GCL System Integration to deregister associate amidst industry restructuring

GCL System Integration Technology (GCL System Integration) announced its plan to deregister Xuzhou Xinyao New Energy Technology, an associate company. This board-approved decision aims to address industry structural adjustments and enhance the company's risk resilience by focusing resources on core operations. Suzhou Integrated, a wholly-owned subsidiary of GCL System Integration, holds a 48.28% stake in Xuzhou Xinyao, with subscribed capital of 800,000,000 yuan. The deregistration constitutes a connected transaction because Xuzhou Richen Low Carbon Industrial Investment Partnership, a limited partner in Xuzhou Xinyao, is an affiliate of GCL System Integration's related party, GCL Technology Holdings.

The board of directors approved the deregistration and the convening of an extraordinary general meeting (EGM) on December 8, 2025, to seek shareholder approval. Four connected directors abstained from voting on the resolution. Xuzhou Xinyao’s total assets were 153,546,310 yuan and net assets were 153,524,890 yuan as of October 31, 2025, with a net profit of 232,580 yuan. GCL System Integration anticipates this deregistration will not affect its consolidated financial statements or have a material impact on its production, operations, or financial condition.

The deregistration is a strategic move to optimize capital allocation, reinforcing GCL System Integration’s core business and technological leadership. While terminating its investment in Xuzhou Xinyao's controlled entity, Xuzhou Gaoxin Zhuoyao New Energy, GCL System Integration intends to continue strategic cooperation, prioritizing the procurement of Xuzhou Gaoxin Zhuoyao battery products.