MECOM Power and Construction Limited — Capital/Financing Update 2021

Jul 21, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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MECOM POWER AND CONSTRUCTION LIMITED 澳能建設控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1183)

VOLUNTARY ANNOUNCEMENT FORMATION OF JOINT VENTURE

This is a voluntary announcement made by the Company to provide the shareholders and potential investors of the Company an update on the latest business development of the Group.

Background

On 15 June 2021, MUCharging entered into the Cooperation Framework Agreement with Guangdong Zhihui, an Independent Third Party, in relation to the joint venture arrangement for undertaking the new energy powered batteries business in Guangdong Province, the PRC.

Scope of business

The Joint Venture is engaged in the research and development, manufacture, assembly and sales services of lithium-ion phosphate batteries for the electric mobility industry. It currently focuses on the business of supplying and operating battery-swapping systems for electric bikes, which has a huge market potential in the PRC. Subject to future development needs, the Joint Venture may develop new markets including large-scale back-up power system, energy storage power system and electric vehicle battery system. As at the date of this announcement, the Joint Venture’s battery-swapping systems are undergoing the final testing stage and expected to be launched onto the market soon.

Capital contribution and profit sharing

The Joint Venture has a registered capital of RMB10 million. MUCharging shall be responsible for contributing the registered capital of the Joint Venture and Guangzhou Zhihui shall be responsible for the research and development, sales and marketing operations of the Joint Venture. The funding needs of the Joint Venture beyond the registered capital of RMB10 million committed by MUCharging shall be contributed by MUCharging and Guangdong Zhihui as to 70% and 30%, respectively, or in such other manner as the parties may agree. MUCharging will finance its capital commitment from its internal resources.

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The profit sharing percentage of MUCharging and Guangdong Zhihui are 70% and 30% respectively and the Joint Venture is a non-wholly owned subsidiary of the Company.

Information of the parties

MU Charging is a wholly-owned subsidiary of the Company and is principally engaged in the provision of electric vehicle charging solution and system services.

Guangdong Zhihui is specialised in new energy powered batteries, urban distributed microgrid for storage and distribution, intelligent charging cabinets and power battery swapping system technology, targeting at electric vehicle manufacturers, traditional vehicle manufacturers, communication base stations and energy storage demand industry, especially with the applications of lithium-ion phosphate batteries and ultra-low temperature start-up batteries for low temperature regions. With 10 years of experience in the research and development of powered batteries and accumulation in production technologies, Guangdong Zhihui has mastered various core and innovation technologies in the industry chain of wide-temperature lithium-ion phosphate batteries, with products applicable to new powered batteries, vehicle start-stop system, energy storage power system, rail transit power, and communication network. Lithium-ion phosphate batteries have become one of the most promising products in the 21st century to reduce oil reliance and carbon emissions.

Reasons and benefits of joint venture arrangement

The Greater Bay Area is a hub for the development and manufacturing of new energy vehicles in the PRC and also one of the world’s leading areas for new energy vehicle applications. In response to this huge new energy vehicle market, it is envisaged that there will be a strong demand for new energy powered batteries and power system. At present, there are around 300 million electric bikes in use in the PRC. Coupled with the growth in need for convenient and safe charging system, the application of lithium-ion phosphate batteries is expected to have a large potential.

The Group has strong expertise in high voltage power substation construction and system installation projects, which therefore have been one of the principal businesses of the Group. The Group is constantly exploring new business opportunities for new power-related projects and further broadens its business scale. The Directors consider that the joint venture arrangement presents a good business opportunity to leverage on the strengths and resources of the Company to further its revenue base and business scale.

As the highest applicable percentage ratio in relation to the joint venture arrangement is less than 5%, the transaction does not constitute a notifiable transaction under Chapter 14 of the Listing Rules. This announcement is made by the Company on a voluntary basis. The Company will comply with the applicable requirements under the Listing Rules in relation to any future capital commitment on the part of the Company that may arise with respect to the joint venture, or the transactions contemplated under the joint venture arrangement, as and when appropriate.

The Board wishes to state that no forecast or prediction of the profits of the Group has been made with regard to the joint venture arrangement.

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Shareholders and potential investors of the Company should exercise caution when dealing in the shares of the Company .

DEFINITIONS

The following terms have the following meanings in this announcement unless the context otherwise requires:

• “Board” the board of Directors of the Company “Company” MECOM Power and Construction Limited, an exempted company incorporated in the Cayman Islands with limited liability, the issued shares of which are listed on the Main Board of the Stock Exchange (stock code: 1183)

• “Cooperation Framework the cooperation framework agreement dated 15 June 2021 between Agreement” MUCharging and Guangdong Zhihui in relation to the joint venture arrangement between these parties

• “Director(s)” the director(s) of the Company “Group” the Company and its subsidiaries “Greater Bay Area” Guangdong-Hong Kong-Macao Greater Bay Area “Guangdong Zhihui” 廣東智匯技術發展有限公司 (Guangdong Zhihui Technology Development Co., Ltd.*), a company established in the PRC with limited liability and an Independent Third Party (save for its interests in the Joint Venture)

• “Independent Third third party(ies) which is(are) independent of the Company and the Party(ies)” connected persons (as defined in the Listing Rules) of the Company

• “Joint Venture” 澳能智匯能源科技 ( 廣州 ) 有限公司 (MECOM Zhihui Energy Technology (Guangzhou) Co., Ltd.*), a company established in the PRC with limited liability and an indirect non-wholly owned subsidiary of the Company

• “Listing Rules” Rules Governing the Listing of Securities on the Stock Exchange “MUCharging” MUCharging (Macau) Limited, a company incorporated in Macau with limited liability and an indirect wholly-owned subsidiary of the Company

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“PRC”

the People’s Republic of China

“RMB”

Renminbi, the lawful currency of the PRC

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

• For identification purpose only

By Order of the Board MECOM Power and Construction Limited Kuok Lam Sek Chairman

Hong Kong, 21 July 2021

As at the date of this announcement, the executive Directors are Mr. Kuok Lam Sek and Mr. Sou Kun Tou, and the independent non-executive Directors are Ms. Chan Po Yi, Patsy, Mr. Cheung Kiu Cho, Vincent and Mr. Lio Weng Tong.

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