Add New Energy Investment Holdings Group Limited Announces Formation of Strategic Investment Partnership for Mining Business

Key Developments and Details

Add New Energy Investment Holdings Group Limited (the “Company”, Stock Code: 02623) has released a supplemental announcement regarding the formation of a significant investment partnership in the mining sector, which may have material implications for investors and the share price.

Formation of the Partnership

• Partnership Structure: On 20 March 2026, Shenzhen Xinlong (subsidiary of the Company), Jiangxi Xintongying (limited partner), and Beijing Shiji (general partner) entered into a Partnership Agreement to jointly form the Partnership for mining investments.
• Term: The Partnership’s term is 20 years (amended from indefinite), subject to further extension by unanimous approval.

Executive Partner Fees and Governance

• Remuneration: The executive partner (Beijing Shiji) will receive a fixed annual fee equal to 0.5% of the Partnership’s total paid-up registered capital. Additionally, if partner returns reach 8% or more, the executive partner is entitled to 10% of the Partnership’s distributable profits for that year.
• Performance and Removal: The executive partner can be removed by partners holding at least two-thirds of the Partnership’s interest if performance is unsatisfactory.

Profit Sharing Mechanism

• Distribution: Profits are distributed in proportion to each partner’s paid-up capital, net of taxes, expenses, and the executive partner’s remuneration.

Exit and Transfer Arrangements

• General Partner: Exit requires unanimous partner consent.
• Limited Partners: May exit under specified events, including legal or regulatory changes, unanimous partner approval, or serious breaches.
• Transfer of Interests: Transfers to non-partners require 30 days’ notice, unanimous consent, and partners have the right of first refusal.

Role of the Executive Partner

• The executive/general partner (Beijing Shiji) has unlimited joint liability for Partnership debts and is responsible for day-to-day management, compliance, investment opportunity identification, investor sourcing, and drawing up management regulations to protect limited partners’ supervisory rights.

Funding Commitment and Capital Contribution

• Shenzhen Xinlong and Jiangxi Xintongying each undertook to contribute up to RMB 149 million for business development and new investments, mainly funded by the Company’s rights issue proceeds and an interest-free loan from a controlling shareholder.
• Investments require unanimous partner approval.
• The business scope includes sales and processing of metal ores, non-metallic minerals, gold, silver, and non-ferrous metals, targeting economic returns.

Major Investment: Baojia Mining Acquisition

• The Partnership plans to acquire 20% equity in Baojia Mining from Lanxiang Mining for RMB 221 million. The valuation is based on Baojia Mining’s 2025 net profit, with an implied P/E multiple of 11.6x, which is at the lower end compared to industry peers, suggesting a fair and reasonable valuation.
• Comparable companies’ P/E multiples range from 4.89x to 165.0x, with Baojia Mining’s valuation being conservative.
• A formal equity transfer agreement is expected by the end of Q2 2026.

Background of Partners

• Beijing Shiji: Ultimate beneficial ownership is 90% Ms. Yang Liren (over 25 years of banking experience, strong industry network) and 10% Ms. Yang Yuxin. Beijing Shiji is not required to hold an investment management license under PRC law.
• The Company and its connected persons are independent from Beijing Shiji and Jiangxi Xintongying except for the Partnership relationship.
• There is no board of directors; the executive partner manages assets as per Partnership Agreement and partners’ decisions.

Accounting Treatment

• The Company’s investment will be accounted for using the equity method. The Company does not hold a controlling 51% stake to limit financial exposure, enabling the Partnership to attract future partners and capital.

Shareholder Value and Price-Sensitive Information

• The formation of this mining investment partnership and the proposed acquisition of a significant stake in Baojia Mining represents a potentially transformative move for the Company, expanding its presence in the mining sector and positioning it for future growth and investment opportunities.
• The partnership structure allows the Company to leverage both mining expertise and financial resources, while limiting financial risk exposure.
• The use of recent rights issue proceeds and an interest-free loan for funding signals strong backing from controlling shareholders.
• The fair and conservative valuation of Baojia Mining compared to industry peers, and the expectation of entering a formal acquisition agreement by Q2 2026, could influence investor sentiment and share price.
• The disclosed remuneration structure for the executive partner and governance mechanisms provide transparency and could impact long-term returns to shareholders.

Conclusion

Investors should closely monitor further announcements regarding the finalization of the Baojia Mining acquisition and the ongoing performance of the newly established Partnership, as these developments could significantly impact the Company’s future profitability, risk profile, and share value.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should carefully consider their own circumstances and consult with professional advisors before making any investment decisions. The information is based on the Company’s official announcements as of 24 April 2026 and may be subject to change.

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