Hangzhou Jinjiang Group Co., Ltd. entered into Equity Transfer Agreement to acquire a 51% stake in Xinjiang Xinji Energy Chemical Co., Ltd. from Dongguang Chemical Limited (SEHK:1702) for CNY 90 million on September 12, 2021. The Consideration shall be paid by Hangzhou Jinjiang in the following manner: (a) on the date of Completion, CNY 45 million shall be paid by Hangzhou Jinjiang in cash; and (b) within three Business Days after the completion of (i) the transfer to and the registration of, the Sale Interest under the name of Hangzhou Jinjiang; and (ii) the change of Director, supervisor and amendment of the articles of association of Xinjiang Xinji, CNY 45 million shall be paid by Hangzhou Jinjiang in cash. Upon Completion, Dongguang Chemical would cease to hold any equity interest in Xinjiang Xinji and Xinjiang Xinji would cease to be an indirect non-wholly owned subsidiary of Dongguang Chemical. The unaudited net asset value of the Xinjiang Xinji as at June 30, 2021 is approximately CNY 89.6 million. Completion of the Equity Transfer Agreement is subject to the fulfillment of the following conditions precedent: all necessary approval by the shareholders of Xinjiang Xinji for the transfer of the Sale Interest to Hangzhou Jinjiang (including but not limited to any waiver of pre-emptive rights by Xinjiang Lvyuan over the Sale Interest) having been obtained by Xinjiang Xinji. In the event that any of the above conditions are not fulfilled (or, as the case may be, waived by Dongguang Chemical) (other than condition precedent (iii) above which may not be waived by Dongguang Chemical and Hangzhou Jinjiang) before 5 p.m., on September 30, 2021 (or such other period as mutually agreed by Dongguang Chemical and Hangzhou Jinjiang), the Equity Transfer Agreement shall lapse and cease to have effect. The net proceeds from the Disposal is expected to be used for other future investments or business opportunities of the Group that may arise and as general working capital of the Group.