Guotai Junan Securities Co., Ltd.
Audit Opinion on Changzhou Yingzhong Technology Co., Ltd.'s Transaction Compliance with Article 11 and Non-Applicability of Articles 43 and 44 of the Measures for the Administration of Major Asset Reorganizations of Listed Companies
Changzhou Yingzhong Technology Co., Ltd. (hereinafter referred to as the "Listed Company" or "Company") intends to acquire 51% of the equity of Changzhou Yingzhong Electric Co., Ltd. (hereinafter referred to as the "Target Company" or "Yingzhong Electric") held by Yu Biao, Yu Yingzhong, and Zhu Lijuan (hereinafter referred to as the "Transaction").
Guotai Junan Securities Co., Ltd. (hereinafter referred to as the "Independent Financial Advisor" or "Guotai Junan"), as the independent financial advisor for the Listed Company's Transaction, has conducted an audit in accordance with the provisions of the Measures for the Administration of Major Asset Reorganizations of Listed Companies (hereinafter referred to as the "Reorganization Measures") regarding whether the Transaction complies with Article 11 of the Reorganization Measures and whether Articles 43 and 44 are applicable. The audit results are as follows:
I. The Transaction Complies with Article 11 of the Reorganization Measures
(I) Compliance with National Industrial Policies and Laws and Regulations on Environmental Protection, Land Management, Anti-Monopoly, Foreign Investment, and Foreign Investment
- The Transaction Complies with National Industrial Development Requirements
The Transaction involves the acquisition of 51% of the equity of Yingzhong Electric. Yingzhong Electric is primarily engaged in the research, development, production, and sales of insulating materials and molded products for power transmission and transformation equipment. According to the "Classification of National Economic Industries" (GB/T4754-2017) issued by the National Bureau of Statistics, the Target Company belongs to the "C38 Electrical Machinery and Equipment Manufacturing" industry, specifically the "C3834 Insulation Products Manufacturing" sub-industry.
According to the "Classification of Strategic Emerging Industries (2018)" issued by the National Bureau of Statistics, Yingzhong Electric's main products fall under "New Energy Industry (6)," specifically "Smart Grid Industry (6.5)," and further into "Power Electronic Basic Component Manufacturing (6.5.2)." Its key products and services include insulating molded parts for ultra-high and extra-high voltage AC and DC power transmission and transformation equipment. The Company's industry belongs to China's strategic emerging industries.
According to the "Catalogue for Guiding Industry Restructuring (2024 Edition)" issued by the National Development and Reform Commission, the businesses of the Target Company are not included in industries restricted or eliminated by national industrial policies. Therefore, the Transaction complies with national industrial policies.
- The Transaction Complies with Laws and Regulations on Environmental Protection
On December 16, 2025, the Changzhou Municipal Bureau of Ecology and Environment issued an Administrative Penalty Decision (Chang Huan Zhong Xing Fa [2025] No. 12) to Changzhou Yingzhong Electric Co., Ltd., imposing a fine of 330,000 yuan for the environmental violation of setting up a pump in the southwest corner of the "Jiao Huan" workshop to pump accumulated water into the rainwater well in the southwest corner of the workshop, and finally discharging it through the rainwater discharge outlet into the municipal rainwater pipe network outside the factory's south gate.