China Rare Color announced that the company plans to use its own capital to increase capital by 306 million yuan to its wholly-owned subsidiary Guangdong Shengyuan Permanent Magnetic Materials Co., Ltd., and will still hold 100% of its shares after the capital increase is completed. The capital increase has been reviewed and approved by the company's board of directors. There is no need to submit it to the shareholders' meeting for consideration. It is not a related transaction or major asset restructuring. The purpose of this capital increase is to optimize the capital structure of Shengyuan Company and mitigate high-debt operating risks, and will not have a significant impact on the company's financial situation and operating results.

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