Group 1 - The core message emphasizes the need for state-owned enterprises to focus on innovation-driven development and enhance their value creation and sustainable development capabilities to support national strategic goals [1][2] - The importance of deepening the reform of state-owned enterprises and accelerating the development of strategic emerging industries was highlighted during discussions with local government officials [2] - The need for state-owned enterprises to strengthen key core technology research and actively invest in sectors such as integrated circuits and new energy vehicles was stressed [2] Group 2 - The initiative aims to create a model for state-owned enterprise reform with local characteristics, enhancing governance and operational efficiency [2] - The approach includes a balance between flexibility in operations and effective regulation, promoting a comprehensive and professional regulatory framework [2] - The emphasis on strengthening the Party's leadership and building a solid foundation for Party building within enterprises was noted as a means to convert Party advantages into development advantages [2]

Envalior Stake Monetization - LANXESS initiated the monetization of its Envalior stake, exercising its right to offer[2] - In 2023, LANXESS formed a polyamide JV with a determined exit mechanism, receiving approximately €1.3 billion immediately[5,6] - LANXESS' lock-up period for its approximately 40% stake in the JV ends on March 31st, 2026[6,7] - LANXESS has already achieved a more balanced business profile with lower complexity, improved sustainability, and a better financial profile, reducing net debt from approximately €3.8 billion to approximately €2.1 billion[8,9] Exit Strategy and Valuation - LANXESS plans further value creation by exercising its right to offer its stake in ENVALIOR to the JV partner[11] - The first possibility to sell is April 1, 2026, with a put option for 50% of shares in Envalior[14] - The purchase price for LANXESS' Envalior stake includes approximately €1.2 billion base value (~40% in JV) with a monetization of BU HPM at a 12x multiple, resulting in approximately €2.5 billion Enterprise Value[12] - In 2028, Advent is expected to acquire LANXESS' €200 million shareholder loan (plus accumulated interest) to Envalior pro rata to the sold LXS stake[15] Valuation Illustration - The agreed value for LANXESS is dependent on LTM EBITDA of Envalior at the exercise date, with no adjustment for debt[20] - For example, if LTM EBITDA is greater than €505 million, the agreed value for LANXESS could be approximately €350 million (70% of €505 million)[20] - If LTM EBITDA is greater than €1.2 billion, the agreed value for LANXESS could be approximately €850 million (70% of €1.2 billion)[20]