ST Chunxing: Terminate the capital increase of Jinzhai Magnesium Industry and plan to cancel the company.

ST Chuncheng announced that previously Lanjing Xin Neng planned to subscribe for 133 million yuan in increased capital of Jinzhai Magnesium Industry. However, due to external financing obstacles and restricted internal fund allocation, this capital increase plan has been cancelled. The company agrees to sign a "Termination Agreement of Capital Increase Agreement", and Jinzhai Magnesium Industry has not yet started actual production and operation. In order to reduce costs and improve efficiency, the company plans to cancel the registration of this company. The magnesium alloy automotive parts business originally planned to be developed will be continued by Jinzhai Chuncheng. This matter does not constitute a major asset restructuring and will not have any adverse impact on the company.