Shanghai Mechanical & Electrical: subsidiary property handover to boost 2025 profit

Shanghai Mechanical & Electrical Industry Co., Ltd. announced a significant development concerning its controlled subsidiary, Smik Welding Material, regarding a housing expropriation and storage compensation agreement. On December 24, 2025, Smik Welding Material formally handed over the expropriated property to Shanghai Pudong Property Co., Ltd. by signing the "Real Estate Transfer Order," fulfilling the terms of the "Housing Expropriation and Storage Compensation Agreement."

The initial agreement, approved by the company's board on November 30, 2023, stipulated a total compensation of CNY 256,060,780.69. Smik Welding Material, in which Shanghai Mechanical & Electrical Industry holds a 67% stake, had previously signed this agreement with Shanghai Pudong Property Co., Ltd. and the Shanghai Pudong Fourth Housing Expropriation Service Affairs Office.

The company anticipates that the accounting treatment of this compensation will increase its 2025 attributable net profit by approximately CNY 103,550,000, subject to final audit confirmation. Investors are advised to exercise caution and engage in rational investment decisions.