Xizi Clean Energy Equipment Manufacturing Co Ltd

Shenghui Technology and Xizi Clean Energy both announced the termination of the original restructuring agreement to acquire Hepu Energy equity through share issuance, raising investor concerns about the deal falling through. Xizi Clean Energy rescinded the framework agreement to sell its 16.42% stake in Hepu Energy to Shenghui Technology, while Shenghui Technology terminated its plan to acquire 85% of Hepu Energy and raise matching funds, instead entering negotiations to purchase a portion of Hepu Energy equity with cash. Previously, Shenghui Technology had paid 165 million yuan to acquire a 15% stake in Hepu Energy based on a valuation of 1.1 billion yuan. Now, due to a sharp decline in Hepu Energy's revenue in the first half of 2026, operating losses, and the risk of impairment on its power assets, the overall valuation is expected to be significantly reduced. Except for Xizi Clean Energy, the other original shareholders will need to retroactively adjust the transfer consideration based on the latest appraisal results, and any refund can be offset against the subsequent acquisition consideration. Shenghui Technology plans to further acquire 36% to 45% of Hepu Energy shares through a wholly-owned subsidiary using cash, but the core terms of this letter of intent are still subject to a formal agreement, and Hepu Energy's continued losses could drag on the company's performance. Shenghui Technology will hold an investor briefing on August 6, 2026 to communicate matters related to the termination of the restructuring.