Hangzhou Hantai Electromechanical Co., Ltd. Announcement on Using Part of Idle Own Funds and Raised Funds for Cash Management

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Securities Code: 001225 Securities Abbreviation: Hetai Electromechanical Announcement No.: 2026-020

Hangzhou Hetai Electromechanical Co., Ltd. Announcement on Using Part of Idle Self-owned Funds and Raised Funds for Cash Management

The company and all members of the board of directors guarantee that the contents of the information disclosure are true, accurate, and complete, without false records, misleading statements, or major omissions.

Important Content Reminder:

1. Investment Types: The investment variety of self-owned funds includes low-risk financial products with high safety and good liquidity; the investment variety of raised funds includes capital-preserving products with high safety, good liquidity, and a term not exceeding 12 months;

2. Investment Amount: Self-owned funds do not exceed 550 million yuan (inclusive), and idle raised funds do not exceed 470 million yuan (inclusive);

3. Special Risk Reminder: The financial market is greatly affected by the macro economy, and it cannot be ruled out that this investment may be affected by market fluctuations. The company will intervene appropriately and in a timely manner according to the economic situation and changes in the financial market, so the actual returns from short-term investments are unpredictable. Investors are advised to pay attention to investment risks.

Hangzhou Hetai Electromechanical Co., Ltd. (hereinafter referred to as the “Company”) held the 14th meeting of the second board of directors on March 26, 2026, to review and approve the proposal on using part of the idle self-owned funds and raised funds for cash management. In order to improve the efficiency of the company’s capital usage, increase company revenue, and safeguard shareholders’ interests, the company and its subsidiaries plan to use no more than 550 million yuan (inclusive) of idle self-owned funds and no more than 470 million yuan (inclusive) of idle raised funds for cash management, with a usage period of 12 months from the date of approval by the company’s 2025 annual general meeting. Within this validity period, funds can be used in a rolling manner within the aforementioned limits. The relevant matters are hereby announced as follows:

I. Basic Situation of Raised Funds

According to the approval of the China Securities Regulatory Commission on the “Approval of Hangzhou Hetai Electromechanical Co., Ltd.'s Initial Public Offering of Stocks” (Zheng Jian Xu Ke [2022] No. 2817), the company has publicly issued 16,166,800 shares of ordinary shares (A shares) to the public. The par value of each share is 1 yuan, and the issue price is 46.81 yuan per share, with a total amount of raised funds of 756,767,908.00 yuan. After deducting the issuance costs of 68,399,144.00 yuan, the net amount of raised funds is 688,368,764.00 yuan. The above funds were fully in place on February 14, 2023, and were verified by Tianjian Certified Public Accountants (Special General Partnership), which issued Tianjian Verification [2023] No. 48 “Verification Report.”

In order to standardize the management and use of raised funds, the company implements special account storage for the raised funds and has signed a regulatory agreement for raised funds storage with the sponsor institution and the bank where the raised funds are stored.

II. Usage of Raised Funds

As of December 31, 2025, the actual usage of the raised funds from the company’s initial public offering of stocks is as follows:

Unit: Ten Thousand Yuan

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As of December 31, 2025, the balance of the raised funds from the company’s initial public offering of stocks is 461,814.0 ten thousand yuan (including cumulative net interest income of 30,460.9 ten thousand yuan). The company will orderly promote the project construction according to the implementation plan of the fundraising projects. Due to the construction cycle of the fundraising projects, some raised funds will be temporarily idle for a certain period. Under the premise of ensuring the normal operation of the company and not affecting the construction of the fundraising projects, the company plans to reasonably use the raised funds for cash management to improve the efficiency of raised funds usage and safeguard the interests of shareholders.

III. Situation of Proposed Use of Part of Idle Self-owned Funds and Raised Funds for Cash Management

(A) Investment Purpose

To improve the efficiency of the company’s capital usage and increase company revenue, the company and its subsidiaries plan to reasonably utilize part of the idle self-owned funds and raised funds for cash management, to better realize the preservation and appreciation of the company’s cash and safeguard the interests of the company’s shareholders.

(B) Investment Limits and Investment Period

The company and its subsidiaries plan to use no more than 550 million yuan (inclusive) of idle self-owned funds and no more than 470 million yuan (inclusive) of idle raised funds for cash management, with a usage period of 12 months from the date of approval by the company’s 2025 annual general meeting. Within this validity period, funds can be used in a rolling manner within the aforementioned limits.

© Types of Investment Products

1. Self-owned Funds

The products intended for investment with idle self-owned funds are low-risk financial products with high safety and good liquidity, and do not purchase high-risk investment varieties such as securities investments and derivatives trading as stipulated in the “Self-Regulatory Guidelines for Listed Companies on the Shenzhen Stock Exchange No. 1 - Standard Operations of Main Board Listed Companies.”

2. Raised Funds

The company will strictly control risks according to relevant regulations and will conduct strict assessments of investment products. The cash management products intended for investment should meet the following conditions:

(1) They should belong to high-safety products such as structured deposits and large certificates of deposit, and must not be non-capital-preserving;

(2) They should have good liquidity, and product terms must not exceed twelve months;

(3) Cash management products must not be pledged.

Implementing cash management must not affect the normal progress of the raised funds investment plan. The special settlement accounts for the products must not hold non-raised funds or be used for other purposes. The company will timely report and announce the opening or cancellation of special settlement accounts for the products to the Shenzhen Stock Exchange for record.

(D) Implementation Method

Investment products must be purchased in the name of the company or its subsidiaries. The board of directors will request the shareholders’ meeting to authorize the company’s chairman and management to exercise relevant investment decision-making rights and sign relevant documents within the above capital limits and authorized period.

(E) Profit Distribution Method

The profits belong to the company or its subsidiaries. The profits obtained from temporarily idle raised funds for cash management will be strictly managed and used in accordance with the regulatory regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange regarding raised funds, as well as the requirements of the company’s internal management system.

(F) Related Relationships

The company and its subsidiaries have no related relationships with the financial institutions that intend to provide cash management products.

(G) Others

The company does not have any behavior that indirectly changes the use of raised funds and guarantees that using part of the idle raised funds for cash management will not affect the normal implementation of fundraising projects. The company will disclose information in accordance with relevant regulations from the Shenzhen Stock Exchange and other regulatory agencies.

IV. Investment Risk Analysis and Risk Control Measures

(A) Investment Risks

1. Although the company will strictly evaluate the products intended for investment, the financial market is greatly affected by the macro economy, and it cannot be ruled out that this investment may be affected by market fluctuations.

2. The company will intervene appropriately and in a timely manner according to the economic situation and changes in the financial market, so the actual returns from short-term investments are unpredictable.

3. Risks related to the operations and monitoring of relevant staff.

(B) Proposed Risk Control Measures

1. The company will strictly adhere to the principle of prudent investment, carefully select investment targets, choose products with high safety and good liquidity for investment, and clarify the amount, term, investment varieties, rights and obligations of both parties, and legal responsibilities of the investment products.

2. The company will analyze and track the changes in the net value of the products in real time. If risk factors that may affect the safety of the company’s funds are identified during assessments, timely measures will be taken to control investment risks.

3. The company’s independent directors and the audit committee of the board of directors have the right to supervise and inspect the use of funds, and can hire professional institutions for auditing if necessary.

4. The company will promptly carry out relevant information disclosure in accordance with related regulations of the Shenzhen Stock Exchange.

V. Impact on the Company’s Daily Operations

The company’s use of idle self-owned funds and raised funds for cash management is conducted under the premise of ensuring normal operations, fund safety, and not affecting the construction of fundraising projects. It will not affect the normal development of the company’s daily operations and fundraising project construction. There is no situation of indirectly changing the use of raised funds. This can improve the efficiency of the company’s fund usage, obtain certain fund returns, and benefit the company and shareholders’ interests.

The company will conduct corresponding accounting for cash management matters in accordance with the Ministry of Finance’s “Enterprise Accounting Standards” and related regulations.

VI. Related Review Procedures and Opinions

(A) Review of the Audit Committee of the Board of Directors

The company held the 25th meeting of the second audit committee of the board of directors on March 16, 2026, and reviewed and approved the proposal on using part of the idle self-owned funds and raised funds for cash management. The audit committee believes that the company and its subsidiaries can use idle self-owned funds and raised funds for cash management without affecting the construction of fundraising projects and normal operations, in compliance with the “Regulatory Rules for the Supervision of Raised Funds by Listed Companies,” “Stock Listing Rules of the Shenzhen Stock Exchange,” and “Self-Regulatory Guidelines for Listed Companies on the Shenzhen Stock Exchange No. 1 - Standard Operations of Main Board Listed Companies.” This matter does not involve indirectly changing the direction of the raised funds or harming the interests of the company and shareholders. The audit committee agrees to the use of idle self-owned funds and raised funds for cash management by the company and its subsidiaries.

(B) Review by the Board of Directors

The company held the 14th meeting of the second board of directors on March 26, 2026, and reviewed and approved the proposal on using part of the idle self-owned funds and raised funds for cash management, agreeing to allow the company and its subsidiaries to use no more than 550 million yuan (inclusive) of idle self-owned funds and no more than 470 million yuan (inclusive) of idle raised funds for cash management, with a usage period of 12 months from the date of approval by the company’s 2025 annual general meeting. Within this validity period, funds can be used in a rolling manner within the aforementioned limits.

This proposal still requires submission to the company’s 2025 annual general meeting for review.

© Sponsor Institution’s Review Opinion

After review, the sponsor institution believes that the company’s use of part of the idle raised funds for cash management has been approved by the company’s audit committee and board of directors, and the relevant matters still need to be submitted to the shareholders’ meeting for review. It complies with the “Regulatory Rules for the Supervision of Raised Funds by Listed Companies,” “Stock Listing Rules of the Shenzhen Stock Exchange,” and “Self-Regulatory Guidelines for Listed Companies on the Shenzhen Stock Exchange No. 1 - Standard Operations of Main Board Listed Companies.” The use of part of the idle raised funds for cash management is beneficial for improving fund usage efficiency, increasing fund returns, and obtaining more investment returns for the company and shareholders, and will not affect the normal progress of the raised funds investment projects, nor will it change or indirectly change the direction of the raised funds or harm shareholders’ interests.

In summary, the sponsor institution has no objections to the company’s use of part of the idle raised funds for cash management. This matter requires approval from the shareholders’ meeting before implementation.

VII. Documents for Reference

1. Resolution of the 14th meeting of the second board of directors;

2. Resolution of the 25th meeting of the second audit committee of the board of directors;

3. Guolian Minsheng Securities Underwriting and Sponsorship Co., Ltd. Review Opinion on Hangzhou Hetai Electromechanical Co., Ltd.'s Use of Part of the Idle Raised Funds for Cash Management.

This announcement is hereby made.

Hangzhou Hetai Electromechanical Co., Ltd.

Board of Directors

March 27, 2026

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