Hualu Hengsheng and affiliates inject capital into subsidiary

Shandong Hualu Hengsheng Chemical Co., Ltd. announced a capital increase of 200,000.00 yuan in its controlled subsidiary, Hualu Hengsheng (Jingzhou) Co., Ltd. The company, along with related parties Hong Kong Hualu Group Limited and Hualu Investment Development Co., Ltd., will contribute cash in proportion to their current equity stakes. Shandong Hualu Hengsheng will invest 140,000.00 yuan, maintaining its 70% controlling interest in the Jingzhou subsidiary.

This capital injection will raise the Jingzhou subsidiary's registered capital from 500,000.00 yuan to 700,000.00 yuan. The funds, sourced from the company's own capital, are intended to support the subsidiary's high-speed development and future projects, enhance profitability, and reduce its asset-liability ratio.

The transaction, classified as a related party transaction, received approval from the company's ninth board of directors and independent directors on December 5, 2025. It is not considered a major asset reorganization and does not require shareholder approval. The company acknowledged potential risks, including those related to macroeconomic policies, financial policies, and future market competition for products and raw materials, which could affect the project's expected returns.