Stock abbreviation: Excellence New Energy Stock code: 688196

Longyan Excellence New Energy Co., Ltd

In FY2024, we will issue shares to specific targets through simplified procedures

Feasibility analysis report on the use of raised funds

December 2024

The total amount of funds raised by the issuance of shares is expected to not exceed 30,000.00 yuan (including the number), and the net funds raised after deducting the issuance expenses are intended to be used for the following projects:

Unit: 10,000 yuan

Serial No. Project Name Total Project Investment The amount of funds to be raised

1 annual output of 100,000 tons of hydrocarbon-based biodiesel project 38,000.00 30,000.00

Before the funds raised in this issuance are in place, the company will invest in advance with self-raised funds according to the actual situation of the investment project with the raised funds, and replace them in accordance with the procedures stipulated in relevant laws and regulations after the raised funds are in place. After the raised funds are in place, if the actual net amount of funds raised after deducting the issuance costs is less than the total amount of funds to be raised, within the scope of the investment project of the funds raised in this issuance, the company will adjust and decide on the specific investment projects, priorities and specific investment amounts of each project according to the actual amount of funds raised, according to the priority of the project, etc., and the insufficient part of the raised funds shall be solved by the company itself.

2. Analysis of the necessity and feasibility of the use of the raised funds

(1) An annual output of 100,000 tons of hydrocarbon-based biodiesel project

1. Project overview

The company raised funds to invest in the construction project of "annual output of 100,000 tons of hydrocarbon-based biodiesel project", the implementation of the main body of Longyan Excellence New Energy Co., Ltd., the project is located in Longyan City, Fujian Province Xinluo District Biofine Chemical Park, the total investment of the project is 380 million yuan, the construction period is expected to be two years, after the completion of the construction will increase the production capacity of 100,000 tons of HVO/SAF.

2. The necessity of the project

(1) Develop circular economy and achieve green and sustainable development

The company's current main products are ester-based biodiesel, industrial glycerin, bio-ester plasticizers, environmentally friendly alkyd resins, etc., and this fundraising project can flexibly adjust the output of HVO/SAF according to market demand. The raw materials used in the production of the project products are mainly waste oils and fats such as gutter oil, which contain a large number of harmful substances to the human body. Therefore, the effective use of waste oil and oil to achieve "waste into treasure" can not only reduce the environmental pollution and illegal use of waste oil, but also save China's limited oil resources. This fundraising project

The smooth implementation is conducive to further enhancing the company's recycling ability of waste oils and fats, and at the same time realizing economic value and improving the company's profitability, it will help protect the environment, save resources, and achieve green and sustainable development.

(2) It is conducive to further expanding biodiesel production capacity and enriching product structure

The project can flexibly adjust the output of HVO/SAF according to market demand. The company has a deep grasp of biology

The development trend of the quality energy market, through this raised funds investment project, on the basis of making full use of the advantages of existing technical reserves, expand HVO/SAF production capacity, enhance the market competitiveness and profitability of the company's products, and enhance the company's ability to resist risks.

In summary, the implementation of this project is necessary.

3. Feasibility of the project

(1) The fund-raising project is in line with the direction of the national industrial policy

The project can flexibly adjust the output of HVO/SAF according to market demand, all of which are used for recycling

The development of the industry is of great significance for reducing the country's dependence on fossil energy, improving the environment and achieving the strategic goal of sustainable development, and belongs to the new energy and circular economy industry that the state vigorously supports and encourages the development of. In recent years, the state has promulgated a series of development regulations, policies and development plans to encourage the development of the industry:

Serial No. Name of Industrial Policy Promulgation/Revision Promulgating Department Main Related Contents

Time

"On Further Strengthening Promoting the Cultivation and Guidance of Harmless Treatment of Wastes and

1 "Gutter Oil" Governance Work in 2017 The State Council Resource Utilization Enterprises and Increase the Production and Sales of "Gutters."

Opinions" Oil" Crackdown on illegal and criminal acts

The GB25199-2017B5 National Standard will be related to biodiesel 2 product national standards

2 National Standard for Diesel Fuel 2017 The Chemical Management Committee has been integrated into 1 national mandatory standard

Members

In accordance with the division of responsibilities and responsibilities for ecological and environmental protection, accumulation

Cooperate with the State Administration for Market Regulation to carry out the elimination of unlicensed

I work according to the black refueling station which I operated, and the product is cooperated

The ecological environment department has done a good job in upgrading the quality of oil products and oil

"The General Office of the State Council on gas recovery and control, groundwater pollution prevention and control, strengthened

3 Accelerate the development of circulation promoters 2019 State Council Volatile organic compounds in storage, transportation and refueling

Opinions on industrial consumption》 pollution prevention and control, and the withdrawal of refined oil retail outlets

soil and groundwater testing and remediation

The competent department of local energy shall study in conjunction with relevant departments

Development of alternative energy sources such as bio-fuel, ethanol and gasoline

The construction of market circulation policies is efficient, clean and low

Carbon energy supply system

Serial No. Name of Industrial Policy Promulgation/Revision Promulgating Department Main Related Contents

Time

"On Complete, Accurate, Comprehensive and Actively Develop Non-Fossil Energy. Implement renewable energy

4 Implement the new development concept and do a good job in the 2021 State Council Source Substitution Action, and vigorously develop wind energy and sun

carbon peak and carbon neutrality energy, biomass energy, marine energy, geothermal energy, etc.,

Opinions》 Continuously increase the proportion of non-fossil energy consumption.

"On Printing and Distributing 2030 to Keep Oil Consumption in a Reasonable Range and Gradually Adjust

5 The 2021 State Council of the 2021 Action Plan for Carbon Peaking rectifies the scale of gasoline consumption and vigorously promotes advanced biology

Notice》 Alternative to liquid fuels, sustainable aviation fuels, etc

Improve the energy efficiency of end fuel products.

"On improving the energy green development and Reform Commission, under the premise of meeting safety and quality standards, support

6 Low-carbon transition institutional mechanisms and the 2022 Energy Agency Hold biofuels, ethanol, biodiesel, bio-days

Opinions on policy measures》 Clean fuels such as natural gas are connected to the oil and gas pipeline network.

Actively promote the use of advanced biofuels in municipal transportation

The "14th Five-Year Plan" bioeconomy key areas of substitution, promotion and application, and the establishment of biomass

7 Development Plan 2022 National Development and Reform Commission Combustion blending standards, and actively carry out biodiesel promotion

Widely pilot projects to promote fossil energy to green and low-carbon

Renewable energy transition.

National Development and Reform Vigorously develop non-food biomass liquid fuels. aggressive

The "14th Five-Year Plan" Renewable Energy Commission, Energy Development of cellulose and other non-food fuel ethanol, encourage the opening

8 Source Development Plan 2022 Bureau, Finance Exhibition Alcohol, electricity, gas, fertilizer and other multi-generation demonstrations. branch

9 ministries are the first to hold biodiesel, bio-aviation kerosene and other fields

R&D and promotion of technical equipment.

"On the organization of the organization of bio-national energy in different fields and regions to carry out biodiesel

9 Pilot work of diesel promotion and application in 2023

Fan's Notice》

"Green Aviation Manufacturing Development Ministry of Industry and Information Technology and other countries that use sustainable aviation fuel by 2025

10 Exhibition Outline (2023-2035 2023 Demonstration application of civil aircraft produced by four departments

years)"

"Industrial Structure Adjustment Guidance National Development and Reform Encourage the development of biofuels (diesel, gasoline, aviation

11 Catalogue (2024 Edition) 2023 Commissioned Kerosene) and other non-food biomass fuel production technologies

Development & Application

(2) Compared with traditional petrochemical products, the products raised this time have a good substitution effect and have a good market prospect

This fundraising project can flexibly adjust the output of HVO/SAF according to market demand, and the products are current and non-existent

The important environmentally friendly biomass energy has incomparable advantages over traditional products in terms of environmental protection and has better market prospects. With the continuous progress of society, the public's attention to environmental protection continues to increase, biomass energy has gradually been valued, and the vigorous development and promotion of the use of biodiesel will be the long-term energy strategic focus of major countries in the world.

(3) The company has a good technology, market and talent reserve in the field of biomass energy

1) Technical reserves

Since its establishment, the company has been focusing on the technical research and development of biodiesel production and biodiesel deep processing products from waste oils and fats, with independent R&D institutions and technical teams, with strong independent innovation capabilities, and is a national high-tech enterprise with independent research and development of product technology and industrial application capabilities. The company now has a provincial enterprise technology center, a key laboratory, an engineering technology center and a national postdoctoral research station, etc., and has undertaken a number of biodiesel application technology research projects such as the "National Key New Product Program", the "National Torch Program", the national "Tenth Five-Year Plan", "Eleventh Five-Year Plan", "Twelfth Five-Year Plan", "Thirteenth Five-Year Plan" and "Fourteenth Five-Year Plan" and has achieved a large number of scientific and technological achievements; At the same time, the company is also a circular economy demonstration enterprise in Fujian Province, an innovative demonstration enterprise in Fujian Province, and a backbone enterprise in strategic emerging industries in Fujian Province. This fundraising project gives full play to the company's technical reserves and research and technological achievements of bio-based materials, through the independent HVO/SAF production process, the use of waste oil as the main raw material, through raw material pretreatment, hydrorefining, hydrogenation and product fractionation and other processes, can flexibly produce a variety of advanced bio-liquid fuels, the company has a solid technical reserve in the field of biomass energy.

2) Sales channel reserves

With good technical reserves, after more than 20 years of development, the issuer has gradually become a leading enterprise in the field of biodiesel, and is currently the largest biodiesel manufacturer in China. After more than 10 years of overseas channel construction, the company has established 2 overseas operation platforms, through the Dutch Excellence Company has fully and deeply participated in the local biofuel trading market in Europe, established long-term and stable cooperative relations with international head energy companies, and successfully expanded the market from the field of road traffic to the field of marine fuel, which can ensure the stable sales of the company's products in the international market. In summary, the company has a wide and complete market channel in the field of biomass energy.

3) Talent pool

The issuer has an independent R&D institution and technical team, with strong independent innovation capabilities, and the R&D team has contributed a number of patented technologies to the company. The company's technical and operation management teams have many years of experience in the research and development, practice and management of biodiesel deep processing products, and have accumulated strong technical advantages such as purification and distillation. In addition, the company has established a complete professional team in product research and development, production management, quality control, market expansion and other aspects through long-term efforts. To sum up, the company's sufficient reserve of high-quality personnel can provide a strong guarantee for the smooth implementation of this fundraising project.

4. Project implementation subject, location and investment estimate

The main body of the project is the company, and the project implementation site is Longyan City, Fujian Province. The total investment of the project is 380 million yuan, including engineering construction, equipment purchase, and working capital.

5. Project filing, environmental protection and land use procedures

The project is planned to be constructed on the company's existing site, and does not involve new land.

The company has completed the project filing and environmental impact assessment procedures involved in this project.

To sum up, the use of the raised funds is necessary and feasible.

3. The impact of the issuance of shares to specific targets on the company's operation and financial situation

(1) The impact on the company's operation and management

The raised funds are intended to be invested in the company's main business, which is in line with the national industrial policy and the company's development strategy, and has good market prospects. The implementation of the investment project of the raised funds is conducive to the company's enriching product structure, expanding the scale of operation, promoting the company's business development, enhancing the company's profitability and comprehensive competitiveness, realizing the company's long-term sustainable development, and conforming to the company's development strategy.

(2) The impact on the company's financial situation

After the completion of the issuance of shares to specific targets, the company's capital strength will be further enhanced, and the company's total assets and net assets will increase. At the same time, the company's asset-liability ratio will decrease accordingly, and the company's asset structure will be optimized to reduce the company's financial risk. With the smooth implementation of this fundraising project and the effective use of the raised funds, the gradual release of project benefits will enhance the company's operating scale and economic benefits, thereby bringing better investment returns to the company and shareholders and promoting the healthy development of the company.

Fourth, the conclusion of the analysis

The investment project of the raised funds is in line with the relevant national industrial policies, in line with the company's overall development strategy, with significant economic and social benefits, and in line with the common interests of the company and all shareholders. The smooth implementation of the project is expected to significantly enhance the company's comprehensive competitiveness and sustainable development ability, while promoting the further improvement of profitability and achieving high-quality development.

Board of Directors of Longyan Excellence New Energy Co., Ltd

December 5, 2024