Luxi Chemical, Cangzhou Da Hua and Sinochem International Establish Polycarbonate Sales Company

April 20, 2026 - Sinochem Polycarbonate Sales (Liaocheng) Co., Ltd. was established, with the business scope including: sales of chemical products (excluding licensed chemical products); sales of engineering plastics and synthetic resins.

According to Qichacha’s equity structure diagram, the company is wholly owned by Luxi Chemical Group Co., Ltd. (51%), Cangzhou Dahua Co., Ltd. (30%), and Sinochem Plastics Co., Ltd. (a wholly-owned subsidiary of Sinochem International Corporation) (19%).

Three giants join forces to reduce competition among peers

Previously, on December 23, 2025, Luxi Chemical was a subsidiary of China National Chemical Corporation (referred to as "China National Chemical") and China National Chemical Group Corporation (referred to as "ChemChina"). In December 2020, ChemChina committed to using various methods such as asset restructuring, business adjustments, entrusted management, and the establishment of joint ventures over five years to promote the integration of related businesses in order to resolve the potential competition issues between Sinochem International (Holding) Co., Ltd. (hereinafter referred to as "Sinochem International") and Luxi Chemical. In September 2021, China National Chemical committed to, over a period of five years and in accordance with the principle of benefiting the development of listed companies and safeguarding the interests of shareholders, especially those of small and medium shareholders, comprehensively using entrusted management, asset restructuring, equity swaps/transfers, business mergers/adjustments, or other legal means to resolve the competition issues that arose after the merger of ChemChina and China National Chemical Corporation. This includes the competition issues in the polycarbonate business sector between Luxi Chemical and Cangzhou Dahua Co., Ltd. (hereinafter referred to as "Cangzhou Dahua").

To earnestly fulfill the competitive business-related commitments made by the state-owned shareholder and mitigate the adverse effects of competitive business on the Company, and in accordance with the resolution pathway stipulated in the original commitment, Luxi Chemical Group Co., Ltd. (“Luxi Chemical”), Cangzhou Dahua Co., Ltd. (“Cangzhou Dahua”), and Sinochem Plastics Co., Ltd. (“Sinochem Plastics”), a wholly-owned subsidiary of Sinochem International Corporation, intend to establish a joint venture to fulfill the relevant commitment. Concurrently, this initiative aims to enhance sales synergy among the three parties in the polycarbonate business, integrate their respective sales resources in this field, further improve and strengthen the Company’s sales industry chain layout, and achieve higher-quality development.

Under the coordination of Sinochem, the three listed companies have conducted extensive communication after studying each party's operating conditions and the feasibility of integration, and have planned to jointly invest in establishing Sinochem Polycarbonate Sales (Liaocheng) Co., Ltd. (subject to final business registration). Luxi Chemical, Cangzhou DaHua and Sinochem Plastics signed the "Joint Venture Agreement for Sinochem Polycarbonate Sales (Liaocheng) Co., Ltd." on December 22, 2025. The proposed registered capital of the joint venture is RMB 5 million, of which Luxi Chemical will contribute RMB 2.55 million, accounting for 51%; Cangzhou DaHua will contribute RMB 1.5 million, accounting for 30%; and Sinochem Plastics will contribute RMB 0.95 million, accounting for 19%. All three parties will fund their contributions with their own funds.