Jiuyuan Group (00827) subsidiary plans to sell 90% of Jiangsu Blue Planet's shares in environmentally friendly new materials for 27 million yuan

According to Zhitong Finance App News, Jiuyuan Group (00827) issued an announcement. On October 26, 2026 (after the trading period), the seller Jiuyuan Hong Kong New Materials Co., Ltd. (a wholly-owned subsidiary of the Company) signed a sales agreement with the buyer Shanxi Jiayuan Investment Co., Ltd., and the buyer has agreed to purchase 90% of the shares in the target company Jiangsu Blue Planet Environmental New Materials Co., Ltd., at a cost of RMB 27 million, subject to the terms and conditions of the sale agreement.

As of the date of this announcement, the Company owned 90% of the target company's shares through the seller. The buyer did not hold any equity or other interest in the target company. After the transaction, the buyer will own 90% of the target company's shares, and the target company will no longer be a subsidiary of the company. As a result, the target company's financial information will no longer be consolidated in the Group's consolidated financial statements.

The target company is 90% owned by the seller and 10% by Jiangsu Blue Planet Environmental Protection Technology Co., Ltd., and is mainly engaged in the manufacture and sale of chemical products; and research and development of chemical products.

Poor market conditions (including rising material prices) have led to a challenging business environment and put financial pressure on the Group. According to the target company's management accounts on June 30, 2026, the target company has net current liabilities of approximately RMB 1,148 billion. The sale is expected to reduce the Group's net current liabilities, while proceeds from the sale will improve the Group's working capital and cash flow position. Furthermore, the target company recorded losses year after year, which had an adverse impact on the Group's cash flow.

After considering the Group's current strategic priorities as set out in the 2025 Annual Report, the Board of Directors has decided to refocus the Group's resources on its core chemical fertilizer business and the stable operation of existing production plants. These businesses and plants have shown more stable returns and a stronger market position. The board of directors believes that the target company's propane oxide business is no longer in line with the Group's short- to medium-term strategic direction, which is to focus on (including) cost reduction, energy saving transformation, and digital transformation of existing businesses. The sale will also enable (among others) the Group to release the value of its investment in the target company and realise cash proceeds, avoid the huge further capital expenses required to put the propane oxide production line into full commercial production, and instead allocate this capital to the Group's existing plants and priority projects; and streamline the Group's corporate structure and reduce the administrative and compliance costs associated with maintaining the target company as a subsidiary.