Announcement on Abnormal Stock Trading Fluctuations and Risk Warning

Shenzhen Magic Decoration Design Engineering Co., Ltd.

Announcement on Abnormal Stock Trading Fluctuations and Risk Warning

The Company and all members of the Board of Directors guarantee the truthfulness, accuracy, and completeness of the information disclosed, without any false records, misleading statements, or material omissions.

Special Reminder:

1. The stock trading price of Shenzhen Magic Decoration Design Engineering Co., Ltd. (hereinafter referred to as the "Company") has increased by 93.33% cumulatively from March 23, 2026, to July 1, 2026. This cumulative increase deviates from fundamentals, indicating market overheating and irrational speculation, with a risk of rapid decline at any time. Investors are kindly requested to pay attention to the risks of secondary market trading, invest rationally, and make prudent decisions.

2. On May 15, 2026, Foshan City Nanhai District Jinding Electronic Engineering Co., Ltd., a creditor of the Company, applied to the Futian Enterprise Restructuring Service Center (hereinafter referred to as the "Restructuring Center") for the restructuring of the Company. The Restructuring Center has solicited the Company's opinion on this matter. The Company agrees to an out-of-court restructuring and has recommended the joint venture of AllBright Law Offices (Shenzhen) and Shenzhen Chengxin Certified Public Accountants (Special General Partnership) as the Company's restructuring coordinator. As of now, the Restructuring Center has accepted the out-of-court restructuring and appointed a restructuring coordinator, and the out-of-court restructuring is progressing in an orderly manner. According to the "Work Rules for the Futian Enterprise Restructuring Service Center (Trial)" and relevant regulations, the restructuring application submitted by the applicant to the Restructuring Center falls within the scope of out-of-court restructuring. The Company has not yet entered any bankruptcy proceedings such as judicial pre-restructuring or restructuring. Whether the Company can reach an out-of-court restructuring plan with the applicant and other relevant parties in the future remains uncertain. This out-of-court restructuring does not represent that the Company will necessarily enter judicial pre-restructuring or restructuring proceedings.

3. The Futian Enterprise Restructuring Service Center is a market-oriented and law-based public service platform for out-of-court restructuring established by the Futian District Government of Shenzhen. It is not a judicial organ and does not have judicial ruling authority.

4. Out-of-court restructuring is based on voluntary negotiation among all parties and has no mandatory legal effect. According to the "Work Rules for the Futian Enterprise Restructuring Service Center (Trial)," if the applicant requests to withdraw the restructuring application and there are no other eligible entities to continue the application, or if the Company cannot reach a restructuring plan or relevant agreement with its major creditors, the Restructuring Center will terminate the restructuring.

5. The Company's stock is at risk of delisting: On April 29, 2026, the Company disclosed its "2025 Annual Report." As of the end of 2025, the audited net assets attributable to the parent company were -5,246.62 million yuan. According to Article 9.3.1 of the "Shenzhen Stock Exchange Stock Listing Rules," the Company's stock trading has been subject to a delisting risk warning by the Shenzhen Stock Exchange. Furthermore, because the net profit after deducting non-recurring gains and losses was negative for the last three consecutive accounting years, and the 2025 audit report indicates uncertainty about the Company's ability to continue as a going concern, it triggers Article 9.8.1 of the "Shenzhen Stock Exchange Stock Listing Rules," and the Company's stock trading has been subject to additional risk warnings. Although the Company's Board of Directors has formulated specific measures to strive to lift the delisting risk warning and other risk warnings, whether these can ultimately be achieved is affected by various internal and external factors, and the execution of related work is also uncertain. Investors are kindly requested to pay attention to investment risks.