Hongyuan Green Energy Plans to Transfer Equity in Inner Mongolia Xinyuan Silicon Material Technology Co., Ltd.

Announcement on the Proposed Transfer of Equity in Inner Mongolia Xinyuan Silicon Material Technology Co., Ltd. by Hongyuan Green Energy Co., Ltd.

The Board of Directors of Hongyuan Green Energy Co., Ltd. and all directors guarantee that this announcement contains no false records, misleading statements, or significant omissions, and assume individual and joint responsibility for the authenticity, accuracy, and completeness of its content.

Key Information:

• Hongyuan Green Energy Co., Ltd. (hereinafter referred to as “the Company”) intends to transfer its 27.0737% equity stake in Inner Mongolia Xinyuan Silicon Material Technology Co., Ltd. (hereinafter referred to as “Inner Mongolia Xinyuan”)—which corresponds to a paid-in capital of RMB 102 million—to Jiangsu Zhongneng Silicon Industry Technology Development Co., Ltd. (hereinafter referred to as “Jiangsu Zhongneng”) for a total consideration of RMB 124.5 million. After this transaction, the Company will not hold any equity interest in Inner Mongolia Xinyuan.
• This transaction does not constitute a related party transaction.
• This transaction does not constitute a major asset reorganization.
• The transaction has been reviewed and approved by the 29th meeting of the Company’s fourth Board of Directors, and does not require submission to the shareholders’ meeting for approval.
• Risk Warning: The signed equity transfer agreement reflects the cooperative terms reached by both parties for this transaction. Jiangsu Zhongneng must still complete the payment of the transfer price as stipulated in the agreement, and both parties need to complete the industrial and commercial change registration for the transferred equity. There is uncertainty regarding the completion of this transaction.

I. Overview of the Transaction

(a) Basic Transaction Details

The Company intends to sign an agreement with Jiangsu Zhongneng to transfer its entire 27.0737% equity interest in Inner Mongolia Xinyuan for a consideration of RMB 124.5 million. Following this transfer, the Company will no longer hold any equity in Inner Mongolia Xinyuan.

(b) Purpose and Rationale of the Transaction

The Company signed a Strategic Cooperation Framework Agreement with Jiangsu Zhongneng on February 28, 2021, to ensure a stable supply of monocrystalline silicon raw materials and to facilitate the smooth launch of a monocrystalline silicon production project. Since then, the Company’s operational circumstances and industry environment have significantly changed. On one hand, the Company has established and put into operation its own silicon material production capacity. On the other hand, the supply-demand dynamics in the photovoltaic industry have shifted. This transaction aims to further optimize resource allocation, focus on core business activities, mitigate investment risks, enhance the quality of the listed company, and protect the rights of minority investors.

(c) Review of the Transaction

On May 6, 2025, the 29th meeting of the Company’s fourth Board of Directors voted unanimously (7 votes in favor, 0 against, and 0 abstentions) to approve the proposal regarding the intended transfer of equity in Inner Mongolia Xinyuan.

(d) No Need for Shareholders’ Meeting Approval

This transaction does not require approval from the shareholders’ meeting.

II. Introduction of the Counterparty

The Company’s Board of Directors has conducted necessary due diligence on the counterparty, Jiangsu Zhongneng, with the following details:

• Name: Jiangsu Zhongneng Silicon Industry Technology Development Co., Ltd.
• Unified Social Credit Code: 913203017849976109
• Registered Address: 66 Yangshan Road, Xuzhou Economic and Technological Development Zone
• Legal Representative: Chen Hui
• Registered Capital: RMB 1,070,757,783.44
• Date of Establishment: March 7, 2006
• Company Type: Limited Liability Company (Hong Kong, Macao, Taiwan Investment, Non-Wholly Owned)
• Business Scope: Manufacturing and sales of electronic materials, photovoltaic equipment, and chemical products; technical services; import and export of goods; and more.
• Shareholder Information: Jiangsu Zhongneng is a subsidiary of GCL-Poly Energy Holdings Limited (HK03800).
• Main Financial Data: As of December 31, 2024, GCL-Poly’s audited total assets amounted to RMB 74.874 billion, with total liabilities of RMB 32.581 billion and a net asset value of RMB 42.293 billion. The annual revenue for 2024 was RMB 15.098 billion, with a net profit attributable to the parent company of -RMB 4.750 billion.
• There are no other relationships between the Company and Jiangsu Zhongneng regarding property rights, business, assets, debts, or personnel.
• Jiangsu Zhongneng is in good standing and has not been listed as a dishonest executor.

III. Basic Information of the Equity Being Transferred

(a) Overview of the Equity

1. Name and Type of the Equity: The subject of this transaction is the Company’s 27.0737% equity interest in Inner Mongolia Xinyuan, corresponding to a paid-in capital of RMB 102 million.
2. Ownership Status: The ownership of the equity is clear, with no existing mortgages, pledges, or other restrictions on transfer. There are no pending litigation or arbitration matters affecting the ownership transfer.
3. Operational Status of Related Assets: Inner Mongolia Xinyuan commenced gradual production in November 2022 and is currently in normal production status. However, due to profound changes in the photovoltaic industry and significant declines in silicon prices, the asset has incurred losses. For 2024, the revenue was RMB 4.792 billion with a net profit of -RMB 477 million.
4. Company Information: Inner Mongolia Xinyuan Silicon Material Technology Co., Ltd., Unified Social Credit Code: 91150203MA0R5BGB0L, Registered Address: Room 402, Office Building of the BaoTou Metal Deep Processing Park Administrative Committee, Baotou City, Inner Mongolia, Legal Representative: Li Li, Registered Capital: RMB 376.75 million, Date of Establishment: April 2, 2021, Company Type: Other Limited Liability Company.

(b) Priority Purchase Rights

This equity transfer is between shareholders and does not involve any priority purchase rights.

(c) Inner Mongolia Xinyuan’s Status

Inner Mongolia Xinyuan has not been listed as a dishonest executor.

(d) Financial Information of the Equity Being Transferred

As of December 31, 2024, Inner Mongolia Xinyuan’s audited total assets were RMB 12.324 billion, with total liabilities of RMB 8.801 billion and net assets of RMB 3.523 billion. The revenue for 2024 was RMB 4.792 billion, resulting in a net profit of -RMB 477 million.

IV. Pricing of the Transaction

The pricing for this transaction is based on Inner Mongolia Xinyuan’s audited net assets as of December 31, 2024 (RMB 352.30658 million). Considering the Company’s equity stake (27.0737%), and after friendly negotiations, the transfer price has been set at RMB 124.5 million. This pricing is based on normal commercial practices, and the transaction price is deemed fair and reasonable, with no harm to the Company or shareholders’ legitimate rights.

V. Main Content of the Transaction Agreement and Performance Arrangements

Party A (Buyer): Jiangsu Zhongneng Silicon Industry Technology Development Co., Ltd.
Party B (Seller): Hongyuan Green Energy Co., Ltd.

Both parties agree that Party A will acquire all of Party B’s equity in Inner Mongolia Xinyuan, specifically the 27.0737% stake held by Party B. The following agreements have been made regarding this equity transfer:

1. The transfer price for the equity held by Party B in Inner Mongolia Xinyuan is RMB 124.5 million.
2. Party A must pay RMB 100 million as a deposit by June 6, 2025, with the remaining RMB 114.5 million to be paid by December 6, 2025. If the initial payment is not made on time, Party B has the right to demand full payment.
3. Party B shall assist Party A in registering the change of equity ownership within 10 days after Party A has paid the transfer amount.
4. If Party A fails to make payments as agreed, it shall pay a penalty for each day of delay; similarly, if Party B delays the registration process without valid reasons, it shall also incur penalties.
5. Party A may designate another entity to complete the transaction, but Party A remains responsible for the payment obligations.
6. This agreement is governed by Chinese law, and any disputes should be resolved through negotiation or litigation in the court where Party B is located, with the losing party bearing all associated costs.

VI. Impact of the Asset Sale on the Listed Company

Completion of this equity transfer is expected to have a positive impact on the Company’s financial performance and asset status for the current year. By optimizing resource allocation and focusing on core business activities through this transfer, the Company aims to mitigate investment risks and protect the interests of shareholders. Additionally, this transaction will help recover funds and improve the Company’s cash flow, aligning with its long-term development strategy. Investors are advised to be aware of related risks.

Hongyuan Green Energy Co., Ltd. Board of Directors
May 8, 2025