ZG Group — M&A Activity 2025

Jul 2, 2025

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This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of the Company.

ZG Group

找钢产业互联集团

(A company controlled through weighted voting rights, incorporated in the Cayman Islands with limited liability and carrying on business in Hong Kong as ZGW)

(Stock Code: 6676)

(Warrant Code: 2572)

VOLUNTARY ANNOUNCEMENT

This is a voluntary announcement made by ZG Group (the "Company", collectively with its subsidiaries, the "Group").

COOPERATION AGREEMENT

The board of directors of the Company (the "Board") is pleased to announce that on July 2, 2025, the Company, through its wholly-owned subsidiary, entered into a joint venture agreement and a set of pertaining articles of association with LYKOS HOLDING HONG KONG LIMITED ("Lykos"), a wholly-owned subsidiary of TRAFIGURA GROUP PTE. LTD.* ("Trafigura"), to jointly establish an industrial internet platform for the non-ferrous metals industry (the "Cooperation"), the Lykos platform (宗金匯平台).

TRAFIGURA AND LYKOS

Lykos is a subsidiary of Trafigura, one of the world's largest metal and mineral traders. As Trafigura's exclusive non-ferrous metals e-commerce platform in China, Lykos platform utilizes internet and big data technologies to provide the non-ferrous metals industry with intelligent commodity pricing, platform transactions, business to business (B2B) payment solutions, warehousing, logistics, and big data services. It aims to enhance operational efficiency, drive growth for enterprises, and deliver superior transaction experiences.

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COOPERATION DETAILS

The Company established a joint venture with Lykos Holding Hong Kong Limited by making a cash capital contribution of RMB45 million, resulting in the Company holding an 8.57% equity interest in the joint venture, Lykos (Shanghai) Information Technology Co., Ltd.* (宗金匯(上海)信息技術有限公司).

Reasons and benefits of the Cooperation

The Cooperation with Trafigura enables the Group to jointly develop a comprehensive non-ferrous metals e-commerce platform, accelerating the Group's expansion in the non-steel sector and establishing a comprehensive industrial internet platform. In 2024, the Group launched the FatCat Industrial Supplies division, which was renamed to Zhaogang Industrial Supplies this year, repurposing infrastructure developed for the steel industry to serve non-steel trading. The non-steel trading business extensively adopts digital modules from the steel industry for pre-sales, in-sales, and after-sales processes, utilizing large-scale AI models for automated matching of inquiry and quotation opportunities. As of 31 December 2024, the non-steel trading business collaborated with 371 suppliers and 1,728 customers, covering over 68,000 stock keeping units (SKUs) and completing 19,811 transactions. The business generated a gross merchandise value (GMV) of RMB408.4 million, representing a year-on-year growth of 192.7% compared to 2023.

The Lykos platform is functionally mature, enabling customers to access reliable supply and pricing information in real-time, place and fulfill orders with a single click, complete settlement and invoicing efficiently, and benefit from transparent information and rapid price responsiveness. These features improve procurement efficiency and strengthen financial risk control, supported by core software systems.

A significant portion of the Group's customers, who procure both steel and non-ferrous metals, have highly overlapping needs. Trafigura and the Group will jointly promote the onboarding of additional suppliers onto the Lykos platform. The Group will leverage its nationwide sales network to distribute finished and semi-finished non-ferrous metal products to industrial and construction end-users. The Group's infrastructure, applicable to non-ferrous metals, will enhance the Lykos platform's capabilities by integrating B2B platform software and offering comprehensive services such as FatCat Logistics and FatCat Cloud to non-ferrous metal industry users.

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DEVELOPMENT PLANS

As an online platform for non-ferrous metals, the Lykos platform provides enterprises of all sizes with a one-stop, transparent, and efficient trading experience. The Cooperation aims to build a leading industrial internet platform for the non-ferrous metals industry.

IMPLICATIONS UNDER THE LISTING RULES

As all applicable percentage ratios calculated under Rule 14.07 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") are below 5%, the Cooperation does not constitute a notifiable transaction under the Listing Rules.

By order of the board of directors
ZG GROUP
Wang Dong
Chairman of the board of directors

Hong Kong, July 2, 2025

As at the date of this announcement, the Board comprises: (i) Mr. Wang Dong, Mr. Wang Changhui, Ms. Gong Yingxin and Ms. Zhou Min as executive directors, (ii) Mr. Ye Qian and Mr. Jiang Rongfeng as non-executive directors and (iii) Mr. Wang Xiang, Mr. Chen Yin and Mr. Wang Weisong as independent non-executive directors.

NOTE:

• For ease of reference, the names of the companies or entities (including the PRC-established companies or entities) have been included in this announcement in both Chinese and English languages. The name in Chinese is the official name of each such company or entity, while the English name is a translation of the Chinese name and is included herein for identification purposes only. In the event of any inconsistency, the Chinese version shall prevail.