Baowu Magnesium Industry: The controlling shareholder plans to acquire 5% of the company's shares through agreement. All AITO magnesium alloy products of Seres are supplied by the company.

Baowu Magnesium Industry announced on June 26 that on June 25, the company received notifications from Baosteel Metals, Mr. Mei Xiaoming, and Mr. Zhu Yuehai, informing it that Baosteel Metals had signed a Share Transfer Agreement with Mr. Mei Xiaoming and Mr. Zhu Yuehai. Baosteel Metals planned to acquire a total of 49,589,578 shares (accounting for 5% of the total share capital of the publicly listed firm) held by Mr. Mei Xiaoming and Mr. Zhu Yuehai in Baowu Magnesium Industry, including 40,795,963 unrestricted shares (accounting for 4.11% of the total share capital of the publicly listed firm) held by Mr. Mei Xiaoming and 8,793,615 shares (accounting for 0.89% of the total share capital of the publicly listed firm) held by Mr. Zhu Yuehai. The price for this share transfer agreement was 11.94 yuan per share, with a total transfer price of 592,099,561.32 yuan. After the completion of the above share transfer, Baosteel Metals held 263,088,395 shares in the company, accounting for 26.53% of the total share capital of the publicly listed firm. Mr. Mei Xiaoming held 122,387,890 shares, accounting for 12.34% of the total share capital of the publicly listed firm, and Mr. Zhu Yuehai held 323,188 shares, accounting for 0.03% of the total share capital of the publicly listed firm. This share transfer would not result in any changes to the company's controlling shareholder or actual controller.

The shareholding situations of both parties before and after this share transfer are as follows:

Regarding the impact of this equity change on the company, Baowu Magnesium Industry announced: Before this equity change, the company's controlling shareholder was Baosteel Metals, which held a total of 213,498,817 shares, accounting for 21.53% of the total share capital of the publicly listed firm, and the actual controller was the State-owned Assets Supervision and Administration Commission of the State Council. After this equity change, the company's controlling shareholder remained Baosteel Metals, which held 263,088,395 shares, accounting for 26.53% of the total share capital of the publicly listed firm, and the actual controller remained the State-owned Assets Supervision and Administration Commission of the State Council. This equity change would not result in any changes to the company's controlling shareholder or actual controller, nor would it have a significant impact on the company's business activities.Through this equity change, Baosteel Metals will further consolidate its control over Baowu Magnesium Industry, leverage its industrial advantages and synergies more deeply, accelerate the development of the light metal industry sector, and further solidify its strategic positioning as a lightweight solution provider for China Baowu and a main force in new materials for China Baowu. After the implementation of this equity change, Baowu Magnesium Industry will serve as a light metal industry platform for China Baowu.Baosteel Metals will expand the business of the publicly listed firm, optimize its business structure, and enhance the value and brand influence of the publicly listed firm in accordance with the principles of being conducive to the sustainable development of the publicly listed firm and beneficial to the interests of all shareholders.

When asked, "How does the company view the penetration of magnesium alloys in the automotive sector? What progress has been made in cooperation with leading automakers like Seres?", Baowu Magnesium Industry responded on the investor interaction platform on June 23rd: Over the past year, magnesium prices have consistently remained lower than aluminum prices, accelerating the penetration of automotive lightweighting. 1. Die-casting factories, including Xusheng, Wencan, IKD, and Meilixin, are continuously expanding their magnesium die-casting layouts. 2. Original equipment manufacturers (OEMs), including new energy vehicle makers like Seres, Geely, SAIC, FAW, and GAC, are increasing the penetration of magnesium products. Among them, Seres' AITO magnesium alloy products are all supplied by our company, with the per-vehicle usage currently exceeding 20Kg. In the future, with the integration of large magnesium die-castings such as electric drive housings, rear floors, and door inner panels into vehicles, the per-vehicle magnesium usage is expected to reach 50-100kg. 3. From the product perspective, areas including instrument panel brackets, electric drive housings, and rear floors are accelerating the development of magnesium applications. Based on the designated projects of our company and other peers in the industry, magnesium alloy automotive die-castings are facing unprecedented development opportunities.

Baowu Magnesium Industry also responded on the investor interaction platform on June 23rd: Magnesium is a metal variety that aligns with China's strategy of self-sufficiency in resources. China boasts abundant reserves of dolomite, magnesite, and salt lakes, with land-based magnesium resources accounting for over 50% of the global total. The reliance on imported raw material ores for magnesium is lower than that for aluminum and steel. Currently, over 70% of the global magnesium ingots are supplied by China. The company will seize the opportunity, shoulder the responsibilities of a central state-owned enterprise, vigorously develop the magnesium industry, and contribute to the self-sufficiency and controllability of structural metals.

Baowu Magnesium Industry previously released its Q1 2025 report, showing that in the first quarter of this year, the company's operating revenue was 2.03 billion yuan, up 9.1% YoY; and its net profit attributable to shareholders was 28.18 million yuan, down 53.6% YoY.

When responding to the company's operating performance in 2024, Baowu Magnesium Industry mentioned: In 2024, the company achieved an operating revenue of 8,982,563,028.12 yuan, up 17.39% YoY; and a net profit attributable to shareholders of listed companies of 159,628,962.00 yuan, down 47.91% YoY.Mainly affected by the decline in magnesium prices, the gross profit margin of magnesium materials and die-casting products decreased, and the company's performance declined YoY.

Regarding the 2025 business plan, Baowu Magnesium Industry stated in its 2024 annual report: 1. Fully promote the technological upgrading of primary magnesium smelting (1) Increase technological innovation in primary magnesium smelting processes and continuously reduce magnesium smelting costs. (2) Intensify exploration of green magnesium smelting technologies and reserve new low-carbon magnesium smelting technologies. 2. Improve the layout of the magnesium industry chain and advance key projects Improve the layout of the industry chain, optimize the rhythm of new capacity layout, target the entire process of the industry chain, advance key projects, and effectively reduce costs: (1) Partially commission the Qingyang project, further optimize the large-tank process, and reduce the cost of primary magnesium; (2) Steadily advance the construction of the Wutai project with an annual output of 100,000 mt of high-performance magnesium-based light alloys and deep processing; (3) Partially complete the Gansu Baowu Xitie project, and further reduce the cost of primary magnesium through cost control of ferrosilicon. 3. Vigorously promote technological innovation in magnesium applications and advance the development of the magnesium market (1) Achieve further technological breakthroughs in key magnesium products and expand new demand for magnesium market applications Domestic market: Increase market promotion efforts in domestic automotive, 3C product, construction, and other fields, establish long-term and stable cooperative relationships with customers, and further expand market share. International Market: Actively participate in internationally renowned exhibitions and industry conferences to showcase the company's technological strength and product advantages, and expand international customer resources. (2) Increase research on magnesium functional materials for future applications and explore new areas for magnesium-based material applications. 4. Optimize Existing Assets and Enhance Asset Return Levels (1) Strengthen Operations of High-Quality Assets: For high-quality existing assets with strong profitability and good market prospects, increase resource investment to enhance their operational management levels and further improve asset profitability. (2) Disposal of Idle Assets: For idle assets such as real estate and equipment, realize asset liquidation or appreciation through methods such as leasing or selling to improve asset utilization efficiency. 5. Optimize Capital Structure and Control Asset-Liability Ratio (1) Reasonably Arrange Financing Scale and Structure: Arrange the proportion of long-term and short-term financing reasonably according to the company's specific situation; determine a reasonable financing amount based on the company's debt repayment ability and operational development needs. Reasonably adopt various financing methods, combining direct financing with indirect financing. (2) Strengthen Fund Management and Operational Efficiency: Accelerate the speed of fund collection and turnover to improve the operational efficiency of funds.

Minsheng Securities released a research report on June 23 stating that it gives Baowu Magnesium a "Recommend" rating. The reasons for the rating mainly include: 1) Compared to the high external dependency on iron and aluminum ores, magnesium is a structurally controllable metal with an entire industry chain that is independently controlled; 2) The magnesium-to-aluminum ratio fell below 1 in March 2024 and has remained so for 15 months, highlighting magnesium's cost-effectiveness; 3) The automotive lightweighting trend is about to take off, ushering in the "singularity" moment for magnesium die-casting. Risk warnings: Risks such as magnesium price declines, capacity release falling short of expectations, and intensified industry competition.

Minmetals Securities released a research report on June 19 stating that it gives Baowu Magnesium (002182.SZ, latest price: 11.31 yuan) a "Buy" rating. The reasons for the rating mainly include: 1) The improvement of corrosion resistance in magnesium alloys is crucial for their application in the automotive sector; 2) Baowu Magnesium has already launched corrosion-resistant magnesium alloy parts; 3) Baowu Magnesium has a comprehensive layout across the entire industry chain in the field of magnesium alloy manufacturing. Risk warnings: 1) The progress in improving the corrosion resistance of magnesium alloys is currently unknown, which may affect their durability testing in automotive applications. 2) The promotion of the company's magnesium alloy products in the automotive industry may face obstacles, affecting subsequent development.

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According to SMM quotes, on June 25, the average price of magnesium ingot 9990 (Fugu, Shenmu) was reported at 16,150 yuan/mt, up 0.62% from the previous trading day. It is reported that the current price fluctuation range in the magnesium market has narrowed, with recent market prices fluctuating within a range of 100-200 yuan. The slight price increase on June 25 was mainly due to producers attempting to raise quotes again after a stalemate in previous days, but actual demand orders remained weak, and market trading activity was low. With the completion of large-scale procurements, it is difficult to see a significant price rally in the short term. Supply side, production at magnesium ingot producers remains stable. The impact of production resumptions and shutdowns at producers that emerged this month has offset each other, having limited impact on overall production. Producer inventories remain weak, and price trends are more driven by news-related factors. In overseas markets, trading was active last week, with FOB transaction prices generally below $2,200/mt and delivery dates mostly delayed to July and August. Currently, overseas customers have completed their staged procurements and have returned to a wait-and-see stance. The actual contracted prices have not followed the upward adjustment of domestic ex-factory prices and remain fluctuating within a low range. Overall, magnesium prices have gradually entered a relatively stable phase, with insufficient upward momentum in the future. Prices may rise when approaching the next procurement period.