About the new lead-carbon energy storage battery assembly production line project of the wholly-owned subsidiary

Progress announcement

The Company and all members of the Board of Directors guarantee that the contents of the announcement are true, accurate and complete, without false records, misleading statements or major omissions, and bear individual and joint legal liabilities for the authenticity, accuracy and completeness of the contents.

1、 Basic information of the project

1. Project name: New Lead-carbon Energy Storage Battery Assembly Production Line Project of Yunnan Polytechnic Hengda New Energy Technology Co., Ltd;

2. Project construction site: Industry-Education Integration Park, Shuixiang Avenue, Yanjiang Street, Qilin District, Qujing City, Yunnan Province;

3. The total investment of the project is 40 million yuan, including 30 million yuan of self-owned funds and 10 million yuan of bank loans;

4. The main construction content of the project: rent 4158 square meters of the existing plant, build a new lead-carbon energy storage battery assembly line, a battery charging and discharging cycle test center and related supporting facilities, and the design capacity of the project is to produce 2GW of new lead-carbon energy storage batteries annually;

Kunming Polytechnic Hengda Technology Co., Ltd. (hereinafter referred to as "the Company") held the forty-second meeting of the third session of the Board of Directors on July 15, 2022 to review and approve the Proposal on Changing the Research and Development Base Project of Lead-carbon Energy Storage Battery of Yunnan Polytechnic Hengda New Energy Technology Co., Ltd. and Additional Investment. For details, see the Announcement on Foreign Investment of Wholly-owned Subsidiaries of Kunming Polytechnic Hengda Technology Co., Ltd. (Announcement No.: 2022-061) disclosed by the company on the official website of Beijing Stock Exchange on July 15, 2022.

2、 Project progress

1. The production line of the project has been installed and debugged. After the system feeding production test, the production line can operate normally and stably and produce products in batches.

2. The company is currently producing products for inspection and plans to send them to a third party for inspection. After the third party's inspection results meet the national standards, the company will deliver small batch production to customers for use. After the customer's use verification, the company will officially produce in batches.

3、 Impact on the company

As the first demonstration of the industrialization of the company's original technology large-capacity lead-carbon energy storage battery, the progress of this project represents the company's large-capacity lead-carbon energy storage battery technology to further enter the industrial application, laying the foundation for the large-scale production and sales of the next new project.

4、 Risk tips

1. Quality and performance risks. At present, the product of the project still needs to be tested by a third party and verified by customers. There is still uncertainty about whether the company's product quality and performance indicators meet the standards and whether the product can be recognized by downstream customers;

2. Risks of project implementation progress and implementation. During the implementation of the project, there may be the impact of changes in the relevant national and local policies, macroeconomic, market environment, own operation plan and other project implementation conditions, resulting in the risk of delay, change, suspension and even termination of the implementation of the project.

3. Market risk. The energy storage battery industry has a broad market and development space, but may be affected by macroeconomic fluctuations at home and abroad, industrial policies, technological route update iterations, market environment changes and other factors, resulting in the industry development, market demand and expansion, project implementation progress and expected benefits, and other risks that are less than expected.

4. Technical and production risks. There may be uncertainties in technology development and application during the implementation of the project, such as the upgrading of industrial technology, the mismatch of production equipment and the loss of professional and technical personnel. There may be risks that the project will not reach the design capacity after being put into production, and the quality will not meet the needs of customers.

The investment and construction of this project is a prudent decision made by the company from the perspective of long-term interests, but there are still certain market, technology and production risks. The company will pay close attention to the changes in policy, market and technology, and actively prevent and respond to possible risks by further improving internal control. Investors are invited to pay attention to risks!

It is hereby announced that

Kunming Polytechnic Hengda Technology Co., Ltd

Board of Directors

December 9, 2022