Zhejiang Zhongke Magnet Co., Ltd.
Analysis Report on the Feasibility of Using Raised Funds for Issuing Convertible Corporate Bonds to Unspecified Objects
August 2026
Zhejiang Zhongke Magnet Co., Ltd. (hereinafter referred to as "Zhongke Magnet" or "the Company"), in order to implement the Company's overall development strategy, plans to raise funds through issuing convertible corporate bonds to unspecified objects to meet the Company's business development needs and enhance its sustainable profitability.
Unless otherwise specified, the abbreviations in this report have the same meaning as in the "Proposal for Zhejiang Zhongke Magnet Co., Ltd. to Issue Convertible Corporate Bonds to Unspecified Objects."
I. Plan for the Use of Raised Funds in This Offering
The total amount of funds to be raised by the Company through the issuance of convertible corporate bonds to unspecified objects shall not exceed 609.0538 million yuan (inclusive). After deducting issuance expenses, the funds will be used for the following projects:
| No. | Project Name | Total Project Investment (RMB Million) | Proposed Investment from Raised Funds (RMB Million) |
|---|---|---|---|
| 1 | Intelligent Manufacturing and Industrialization Project for High-Performance Rare Earth Permanent Magnet Components for Thermal Management Systems and Robots | 49,729.37 | 45,905.38 |
| 2 | Supplement Working Capital | 15,000.00 | 15,000.00 |
| Total | 64,729.37 | 60,905.38 |
Note: The proposed investment from raised funds for each fundraising project does not include amounts already invested before the board of directors' resolution on this issuance.
The portion of the total project investment exceeding the proposed investment from raised funds will be funded by the Company's own funds. If the net proceeds from this issuance after deducting issuance expenses are less than the total proposed investment of raised funds, the shortfall will be covered by the Company's own funds. Before the raised funds for the convertible corporate bonds are in place, the Company will make advance investments based on project needs using its own funds, and these advance investments will be replaced with the raised funds after they are in place, in accordance with relevant laws, regulations, requirements, and procedures.
Within the scope of the above fundraising investment projects, the board of directors may make appropriate adjustments to the investment amounts of raised funds for the above projects based on the actual needs of the projects and in accordance with relevant legal procedures.
II. Analysis of the Investment Projects Funded by Raised Funds
The investment projects funded by the raised funds in this offering include the "Intelligent Manufacturing and Industrialization Project for High-Performance Rare Earth Permanent Magnet Components for Thermal Management Systems and Robots" and "Supplement Working Capital." The former deeply integrates into the global thermal management and robotics sectors, expanding the Company's new energy vehicle thermal management systems and core components for robots, and corresponding high-performance rare earth permanent magnet materials.
The latter is for supplementing working capital, accounting for no more than 30% of the total raised funds. It will primarily be used to meet the daily operating capital needs arising from the expansion of the Company's business scale, raw material procurement, inventory, and accounts receivable. The feasibility and necessity of the investment projects funded by the raised funds are analyzed as follows: