary general meeting of shareholders in 2025 on September 8 to deliberate on providing a guarantee for its associated company, Chongqing Xinmeihe Technology Co. (Xinmeihe). The proposed guarantee amounts to 100 million yuan, which represents 1.55% of Sanmei Chemical's audited net assets as of December 31, 2024. This move aims to ensure Xinmeihe’s project construction and production operations.

Sanmei Chemical holds a 49% equity stake in Xinmeihe, while Shandong Xinlong Technology Co. owns 51%. The guarantee will be provided in proportion to Sanmei Chemical's shareholding, with other shareholders also providing guarantees on a pro-rata basis. The transaction constitutes a related party transaction because Sanmei Chemical's director, Pan Hang, also serves as a director and deputy general manager of Xinmeihe.

The board of directors approved the proposal on August 21, 2025, with eight votes in favor and none against, after independent directors and the audit committee reviewed and approved it. As of the announcement date, the cumulative external guarantees by Sanmei Chemical and its controlled subsidiaries total 708.45 million yuan, representing 11.00% of the company's latest audited net assets, with no overdue guarantees.