Review Opinion on the Estimated New Daily Related Party Transaction Limit of Zhonglun New Materials Co., Ltd.
CITIC Securities Co., Ltd. (hereinafter referred to as "CITIC Securities" or "Sponsor") serves as the continuous supervision sponsor for Zhonglun New Materials Co., Ltd. (hereinafter referred to as "Zhonglun New Materials" or "Company") during its initial public offering and listing on the ChiNext. In accordance with the "Shenzhen Stock Exchange ChiNext Stock Listing Rules" and the "Shenzhen Stock Exchange Listed Company Self-Regulatory Guidelines No. 2 - Standard Operation of ChiNext Listed Companies," CITIC Securities conducted a prudent review of the estimated new daily related party transaction limit of Zhonglun New Materials. The specific situation is as follows:
I. Basic Information on Daily Related Party Transactions
(1) Overview of Daily Related Party Transactions
On February 11, 2026, Zhonglun Technology Group Co., Ltd. (hereinafter referred to as "Zhonglun Group"), the controlling shareholder of Zhonglun New Materials, won 20% equity ownership of Fujian Tianchen Yaolong New Materials Co., Ltd. (hereinafter referred to as "Tianchen Yaolong") through judicial auction for RMB 325,080,847.20. According to the notification from the controlling shareholder Zhonglun Group, Tianchen Yaolong intends to handle business registration changes in the near future. Given that Zhonglun Group holds a significant equity stake in Tianchen Yaolong and the substantial annual procurement amount from Tianchen Yaolong, it is recognized as a related party of the Company based on the principle of substance over form as per the relevant regulations of the Shenzhen Stock Exchange ChiNext Stock Listing Rules. Tianchen Yaolong has been a major supplier of caprolactam, a raw material for the Company. The new daily related party transactions are primarily due to Tianchen Yaolong becoming a new related party recently.
On April 10, 2026, the Company held the 12th meeting of the second board of directors, which approved the proposal on the estimated new daily related party transaction limit. Due to operational needs and after analyzing the future business activities between the Company and Tianchen Yaolong, it is estimated that the Company and its wholly-owned subsidiaries will engage in raw material procurement transactions with Tianchen Yaolong amounting to no more than RMB 1.2 billion from April 10, 2026, to December 31, 2026. The estimated new daily related party transaction limit will take effect from the date of board approval if within the board's authority; otherwise, it will take effect from the date of shareholder meeting approval.
(2) Estimated Related Party Transaction Categories and Amounts
| Related Party | Transaction Category | Pricing Principle | Estimated Transaction Amount (April 10, 2026 - December 31, 2026) | Previous Year Actual Related Party Transaction Amount | Amount of Related Party Transactions as of Disclosure Date |
|---|---|---|---|---|---|
| Tianchen Yaolong | Raw Material Procurement | Market Price | 120,000 | Not Applicable | Not Applicable |