The Board of Directors and all directors of Aeolus Tyre Co., Ltd. (hereinafter referred to as the “Company”) warrant that this announcement contains no false records, misleading statements or material omissions, and shall be individually and jointly liable for the truthfulness, accuracy and completeness of its content.

1. Overview of Establishment of a Subsidiary for Outbound Investment and Connected Transaction

The Company intends to invest RMB 840 million to establish a wholly-owned subsidiary, Aeolus Tyre (Hainan) Co., Ltd. (hereinafter referred to as “Aeolus Hainan”, the final name shall be subject to the approval and registration of the relevant government authorities). After the establishment of Aeolus Hainan, it will introduce investors through capital increase and share expansion. As the potential investors participating in this transaction and their investment amounts have not been finally determined, the shareholding ratio of Aeolus Hainan may change, and the specific shareholding ratio shall be subject to and stipulated in the final transaction agreement.

After introducing investors, Aeolus Hainan intends to jointly fund the establishment of a joint venture company, Aeolus Tyre Egypt Co., Ltd. (hereinafter referred to as “Aeolus Egypt”, the final name shall be subject to the approval and registration of the relevant government authorities) with Prometeon Tyre Egypt Co., S.A.E. (hereinafter referred to as “Prometeon Egypt”) and CNRC International Limited (hereinafter referred to as “CNRC International”). Aeolus Egypt is mainly engaged in the production and sales of TBR tires, OTR tires and AGRO tires

The proposed registered capital of Aeolus Egypt is RMB 1.516 billion (or equivalent US dollars, the specific amount will be determined based on the real-time exchange rate). Aeolus Hainan intends to invest RMB 1.5 billion or equivalent US dollars, holding 98.93% of the shares; Prometeon Egypt intends to invest RMB 15.16 million or equivalent US dollars, holding 1% of the shares; CNRC International intends to invest RMB 1 million or equivalent US dollars, holding 0.07% of the shares. The actual investment amount of this project shall be subject to the approval of the competent Chinese and Egyptian government authorities.

In accordance with the Shanghai Stock Exchange Rules Governing the Listing of Stocks and other relevant provisions, Prometeon Egypt and CNRC International are connected parties of the Company, and this transaction constitutes a connected transaction, but does not constitute a material asset restructuring as defined in the Measures for the Administration of Material Asset Restructurings of Listed Companies.

As of the date of this announcement, in the past 12 months, all the connected transactions between the Company and connected parties in Sinochem Holdings Corporation Ltd. have been duly approved following regulations for listed companies. This connected transaction still needs to be submitted to the Company's shareholders' meeting for deliberation and approval.

2. Basic Information of Connected Parties

As of the date of this announcement, except for the connected transactions disclosed herein, there are no other relationships such as property rights, assets, credits and debts between the Company and the above connected parties. The above connected parties are not dishonest judgment debtors.

3. Basic Information of the Outbound Investment and Connected Transaction

As of the date of this announcement, Aeolus Hainan and Aeolus Egypt have not yet been established, and the relevant registration information of Aeolus Hainan and Aeolus Egypt shall be finally subject to the approval of the market entity registration authorities and the competent government departments.

Details of establishment of Aeolus Hainan and Aeolus Egypt and Aeolus Tyre Egypt Capacity Expansion and Efficiency Improvement Project to be invested are as follows:

• Project Name: Aeolus Tyre Egypt Capacity Expansion and Efficiency Improvement Project

• Project Type: New Overseas Investment

• Project Location: Alexandria, Egypt

• Scope of Construction: Fully utilize the existing land and certain public utilities of Prometeon Egypt's factory, purchase the adjacent land of the factory, build new radial tire production workshops (including processes of mixing, semi-finished products, building, curing and finished product inspection), finished product warehouses, mileage test stations, physical and chemical laboratories and supporting public utilities, renovate and expand the main substation, and install new equipment for processes, laboratories and utilities.

• Construction Period: The expected construction period is 20 months (the final period shall be subject to the actual situation in construction phase)

• Construction Scale: Annual production capacity of 1.5 million TBR tires, 30,000 OTR tires and 30,000 AGRO tires

• Total Investment: RMB 2,680.55 million (the final amount shall be subject to the actual investment)

4. Main Contents of the Transaction Agreement and Performa