Huaxin Construction Materials (06655): Huaxin Central Asia Investment (Wuhan) signs “Share Acquisition Agreement” with Holderfin B.V.

According to Zhitong Finance App, Huaxin Materials (06655) issued an announcement. On August 1, 2026, the buyer Huaxin Central Asia Investment (Wuhan) Co., Ltd. signed an “Share Acquisition Agreement” with the seller Holderfin B.V. According to this, in accordance with and in accordance with the terms and conditions of the Share Acquisition Agreement, the seller conditionally agreed to sell, and the buyer conditionally agreed to purchase shares in the core target company held indirectly and directly by the seller. The transaction was carried out in two stages: the first stage (this transaction), based on the pricing basis of the enterprise value of the company with 100% equity corresponding to 100% of the shares of the core target company, which received 67.623% of the shares purchased between the three holding companies. The acquisition cost was about US$527 million (the delivery statement delivery mechanism will be used to adjust according to the cash, debt, group non-trade transactions and working capital conditions of the core target company at the time of delivery); the second stage is where the buyer exercises a subscription option or the seller exercises a put option directly after three years. The core target company holds 31.377% of the shares. This portion of the consideration is the core target company's latest audited annual revenue (after deducting increased revenue due to production expansion) × 2.4 × 31.377%, and not less than US$280 million.

Since the buyer should issue an offer to the other shareholders of the core target company after the completion of the initial acquisition in accordance with the requirements and instructions of the Philippine SEC and relevant laws and regulations.

After the acquisition is completed, the target company will become a holding subsidiary of the Company. Therefore, the financial results of the target company will be incorporated into the company's financial accounts.

In this transaction, the buyer will acquire a specific share of the following three holding companies: 99.9997% of the shares of the target company A Clinco Corporation; 36.8038% of the shares of the target company B Cemco Holdings, Inc.; and 27.51% of the underlying company C Union Cement Holdings Corporation. By acquiring these shares, the buyer will indirectly obtain a total of 67.623% of the issued share capital and voting rights of the core target company Holcim Philippines Inc. The price will be paid in cash by the buyer, and it is expected to be disbursed using the Group's own funds and external financing funds such as bank loans and bond issuance.

Although this transaction is a related transaction, it is still an optimized asset allocation carried out by Haorui, the largest shareholder of the company, in view of Huaxin's excellent technology and supply chain integration capabilities, and is conducive to the development of Huaxin's overseas business and new markets.

Overseas development (including new construction or acquisition) has been one of the company's important strategies for nearly ten years. The company has a good track record in successfully integrating and developing acquired companies, improving post-acquisition performance, and achieving target returns on overseas investments. Overseas development has two major benefits: first, the strategy enables the company to grow by relying on the talent base and accumulated expertise and capabilities in industrial technology and production chain integration; second, it effectively offsets the adverse effects of falling domestic market demand.

At present, the company operates in 14 overseas countries. Overseas clinker production capacity has reached 26.6 million tons/year, and cement grinding production capacity has reached 36.15 million tons/year. From January to June 2026, the company's overseas cement and clinker sales volume reached 13.18 million tons, up 57% year on year, achieving sales revenue of 8.542 billion yuan, up 107% year on year. While the domestic cement business faced severe tests, overseas business became an important contributor to the company's performance.

The target company is located in the Philippines. The Philippine population exceeds 110 million, has sufficient labor resources, private consumption accounts for a high share of GDP, and the domestic demand market is strong. The country's GDP has maintained steady growth of more than 5.5% in recent years, infrastructure has continued to expand, cement consumption demand has been steadily released, and there is plenty of room for long-term growth in the cement industry. Per capita cement consumption in the Philippines is at a low level, around 290 kg.

The core target company of this transaction has four integrated cement clinker plants and a cement grinding station in the core regions of Luzon and Mindanao in the Philippines, with an annual production capacity of 5.2 million tons of clinker and 9 million tons of cement. It has rich limestone resources and good location advantages, and has considerable potential for technical and management optimization after the merger and acquisition.

The Group is deeply involved in the overseas building materials market and has accumulated many overseas cement mergers and acquisitions, and has a complete competitive advantage in production technology, cost control, supply chain management and marketing. After the Philippine asset acquisition and delivery is completed, the company can export mature management systems and advanced production processes, continuously optimize target capacity utilization, reduce comprehensive operating costs, fully tap the potential for target performance growth, and ensure a good return on this overseas investment; at the same time, the merger and acquisition will also improve the company's Southeast Asian industrial layout, further expand the scale of global production capacity, and enhance the company's influence in the international market and the ability to operate against cycles. Furthermore, the original shareholder, Haorui continued to hold shares in Philippine assets for a certain period of time, contributing strongly to the continuation of the brand.

The Company has established an independent board committee composed of all independent non-executive directors (i.e. Mr. Huang Guanqiu, Mr. Zhang Jiping and Mr. Jiang Hong) to consider whether the terms of the “Share Acquisition Agreement” and the transactions to be carried out under it are fair and reasonable, and conform to the overall interests of the Company and shareholders, and to make suggestions to independent shareholders in this regard.

Miley Capital has been appointed by the Company as an independent financial advisor to advise the Independent Board Committee and independent shareholders on whether the terms of the “Share Acquisition Agreement” and proposed transactions under it are carried out in accordance with general commercial terms, are fair and reasonable, and are in line with the overall interests of the Company and shareholders.