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

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

The board of directors of Hongyuan Green Energy Co., Ltd. and all directors assure that this announcement does not contain any false records, misleading statements, or major omissions, and they bear 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”) plans to transfer its 27.0737% equity interest (corresponding to a paid-in capital of RMB 102 million) in Inner Mongolia Xinyuan Silicon Material Technology Co., Ltd. (hereinafter referred to as “Inner Mongolia Xinyuan”) to Jiangsu Zhongneng Silicon Industry Technology Development Co., Ltd. (hereinafter referred to as “Jiangsu Zhongneng”) for a total price of RMB 124.5 million. Upon completion of this transaction, the Company will no longer hold any equity in Inner Mongolia Xinyuan.
• This transaction does not constitute a related-party transaction.
• This transaction does not constitute a significant asset reorganization.
• The transaction has been reviewed and approved in the 29th meeting of the fourth board of directors, and does not require submission for shareholder approval.
• Risk Warning: The equity transfer agreement signed is based on mutual cooperation terms, and Jiangsu Zhongneng still needs to process payment as stipulated in the agreement, and both parties need to complete the industrial and commercial registration changes 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 27.0737% equity interest (corresponding to a paid-in capital of RMB 102 million) 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 Reason for the Transaction

On February 28, 2021, the Company signed a Strategic Cooperation Framework Agreement with Jiangsu Zhongneng to ensure the supply of monocrystalline silicon raw materials and to facilitate the smooth operation of a monocrystalline silicon production project. Since acquiring the stake, the Company’s operational status and industry environment have undergone significant changes. On one hand, the Company’s own silicon material production capacity has been established, and on the other hand, the supply and demand dynamics in the photovoltaic industry have shifted. This transaction aims to further optimize resource allocation, focus on core operations, reduce investment risks, enhance the quality of the listed company, and protect the rights and interests of small and medium-sized investors.

(c) Review Status of the Transaction

On May 6, 2025, the 29th meeting of the fourth board of directors approved the proposal regarding the equity transfer of Inner Mongolia Xinyuan with a voting result of 7 in favor, 0 against, and 0 abstentions.

(d) No Requirement for Shareholder Meeting Approval

II. Information on the Counterparty

The Company’s board of directors has conducted necessary due diligence regarding the counterparty, which is as follows:

• Name: Jiangsu Zhongneng Silicon Industry Technology Development Co., Ltd.
• Unified Social Credit Code: 913203017849976109
• Registered Address: No. 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, Macau, Taiwan Investment, Non-solo)
• Business Scope: Manufacturing and sales of electronic special materials, photovoltaic equipment, and other related services.
• Shareholder Information: Jiangsu Zhongneng is a subsidiary of GCL-Poly Energy Holdings Limited (HK03800).
• Financial Data: As of December 31, 2024, GCL-Poly had total assets of RMB 748.74 billion, total liabilities of RMB 325.81 billion, and net assets of RMB 422.93 billion. In 2024, the operating income was RMB 15.098 billion, with a net profit of -RMB 4.75 billion.
• The Company has no other relationships with Jiangsu Zhongneng in terms of property, operations, assets, debts, or personnel.
• Jiangsu Zhongneng is in good standing and has not been listed as a dishonest executor.

III. Basic Information on the Transaction Target

(a) Overview of the Transaction Target

• Name and Type of the Transaction Target: The transaction target is the Company’s 27.0737% equity in Inner Mongolia Xinyuan (corresponding to a paid-in capital of RMB 102 million).
• Ownership Status: The ownership of the transaction target is clear, with no mortgages, pledges, or other restrictions on transfer. There are no ongoing litigation, arbitration, or judicial measures that would impede ownership transfer.
• Operational Status: Inner Mongolia Xinyuan began gradual production in November 2022 and is currently in normal operation. However, due to significant changes in the photovoltaic industry and a sharp decline in silicon prices, the target asset has reported losses. In 2024, it generated operating income of RMB 4.792 billion, with a net profit of -RMB 477 million.
• Company Information: Inner Mongolia Xinyuan Silicon Material Technology Co., Ltd., Unified Social Credit Code: 91150203MA0R5BGB0L, is located in Baotou, Inner Mongolia, with a registered capital of RMB 376.75 million and established on April 2, 2021.
• The transfer of equity does not involve any right of first refusal among shareholders.
• Inner Mongolia Xinyuan has not been listed as a dishonest executor.

(b) Key Financial Information of the Transaction Target

As of December 31, 2024, Inner Mongolia Xinyuan reported total assets of RMB 12.324 billion, total liabilities of RMB 8.801 billion, and net assets of RMB 3.523 billion, with an operating income of RMB 4.792 billion and a net profit of -RMB 477 million.

IV. Pricing of the Transaction Target

The transaction price is based on the audited net assets of Inner Mongolia Xinyuan as of December 31, 2024 (RMB 352.31 million). Considering the Company’s equity stake (27.0737%) and the asset-liability and operational situation of Inner Mongolia Xinyuan, both parties have agreed on a transfer price of RMB 124.5 million through friendly negotiations. The pricing is based on normal commercial practices, ensuring it is fair and reasonable without harming the legal rights and interests of the Company and its shareholders.

V. Main Contents and Performance Arrangement of the Transaction Agreement

Party A (Transferee): Jiangsu Zhongneng Silicon Industry Technology Development Co., Ltd.

Party B (Transferor): Hongyuan Green Energy Co., Ltd.

Both parties confirm and agree that Party A will acquire all of Party B’s equity in Inner Mongolia Xinyuan, which constitutes 27.0737% of the equity. The agreement includes:

• The transfer price for Party B’s equity in Inner Mongolia Xinyuan is RMB 124.5 million.
• 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 as agreed, Party B has the right to demand full payment.
• Party B shall assist Party A in registering the equity transfer in Party A’s name within 10 days after the full payment of the transfer price.
• If Party A defaults on the payment, it shall pay a penalty for each day of delay. Conversely, if Party B delays in facilitating the registration, it shall also pay a penalty for each day of delay (unless due to factors beyond Party B’s control).
• Party A may designate another entity to assume the equity transfer, but Party A remains liable for payment obligations, considering the designated entity’s payment as Party A’s payment.
• This agreement is governed by Chinese law, and any disputes arising during its performance will be resolved through negotiation. If negotiations fail, either party may file a lawsuit in the court where Party B is located. The losing party will bear all litigation expenses, including but not limited to court fees, travel expenses, and attorney fees.

VI. Impact of Asset Sale on the Listed Company

Completion of this equity transfer is expected to have a positive impact on the Company’s performance and asset status for the current year. This transfer will further optimize resource allocation, focus on core business operations, reduce investment risk, and effectively safeguard the interests of the Company and its shareholders. Additionally, by transferring equity, the Company will recover funds and optimize its cash flow, aligning with its long-term development strategy. Investors are advised to be aware of associated risks.

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