Zhuohang Holdings' subsidiary plans to invest 40 million yuan in Xiexin Industrial Park Management (Guangdong) to acquire a 51% stake

According to the announcement from Zhuohang Holdings (01865), on May 15, 2025, the investor (the company's indirect wholly-owned subsidiary PENGO Green Energy New Energy (Guangzhou) Co., Ltd.) entered into a capital injection agreement with the target shareholder (Central Asia Private Equity Fund Management (Shenzhen) Co., Ltd.) and the target company (GCL Industrial Park Management (Guangdong) Co., Ltd.). Under this agreement, the investor conditionally agreed to subscribe for the registered capital of the target company at a subscription price of RMB 40 million. Upon completion, the investor will hold approximately 51% of the target company after the capital expansion. Therefore, the completion of the capital injection will give the group control over the target company and the project company, and it will be consolidated into the company's financial statements as an indirect non-wholly-owned subsidiary. The target company is a limited liability company established in China on August 16, 2023, primarily engaged in the management of pumped storage power stations. The target company successfully obtained the use rights of two state-owned construction land parcels through public auction on the Guangdong Provincial Public Resource Trading Platform online trading system. Before participating in the bidding, the target company thoroughly reviewed the relevant auction documents and completed on-site inspections, paying a total bidding deposit of RMB 18.18 million to obtain bidding qualifications. Through the public bidding process, it ultimately successfully acquired the use rights of the two state-owned construction land parcels. These two parcels are located in Qianfeng Village, Dongcheng Street, Sihui City, Guangdong Province, with a total land area of 133,000 square meters (equivalent to about 200 acres). The land is designated for industrial use (the planned land nature is Class I industrial land), with a transfer period of 50 years. According to the transfer requirements, the successful bidder must pay the full land transfer price of RMB 60.6 million, after which the transferor will deliver the two parcels in their current condition. The project company (GCL No-Dam Energy Storage Technology (Guangdong) Co., Ltd.) was registered in China on August 30, 2024, primarily engaged in the pumped storage power station business. The project company is wholly owned by the target company. On December 10, 2024, the project company signed an investment contract with the Sihui Municipal People's Government for a 100MW/600MWh new efficient no-dam pumped storage power station and energy storage project, with an investment amount of RMB 1.8 billion. The project company will mainly construct a no-dam energy storage power station with a total capacity of 100MW/600MWh and produce energy storage equipment products, with an annual grid-connected electricity generation of 198,000 MWh and an annual off-grid electricity generation of 238,554 MWh. The group has been actively seeking potential business opportunities to expand its sources of revenue. The board of directors believes that the capital injection will diversify the group's operational scope and enhance its competitiveness. The capital injection also aligns with the group's strategy to improve its financial performance, as subscribing to the equity of the target company will diversify the group's sources of income. The board believes that acquiring the target group will benefit the group's energy business and intelligent manufacturing business, and provide support for the group's clean energy projects in China, including photovoltaic, wind power, energy storage, integrated ultra-fast charging stations for solar storage and charging, and comprehensive smart energy management. The group will leverage its advantages in the industrial chain to provide support in terms of industrial chain coverage and foreign capital injection for the contracting parties' cooperative projects. The contracting parties will leverage their respective advantages in project development, investment, research, and operation phases, achieving project cooperation through mutually beneficial resource sharing As a leading builder of new industrial ecosystems in China, the group's business operations cover multiple sectors including urban pipelines, smart cities, industrial real estate, and new energy infrastructure. The company has always adhered to the mission of "empowering industries with ecology," committed to creating greater value for society and consumers. The target company has obtained the enterprise investment project filing certificate from Guangdong Province for the annual production of 15GW and 20GW inverter products, laying a foundation for the smooth advancement of the project. In addition, the target company has secured a project for a new type of efficient damless pumped storage power station with a capacity of 100MW/600MWh, and the target company aims to become a leading enterprise in the energy storage new energy field, demonstrating its strong competitiveness in the global new energy sector and further proving its efforts and achievements in sustainable development and environmental protection. This investment will strategically position the group to fully leverage the opportunities presented by China's renewable energy transition, creating long-term value for shareholders through sustainable growth. By acquiring 51% of the target company's shares, the group will gain control over its advanced pumped storage project (100MW/600MWh) and inverter production (15GW/20GW), laying the groundwork for future annual electricity revenue of 198,000MWh while achieving diversified development into the high-growth clean energy sector. This vertical integration establishes a solid foundation for shareholder value through three key drivers: (1) recurring revenue generated after the utility-scale energy storage goes into operation; (2) improved profit margins by combining the group's construction expertise with the target company's technology; and (3) priority access to renewable energy policies and subsidies in Guangdong Province. This investment ensures the group's sustainable growth through a forward-looking business model that combines the group's infrastructure capabilities with next-generation energy solutions aligned with China's 2060 carbon neutrality goals. As projects come online, shareholders will benefit from gradually improving financial conditions, while the group, leveraging its rich engineering experience, can accelerate project development progress. Damless storage technology and large-scale inverter production are competitive advantages for the group, helping it capture the growing demand in China's energy storage market, which is expected to expand significantly in the coming years. In addition to financial returns, this move will enhance the group's environmental, social, and governance (ESG) image, with the target company expected to provide 238,554MWh of clean energy annually upon project completion. This sustainable development impact enhances the group's appeal to green investors and aligns with the global decarbonization trend, ensuring long-term competitiveness in the evolving energy landscape