Zhongshan Huali Industrial Group Co., Ltd.
Announcement on Adjusting the Investment Amount of Some Raised Fund Projects and Permanently Supplementing Working Capital with Surplus Raised Funds
The Company and all members of the Board of Directors guarantee that the information disclosed is true, accurate, and complete, and that there are no false records, misleading statements, or major omissions.
Zhongshan Huali Industrial Group Co., Ltd. (hereinafter referred to as the "Company") held the sixth meeting of the third Board of Directors on August 19, 2026. The meeting unanimously approved by 8 votes in favor the "Proposal on Adjusting the Investment Amount of Some Raised Fund Projects and Permanently Supplementing Working Capital with Surplus Raised Funds". It was agreed to adjust the investment amounts for the "Huali Footwear R&D Center and Headquarters Building Project" (hereinafter referred to as the "Headquarters Building Project") and the "Myanmar Shichuan Footwear Production Base Project" (hereinafter referred to as the "Myanmar Shichuan Project"). The investment amount for the Headquarters Building Project will be reduced by RMB 66,833.03 million, and the investment amount for the Myanmar Shichuan Project will be reduced by RMB 122.07 million. The total reduced raised funds of RMB 66,955.10 million, along with the net amount of bank deposit interest and wealth management income received, after deducting bank fees (the actual amount is subject to the bank settlement amount on the fund transfer date), will be permanently supplemented to working capital. The subsequent construction of the Headquarters Building Project and the Myanmar Shichuan Project will be funded by the Company's own capital. The sponsor, Industrial Securities Co., Ltd., has issued a verification opinion on this matter. This proposal still needs to be submitted to the Company's shareholders' meeting for deliberation. The specific details are hereby announced as follows:
1. Basic Situation of Raised Funds from the Initial Public Offering
With the approval of the China Securities Regulatory Commission's "Approval on the Registration of Zhongshan Huali Industrial Group Co., Ltd.'s Initial Public Offering of Shares" (Zhengjian Xu Ke [2021] No. 743), the Company issued 117 million shares of RMB ordinary shares (A shares) at a par value of RMB 1.00 per share and an issuance price of RMB 33.22 per share. The total raised funds amounted to RMB 3,886,740,000.00. After deducting issuance expenses (excluding tax) of RMB 223,684,717.35, the net raised funds amounted to RMB 3,663,055,282.65.
Rongcheng Certified Public Accountants (Special General Partnership) audited the capital verification of the Company's initial public offering of shares on April 19, 2021, and issued the "Capital Verification Report" (Rongcheng Yan Zi [2021] No. 518Z0032). The Company has implemented a special account storage system for the raised funds and has signed the "Raised Funds Tripartite Supervision Agreement" and "Raised Funds Quadrupartite Supervision Agreement" with the sponsor and the banks where the raised funds are deposited. After the Company changed some of the raised fund investment projects, the corresponding raised fund supervision agreements were amended, and supplementary agreements to the raised fund supervision agreements were signed with the sponsor and the banks where the raised funds are deposited.