On August 16, Hualian Holdings (000036) announced that it had received a notification letter from Canada’s Foreign Investment Review and Economic Security (FIRES) agency, stating that the company’s investment in the Arizaro lithium salt lake project in Argentina may affect Canadian national security and could trigger a further review. The company cannot yet assess the potential impact of this letter, and there is uncertainty over whether the transaction will ultimately pass the review.
The announcement disclosed that on December 22, 2025, Hualian Holdings convened the sixth meeting of its 12th Board of Directors, which approved the proposal regarding the cash acquisition of 100% equity in Argentum Lithium S.A. and the signing of a share purchase agreement. The company planned to use its own or self-raised funds of approximately $175 million (roughly 1.18 billion yuan) to acquire the entire stake held by the counterparties, thereby obtaining an 80% interest in the Arizaro lithium salt lake project in Argentina. On the same day, the parties signed the Share Purchase Agreement.
It is reported that Argentina’s Arizaro project comprises six mining rights across the Arizaro lithium salt lake, covering a total area of approximately 205 sq km, with total LCE resources of 4.122 million mt. The Arizaro salt flat where the project is located is the largest undeveloped salt flat in South America’s “Lithium Triangle.”
Following the signing of the Share Purchase Agreement, the seller wrote to FIRES in January 2026 regarding the transaction, arguing that Argentum Lithium S.A. is not a Canadian company, holds no Canadian assets, has no employees or business premises in Canada, and does not meet the criteria envisioned under the Investment Canada Act. Prior to receiving the notification letter, the seller had received no response to that communication. Based on this situation and the specific circumstances of the deal, both parties agreed to amend the Share Purchase Agreement by executing an Amendment Agreement and an Extension Agreement.
Under the Share Purchase Agreement and the Amendment Agreement, the company and the seller will actively communicate with and respond to FIRES. The company remains unable to assess the potential impact of this notification letter.
Hualian Holdings stated that it remains uncertain whether the Canadian government will initiate a further review of the transaction following the notification letter. The deal is currently undergoing the domestic ODI filing and approval process. Whether the transaction will ultimately pass the review, the outcome of such review, and the timing of completion are all uncertain, posing risks of delayed closing or failure to complete the deal.
According to public information, Hualian Holdings was founded in September 1989 and listed on the Shenzhen Stock Exchange in June 1994, primarily engaged in real estate development and property management services.
In recent years, Hualian Holdings has been actively exploring paths for industrial transformation, focusing on areas such as new energy technology, carbon neutrality technology, and digital technology.
Following the Arizaro project acquisition, Hualian Holdings originally planned to enter the salt lake lithium extraction sector, leveraging the direct extraction and adsorption technology from its previously invested companies, Shenzhen Juneng and Zhuhai Juneng, to form a business layout spanning resources, technology, and finished products or partnerships.
On the earnings front, Hualian Holdings expects its H1 net profit attributable to shareholders of the publicly listed firm to be between 23 million yuan and 31 million yuan, up 1,029.89%–1,422.89% YoY. Net profit after deducting non-recurring items is expected to come in at 22–30 million yuan, up 239.25%–362.61% YoY.
Regarding the earnings change, Hualian Holdings attributed it mainly to a YoY increase in property sales revenue from the Hangzhou “Qiantang Mansion” project during H1, as well as a low base effect, with net profit attributable to shareholders of the publicly listed firm in the prior-year period at just 2.0356 million yuan.
