Announcement on the Estimated Guarantee Limits for the Company and Its Subsidiaries for 2026

Overview of Guarantees

(1) Overview

To meet the operational and business development needs of Hengdian Group DMEGC Magnetics Co., Ltd. (hereinafter referred to as "the Company") and its subsidiaries, the Company estimates that in 2026, it will provide guarantees for subsidiaries within the consolidated financial statements, between subsidiaries, and for subsidiaries to the Company, with a new guarantee limit not exceeding 1.83 billion yuan (or equivalent foreign currency). Among this, the guarantee limit for entities with a debt-to-asset ratio below 70% will not exceed 430 million yuan (or equivalent foreign currency), while the limit for those with a debt-to-asset ratio of 70% and above will not exceed 1.4 billion yuan (or equivalent foreign currency). The scope of guarantees includes but is not limited to financing guarantees related to financing activities (including loans, bank acceptance bills, letters of credit, guarantees, bill discounts, factoring, export financing, foreign exchange derivative transactions, etc.) and performance guarantees arising from daily operations. The types of guarantees include general guarantees, joint liability guarantees, mortgages, and pledges. To improve decision-making efficiency, the board of directors has authorized the management to implement relevant matters and sign agreements and documents related to guarantees within the above-mentioned limits. Based on actual operational needs, within the above limits, guarantees for entities with a debt-to-asset ratio below 70% can be adjusted among themselves; similarly, guarantees for entities with a debt-to-asset ratio of 70% and above can also be adjusted among themselves or transferred to entities with a debt-to-asset ratio below 70%. The authorization period for the above guarantee limits is from the date of approval by the Company's second extraordinary general meeting of shareholders in 2025 until the date of the 2026 annual general meeting of shareholders.

(2) Review Procedures

The Company and all members of the board of directors ensure that the content of the information disclosure is true, accurate, and complete, with no false records, misleading statements, or significant omissions.

This guarantee matter has been approved by the 26th meeting of the 9th board of directors. According to the "Regulatory Guidelines No. 8 for Listed Companies - Regulatory Requirements for Fund Transactions and External Guarantees," "Shenzhen Stock Exchange Stock Listing Rules," "Self-Regulatory Guidelines No. 1 for Main Board Listed Companies," and "Company Articles of Association" and "Company External Guarantee Management System," this guarantee matter still requires approval by the Company's second extraordinary general meeting of shareholders in 2025.

Estimated Guarantee Limits