Core Viewpoint - Mitsubishi Chemical announced its exit from the coking and carbon materials business operated by its subsidiary, which includes needle coke and pitch coke products, due to a prolonged downturn in the overseas coking market [1] Group 1: Business Exit Details - The company expects a non-recurring loss of approximately 85 billion yen from this business exit [1] - Production of related products is scheduled to cease in the second half of 2027, with sales gradually reducing and equipment to be dismantled promptly after production halts [1] - The exited business generated revenue of 115.7 billion yen for the fiscal year ending March 2025 and employed around 600 staff as of February 2, 2026 [1] Group 2: Market Conditions - The decision to exit is attributed to a persistent slump in steel demand and oversupply in the global coking market, leading to a supply-demand imbalance [1] - The carbon materials production system is closely tied to coke oven operations, meaning that the cessation of coke production will directly impact the cost structure of the carbon materials business [1] - Given the ongoing oversupply and weak demand in the industry, Mitsubishi Chemical believes that stopping coke production is the most viable development option [1] Group 3: Strategic Shift - In recent years, Mitsubishi Chemical has accelerated its exit from traditional petrochemical businesses, having decided at the end of 2021 to phase out oil and coal chemical operations over several years [1] - The company has also announced exits from the PET bottle business and has undertaken a series of restructuring actions, including the closure of the Mitsubishi Chemical Shimonoseki and Shinryo Hama factories [1]

Group 1 - Mitsubishi Chemical announced the exit from its coal division's operations in the coking and carbon materials business, including needle coke and pitch coke products [1] - The company expects a non-recurring loss of approximately 85 billion yen from this business exit [1] - The production plan for related products is set to cease in the second half of 2027, with sales gradually reducing and equipment to be dismantled post-production [1] Group 2 - The exited business generated revenue of 115.7 billion yen for the fiscal year ending March 2025 and employed around 600 staff as of February 2, 2026 [1] - The decision to exit was influenced by a prolonged downturn in the overseas coking coal market, characterized by weak steel demand and oversupply of competing products [1] - The carbon materials production system is closely tied to coke oven operations, and the cessation of coke production will directly impact the cost structure of the carbon materials business [1]

Core Viewpoint - The company has provided guarantees for its subsidiaries to support their financing needs, with a total guarantee amount of RMB 9,500 million for three subsidiaries [2][5][15]. Summary by Sections Guarantee Overview - The company has provided guarantees for its subsidiaries, including RMB 20 million for Su Tong Qili Carbon Materials Co., Ltd., RMB 20 million for Yunnan Su Tong Yun Aluminum Carbon Materials Co., Ltd., and RMB 55 million for Longxi Su Tong Carbon Materials Co., Ltd. [2][5] - The total approved guarantee limit is RMB 10 billion, which can be used repeatedly within the validity period of the shareholders' meeting resolution [5]. Financial Data of Guaranteed Subsidiaries - Su Tong Qili has a registered capital of RMB 26.4 million and was established on December 22, 2016 [8]. - Yunnan Su Tong Yun Aluminum has a registered capital of RMB 72 million and was established on May 16, 2018 [9]. - Longxi Su Tong has a registered capital of RMB 28 million and was established on November 30, 2021 [10]. Necessity and Reasonableness of Guarantees - The guarantees are intended to meet the production and operational needs of the subsidiaries, ensuring their stable development [15]. - The company maintains control over the management and finances of the subsidiaries, and the risk associated with the guarantees is considered manageable [15][16]. Board of Directors' Opinion - The board believes that the guarantee amounts are in line with the company's operational needs and overall development strategy, and will not adversely affect the company's operations [16]. Total External Guarantees - As of the announcement date, the total external guarantees provided by the company and its subsidiaries amount to RMB 1,161,861.57 million, which is 224.70% of the company's audited net assets for 2024 [4][17]. - The actual guarantee balance is RMB 796,676.57 million, representing 154.07% of the company's audited net assets for 2024 [4][17]. No Overdue Guarantees - The company has no overdue external guarantees as of the announcement date [18].