Jixin State Control (08629) plans to increase the inspection capital of Maoming Orange Island Project by 13.3239 million yuan

Zhitong Finance App News, Jixin State Control (08629) issued an announcement. On December 16, 2025, the company, Huazhou Construction Engineering Quality Center and the target company Maoming Orange Engineering Inspection Co., Ltd. signed a capital increase agreement. Based on this, the company conditionally agreed to subscribe for 51% of the target company's expanded registered capital, at a total cost of RMB 13.3239 million. After completion, the target company will become a non-wholly-owned subsidiary of the Company, and the financial results of the target company will be consolidated in the Group's financial statements.

The board of directors has been actively seeking opportunities to strengthen our current market position in Maoming and expand our service footprint to Tier 3 to 5 cities in western Guangdong. After thorough evaluation and discussions with Huazhou Construction Engineering Quality Center and target companies, the directors believe that Huazhou City (a county-level city managed under Maoming City) has strong and sustainable demand for inspection services.

In 2024, the target company's performance declined due to reduced real estate inspection activities and limited competitiveness in road inspection services. However, based on the following considerations, the Board believes that this situation can be reversed and believes that the proposed capital increase is a strategic opportunity for the target company to reposition growth: the target company currently lacks sufficient technical parameters and resources to compete effectively in the field of road inspection. Through the proposed capital increase, the company plans to integrate its existing capabilities, including technology, equipment and certification, to rapidly improve the target companies' road inspection capabilities and create operational synergy benefits.

The decline in real estate inspections is seen as a short-term industry fluctuation. In contrast, demand for public infrastructure and road inspection is expected to remain stable in the long run, driven by existing investments in infrastructure. Target companies' recovery in financial performance supports this. According to unaudited financial data for the eight months ended August 31, 2025, the target company's revenue was approximately RMB 9.7 million, an increase of 54.7% over the financial year ended December 31, 2024. The company is optimistic about market recovery and the potential for diversified business development.

As of August 31, 2025, the target company served more than 90 customers in Huazhou. The directors believe that the proposed capital increase will help the Group use its extensive network to quickly expand services to Huazhou City.

The proposed capital increase will enable the Group to use its rich experience in providing testing and inspection services and the target company's established layout in Huazhou to jointly develop and expand the local testing and inspection service market and further enhance the financial performance of the target company and the Group.