Guanghui Logistics Co Ltd

Guanghui Energy announced on the evening of September 29 that its wholly owned subsidiary Balikun Guanghui Malang Mining Co., Ltd. will invest a total of approximately 366 million yuan to take stakes in the Ningdong and Mingshui integrated energy logistics base projects through equity transfer plus capital increase. After the transaction, Malang Mining will hold 45.98 percent of Guanghui Ningxia Coal Storage and Distribution Co., Ltd. and 42 percent of Gansu Guanghui Xinjiang Coal Logistics Co., Ltd. The deal adopts a package of zero-yuan equity transfer, assumption of capital contribution obligations, and capital increase. Malang Mining will acquire the unpaid equity of the two target companies held by Guanghui Logistics at zero consideration, assume capital contribution obligations totaling 342 million yuan, and subscribe to 23.7931 million yuan of new registered capital in Gansu Guanghui Xinjiang Coal Logistics at one yuan per share. This is another key move by Guanghui Energy to implement its strategy of shipping Xinjiang coal outward and complete its coal production, sales, storage, and transportation chain, following the start of production at the Malang coal mine and the expansion of the Naoliu Highway. The Ningdong base is located in the core area of the Ningdong energy and chemical industry in Ningxia, adjacent to the Meihuajing station on the Taiyuan-Zhongwei-Yinchuan railway, and has been listed as a key project in Ningxia's 15th Five-Year Plan. The Mingshui base is located in Subei, Jiuquan, Gansu, at the first station out of Xinjiang on the Linhe-Hami railway, and is a major project of Gansu Province. Once completed, the two bases will serve as forward coal warehouses for Xinjiang coal sold outside the region. Malang Mining is only an equity investor, does not obtain control, will not be consolidated into financial statements, and will have no direct impact on the current income statement.