Background and Strategic Rationale

Sinostar PEC Holdings Limited is optimizing its asset allocation and improving asset utilization efficiency through the disposal of a retired polypropylene installation previously announced to be retired as of August 18, 2025. The disposal forms part of the Group’s broader strategy to streamline operations and concentrate resources on more productive assets.

The transaction is structured as an Interested Party Transaction due to the purchaser, Dongming Zhongyou Fuel & Petrochemical Co., Ltd., being a wholly owned subsidiary of Dongming Petrochem, in which the Company’s Executive Chairman and CEO Mr. Li Xiangping has shareholding interests.

Valuation and Financial Impact

The RMB16,146,310 consideration was determined based on an independent valuation report by Heze Jiangtian Assets Valuation Office. The sale price represents a modest valuation gain of RMB306,113.63 over the installation’s book value of RMB15,840,196.37.

For context, the transaction amount equates to 1.32% of Sinostar PEC’s audited tangible net assets for FY2024. While not material from an accounting perspective, the gain reflects the Group’s commitment to maximizing asset value and optimizing capital deployment.

The proceeds from the disposal will be used for general working capital, enhancing liquidity and supporting ongoing operational requirements.

Shareholder Considerations and Corporate Governance

• Interested Person Transaction: As the transaction involves a related party, it was subject to review under Chapter 9 of the SGX-ST Listing Manual. However, it is classified as a non-material, non-recurrent interested person transaction and does not require shareholders’ approval.
• Audit Committee Review: The Audit Committee has affirmatively stated that the transaction is conducted on normal commercial terms, the consideration is fair and reasonable, and it is not prejudicial to the interests of the Company or its minority shareholders.
• Minor Impact: The disposal is not expected to have a material effect on the Group’s overall financial position or operating performance for the year ending 31 December 2025.
• Management’s Interest: Save for the disclosed interest by Mr. Li Xiangping, no other directors or substantial shareholders have any direct or indirect interest in the transaction.

Potential Price Sensitivity

While the transaction is not material in absolute financial terms, investors should note that it demonstrates management’s proactive approach to asset management and capital efficiency. The related party nature of the transaction and the gain over book value may be of interest to shareholders monitoring corporate governance and management alignment. Nevertheless, as stated by the company, the transaction is not expected to materially impact either financial results or share price in the near term.

Conclusion

The disposal of the retired polypropylene installation is a routine transaction aimed at optimizing Sinostar PEC Holdings Limited’s asset portfolio. It reflects prudent asset management but is not expected to significantly move the share price or impact the company’s financials for FY2025.

Disclaimer: This article is for informational purposes only and does not constitute financial advice or an offer to buy or sell any securities. Investors should conduct their own due diligence and consult with professional advisors before making investment decisions. The information provided is based on public disclosures by Sinostar PEC Holdings Limited as of 10 December 2025.

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