Core Viewpoint - Tangshan Sanyou Chemical Co., Ltd. announces that its controlling shareholder, Tangshan Sanyou Soda Industry (Group) Co., Ltd., plans to increase capital in its subsidiary, Tangshan Sanyou Silicon Industry Co., Ltd., through a private agreement with a cash investment of RMB 100 million, which constitutes a related party transaction [2][3][31]. Summary by Sections 1. Related Party Transaction Overview - The controlling shareholder, Sanyou Soda Industry Group, will invest RMB 100 million in Sanyou Silicon Industry to support the company's strategic development and enhance its capital structure [3][4]. - The original shareholders of Sanyou Silicon, including the company and its subsidiary, Sanyou Chlor-Alkali Co., Ltd., will not participate in this capital increase [2][3]. 2. Board of Directors Review - The board approved the capital increase on May 28, 2025, and authorized management to handle related matters [4][31]. - The transaction was reviewed and approved by independent directors, ensuring compliance with regulations and avoiding conflicts of interest [4][29]. 3. Information on the Investor - Tangshan Sanyou Soda Industry (Group) Co., Ltd. has a registered capital of RMB 1,592.65 million and a good credit status [5][6]. - As of the end of 2024, the group reported total assets of RMB 27,913.83 million and a net profit of RMB 68.67 million [6]. 4. Information on the Target Company - Tangshan Sanyou Silicon Industry Co., Ltd. has a registered capital of RMB 509.69 million and reported a net loss of RMB 28.59 million for 2024 [9][10]. - The company is 95.29% owned by Tangshan Sanyou Chemical, maintaining its status as a subsidiary post-capital increase [11]. 5. Audit, Assessment, and Pricing - An audit report indicated that as of November 30, 2024, Sanyou Silicon had total assets of RMB 334.58 million and a net asset value of RMB 146.76 million [13]. - The valuation of Sanyou Silicon's equity was assessed at RMB 1,812.69 million, reflecting a 23.52% increase over its book value [14][15]. 6. Impact of the Capital Increase - The capital increase is expected to enhance Sanyou Silicon's financial strength and support its operational needs, aligning with the company's strategic goals [27]. - The transaction will not lead to changes in management or operations at Sanyou Silicon, nor will it create competitive conflicts with other businesses controlled by the investor [28]. 7. Approval Procedures for the Related Party Transaction - The independent directors unanimously approved the transaction, affirming that it adheres to principles of fairness and does not harm the interests of minority shareholders [29][30].