Sichuan Development Guorun Water Investment Co., Ltd agreed to acquire 80% stake in Zhaotong Dianchi Water Treatment Co., Ltd. from Kunming Dianchi Water Treatment Co., Ltd. (SEHK:3768) for approximately CNY 200 million on December 29, 2023. The consideration consists of CNY 202.6 million in cash. Upon completion of the Disposal, the Group will only be interested in 20% of each of the Target Companies, each of which will cease to be subsidiaries of the Company, and their financial results will cease to be consolidated into the consolidated financial statements of the Group.

For details, please refer to the announcements of the Company dated December 29, 2023. As part of the consideration, CNY 202.6 million was paid towards common equity. Zhaotong Dianchi Water Treatment reported net asset value of CNY 182.96 million as on June 30, 2023.

Completion of the transaction is subject to obtaining a written consent document from the local government of Zhaotong Dianchi Water and approval from shareholders of Kunming Dianchi Water Treatment Co., Ltd. The disposal was unanimously approved by the Board of Directors of Kunming Dianchi Water Treatment Co., Ltd. Pan-China Certified Public Accountants LLP acted as an accountant for Kunming Dianchi Water Treatment Co., Ltd.