Retirement Of 50k Ton Polypropylene Installation

(Company Registration Number: 200609833N) (Incorporated in the Republic of Singapore)

The Board of Directors (the "Board") of Sinostar PEC Holdings Limited (the "Company" or together with its subsidiaries, "the Group") wishes to announce the retirement of a 50K tons Polypropylene installation owned by its subsidiary, Dongming Hengchang Petrochemical Co., Ltd. ("Hengchang").

The 50k ton polypropylene plant was put into operation in March 2001 and has been operating for more than 24 years. As of the end of June 2025, the net asset value of this installation is RMB 15.97 million, representing 0.77% of the Group's total assets of RMB 2.0816 billion. The installation contributed 3.09% of sales revenue in 2023, 4.5% in 2024, , and 4.27% in the first half of 2025.

The Board has decided to retire the installation after carrying out a comprehensive evaluation, based on the following key considerations:

1. The installation faces aging issues with potential safety production hazards and risks of mandatory closure due to regulatory policies in near future;

2. The conventional polypropylene products produced by this installation has been suboptimal., narrow product range, resulting in products lacking market competitiveness, with no value for reinvestment or reconstruction;

3. Poor operational efficiency, with continuous losses recorded in recent years.

Following the retirement of this installation, the Group's polypropylene processing capacity will be reduced from 250,000 tons to 200,000 tons annually. However, this will not affect the production balance as the Group's propylene production capacity remains at approximately 180,000 tons, with external procurement requirements reduced accordingly from 70,000 tons to 20,000 tons.

Hengchang's management has been authorised to handle the disposal of the retired installation which is currently under evaluation. The final disposal decision will be determined after further assessment and will be subject to Board approval.

The retirement of the 50K ton polypropylene installation is not expected to have a material impact on the Group's financial position or operating performance for the financial year ending 31 December 2025.

Li Xiangping

Executive Chairman and Chief Executive Officer 18 August 2025