Securities Code: 000988 Securities Abbreviation: Huagong Technology Announcement No.: 2026-05 Huagong Technology Industrial Co., Ltd. Announcement on Carrying Out Group Bill Pool Business The Company and the Board of Directors guarantee that the information disclosed is true, accurate, and complete, and that there are no false records, misleading statements, or material omissions. Huagong Technology Industrial Co., Ltd. (hereinafter referred to as "Huagong Technology" or the "Company") held the 21st meeting of the 9th Board of Directors on January 27, 2026, and reviewed and approved the "Proposal on Carrying Out Group Bill Pool Business." The details are hereby announced as follows: I. Overview of Bill Pool Business
- Business Overview Bill pool business refers to a comprehensive bill management service provided by partner banks to meet the Company's demand for unified management and coordinated use of its held bills. This service includes bill custody and collection, bill pledge financing, bill discounting, and bill agency inquiry and business statistics. The Company and its wholly-owned subsidiaries can carry out financing business within their respective pledge quotas. If the self-owned pledge quota is insufficient, they can apply to use the pledge quota of other member units within the bill pool. Upon maturity of pledged bills, they will be deposited into a margin account, forming a pledge/guarantee quota together with the pledged bills. The quota can be used on a revolving basis, and the margin balance can be replaced with new bills.
- Partner Banks The partner banks for the bill pool business are commercial banks with good credit standing in China. The specific partner banks will be selected by the Company's shareholders' meeting, authorizing the Company's Chairman to choose based on the Company's cooperative relationship with commercial banks, the commercial banks' bill pool service capabilities, and other comprehensive factors.
- Implementation Entity The implementation entities for the bill pool business are the Company and its wholly-owned subsidiaries. There is no sharing of bill pool quotas with the Company's controlling shareholder, actual controller, or their related parties.
- Business Term The term for the aforementioned bill asset pool business is three years from the date of approval by the shareholders' meeting.
- Implementation Quota The Company and its wholly-owned subsidiaries will share a bill pool quota not exceeding RMB 2 billion. The shared quota generated by pledge and guarantee in the bill pool business will form situations where the Company guarantees its subsidiaries, subsidiaries guarantee subsidiaries, and subsidiaries guarantee the Company. The total guarantee amount will not exceed RMB 2 billion. During the business term, this quota can be used on a revolving basis.
- Guarantee Method Under the premise of controllable risk, the establishment and use of the bill pool can adopt various guarantee methods such as bill pledge and margin pledge. The maximum guarantee amount for the bill pool will not exceed RMB 2 billion. II. Objectives of Carrying Out Bill Pool Business
- Reduce Management Costs By carrying out the bill pool business, the Company and its wholly-owned subsidiaries can deposit their received bills into partner banks for centralized management. The partner banks will handle custody and collection services on behalf of the Company, which is conducive to optimizing the financial structure, reducing management risks, and lowering management costs.
- Centralized Allocation of Bill Resources and Maximization of Benefits By carrying out the bill pool business, the Company can achieve unified management and coordinated use of internal bills. The quota can be adjusted as needed, which is conducive to solving the problem of imbalance between the number of bills held and the number of bills used by the Company and its wholly-owned subsidiaries, and fully activating bill assets.
- Improve Fund Utilization Efficiency The Company and its wholly-owned subsidiaries will use a portion of their outstanding bills as collateral to issue bills not exceeding the total pledge amount, which will be used to pay supplier payments and other daily operating expenses. This is conducive to reducing the occupation of monetary capital and improving the efficiency of fund utilization.
- Strengthen Bill Risk Prevention and Promote Bill Electronization The bill pool system provides the Company with bill authenticity verification and paper bill custody services, realizing the electronization of paper bills. The Company and its wholly-owned subsidiaries can query bill details in real-time and intuitively. The system will automatically handle collections before bill maturity, avoiding the risk of delayed collections. III. Risks and Risk Control of Bill Pool Business
- Liquidity Risk When carrying out the bill pool business, the Company needs to open a special margin account with the partner bank for bill pool pledge financing. This account will be used as the account for incoming funds from bill collections upon maturity of pledged bills under the bill pool. The discrepancy between the maturity dates of notes receivable and notes payable may cause the collected funds to enter the margin account opened by the Company with the partner bank, which will have a certain impact on the Company's liquidity. Risk Control Measures: The Company and its wholly-owned subsidiaries can mitigate this impact by using newly received bills to replace the margin in the pool. The liquidity risk is controllable.
- Guarantee Risk The Company and its wholly-owned subsidiaries will pledge bills in the bill pool to apply to partner banks for issuing bank acceptance bills to pay supplier payments and other daily operating expenses. As the pledged bills mature, collections and payments are processed. If the bills cannot be collected normally upon maturity, the pledged guarantee amount will be insufficient, leading the partner bank to request the Company to provide additional guarantees. Risk Control Measures: After carrying out the bill pool business, the Company and its wholly-owned subsidiaries will arrange for dedicated personnel to liaise with partner banks, conduct tracking management, and promptly understand the status of bill collections and payments upon maturity, as well as arrange for newly received bills to enter the pool, ensuring the safety and liquidity of the bill pool. IV. Decision-Making Procedures and Organizational Implementation
- Decision-Making Procedures This guarantee matter has been reviewed and approved by the Audit Committee of the Company's Board of Directors and submitted to the Board of Directors for review. Due to the fact that the asset-liability ratio of some of the Company's wholly-owned subsidiaries is higher than 70%, and the bill pool business involves guarantees between companies within the scope of the Company's consolidated financial statements, this guarantee matter has been reviewed and approved by more than two-thirds of the directors present at the board meeting. It still needs to be submitted to the shareholders' meeting for review and approval by special resolution before it can be implemented.
- Organizational Implementation Within the aforementioned bill pool business quota and term, the Chairman is authorized to make decisions on specific operations and sign relevant contracts and other legal documents, including but not limited to selecting qualified commercial banks, determining the specific bill pool quota, guarantee objects, guarantee methods, and amounts that can be used by the Company and its wholly-owned subsidiaries. The Company's finance department will be responsible for the overall organization and implementation. V. Documents for Reference
- Resolution of the 21st Meeting of the 9th Board of Directors of the Company;
- Resolution of the First Meeting of the Audit Committee of the 9th Board of Directors of the Company in 2026. Hereby Announced Board of Directors of Huagong Technology Industrial Co., Ltd. January 28, 2026