China Merchants Securities Co., Ltd

About Zhuhai Guanyu Battery Co., Ltd

Verification opinions on the changes of some fundraising projects

China Merchants Securities Co., Ltd. (hereinafter referred to as "China Merchants Securities", "Sponsor Agency", "Lead Underwriter"), as the sponsor of the initial public offering of shares and the issuance of convertible corporate bonds to unspecified objects of Zhuhai Guanyu Battery Co., Ltd. (hereinafter referred to as "Zhuhai Guanyu", "Listed Company", "Company"), in accordance with the Administrative Measures for the Sponsorship Business of Securities Issuance and Listing, the Self-Regulatory Guidelines for Listed Companies on the Science and Technology Innovation Board of the Shanghai Stock Exchange No. 1 - Standardized Operation, Shanghai Stock Exchange Science and Technology Innovation Board Listing Rules and other laws and regulations, the company's changes to some of the company's fundraising projects have been verified, the details are as follows:

1. Overview of changes in some fundraising projects

(1) The basic situation of the funds raised

With the approval of the China Securities Regulatory Commission Zheng Jian Xu Xu [2021] No. 2944, the company issued 155,713,578 RMB ordinary shares (A shares) at an issue price of RMB 14.43 per share by China Merchants Securities, the lead underwriter, through a combination of targeted placement to strategic investors, offline inquiry and placement to qualified investors, and online pricing and issuance to public investors holding the market value of non-restricted A shares and non-restricted depositary receipts in the Shanghai market. The total amount of funds raised was RMB2,246,946,930.54, deducting the issuance expenses of RMB143,020,958.53 excluding tax, and the actual net amount of funds raised was RMB2,103,925,972.01.

As of October 11, 2021, the above raised funds have been fully secured and have been issued by Grant Thornton accountants

The Capital Verification Report issued by the firm (Special General Partnership) (2021) No. 351C000675 will be verified.

(2) The situation of the fundraising and investment projects

According to the "Zhuhai Guanyu Battery Co., Ltd. Initial Public Offering of Shares and Listing on the Science and Technology Innovation Board

Mingshu" and the fifteenth meeting of the first board of directors held by the company on November 17, 2021

The seventh meeting of the board of supervisors deliberated and passed the "On Adjusting the Amount of Raised Funds to be Invested in Investment Projects of Raised Funds".

Preface Project Name Project Investment Proposed Use Before Adjustment Proposed Use After Adjustment

No. Amount Amount of Funds Raised Amount of Funds Raised

1 Zhuhai polymer lithium battery production base construction project 209,000.00 209,000.00 135,000.00

2 Chongqing lithium battery cell packaging production line project 40,230.00 40,230.00 26,000.00

3 R&D center upgrade and construction project 40,670.00 40,670.00 26,000.00

4 Supplementary liquidity items 35,000.00 35,000.00 23,392.60

Total 324,900.00 324,900.00 210,392.60

(3) The termination of the original project

The company held the sixth meeting of the second board of directors and the second board of supervisors on June 11, 2023

The second meeting was held on June 27, 2023, and the first extraordinary general meeting of shareholders in 2023 was held to deliberate and approve

The "Proposal on Terminating Part of the Initial Public Offering of Shares". In view of the adjustment of the production capacity layout of the company's power and energy storage business and the packaging and supporting business needs of consumer customers, the company has decided to terminate the "Chongqing lithium battery cell packaging production line project" (hereinafter referred to as the "original project") of the initial public offering of shares after full and prudent research and demonstration. After the termination of the project, the project implementation entity will return the funds that have been used in the early stage to the special account for raising funds, and the raised funds will continue to be deposited in the corresponding special account for raising funds of the original project

In accordance with the company's relevant management regulations, do a good job in the management of raised funds. Details are detailed in the company's announcement on June 12, 2023

The "Announcement on the Termination of Part of the Initial Public Offering of Shares" disclosed on June 28, 2023

The "Announcement of the Resolution of the First Extraordinary General Meeting of Shareholders in 2023" disclosed on the day.

(4) The specific reasons for the change of some fundraising items

After the termination of the original project, the company actively excavated projects with strong profitability and good future development prospects. In order to enhance the core competitiveness of the company's products, meet the needs of the company's customers, consolidate and expand the existing market share, and further improve the efficiency of the use of raised funds, the company plans to change part of the raised funds to be invested in the construction of the "steel shell lithium battery production and expansion project" (hereinafter referred to as the "new project") in combination with the actual situation and the current development needs.

(5) Deliberation procedures

The company held the 22nd meeting of the second board of directors and the second board of supervisors on October 8, 2024

At the 11th meeting, the "Proposal on the Change of Some Fundraising Projects" was deliberated and passed. This change does not involve related party transactions, nor does it constitute a major asset restructuring as stipulated in the Administrative Measures for the Material Asset Restructuring of Listed Companies

The matter still needs to be submitted to the general meeting of shareholders of the company for deliberation.

Second, the specific content of the new project

(1) Basic information

1. Project name: steel shell lithium battery production and expansion project

2. Implementing entity: Zhuhai Guanyu Battery Co., Ltd

3. Implementation location: Doumen District, Zhuhai City

4. Construction period: 14 months

5. Construction content: The project uses the existing plant to purchase a series of advanced steel shell process production and testing equipment such as high-precision single-sided tablet making machine, cutting and stacking machine, steel shell battery forming machine, etc., and builds 2 new steel shell mass production lines.

6. Investment estimate: The total investment of the project is expected to be 40,500.00 yuan, of which the investment amount of the raised funds is 26,000.00 yuan, and the insufficient part will be made up by the company with its own or self-raised funds. The specific investment plan is as follows:

Unit: 10,000 yuan

Serial No. Investment Content Investment Amount Proportion of total project investment

1 Equipment purchase and installation 40,000 98.77%

2 Liquidity 500 1.23%

Total 40,500 100.00%

7. Estimated economic benefits: After the project reaches production, the production capacity of steel-shell lithium-ion batteries will be increased by 10.56 million per year, with an average annual new main business income of 379.2343 million yuan and an average annual net profit of 40.3651 million yuan during the calculation period, which has good economic benefits.

8. Project filing and environmental impact assessment: The project has obtained the "Guangdong Provincial Technological Transformation Investment Project Filing Certificate" (record certificate number 245055384132094) issued by the Zhuhai Doumen District Science and Technology and Industrial Information Technology Bureau and the environmental impact assessment approval issued by the Zhuhai Municipal Ecological Environment Bureau (Zhuhuan Jian Table [2022] No. 87).

9. The company will open a special account for the new fund-raising project, and sign a tripartite supervision agreement with the bank and the sponsor for the storage of the special account for the raised fund. The board of directors authorized the company's management and its authorized persons to be solely responsible for opening a special account for the raised funds, signing the regulatory agreement for the raised funds and other related matters.

(2) The necessity and feasibility of project construction

1. Necessity

(1) It will help the company seize downstream development opportunities, continue to consolidate and enhance its position in the industry, and promote the healthy and sustainable development of the company

After nearly three years of adjustment, the demand of the consumer electronics industry will gradually stabilize and rebound in 2023, and the recovery trend will continue in 2024. In addition, the increasing popularity of AI technology has made the requirements for battery performance of devices more stringent, requiring lithium batteries with higher energy density and faster charging speed to support their intelligent functions. At the same time, the growing demand for battery life and stability, data processing, and energy consumption in the PC, tablet, and smartphone markets is driving innovation in lithium-ion battery technology and capacity expansion. In this context, taking the lead in improving the strategic layout of consumer soft-pack lithium-ion batteries will become an important measure for enterprises in the industry to grasp the development opportunities of the industry, seize the competitive opportunities, further expand the market share, and consolidate the industry position.

After years of accumulation, the company has deep technical strength and high-quality and extensive customer base in various main business areas. The implementation of this project is based on the company's existing consumer lithium battery research and development, large-scale mass production capacity and customer certification and mass sales, the company intends to increase the production capacity of steel-shell lithium-ion batteries through the implementation of this project, so as to ensure that the order needs of core customers are met, and further improve the company's market share in the field of mobile phone lithium batteries.

(2) Adopt the lamination process to build high-quality production capacity and consolidate the company's core competitiveness

At present, the automation rate of the company's lithium-ion battery production line has been at a relatively high level in the industry. In response to the national "Made in China 2025" major strategy and to meet the increasing product quality requirements of well-known customers at home and abroad, this project will continue to improve the automation level of the production line, reduce manufacturing costs and improve production efficiency through the purchase of advanced equipment such as diaphragm laser cutting machine, stacked core buffer machine, TWF transfer welding machine and stacked core buffer machine. The company adopts the self-developed automatic special-shaped lamination technology, and realizes the high-precision production of products through the integration of high-precision die-cutting equipment, high-precision CCD vision system and high-precision robots, among which the die-cutting accuracy and lamination accuracy can reach a high level in the industry. Compared with the traditional "Z" shaped lamination technology, this technology can increase the die-cutting accuracy by 50-60% and the lamination accuracy by 40-60%, and can realize the plane special-shaped and three-dimensional special-shaped structures at the same time, realizing the diversification of product structure and shape, and better meeting the needs of downstream high-end consumer electronics products for high energy density, high charging rate, lightness, thinness, special-shape and other characteristics.

(3) The speed of replacing aluminum-plastic film with steel shell is accelerated, and the steel shell technology improves the performance and safety of the battery

Compared with pouch cells, the design of steel-shell batteries shows higher flexibility in form design, which can better adapt and optimize the use of space inside the device, especially the corner space, which helps to improve the charge of the battery. In addition, the steel shell material provides stronger physical protection than the aluminum-plastic film, which is especially conducive to the application scenario that requires frequent disassembly and assembly of the battery, enhancing the durability and safety of the battery. In addition, from the perspective of environmental protection, steel-shell batteries have the advantage of high recycling rate and low impact on the environment, which is in line with the concept of sustainable development.

With the advantages of performance, steel-shell batteries are expected to become one of the mainstream choices for smart consumer electronics products with outstanding functions such as battery life and safety in the future. Due to the long customer verification cycle of the new production line, the company urgently needs to carry out the layout of the steel shell production line in advance.

Through the implementation of this project, the company plans to purchase steel shell battery production equipment, build a new production line, realize the industrialization of steel shell consumer lithium-ion batteries, enrich the existing product structure, realize the application expansion of downstream consumer electronic products, and help the follow-up mining of potential customers.

2. Feasibility

(1) In the context of carbon neutrality, a number of government policies and measures strongly support the healthy development of the consumer lithium battery industry

In recent years, the development of a green and low-carbon economy has gradually become a global consensus, and the world's major economies have put forward it

Carbon neutrality goals and corresponding measures. In September 2020, China proposed that carbon emissions should peak before 2030.

Goal of carbon neutrality by 2060. Under a series of policy layout, in order to promote the development of the new energy industry and accelerate the transformation of the energy structure, the state has introduced a series of support policies, including tax incentives, financial subsidies, research and development funding, market access relaxation, etc., aiming to reduce the operating costs of enterprises and encourage technological innovation and industrial upgrading. Especially in the lithium battery industry, the government has clearly put forward the development goal of improving the energy density, safety and cycle life of the battery, and formulated the corresponding technical standards and safety specifications to guide enterprises to improve product quality and market competitiveness.

In October 2023, the Ministry of Industry, Industry and Information Technology of the State Railway Administration, China State Railway Group Co., Ltd

The company issued the "Guiding Opinions on the Railway Transportation of Consumer Lithium Battery Cargo", which specifically mentioned that the loading and unloading of consumer lithium batteries should comply with the relevant regulations on railway cargo loading and unloading safety technology; Railway vehicles loaded with consumer lithium batteries are prohibited from slipping. In June 2024, the Ministry of Industry and Information Technology's "Standard Conditions for the Lithium-ion Battery Industry (2024 Edition)" made requirements for the energy density of energy-based single batteries of different materials.

The introduction of the above series of policies provides a good policy environment for the development of China's lithium-ion battery industry, and the implementation of this project has good policy feasibility.

(2) Profound customer resources and supply chain accumulation provide a good foundation for project implementation

With consistent high-quality products and professional services, the company has established a good reputation in the consumer lithium battery market and has established long-term and stable cooperative relations with many well-known enterprises. These partners cover the entire industry chain from raw material suppliers to end product manufacturers, forming an efficient, synergistic, mutually beneficial and win-win business ecosystem.

In terms of supply chain management, the company has established a complete supply chain system through refined management and continuous optimization to ensure the stable supply of raw materials and cost control. At the same time, the company has established a close cooperative relationship with its suppliers to continuously improve the responsiveness and flexibility of the supply chain through the sharing of market information, collaborative R&D and joint innovation.

In terms of customer resources, the company has won the trust and support of customers by deeply understanding customer needs and providing personalized solutions. The company's customer base spans multiple industries and sectors, including smartphones, laptops, power tools, etc., and these customers have strict requirements for the performance and quality of lithium batteries, and the company is able to meet their high standards and further strengthen its market position.

(3) The company's talent leading strategy and profound technology accumulation provide a strong guarantee for the implementation of the project

The company's core team has long-term experience in the research and development, production and sales of lithium-ion batteries, has a strong sensitivity and forward-looking grasp of market development trends and product technology directions, has a deep understanding of the lithium-ion battery industry, and has a comprehensive and in-depth understanding and understanding of the main development process, technical basis and product characteristics of new products.

At present, the company has cooperated with many world-renowned electronic brand enterprises and become their long-term strategic partners. The company grew to become the world's second-largest manufacturer of polymer lithium-ion batteries in the consumer electronics industry. With the continuous development and expansion of the company's business and its scale, the company continues to expand the core team through internal training and external introduction, and continuously optimizes the talent pool and structure. At the same time, the company uses competitive salary policies, good management mechanisms, excellent corporate culture, etc. to fully mobilize the enthusiasm of talents, effectively motivate talents and teams, and maintain stability of core personnel.

3. Risks and countermeasures for the implementation of new projects

(1) The main risks faced by the implementation of the project

1. Project implementation risk

In the process of construction and subsequent operation, the project is affected by many factors such as macro policies, market environment, industry competition pattern, etc., such as changes in macro policies, deterioration of the market environment, intensified industry competition and other factors, the implementation progress may be less than expected, and there may be risks of delay, change, suspension or termination.

2. The risk that the benefits of the project do not meet the expected level after the implementation of the project

The feasibility analysis of the new project is made in combination with the current market environment, the company's historical data, the forecast of future market trends and other factors, if the unexpected circumstances in the implementation of the project lead to the delay of the project construction, or the adverse changes in the market environment after the construction of the project and the completion of the industry competition intensify, the decline in product prices, and the demand for downstream products does not maintain the synchronous and coordinated development, it may lead to the actual benefits of the raised funds investment project is lower than the expected level.

(2) Risk response measures

The company will fully evaluate the pace of implementation of the project according to the utilization of existing production capacity, combined with the downstream market environment, competition pattern and development trend. At the same time, the company will continue to improve its R&D capabilities, actively develop new customers and new orders, provide strong support for the release of production capacity, and dynamically adjust the release rhythm of new production capacity according to the mass production progress of newly developed products, so as to reduce the financial impact caused by large short-term investment.

Fourth, the impact of this change in the use of part of the raised funds on the company

The change in the use of the raised funds is a prudent decision made by the company based on factors such as strategic planning, market environment, sustainable development and industrial layout, which is in line with the company's development strategy and long-term planning, does not harm the interests of shareholders, and is in line with the "Regulatory Guidelines for Listed Companies No. 2 - Regulatory Requirements for the Management and Use of Raised Funds by Listed Companies" and the "Rules for the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange" and "Self-Regulatory Guidelines for Listed Companies on the Science and Technology Innovation Board of the Shanghai Stock Exchange No. 1 - Standardized Operation" and other relevant regulations. The company will strictly abide by the relevant regulations on the use of raised funds, strengthen the internal and external supervision of the use of raised funds, ensure that the use of raised funds is legal and effective, and maximize the interests of the company and all investors.

5. Opinions of the Board of Directors, the Board of Supervisors, and the Sponsor on the Changes to Some Fundraising and Investment Projects

(1) Opinions of the Board of Directors

On October 8, 2024, the 22nd meeting of the second board of directors of the company passed the "Proposal on the Change of Part of the Fundraising and Investment Projects", and agreed that the company will change the use of funds in some of the fundraising projects, and the above matters still need to be submitted to the general meeting of shareholders of the company for deliberation.

(2) Opinions of the Board of Supervisors

The change of some of the company's fundraising projects is in line with the company's development plan and actual needs, which will help improve the efficiency of the use of raised funds, further enhance the company's core competitiveness and profitability, and conform to the interests of the company and all shareholders. Therefore, the Board of Supervisors approved the changes to some of the company's fundraising projects.

(3) Special opinions of the sponsor institution

The changes to some of the fundraising projects have been deliberated and approved by the board of directors and the board of supervisors of the company, and the necessary review procedures have been fulfilled, and they still need to be submitted to the company's general meeting of shareholders for deliberation. This matter complies with the relevant provisions of the "Regulatory Guidelines for Listed Companies No. 2 - Regulatory Requirements for the Management and Use of Funds Raised by Listed Companies", "Self-Regulatory Guidelines for Listed Companies on the Science and Technology Innovation Board of the Shanghai Stock Exchange No. 1 - Standardized Operation" and other relevant provisions and the company's fund-raising management system.

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(There is no text on this page, it is the stamped page of the "Verification Opinions of China Merchants Securities Co., Ltd. on the Changes of Part of the Fundraising Projects of Zhuhai Guanyu Battery Co., Ltd.")

Sponsor Representative:

Guan Jianhua Wang Dawei

China Merchants Securities Co., Ltd

2024-0-1/00-00-19