According to Zhitong Finance App, Longpan Technology (02465) announced that on August 18, 2026, the Company, Changzhou Lithium Source (a non-wholly-owned subsidiary of the Company) and Changzhou Lithium Source shareholders signed a capital increase agreement. According to the capital increase agreement, the company has agreed to invest RMB 1.4 billion to subscribe to Changzhou Lithium Source's additional registered capital of about RMB 195 million, accounting for 17.86% of Changzhou Lithium Source's total registered capital after the capital increase. The remaining portion will be included in Changzhou Lithium Source's capital reserve, and the shareholders of Changzhou Lithium Source have agreed to relinquish the priority subscription rights relating to the capital increase.
After completing the capital increase, after considering the dilution of the Company's current shareholding ratio in Changzhou Lithium Source, the net change in the Company's shareholding ratio in Changzhou Lithium Source is about 6.81%, so the shareholding ratio will increase from about 61.88% to 68.69%. Therefore, Changzhou Lithium will continue to be a subsidiary of the Company after completing the capital increase, and its financial results will continue to be consolidated into the Company's financial statements.
The directors believe that entering into a capital increase agreement is in line with the Group's overall strategic development plan and long-term interests, and allows the Group to use the net proceeds from issuing A-shares to specific targets in the manner disclosed in such announcements and circulars.
After the capital increase is completed, the financial situation and competitiveness of Changzhou Lithium Source will be consolidated. Changzhou Lithium Source will be more conducive to supporting the Group's business plans for the development of (i) the 110,000 ton cathode material project (which includes the construction of a new 110,000 ton high performance phosphate cathode material production line) and (ii) the 85,000 ton cathode material project (which includes the construction of an 85,000 ton new high-performance phosphate cathode material production line).
The company focuses on green new energy core materials, and implements a parallel industrial layout with new energy and traditional business. Its main products include automotive chemicals and lithium iron phosphate cathode materials, and the cathode material production line will further increase the Group's production capacity, thereby increasing the Group's market share. Therefore, these two cathode projects are closely compatible with the company's main business, are in line with national industrial policy, conform to industry trends and the company's overall development strategy, and are expected to produce good economic and social benefits. Therefore, the Company will provide further financial support for these cathode projects in the form of capital increases, which will be in line with the overall interests of the Company and shareholders.