ST Jihua has responded to shareholders' right of suggestion regarding the resubmission for review of a related-party transaction proposal after it was vetoed by minority shareholders. The company stated that the total estimated amount of daily related-party transactions for 2026 has increased by approximately 368.08 percent compared to the actual amount in 2025, mainly because it jointly established a supply chain company with its controlling shareholder, Xinxing Cathay International Group, and Xinxing Ductile Iron Pipes. Some raw materials will gradually be procured from this supply chain company, and the amount under the "procurement of goods" item is expected to increase by 220 million yuan as a result. At the same time, production capacity improvements in certain business segments have led to reasonable growth. The company has consistently applied the principle of "upper limit management" to related-party transaction estimates, and the 2026 estimates are based on the maximum possible upper limits. In addition, the final transaction prices for procurement from the supply chain company will not be higher than comparable prices for procurement from independent third parties, nor will they be higher than the prices it charges to other non-related customers. In the first quarter of 2026, ST Jihua achieved revenue of 1.348 billion yuan and a net loss attributable to the parent company of 122 million yuan.
Jihua Group Corp LtdRelated-party transaction estimates increased 368% due to joint supply chain company; procurement prices capped at independent third-party levels, but higher volumes and loss in Q1 create uncertainty.
Xinxing Ductile Iron Pipes Co LtdMentioned as joint venture partner in supply chain company; impact unclear as no specific details on its own transactions.