Innovation Industrial (02788.HK) subsidiary Inner Mongolia Chuangyuan acquires 41.5% stake in Shandong Chuangyuan and 100% stake in Tongliao Smart Mining for RMB 1.526 billion, perfecting integrated electrolytic aluminum industry chain

Gelonghui, March 17 — Chuangyi Industrial (02788.HK) announced that, (i) on March 17, 2026, Inner Mongolia Chuangyuan (a wholly owned subsidiary of the company), Innovation Group, and Shandong Chuangyuan entered into a Shandong Chuangyuan equity transfer agreement. Under this agreement, Inner Mongolia Chuangyuan will conditionally acquire, and Innovation Group will conditionally sell the remaining 41.5% equity of Shandong Chuangyuan for RMB 526 million; and (ii) on March 17, 2026, Inner Mongolia Chuangyuan, Innovation Group, and Tongliao Smart Mining entered into a Tongliao Smart Mining equity transfer agreement. Under this agreement, Inner Mongolia Chuangyuan will conditionally acquire, and Innovation Group will conditionally sell all equity of Tongliao Smart Mining for RMB 1 billion. After the completion of the proposed acquisitions, Shandong Chuangyuan and Tongliao Smart Mining will both become wholly owned subsidiaries of the company.

The company’s main business includes the production and sale of electrolytic aluminum, alumina, and other related products. It has established an integrated ecosystem covering the “energy — alumina refining — electrolytic aluminum smelting” industry chain. Alumina is the most important upstream raw material for electrolytic aluminum production, directly affecting the sustainability of production, cost stability, and overall product quality. Shandong Chuangyuan mainly engages in the production and sale of alumina and supplies raw materials for the company’s electrolytic aluminum production.

To promote the refining of alumina and electrolytic aluminum smelting in the upstream aluminum industry chain and achieve synergistic effects, the group has historically acquired a total of 58.5% of Shandong Chuangyuan through a series of equity transfers from Innovation Group. The decision to acquire 58.5% of the shares was made to obtain controlling interests in Shandong Chuangyuan, thereby optimizing the group’s synergy within the upstream aluminum industry. This acquisition also considered (i) the group’s available funds at the time, especially given the significant capital requirements for the group’s green energy power projects and overseas expansion plans; and (ii) the potential future capital expenditures and fluctuations in alumina prices, allowing flexibility for future acquisition decisions through negotiations with Innovation Group.

The proposed acquisition of Tongliao Smart Mining aims to: (1) expand into the upstream core energy business, further enhancing the company’s ability to independently control the industry chain, stabilizing coal supply sources, reducing reliance on external market procurement, effectively hedging against significant fluctuations in coal prices, policy adjustments, and other external factors, ensuring stable and reliable power supply for production, and improving overall operational efficiency and sustainable development; (2) further optimize the company’s industry chain layout to benefit from strong synergies in energy supply, power generation, and electrolytic aluminum smelting; and (3) reduce procurement, logistics, and intermediary costs, lower production expenses, improve the profitability of electrolytic aluminum products, strengthen the company’s cost advantages, and enhance its ability to withstand cyclical industry fluctuations, thereby stabilizing operational performance.