Announcement on Abnormal Stock Trading Fluctuations

Securities Code: 002674

Securities Abbreviation: Xingye Technology

Announcement Number: 2026-042

Xingye Leather Technology Co., Ltd.

Announcement on Abnormal Stock Trading Fluctuations

The Company and all members of the Board of Directors guarantee the truthfulness, accuracy, and completeness of the information disclosed, and that there are no false records, misleading statements, or significant omissions.

Special Notice:

1. Recently, the company's stock price has experienced significant fluctuations due to market sentiment, concept speculation, and other factors. Some market views have over-interpreted and set excessively high expectations for the development of the company's new business acquired, which deviates significantly from the company's current actual performance. There is a risk of significant stock price fluctuations, rapid declines, and valuation corrections in the future. Investors are urged to abandon speculative mindsets, rationally assess the company's current development status and valuation level, make prudent decisions, and pay attention to investment risks.

2. On the evening of June 21, 2026, the Company issued the "Voluntary Information Disclosure Announcement on Signing the Framework Agreement for the Acquisition of Indium Phosphide Business Assets." This acquisition matter still needs to be submitted to the Board of Directors for deliberation, and the completion of this transaction remains uncertain. The proposed acquisition of the Indium Phosphide business has industry characteristics such as a long customer certification cycle and high entry barriers. Preliminary investigations indicate that the net assets of the proposed acquisition of the Indium Phosphide business are expected to be no more than RMB 25 million. The revenue generated by the Indium Phosphide business from January to May 2026 is expected to be no more than RMB 5 million, with current orders not exceeding RMB 2 million. The revenue already achieved and to be achieved in 2026 from this business accounts for a very small proportion of the company's 2025 revenue. It is currently expected that this matter will have a minimal impact on the company's current operating revenue and net profit.

3. The Indium Phosphide assets that the Company plans to acquire have not been profitable for the past three years. It is expected that after the acquisition is completed, there may be a risk of this business not being profitable in the short term.

4. After acquiring the Indium Phosphide substrate business assets, the Company plans to establish a subsidiary to operate this business independently. After the establishment of the subsidiary, it will still need to go through procedures such as project filing, environmental impact assessment approval, and project safety condition review. The estimated processing time is 6 to 9 months, and there is a risk that the Indium Phosphide substrate business will not be able to produce during the period of handling these procedures.

5. The Indium Phosphide assets that the Company plans to acquire are mainly 2-inch and 3-inch Indium Phosphide substrates, which are commonly used in the market and are mainly used for detectors. The VGF single crystal yield is low. Currently, the verification threshold for 4-inch products is high, and there may be a risk of customer verification failure. All current products do not involve optical module customers.

6. Currently, the global Indium Phosphide substrate market is highly concentrated, with overseas leading manufacturers holding the major market share. The customer certification cycle is long, and the entry barriers are high. After new products are launched, the company may face slow market development, delayed customer certification, and intensified market competition, posing a risk of production capacity release falling short of expectations or economic benefits failing to meet targets.