Core Viewpoint - Zhejiang Wanliyang Co., Ltd. has decided to waive its preferential subscription rights for capital increase in its associate company, Zhejiang Wanliyang Energy Technology Co., Ltd., which will allow Wanliyang Group to become the largest shareholder after the capital increase [1][3][12]. Summary by Sections 1. Overview of Waiving Subscription Rights - The company has approved the waiver of its preferential subscription rights for a capital increase in its associate company, Wanliyang Energy, which focuses on energy storage station investment and operation [1][3]. - Wanliyang Energy plans to raise funds through capital increase to support its business development and improve its financial structure, with an assessed value of RMB 739.96 million as of June 30, 2025 [1][10]. 2. Details of the Capital Increase - Wanliyang Group will invest RMB 133 million to subscribe for an additional registered capital of RMB 38 million in Wanliyang Energy, increasing its stake from 34.95% to 44.65% post-capital increase [2][3]. - The registered capital of Wanliyang Energy will rise from RMB 216.78 million to RMB 254.78 million after the capital increase [3]. 3. Impact on Shareholding Structure - Following the capital increase, the company's ownership in Wanliyang Energy will decrease from 47.05% to 40.03%, but it will remain an associate company [3][12]. - Wanliyang Group's increased stake is expected to enhance Wanliyang Energy's development through resource integration and brand support [12][13]. 4. Financial Implications - The net asset value of Wanliyang Energy was reported at RMB 206.28 million, with a post-investment valuation of RMB 891.73 million after the capital increase [10]. - The company believes that waiving the subscription rights aligns with its long-term strategic focus on its core business, which is the development of automotive transmission systems [13]. 5. Independent Board Review - The independent board meeting approved the waiver of subscription rights, confirming that the decision aligns with the company's operational needs and long-term strategy [14][15]. - The independent directors noted that the transaction complies with relevant laws and regulations and does not adversely affect the company's financial status [14].