China Risun and Tongda Coking Signed an Operation Management Services Agreement

(Hong Kong, 18 April 2024) – Risun Marketing Co. Ltd. (“Risun Marketing”) under China Risun Group Limited (“China Risun”, or the “Group”, stock code: 1907.HK), a leading global integrated coke, coking chemicals and refined chemicals producer and supplier and relevant operation management services provider in China, has signed an operation management services agreement with Tongda Coking Co. Ltd. ("Tongda Coking") in Beijing. After thorough communication and research, the parties reached a high degree of consensus on the prevailing severe market situation of coal, coke, and steel, and decided to leverage their respective strengths and carry out in-depth cooperation to jointly improve the management and operational capabilities of Tongda Coking, enhancing its operating efficiency and regional competitiveness. Yang Xuegang, Chairman of China Risun, and Lian Hailiang, Chairman of Tongda Coking, attended the signing ceremony.

According to the agreement, the contracted period of cooperation lasts for three years. China Risun will dispatch a professional service team to provide Tongda Coking’s coking business with professional operation management services across sales, transportation, production, supply and R&D, helping Tongda Coking to optimize the production and operation management of this business segment, reduce production and operation costs, and improve profitability. It will also use Risun’s marketing platform and supply chain system and be responsible for the purchase of raw coal, coal blending management, coking and chemical product sales and logistics for Tongda Coking’s coking business, so as to improve its operational efficiency. At the same time, it will determine the condition of Tongda Coking’s equipment during operation and maintenance services, and provide suggestions for informatization, intelligence, digitalization, and technological transformation projects that need to be implemented. The basic goal of the cooperation is to improve the stability of Tongda Coking's customers, realize the just-in-time “zero inventory” of coke shortly, and continuously optimize the coal blending structure, reduce coal blending costs, and stabilize the quality of coke. The cooperation also aims to gradually achieve stable and full production of coke, reclaim the assay rights of coke sales and achieve an organic balance between coke sales collection and coal purchase payments, so as to improve overall operating cash flow, and increase revenue and profitability.

Tongda Coking is located in the Taiyangshan Development Zone Industrial Park in Wuzhong City, Ningxia Hui Autonomous Region. Since June 2019, it has integrated and reorganized its existing idle assets and started the construction of an integrated coal chemical industrial park with various products such as coal mines, coal washing and coal chemical products, and has been mainly engaged in the refining and sale of coke and its chemical products. Founded in 1995 and listed on the Main Board of the Hong Kong Stock Exchange since March 2019, China Risun headquarters in Beijing and has production bases and companies in various provinces, municipalities and autonomous regions in China and different countries. It owns a global industrial chain, supply chain and an operation management system with the integration of sales, delivery, production, supply and R&D, giving it an initial national business layout

Through this new strong alliance, China Risun and Tongda Coking will be able to capitalize on the Risun brand, China Risun’s nine core competencies and nine competitive advantages, special and patented technologies for accelerating business expansion, and operation and management experiences, enabling the parties to optimize purchase and sales management and widen the price differentiation on both ends, improve organizational structure and management system construction to strengthen teams, systems and mechanisms, reinforce financial management to realize better cost control, enhance production, operation and management to improve business operations, and advance process operations to reduce costs and raise efficiency. These will support the two companies to realize their strategic visions and goals, as well as achieve mutually successful development.

The signing ceremony was hosted by Li Qinghua, CEO of China Risun. Teng Houpeng, the General Manager of Tongda Coking, and Chen Zhisheng, the Marketing General Manager of China Risun, represented both parties in the signing, alongside some senior leaders from both sides.