Recently, a significant restructuring event has occurred in China's acrylic industry: On December 8, 2025, Kuraray Co., Ltd. announced the signing of an equity transfer agreement to sell 100% of the shares of its wholly-owned subsidiary, Kuraray Acrylic (Zhangjiagang) Co., Ltd., to Jiangsu Double Elephant Group Co., Ltd. This event marks a critical shift in the global MMA-PMMA industry structure, with far-reaching implications for China's acrylic sector and our company. We hereby issue this notice to clarify the potential impacts and outline our corresponding strategic measures.

I. Impact on China's Acrylic Industry

•   Accelerated Transfer of Global Industry Focus: Foreign capital's withdrawal from China's acrylic business (driven by factors such as sluggish demand for acrylic bathtubs amid real estate adjustments and declining profitability) further confirms that China is becoming the global core of the acrylic supply chain. Local leading enterprises are taking over to drive the industry's transformation from "scale expansion" to "structural upgrading"
•   Strengthened Integration of Leading Enterprises: As China's largest MMA producer, Double Elephant Group will achieve vertical integration of the "PMMA raw material - PMMA resin - high-end sheet" industrial chain through this acquisition. It will inherit Kuraray's advanced casting technology and high-end brand resources, significantly enhancing the barriers to entry in the high-end market.
•   Intensified Industry Shuffling: The mid-to-low-end market, which is already in oversupply, will face more severe price competition. Small and medium-sized enterprises (SMEs) without integrated capabilities or technological advantages will face greater pressure of capacity clearance, leading to increased industry concentration.

II. Impact on Our Company

•   Increased Market Competition Pressure: Double Elephant Group will achieve vertical integration of the "MMA raw material - PMMA resin - high-end sheet" industrial chain through this acquisition, reducing its production costs by 15%-20% compared to the industry average. As a company with independent acrylic sheet production capacity, we do not rely on external procurement of raw materials, which gives us a certain cost foundation. However, Double Elephant's significant cost advantage will intensify price competition in the mid-to-low-end market, and we may still face challenges in order competition, which may affect the stability of our profit space.
•   Higher Technological and Compliance Thresholds: The upgrading of the high-end market will raise industry standards for light transmittance, weather resistance, and impact resistance. Meanwhile, the increasing requirements for environmental protection and digital transformation (e.g., VOCs treatment investments of 1.5-2 million yuan) will bring additional financial pressure.
•   Potential Lightweight Collaboration Opportunities: The expansion of leading enterprises will generate demand for supporting services. As a small enterprise, we may explore targeted lightweight collaboration opportunities, such as undertaking small-batch customized processing of acrylic sheet accessories or providing supporting services for specific links, to secure stable small-volume orders and accumulate experience in standardized production.

III. Our Strategic Measures

 To respond proactively to industry changes and maintain sustainable development, the company will implement the following key measures:

•   Focus on Niche Segments for Differentiated Survival: Instead of spreading resources thin on a full range of products, we will focus on 1-2 low-investment, high-margin niche areas that big companies overlook. For example, customized acrylic crafts (like personalized gifts), small-batch pet acrylic accessories, or local advertising signage. Taking advantage of our small team's agility, we can quickly respond to personalized needs, build a "small but refined" product feature, and stay away from price wars with large enterprises.
•   Explore Collaboration and Synergistic Development: We will actively communicate with leading enterprises such as Double Elephant Group to explore cooperation opportunities in auxiliary materials supply or OEM processing. Meanwhile, we will strengthen partnerships with local decoration companies, equipment manufacturers, and cross-border e-commerce platforms to expand stable sales channels.
•   Focus on Quality Improvement and Flexible Compliance: We will prioritize optimizing existing production processes (such as improving sheet cutting precision and surface polishing techniques) to enhance product quality stability, which is crucial for retaining old customers and winning small-batch customized orders. For environmental compliance, we will adopt low-cost and practical solutions, such as using environmentally friendly auxiliary materials, optimizing workshop ventilation systems. We will also proactively understand local differentiated environmental management policies for small enterprises to avoid unnecessary compliance expenses.

IV. Conclusion

  The acquisition of Kuraray's China acrylic business by Double Elephant Group is a landmark event in China's acrylic industry's transition to maturity. While it brings short-term challenges such as increased competition and cost pressure, it also creates long-term opportunities for industry upgrading and differentiated development.

  The company will adhere to the principles of "focus, flexibility, and collaboration" to proactively adapt to market changes, strengthen our core competitiveness, and achieve stable development amid industry shuffling. We will keep all stakeholders updated on subsequent industry dynamics and strategic adjustments in a timely manner.