Foshan Energy Group Co., Ltd. Announcement on Retrospective Adjustment of Financial Data for Business Combination Under Common Control
The Company and its Board of Directors guarantee the content of this information disclosure is true, accurate, and complete, and that there are no false records, misleading statements, or material omissions.
Foshan Energy Group Co., Ltd. (hereinafter referred to as the "Company") held its Fourth Extraordinary Meeting of the Fifth Board of Directors on May 12, 2023, and its First Extraordinary General Meeting of Shareholders on May 30, 2023, respectively. Both meetings deliberated and approved the "Proposal on the Acquisition of Equity of Foshan Funeng Smart Manufacturing Technology Co., Ltd. and Related Party Transactions." The proposal agreed that Guangdong Foshan Energy Technology Co., Ltd. (hereinafter referred to as "Foshan Energy Technology"), a wholly-owned subsidiary of the Company, would sign an "Equity Transfer Agreement" with Funeng Dongfang Equipment Technology Co., Ltd. (hereinafter referred to as "Funeng Dongfang"). Foshan Energy Technology would acquire 100% of the equity of Foshan Funeng Smart Manufacturing Technology Co., Ltd. (hereinafter referred to as "Funeng Smart Manufacturing"). This acquisition would be carried out in two phases: Phase 1, Foshan Energy Technology would acquire 49% of the equity of Funeng Smart Manufacturing; Phase 2, within ten working days from the date when Funeng Smart Manufacturing completes the investment in the project land approved by the People's Government of Chancheng District or its authorized department, reaching over 25% of the total investment, Foshan Energy Technology would pay the second installment of the equity transfer payment to Funeng Dongfang to acquire the remaining 51% equity of Funeng Smart Manufacturing. Detailed information can be found in the relevant announcements published by the Company on May 15, 2023, and May 31, 2023, in Securities Times, China Securities Journal, Securities Daily, Shanghai Securities News, and on the CNINFO website (http://cninfo.com.cn).
In December 2025, Foshan Energy Technology completed the acquisition of 51% of the equity of Funeng Smart Manufacturing. The Company's shareholding in Funeng Smart Manufacturing increased to 100%, and Funeng Smart Manufacturing was formally included in the Company's consolidated financial statements. Detailed information can be found in the relevant announcements published by the Company on December 31, 2025, in Securities Times, China Securities Journal, Securities Daily, Shanghai Securities News, and on the CNINFO website (http://cninfo.com.cn).
In this transaction, both the Company and Funeng Dongfang are controlled by Foshan Investment Holdings Group Co., Ltd. (hereinafter referred to as "Foshan Holdings Group"), and this control is not temporary. Therefore, this transaction constitutes a business combination under common control. When preparing consolidated financial statements for the period of consolidation, the Company shall adjust the opening balance of the financial statements and relevant items of comparative statements. The relevant situation is explained as follows:
I. Explanation of the Reason for Retrospective Adjustment
Before the business combination under common control of Funeng Smart Manufacturing by the Company in December 2025, the Company held 49.00% of the equity of Funeng Smart Manufacturing, and Funeng Dongfang held 51.00% of the equity of Funeng Smart Manufacturing. Both the Company and Funeng Dongfang are controlled by Foshan Holdings Group, and this control is not temporary.
As of December 31, 2025, the Company has paid the transaction consideration to Funeng Dongfang, completed the industrial and commercial registration, and transferred control. The Company acquired 51.00% of the equity held by Funeng Dongfang in Funeng Smart Manufacturing. Since then, the Company's shareholding in Funeng Smart Manufacturing has reached 100.00%, and Funeng Smart Manufacturing has been included in the Company's consolidated financial statements for the 2025 fiscal year, becoming a subsidiary acquired through a business combination under common control.