There are differences! Shangfeng Cement Terminates Capital Increase and Acquires 1.2 Million Tons of Grinding Index!

On January 4, Shangfeng Cement issued a notice on the termination of capital increase and acquisition of assets by Ningbo project subsidiaries.

Previously, on November 5, 2025, Gansu Shangfeng Cement Co., Ltd. held the seventh meeting of the eleventh board of directors to consider and adopt the Bill on Capital Increase and External Acquisition of Assets by Holding Subsidiaries. In order to develop the regional market in East China, Zhejiang Shangfeng Building Materials Co., Ltd. (Hereinafter referred to as "Shangfeng Building Materials"), a wholly-owned subsidiary of the company, and Ningbo Economic and Technological Development Zone Kaiyuan Development Investment Co., Ltd. Ningbo Shangfeng Cement Co., Ltd. (Hereinafter referred to as "Ningbo Shangfeng"), a joint venture, has increased its capital by 40 million yuan in cash , with Ningbo Shangfeng as the carrier . (hereinafter referred to as "Wanhua Building Materials") with an annual output of 1.2 million tons of cement grinding capacity and an annual transfer of 600000 tons of ultra-fine powder storage project and its supporting equipment and facilities . The total amount of assets to be acquired by Ningbo Shangfeng, a joint venture, is 72,030,229.08 yuan .

In view of the differences between Ningbo Shangfeng and Wanhua Building Materials on the value and status of some assets in the process of inventory and delivery of the assets to be acquired, it is impossible to reach a consensus on the solution and delivery in the short term, and it is expected that the original cooperative operation objectives will not be achieved. Based on the current market situation of the building materials industry, after comprehensive evaluation by the management of the Company and negotiation with the joint venture partner Ningbo Kaiyuan, both parties intend to terminate the original cooperation plan, and Shangfeng Building Materials will withdraw from all the shares of Ningbo Shangfeng and will no longer participate in the aforementioned investment in Ningbo Shangfeng and the acquisition of Ningbo Shangfeng.

As Ningbo Shangfeng is specially established for this cooperation and acquisition, during the preparation period, the shareholders of both parties only paid a total of 500000 yuan (of which, Shangfeng Building Materials paid 255000 yuan and Ningbo Kaiyuan paid 245000 yuan). Shangfeng Building Materials intends to transfer 51% of the equity of Ningbo Shangfeng to Ningbo Free Trade Zone Nortel Industrial Co., Ltd. according to the paid-in registered capital of 255,000 yuan. After the transfer of equity, the company will no longer include Ningbo Shangfeng in the scope of consolidated statements, no longer enjoy the rights and interests of Ningbo Shangfeng, and no longer assume any obligations and responsibilities. Specifically, Ningbo Shangfeng will go through the relevant registration procedures for industrial and commercial changes after fulfilling the decision-making procedures. After

the withdrawal of Shangfeng Building Materials from Ningbo Shangfeng Equity and the receipt of equity transfer funds, the company has no loss of interest. The termination of the implementation of the original cooperative capital increase acquisition plan and the withdrawal of Ningbo Shangfeng's equity will not adversely affect the company's production, operation and financial situation, and will not harm the interests of the company and all shareholders, especially the interests of minority shareholders.