Transfer agreement for 10% stake in Bai'ao Chemistry terminated midway; cross-sector semiconductor equity investment plans fall through

On the evening of June 1, Biochemical (603360) announced that the planned aggregate 10% equity transfer by the company's controlling shareholder, Tongyun Investment, and shareholder Guangyao Zhixin, who holds over 5%, has been terminated.

The two shareholders had originally planned to each transfer 5% of their equity to Liu Hongjun, a director and co-general manager of the listed company. Due to the disappearance of objective conditions for the performance of the original equity transfer agreement, the transaction parties signed a termination agreement on May 31, 2026, to negotiate the termination of the entire transfer plan. As of the disclosure date, the transfer registration of the target shares had never been completed.

The listed company explicitly stated that the termination of this equity transfer will not change the company's actual control rights, and will have no negative impact on corporate governance, daily production and operation, or finance and performance. There is no situation that infringes upon the rights and interests of the listed company and its minority shareholders.

I. Review of the Transaction: Nearly 2 Billion Yuan Equity Transfer Finalized Half a Year Ago, Binding Semiconductor Strategy

This equity transaction was initially finalized on November 26, 2025, when Liu Hongjun formally signed share transfer agreements with Tongyun Investment and Guangyao Zhixin. The two transferors each sold 35.3112 million shares of the company (each accounting for 5% of the total share capital), with a cumulative transfer of 70.6224 million shares, corresponding to 10% of the total share capital, and a total transaction consideration of approximately 1.986 billion yuan.

The company disclosed at the time that the core purpose of this equity transfer settlement was to assist the long-term development of the listed company's semiconductor sector; all funds for Liu Hongjun's acquisition of the equity originated from the proceeds of the disposal of equity assets under his own name, and the source of funds was compliant and legal.

In terms of shareholder ranking, Tongyun Investment and Guangyao Zhixin are the first and second largest shareholders of the listed company, respectively. If the equity transfer had been successfully completed, Liu Hongjun would have become the third largest shareholder of Biochemical.

<II. Personnel Background: Transferee Controls Semiconductor Business, Holds Multiple Semiconductor Entities

Liu Hongjun officially assumed the position of co-general- manager of Biochemical in April 2025, a role that originated from the company's strategic business transformation. At that time, the listed company announced that its main business would extend from traditional fine chemicals to a dual track of chemicals and semiconductors, splitting into two independent business sectors, with Liu Hongjun taking full charge of the semiconductor sector's operations.

Currently, Liu Hongjun holds multiple positions. In addition to being a director and co-general manager of Biochemical, he also serves as the chairman of two semiconductor enterprises: Suzhou XinhuiLian Semiconductor and XinhuiLian New (Suzhou) Technology. He is the core person in charge of the implementation of the company's semiconductor business.

III. Fundamental Pressure: Main Business Revenue Increases but Profit Does Not, Q1 2026 Performance and Cash Flow Both Weaken

Biochemical's traditional main business focuses on the R&D, production, and sales of isothiazolinone industrial biocide APIs and compound preparations. The continuous pressure on the performance fundamentals may be a potential incentive for the change in the equity transfer.

1. 2025 Full-Year Performance: Revenue Soars, Profit Halved

The company's full-year revenue was 1.724 billion yuan, a year-on-year increase of 35.66%, but the net profit attributable to shareholders was 210 million yuan, a significant year-on-year decline of 46.45%, presenting a clear characteristic of increased revenue without increased profit; the net cash flow from operating activities for the year was 547 million yuan, and cash flow performance was fair.

2. Q1 2026 Accelerated Weakening: Revenue, Net Profit, and Cash Flow All Deteriorate Across the Board

Q1 revenue declined by 46.12% year-on-year, and net profit attributable to shareholders was 19.8285 million yuan, a sharp year-on-year drop of 65.28%; operating cash flow turned from positive to negative, with a net amount of -29.7494 million yuan for the period, with both profitability and the funding side under simultaneous pressure.

IV. Conclusion of the Transaction: Six-Month Equity Cooperation Comes to an Abrupt Halt, Cross-Border Semiconductor Capital Layout Postponed

From the signing in November 2025 to the termination at the end of May 2026, this large equity transfer, which was tied to the semiconductor transformation, lasted only half a year before being terminated. With the failure of the equity acquisition plan, the original implementation path relying on Liu Hongjun's personal capital investment to empower the semiconductor business has been forced to be shelved, and the pace of capital operations for the company's "Chemicals + Semiconductors" dual main business is facing adjustments.