Novautek Technologies Group Limited — Proxy Solicitation & Information Statement 2022

May 19, 2022

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action you should take, you should consult your licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Kong Sun Holdings Limited, you should at once hand this circular to the purchaser or the transferee or to the bank manager, licensed securities dealer or registered institution in securities or other agent through whom the sale was effected for transmission to the purchaser or the transferee.

Hong Kong Exchange and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

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KONG SUN HOLDINGS LIMITED 江山控股有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 295)

(1) MAJOR TRANSACTIONS DISPOSALS OF SUBSIDIARIES AND PROVISION OF GUARANTEES AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

A letter from the Board is set out on pages 6 to 18 of this circular.

A notice convening the extraordinary general meeting of the Company to be held at Unit 803–4, 8/F, Everbright Centre, 108 Gloucester Road, Wanchai, Hong Kong on Friday, 24 June 2022 at 11:00 a.m. (the ‘‘EGM’’) is set out on pages EGM-1 to EGM-2 of this circular. Whether or not you intend to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s share registrar, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, as soon as possible and in any event not less than 48 hours before the time fixed for holding the EGM or any adjournment thereof. Completion and return of the form(s) of proxy will not preclude you from attending and voting in person at the EGM should you so wish.

PRECAUTIONARY MEASURES AND SPECIAL ARRANGEMENTS FOR THE EGM

Please refer to page 1 of this circular for measures being implemented at the EGM to try to prevent and control the spread of the novel coronavirus (‘‘COVID-19’’), including, without limitation:

— all attendees being required to (a) undergo body temperature screening; and (b) wear surgical masks prior to admission to the EGM venue;

• all attendees being required to wear surgical masks throughout the EGM;

• appropriate seating arrangement being implemented; and

• no distribution of corporate gift or refreshment.

The Company reminds attendees that they should carefully consider the risks of attending the EGM, taking into account their own personal circumstances. Furthermore, the Company would like to remind the Shareholders that physical attendance in person at the EGM is not necessary for the purpose of exercising their voting rights and strongly recommends that Shareholders appoint the chairman of the EGM as their proxy and submit their form of proxy as early as possible. Subject to the development of COVID-19, the Company may implement further changes and precautionary measures and may issue further announcement on such measures as appropriate.

19 May 2022

CONTENTS

	Pages
Precautionary Measures for the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Appendix I — Financial Information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
Appendix II — Valuation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
Appendix III — General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	III-1
Notice of the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1

– i –

PRECAUTIONARY MEASURES FOR THE EGM

The health of our Shareholders, staff and stakeholders is of paramount importance to us. In view of the ongoing COVID-19 pandemic, the Company will implement the following precautionary measures at the EGM to protect attending Shareholders, staff and stakeholders from the risk of infection:

• (i) Compulsory body temperature checks will be conducted for every Shareholder, proxy or other attendee at each entrance of the meeting venue. Any person with a body temperature of over 37.4 degrees Celsius may be denied entry into the meeting venue or be required to leave the meeting venue;

• (ii) All attendees are required to wear a surgical face mask throughout the meeting and inside the meeting venue, and to maintain a safe distance between seats; and

• (iii) No refreshment will be served, and there will be no corporate gift.

In addition, the Company reminds all Shareholders that physical attendance in person at the meeting is not necessary for the purpose of exercising voting rights. Shareholders may appoint the chairman of the meeting as their proxy to vote on the relevant resolutions at the meeting instead of attending the meeting in person, by completing and return the proxy form attached to this circular.

If any Shareholder chooses not to attend the EGM in person but has any question about any resolution or about the Company, or has any matter for communication with the Board, he/ she is welcome to send such question or matter in writing to our head office and principal place of business in Hong Kong.

If any Shareholder has any question relating to the meeting, please contact Computershare Hong Kong Investor Services Limited, the Company’s share registrar in Hong Kong as follow:

Computershare Hong Kong Investor Services Limited 17M Floor, Hopewell Centre 183 Queen’s Road East Wanchai, Hong Kong Tel: +852 28628555

– 1 –

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

• ‘‘Announcement’’

• the announcement of the Company dated 25 March 2022 in relation to the Disposals

• ‘‘Baoxin Industrial’’ 寶豐縣寶新實業有限公司 (Baofeng Baoxin Industrial Limited*), a company established in the PRC with limited liability

• ‘‘Board’’ the board of Directors

• ‘‘certain deliverables’’ deliverables including but not limited to the company seal, key financial and asset information of the relevant Project Company, and information including contracts, construction, other financials of the power plants of the relevant Project

• ‘‘CITIC Financial Leasing’’ 中信金融租賃有限公司 (CITIC Financial Leasing Co., Ltd.), a company established in the PRC with limited liability

• ‘‘Company’’

• Kong Sun Holdings Limited, a company incorporated in Hong Kong with limited liability, the shares of which are listed on the main board of the Stock Exchange (stock code: 295)

• ‘‘connected person(s)’’ has the meaning ascribed to it under the Listing Rules

• ‘‘Director(s)’’ director(s) of the Company

• ‘‘Disposal Agreements’’ the First Agreement and the Second Agreement (each, a ‘‘Disposal Agreement’’)

• ‘‘Disposals’’

• the First Disposal and the Second Disposal

• ‘‘EGM’’

• the extraordinary general meeting of the Company to be convened for the purpose of considering and, if thought fit, approve, among other things, the Disposals

• ‘‘Escrow Account’’

• in respect of each Disposal Agreement, the bank account to be established under the joint control of Kong Sun Yongtai and the Purchaser for holding the relevant earnest money pursuant to the terms of such Disposal Agreement

– 2 –

DEFINITIONS

• ‘‘First Agreement’’

• ‘‘First Debts’’

• ‘‘First Disposal’’

• ‘‘First Guarantee’’

• ‘‘First Project’’

• ‘‘First Project Company’’

• ‘‘First Sale Equity Interest’’

• ‘‘First Share Charge’’

• ‘‘Group’’

• ‘‘Guarantees’’

• ‘‘Hong Kong’’

• ‘‘Huaxia Financial Leasing’’

• ‘‘Kong Sun Yongtai’’

the equity transfer agreement dated 25 March 2022 entered into by and among the Purchaser, Kong Sun Yongtai and the First Project Company in relation to the First Disposal

• the outstanding loans, advances, interests (if any) and other sums owed by the First Project Company to Kong Sun Yongtai and its related parties

• the disposal of the First Sale Equity Interest

• the guarantee provided by Kong Sun Yongtai and its related companies for securing the existing indebtedness in the amount of approximately RMB57,821,000 due by the First Project Company to CITIC Financial Leasing

• a 20 MW distributed photovoltaic power plant owned by the First Project Company

• 濟源大峪江山光伏發電有限公司 (Jiyuan Dayu Jiangshan Photovoltaic Power Generation Limited*), a company established in the PRC with limited liability and a subsidiary of the Company

• the entire equity interests of the First Project Company

• the share charge provided by Kong Sun Yongtai and its related parties for securing the existing indebtedness in the amount of approximately RMB57,821,000 due by the First Project Company to CITIC Financial Leasing

• the Company and its subsidiaries

• the First Guarantee and the Second Guarantee

• the Hong Kong Special Administrative Region of the PRC

• 華夏金融租賃有限公司 (Huaxia Financial Leasing Co., Ltd.), a company established in the PRC with limited liability

• 江山永泰投資控股有限公司 (Kong Sun Yongtai Investment Holdings Limited*), a company established in the PRC with limited liability and an indirect wholly-owned subsidiary of the Company

– 3 –

DEFINITIONS

• ‘‘Latest Practicable Date’’

• 16 May 2022, being the latest practicable date prior to the printing of this circular for ascertaining certain information for inclusion in this circular

• ‘‘Listing Rules’’

• the Rules Governing the Listing of Securities on the Stock Exchange

• ‘‘MW’’

• mega watts

• ‘‘PRC’’ the People’s Republic of China

• ‘‘Previous Disposals’’

• the previous disposals of seven project companies from Kong Sun Yongtai and Xinjiang Chengshi to the Purchaser as disclosed in the Company’s announcement dated 2 November 2021

• ‘‘Previous Guarantees’’

• the previous guarantees provided by Kong Sun Yongtai, Xinjiang Chengshi and their related companies for securing the existing indebtedness, in any event in the total maximum guarantee amount of approximately RMB242,130,000, as disclosed in the Company’s announcement dated 2 November 2021

• ‘‘Project Companies’’

the First Project Company and the Second Project Company

• ‘‘Purchaser’’

• 中原新華水利水電投資有限公司 (Zhongyuan Xinhua Water Resources and Hydropower Investment Limited*), a company established in the PRC

• ‘‘Reference Date’’

• 31 August 2021

• ‘‘RMB’’

• Renminbi, the lawful currency of the PRC

• ‘‘Second Agreement’’

• the equity transfer agreement dated 25 March 2022 entered into by and among Kong Sun Yongtai, the Purchaser and the Second Project Company in relation to the Second Disposal

• ‘‘Second Debts’’

• the outstanding loans, advances, interests (if any) and other sums owed by the Second Project Company to Kong Sun Yongtai and its related parties

• ‘‘Second Disposal’’

• the disposal of the Second Sale Equity Interest and the rights of Kong Sun Yongtai as the ultimate beneficial owner of the Second Project Company

– 4 –

DEFINITIONS

• ‘‘Second Guarantee’’

• the guarantee provided by Kong Sun Yongtai and its related companies for securing the existing indebtedness in the amount of approximately RMB349,528,000 due by the Second Project Company to Huaxia Financial Leasing

• ‘‘Second Project’’

• a 100 MW photovoltaic power project owned by the Second Project Company

• ‘‘Second Project Company’’

• 寶豐縣鑫泰光伏電力科技開發有限公司 (Baofeng Xintai Photovoltaic Power Technology Development Limited*), a company established in the PRC with limited liability and a subsidiary of the Company

• ‘‘Second Sale Equity Interest’’

• 50% equity interests of the Second Project Company held by Kong Sun Yongtai

• ‘‘SFO’’

• the Securities and Futures Ordinance (Cap. 571 of the laws of Hong Kong)

• ‘‘Share(s)’’

• ordinary shares of the Company

• ‘‘Shareholders’’ holders of the Shares

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

• ‘‘Transition Period’’

• in respect of each Disposal, the period from (but excluding) the Reference Date to (and including) the date of completion of such Disposal

• ‘‘Transition Period Audit’’

• an audit to be performed by an auditor engaged by the Purchaser with respect to each Project Company for the Transition Period

• ‘‘Xinjiang Chengshi’’ 新疆誠石易盛商貿有限公司 (Xinjiang Chengshi Yisheng Trading Co., Ltd.), a company established in the PRC with limited liability and a direct wholly-owned subsidiary of the Company

• ‘‘%’’

per cent.

– 5 –

LETTER FROM THE BOARD

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KONG SUN HOLDINGS LIMITED 江山控股有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 295)

Executive Directors: Mr. Jin Yanbing (Chief Executive Officer and Chairman) Mr. Qin Hongfu

Non-executive Director:

Registered Office and Principal Place of Business: Unit 803–4, 8/F, Everbright Centre, 108 Gloucester Road, Wanchai, Hong Kong

Mr. Jiang Hengwen

Independent non-executive Directors:

Mr. Lang Wangkai Ms. Wu Wennan Mr. Xu Xiang

19 May 2022

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTIONS — DISPOSALS OF SUBSIDIARIES AND PROVISION OF GUARANTEES

INTRODUCTION

Reference is made to the Announcement. On 25 March 2022, Kong Sun Yongtai, the Purchaser and the Project Companies entered into the Disposal Agreements, pursuant to which Kong Sun Yongtai conditionally agreed to sell the First Sale Equity Interest and the Second Sale Equity Interest in the Project Companies to the Purchaser for a total consideration of approximately RMB118,675,000.

The purpose of this circular is to provide you with, among other things, further details of the Disposals, the financial information of the Group, the valuation report of the Project Companies, the notice convening the EGM and other information as required under the Listing Rules.

– 6 –

LETTER FROM THE BOARD

PRINCIPAL TERMS OF THE DISPOSAL AGREEMENTS

(A) The First Agreement

Subject matter

On 25 March 2022, Kong Sun Yongtai, the Purchaser and the First Project Company entered into the First Agreement, pursuant to which Kong Sun Yongtai conditionally agreed to sell, and the Purchaser conditionally agreed to acquire, the First Sale Equity Interest.

Consideration

The consideration for the First Disposal is approximately RMB34,400,000, which shall be payable by the Purchaser in cash in the following manner:

• (i) an amount of approximately RMB17,200,000, representing approximately 50% of the consideration for the First Disposal, shall be paid into the Escrow Account within three (3) business days before completion of the First Disposal (the ‘‘First Earnest Money’’) and shall be transferred to Kong Sun Yongtai within ten (10) business days after completion of the First Disposal;

• (ii) an amount of approximately RMB9,938,000, representing approximately 28.89% of the consideration for the First Disposal, shall be paid to Kong Sun Yongtai within ten (10) business days after completion of handover of certain deliverables relating to the First Project Company; and

• (iii) within ten (10) business days upon each receipt of the First Project Company of the state renewable energy subsidies before the Reference Date, up to a total amount of approximately RMB7,262,000, representing approximately 21.11% of the consideration for the First Disposal shall be paid to Kong Sun Yongtai.

Repayment of the First Debts

As at the Reference Date, the First Project Company had the outstanding First Debts in the amount of approximately RMB103,062,000, subject to adjustment for any net increase or decrease thereof as determined by the Transition Period Audit report to be issued within ten (10) business days of completion of the First Disposal, which shall be payable by the First Project Company to Kong Sun Yongtai in cash in the following manner:

• (i) an amount of approximately RMB101,061,000, shall be settled by the First Project Company within ten (10) business days after issuance of the Transition Period Audit report and the determination of the actual amount of the outstanding First Debts; and

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LETTER FROM THE BOARD

• (ii) a corresponding amount up to a total amount of up to approximately RMB2,001,000, shall be paid to Kong Sun Yongtai within ten (10) business days upon completion of certain rectification works items of the First Project by Kong Sun Yongtai required by the Purchaser. The rectification works shall be completed not later than within one (1) year after completion of the First Disposal. The estimated cost of such rectification works items of the First Project is approximately RMB2,001,000.

Default

If the Purchaser fails to pay the consideration for the First Disposal pursuant to the terms of the First Agreement or the First Project Company fails to repay the First Debts pursuant to the terms of the First Agreement, Kong Sun Yongtai has the right to request the Purchaser and the First Project Company to pay to it a default payment, which is calculated based on the relevant unpaid amounts due and a penalty at 0.05% of the relevant amounts due on a daily basis. If the default continues for more than sixty (60) calendar days from the relevant due date, Kong Sun Yongtai will be entitled to terminate the First Agreement without any liability, and request the Purchaser to compensate for all losses incurred by Kong Sun Yongtai.

Conditions Precedent

Completion of the First Disposal is subject to the satisfaction of the following conditions precedent:

• (a) the Company having obtained the approval from the Board, the Stock Exchange, the Shareholders at the EGM for the execution and performance of the First Agreement;

• (b) the Purchaser having paid the First Earnest Money into the Escrow Account;

• (c) Kong Sun Yongtai having obtained the consent from CITIC Financial Leasing in respect of the First Disposal and the release of the First Share Charge; and

• (d) the Purchaser having completed the filing of valuation report of state-owned assets in relation to the First Disposal.

As at the Latest Practicable Date, none of the above conditions precedent has been satisfied.

Arrangements during the Transition Period

Any profits generated and any losses incurred by the First Project Company in the ordinary course of business during the Transition Period shall be borne by the First Project Company.

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LETTER FROM THE BOARD

During the Transition Period, the First Project Company shall continue to perform its existing contracts. The First Project Company shall not, among other things, enter into loan agreements, mortgages and guarantees etc. not in the ordinary course of its business, and/or incur new expenditures exceeding RMB500,000 per transaction during the Transition Period without the prior consent of the Purchaser.

Termination of the First Guarantee

Pursuant to the First Agreement, by no later than one hundred and twenty (120) days after completion of the First Disposal, the Purchaser shall procure the release of the First Guarantee by CITIC Financial Leasing. Kong Sun Yongtai does not charge any guarantee fee to the First Project Company. In the event that the Purchaser does not procure completion of the release of the First Guarantee within one hundred and twenty (120) days after completion of the First Disposal, Kong Sun Yongtai shall have the right to seek for damages from the Purchaser and default penalty incurred thereunder calculated at a daily percentage rate of 0.05% based on the principal of guarantee amount. If the Purchaser fails to procure completion of the release of the First Guarantee within one hundred and eighty (180) days after completion of the First Disposal, Kong Sun Yongtai shall have the right to rescind the First Agreement, and request the Purchaser to compensate for all losses and fees incurred by Kong Sun Yongtai and the Purchaser shall bear all the costs and expenses in connection with the transactions contemplated thereunder. The Company will then make assessment on the possible implications under the Listing Rules and make further disclosure as and when appropriate to comply with it.

The continuation of the First Guarantee was agreed after an arm’s length negotiation between the parties and was one of the key commercial terms for the Purchaser to agree to the transactions contemplated under the First Agreement. In view of the financial stress that the Group is encountering though the terms and conditions of the First Guarantee may not be ideal, the Directors consider that the First Disposal and the First Guarantee are still the best available option under the circumstances for the Company to cut losses and streamline its operation at an appropriate timing. The First Guarantee would also facilitate CITIC Financial Leasing to provide its consent regarding the First Disposal, which is a condition precedent under the First Agreement. Without the First Guarantee, completion of the First Disposal may be prolonged given it will take time for Kong Sun Yongtai and the Purchaser to explain to the CITIC Financial Leasing for the change in control of the First Project Company and to get the consent from the CITIC Financial Leasing for the purpose of satisfaction of the condition precedent under the First Agreement. In the worst case scenario where the Purchaser fails to procure release of the First Guarantee within one hundred and eighty (180) days after completion of the First Disposal, Kong Sun Yongtai shall have the right to rescind the First Agreement. On the above basis, the continuation of the First Guarantee for a short period of time after completion of the First Disposal is on normal commercial terms, fair and reasonable and in the interest of the Company and its Shareholders.

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LETTER FROM THE BOARD

(B) The Second Agreement

Subject matter

On 25 March 2022, Kong Sun Yongtai, the Purchaser and the Second Project Company entered into the Second Agreement, pursuant to which Kong Sun Yongtai conditionally agreed to sell, and the Purchaser conditionally agreed to acquire, the Second Sale Equity Interest and the rights of Kong Sun Yongtai as the ultimate beneficial owner of the Second Project Company for a total consideration of approximately RMB84,275,000.

Consideration

The consideration for the Second Disposal is approximately RMB84,275,000, which shall be payable by the Purchaser in cash in the following manner:

• (i) an amount of approximately RMB42,138,000, representing approximately 50% of the consideration for the Second Disposal, shall be paid into the Escrow Account within three (3) business days before completion of the Second Disposal (the ‘‘Second Earnest Money’’) and shall be transferred to Kong Sun Yongtai within ten (10) business days after completion of the Second Disposal;

• (ii) an amount of approximately RMB31,561,000, representing approximately 37.45% of the consideration for the Second Disposal, shall be paid to Kong Sun Yongtai within ten (10) business days after completion of handover of certain deliverables relating to the Second Project Company; and

• (iii) within ten (10) business days upon each receipt of the Second Project Company of the state renewable energy subsidies before the Reference Date, up to a total amount of approximately RMB10,576,000, representing approximately 12.55% of the consideration for the Second Disposal shall be paid to Kong Sun Yongtai.

Repayment of the Second Debts

As at the Reference Date, the Second Project Company had the outstanding Second Debts in the amount of approximately RMB309,153,000. The Second Debts, subject to adjustment for any net increase or decrease thereof during the Transition Period as determined by the Transition Period Audit report to be issued within ten (10) business days of completion of the Second Disposal, which shall be payable by the Second Project Company to Kong Sun Yongtai in cash in the following manner:

• (i) an amount of approximately RMB304,197,000, shall be settled by the Second Project Company within ten (10) business days after issuance of the Transition Period Audit report and the determination of the actual amount of the outstanding Second Debts; and

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LETTER FROM THE BOARD

• (ii) a corresponding amount up to a total amount of up to approximately RMB4,956,000, shall be paid to Kong Sun Yongtai within ten (10) business days upon completion of each of certain rectification works items of the Second Project by Kong Sun Yongtai required by the Purchaser. The rectification works shall be completed not later than within one (1) year after completion of the Second Disposal. The estimated cost of such rectification works items of the Second Project is approximately RMB4,956,000.

Default

If the Purchaser fails to pay the consideration for the Second Disposal pursuant to the terms of the Second Agreement or the Second Project Company fails to repay the Second Debts pursuant to the terms of the Second Agreement, Kong Sun Yongtai has the right to request the Purchaser and the Second Project Company to pay to it a default payment, which is calculated based on the relevant unpaid amounts due and a penalty at 0.05% of the relevant amounts due on a daily basis. If the default continues for more than sixty (60) calendar days from the relevant due date, Kong Sun Yongtai will be entitled to terminate the Second Agreement without any liability, and request the Purchaser to compensate for all losses incurred by Kong Sun Yongtai.

Conditions Precedent

Completion of the Second Disposal is subject to the satisfaction of the following conditions precedent:

• (a) the Company having obtained the approval from the Board, the Stock Exchange and the Shareholders at the EGM for the execution and performance of the Second Agreement;

• (b) the Purchaser having paid the Second Earnest Money into the Escrow Account;

• (c) Kong Sun Yongtai having obtained the consent from Huaxia Financial Leasing in respect of the Second Disposal;

• (d) the Purchaser having completed the filing of valuation report of state-owned assets in relation to the Second Disposal; and

• (e) the Purchaser, Kong Sun Yongtai and Baoxin Industrial having issued the industrial and commercial registration documents in relation to the Second Disposal.

As at the Latest Practicable Date, none of the above conditions precedent has been satisfied.

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LETTER FROM THE BOARD

Arrangements during the Transition Period

Any profits generated and any losses incurred by the Second Project Company in the ordinary course of business during the Transition Period shall be borne by the Second Project Company.

During the Transition Period, the Second Project Company shall continue to perform its existing contracts. The Second Project Company shall not, among other things, enter into loan agreements, mortgages and guarantees etc. not in the ordinary course of its business, and/or incur new expenditures exceeding RMB500,000 per transaction during the Transition Period without the prior consent of the Purchaser.

Termination of the Second Guarantee

Pursuant to the Second Agreement, by no later than one hundred and twenty (120) days after completion of the Second Disposal, the Purchaser shall procure the release of the Second Guarantee by Huaxia Financial Leasing. Kong Sun Yongtai does not charge any guarantee fee to the Second Project Company. In the event that the Purchaser does not procure completion of the release of the Second Guarantee within one hundred and twenty (120) days after completion of the Second Disposal, Kong Sun Yongtai shall have the right to seek for damages from the Purchaser and default penalty incurred thereunder calculated at a daily percentage rate of 0.05% based on the principal of guarantee amount. If the Purchaser fails to procure completion of the release of the Second Guarantee within one hundred and eighty (180) days after completion of the Second Disposal, Kong Sun Yongtai shall have the right to rescind the Second Agreement, and request the Purchaser to compensate for all losses and fees incurred by Kong Sun Yongtai and the Purchaser shall bear all the costs and expenses in connection with the transactions contemplated thereunder. The Company will then make assessment on the possible implications under the Listing Rules and make further disclosure as and when appropriate to comply with it.

The continuation of the Second Guarantee was agreed after an arm’s length negotiation between the parties and was one of the key commercial terms for the Purchaser to agree to the transactions contemplated under the Second Agreement. In view of the financial stress that the Group is encountering though the terms and conditions of the Second Guarantee may not be ideal, the Directors consider that the Second Disposal and the Second Guarantee are still the best available option under the circumstances for the Company to cut losses and streamline its operation at an appropriate timing. The Second Guarantee would also facilitate Huaxia Financial Leasing to provide its consent regarding the Second Disposal, which is a condition precedent under the Second Agreement. Without the Second Guarantee, completion of the Second Disposal may be prolonged given it will take time for Kong Sun Yongtai and the Purchaser to explain to the Huaxia Financial Leasing for the change in control of the Second Project Company and to get the consent from the Huaxia Financial Leasing for the purpose of satisfaction of the condition precedent under the Second Agreement. In the worst case scenario where the Purchaser fails to procure release of the Second Guarantee within one hundred and eighty (180) days after completion of the Second Disposal, Kong Sun Yongtai shall have the right to rescind the Second Agreement. On the above basis, the continuation of the

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LETTER FROM THE BOARD

Second Guarantee for a short period of time after completion of the Second Disposal is on normal commercial terms, fair and reasonable and in the interest of the Company and its Shareholders.

BASIS OF THE CONSIDERATION FOR THE DISPOSALS

The consideration for the Disposals was determined upon arm’s length negotiations between the parties with reference to the valuation of the First Sale Equity Interest and the Second Sale Equity Interest as at 28 February 2022 in the amount of approximately RMB105,320,000 appraised by an independent valuer.

It is the usual practice in the industry and in previous disposals of the Company for having a portion of consideration to be held in an escrow account before the completion of the relevant disposal. With RMB59,338,000, representing approximately 50% of the aggregate consideration for the Disposals being kept in the Escrow Account jointly controlled by Kong Sun Yongtai and the Purchaser, this arrangement is under normal commercial terms, fair and reasonable and in the interest of the Company and its Shareholders.

COMPLETION OF THE DISPOSALS

As at the Latest Practicable Date, the Project Companies are subsidiaries of the Company. Completion of each Disposal shall take place on the date on which the transfer of Kong Sun Yongtai’s equity interests in the relevant Project Company has been registered with the relevant administration for industry and commerce and a new business license has been issued to such Project Company.

Completion of each of the Disposals is not inter-conditional upon each other.

INFORMATION ON THE PROJECT COMPANIES

(A) The First Project Company

The First Project Company is a company established in the PRC with limited liability. It is principally engaged in solar power generation. As at the Latest Practicable Date, the First Project Company is a direct wholly-owned subsidiary of Kong Sun Yongtai.

The financial results of the First Project Company for the two years immediately preceding the Latest Practicable Date are as follows:

			For the year	ended
			31 December
			2020		2021
			(Audited)	(Unaudited)
			RMB’000	RMB’000
Net	profit	before tax	9,493		5,733
Net	profit	after tax	8,218		5,094

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LETTER FROM THE BOARD

The unaudited net asset value of the First Project Company as at 28 February 2022 was approximately RMB34,817,000.

(B) The Second Project Company

The Second Project Company is a company established in the PRC with limited liability. It is principally engaged in solar power generation. As at the Latest Practicable Date, the Second Project Company is a subsidiary of Kong Sun Yongtai, with each of Kong Sun Yongtai and Baoxin Industrial holding 50% equity interests of the Second Project Company respectively. Baoxin Industrial is a nominee shareholder of the Second Project Company holding the equity interests on behalf of Kong Sun Yongtai and Kong Sun Yongtai is the ultimate beneficial owner of the Second Project Company.

The financial results of the Second Project Company for the two years immediately preceding the Latest Practicable Date are as follows:

			For the year	ended
			31 December
			2020		2021
			(Audited)	(Unaudited)
			RMB’000	RMB’000
Net	profit	before tax	5,870		7,890
Net	profit	after tax	3,877		5,827

The unaudited net asset value of the Second Project Company as at 28 February 2022 was approximately RMB153,775,000.

INFORMATION ON THE PARTIES

Kong Sun Yongtai

Kong Sun Yongtai is an indirect wholly-owned subsidiary of the Company and is principally engaged in the investment in and operation of solar power plants. As at the Latest Practicable Date, the Project Companies are subsidiaries of Kong Sun Yongtai.

The Company

The Company is principally engaged in the investment in and operation of solar power plants, provision of solar power plant operation and maintenance services, provision of financial services and asset management.

– 14 –

LETTER FROM THE BOARD

The Purchaser

The Purchaser is a company established in the PRC and is principally engaged in investment, development and operation management of water conservancy, hydropower and water supply projects. As at the Latest Practicable Date, the Purchaser is wholly-owned by Xinhua Hydropower Company Limited (新華水力發電有限公司) (‘‘Xinhua Hydropower’’). Xinhua Hydropower is owned as to 55% by China National Nuclear Corporation (‘‘China Nuclear’’) and 45% by Xinhua Water Resources Holding Group Corporation Ltd. (‘‘Xinhua Water Resources’’). China Nuclear is wholly owned by 國務院國有資產監督管理委員會 (State-owned Assets Supervision and Administration Commission of the State Council). Xinhua Water Resources is wholly owned by Bureau of Comprehensive Development Ministry of Water Resources.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner is a third party independent of the Company and connected persons of the Company.

REASONS AND BENEFITS FOR THE DISPOSALS

The Directors consider that it is a good opportunity for the Group to realise its investment in the Project Companies so as to better allocate the Group’s resources, optimise its operation model, enhance the efficiency of equipment in solar power plants and accelerate its pace in transforming to asset-light model.

Upon completion of the Disposals, the Company will continue to have 14 completed solar power plants with a total installed capacity of 389.8 MW. The Company will continue to engage in the solar power plants business with (a) the generation of solar power and sale of electricity to power grid companies through its remaining solar power plants, and (b) the provision of solar power plant operation and maintenance services to third parties, including the Project Companies disposed by the Group, through the Group’s own workforce of engineers and maintenance staff. The management team for the operation and management of the remaining group will not be downsized as a result of the Disposals.

Solar power generating business is a capital intensive industry, which highly relies on external financing in order to fund for the construction of a solar power plant while the recovery of capital investment takes a long period of time. Any delay in enlisting of the solar power plants of the Group on 可再生能源電價附加資助目錄 (Renewable Energy Tariff Subsidy Catalogue*) (the ‘‘Subsidy Catalogue’’) or any delay in the receipt of renewable energy subsidies for its solar power plants that have been enlisted on the Subsidy Catalogue could have a material adverse effect on the Group’s business, financial condition, cash flow and operating results. To cope with the gearing risk, the Group will pay close attention to the market dynamics, and to avoid any unfavorable changes to the Group. The Group has been actively seeking for opportunities to transform into the asset-light model to optimise its finance structure and lower its gearing ratio. The Disposals represent a good opportunity for the Group to implement its asset-light strategy. The Company may consider further disposal(s) when it considers beneficial to the Company and the Shareholders as a whole in future.

– 15 –

LETTER FROM THE BOARD

In addition, the Disposals will lower the Group’s gearing ratio given the net proceeds from the Disposals will be applied for repaying the existing debts.

Based on the foregoing, the Directors are of the view that the Disposals and the terms of the Disposal Agreements were entered into on normal commercial terms and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

FINANCIAL EFFECT OF THE DISPOSALS AND INTENDED USE OF PROCEEDS

Upon completion of the First Disposal, the First Project Company will cease to be a subsidiary of the Company and the financial results of the First Project Company will cease to be consolidated by the Group. Upon completion of the Second Disposal, the Second Project Company will cease to be a subsidiary of the Company and the remaining 50% equity interests in the Second Project Company will be accounted as a financial asset measured at fair value through other comprehensive income in the Company’s financial statements.

Upon completion of the Disposals, the unaudited total assets and the total liabilities of the Group will be decreased by approximately RMB932,847,000 and RMB818,839,000, respectively. Upon completion of the Disposals, the unaudited loss before tax of the Group will be increased by approximately RMB9,678,000.

Subject to final audit, it is expected that the Group will realise a net gain on the Disposals of not less than approximately RMB5,300,000, which is calculated by reference to the difference between (i) the consideration for the Disposals and net asset value of the First Sale Equity Interest and Second Sale Equity Interest as at 28 February 2022 of approximately RMB111,705,000 and (ii) the related transaction costs, taxes and expenses of the Disposals. With the benefit of the net gain on the Disposals and having taking into consideration of the reasons for the Disposals as stated under the paragraph headed ‘‘Reasons and Benefits for the Disposals’’ above, the Company is of the view that the Disposals will be in the interests of the Company and the Shareholders as a whole as it will lower the Group’s gearing ratio.

The net proceeds from the Disposals after deducting the taxation and transaction costs are estimated to be approximately RMB529,000,000. The Group intends to apply the net proceeds from the Disposals to repay its existing indebtedness.

LISTING RULES IMPLICATIONS

The Disposals

As one of the applicable percentage ratios under Rule 14.07 of the Listing Rules in respect of the Disposals, when aggregated with the Previous Disposals, exceeds 25% but all of them are lower than 75%, the transactions contemplated under the Disposal Agreements constitute a major transaction for the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting, announcement and Shareholders’ approval requirements under Chapter 14 of the Listing Rules.

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LETTER FROM THE BOARD

The Guarantees

As the highest percentage ratio in respect of the Guarantees, when aggregated with the Previous Guarantees, exceeds 25%, these Guarantees constitute a major transaction for the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting, announcement and Shareholders’ approval requirements under Chapter 14 of the Listing Rules.

EGM

Set out on pages EGM-1 to EGM-2 of this circular is a notice of the EGM to be held at Unit 803–4, 8/F, Everbright Centre, 108 Gloucester Road, Wanchai, Hong Kong on Friday, 24 June 2022 at 11:00 a.m., at which ordinary resolutions will be proposed to approve the Disposal Agreements, the Guarantees and the transactions contemplated thereunder.

Whether or not you propose to attend the meeting, you are requested to read the notice of EGM and complete the accompanying form of proxy, which are enclosed in this circular in accordance with the instructions printed thereon and return the same to the Company’s share registrar and transfer office, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Center, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding of the meeting or any adjournment thereof. Completion and return of the proxy form shall not preclude you from attending and voting at the meeting should you so wish. Pursuant to the Listing Rules, any Shareholder who has a material interest in the Disposals and the Guarantees and his/her/its close associates is/are required to abstain from voting on the relevant resolutions at the EGM.

As at the Latest Practicable Date, so far as the Company is aware, none of the Shareholders has any material interest in the Disposals and the Guarantees. Hence, no Shareholder is required to abstain from voting on the resolutions in relation to the Disposal Agreements and the Guarantees at the EGM. As none of the Directors is interested in the Disposal Agreements and the transactions contemplated thereunder, no Directors had abstained from voting on the relevant Board resolutions approving the Disposal Agreements and the transactions contemplated thereunder.

RECOMMENDATION

The Directors consider that the terms of the Disposal Agreements, the Guarantees and the transactions contemplated thereunder are fair and reasonable, in the ordinary and usual course of business of the Group and on normal commercial terms, and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend that the Shareholders to vote in favour of the resolutions to be proposed at the EGM to approve the Disposal Agreements, the Guarantees and the transactions contemplated thereunder.

– 17 –

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendices to this circular.

Yours faithfully, For and on behalf of the Board Kong Sun Holdings Limited Mr. Jin Yanbing Executive Director

– 18 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. SUMMARY OF THE FINANCIAL INFORMATION OF THE GROUP

The financial information of the Group for the three years ended 31 December 2019, 2020 and 2021 are set out in the following documents which have been published on the websites of the Stock Exchange (http://www.hkex.com.hk) and the website of the Company (www.kongsun.com):

• . The audited consolidated financial statements of the Group for the year ended 31 December 2019 have been set out on pages 81 to 196 of the 2019 annual report of the Company published on 27 April 2020. Please also see below the link to the 2019 annual report:

https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0427/2020042701218.pdf

• . The audited consolidated financial statements of the Group for the year ended 31 December 2020 have been set out on pages 81 to 202 of the 2020 annual report of the Company published on 20 April 2021. Please also see below the link to the 2020 annual report:

https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0420/2021042000331.pdf

• . The audited consolidated financial statements of the Group for the year ended 31 December 2021 have been set out on pages 79 to 192 of the 2021 annual report of the Company published on 26 April 2022. Please also see below the link to the 2021 annual report:

https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0426/2022042601962.pdf

2. WORKING CAPITAL

The Directors, after due and careful consideration and taking into account the proceeds from the Disposals, the timely settlement of certain of the Group’s renewable energy subsidy receivables from the State Grid Companies on the expected dates, present internal resources and banking and other facilities and the net proceeds from the successful completion of the Previous Disposals, are of the opinion that the Group would have sufficient working capital for at least 12 months from the date of this circular. The Company has obtained the relevant confirmation as required under Rule 14.66(12) of the Listing Rules.

– I-1 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

3. STATEMENT OF INDEBTEDNESS

As at the close of business on 31 March 2022, being the latest practicable date for the purpose of this statement of indebtedness, the Group’s indebtedness includes secured loans and borrowings which amounted to approximately RMB2,963,928,000 and unsecured corporate bonds which amounted to approximately RMB41,641,000 and lease liabilities amounted to approximately RMB170,098,000.

The Group’s loans and borrowings were secured by its assets, including solar power plants, trade receivables, lease prepayments, financial assets measured at fair value through other comprehensive income and the equity interests of certain subsidiaries.

As at 31 March 2022, the Group had executed guarantees with respect to loans of approximately RMB175,166,000 granted by independent third parties to three former subsidiaries of the Group before their disposal.

As at 31 March 2022, the Group’s lease liabilities amounted to approximately RMB170,098,000 in relation to the remaining lease terms of certain lease contracts, which is unsecured and unguaranteed.

The Directors confirm that, as of 31 March 2022, being the latest practicable date for the purpose of this statement of indebtedness, save as disclosed above, the Group did not have any issued and outstanding, or authorised or otherwise created but unissued debt securities, term loans, other borrowings, indebtedness, mortgages and charges, contingent liabilities and guarantees.

The Directors confirm that, save as disclosed above, there have been no material changes in the indebtedness or contingent liabilities of the Group as at the Latest Practicable Date.

4. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

The Group is mainly engaged in investment in and the operation of solar power plants, provision of solar power plant operation and maintenance services, provision of financial services, trading of liquefied natural gas and asset management.

In the long run, by focusing on clean energy and green finance, the Group will continue to develop its solar power generation business, optimise its operation mode and enhance the efficiency of equipment in solar power plants. Through integration of industry and finance, it will also improve its operational efficiency, so as to drive the development of green and lowcarbon energy in China and make positive contributions to environmental protection.

It is expected that by transferring the controlling interests of solar power plant projects, the Group will be able to recycle capital, reduce its debts and finance costs and mitigate the pressure on project financing, while further improve the return on capital and receive stable fees annually by providing solar power plant operation and maintenance services.

– I-2 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Solar power generating business is a capital intensive industry, which highly relies on external financing in order to fund for the construction of solar power plant while the recovery of capital investment takes a long period of time. To cope with the gearing risk, the Group will pay close attention to the market dynamics, and to avoid any unfavorable changes to the Group.

Given the Group highly relies on external financing in order to obtain investment capital for new solar power plants development, any interest rate changes will have impact on the Group’s capital expenditure and finance costs, hence, affecting the Group’s operating results.

5. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, there has been no material adverse change in the financial or trading position of the Group since 31 December 2021, being the date to which the latest audited consolidated financial statements of the Company were made up.

– I-3 –

VALUATION REPORT

APPENDIX II

The following is the text of a valuation report prepared for the purpose of incorporation in this circular received from Valor Appraisal & Advisory Limited, an independent valuer, in connection with their valuation of 100% equity interest in 濟源大峪江山光伏發電有限公司 and 50% equity interest in 寶豐縣鑫泰光伏電力科技開發有限公司 as at 28 February 2022.

==> picture [133 x 69] intentionally omitted <==

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Date: 19 May 2022

The Board of Directors

Kong Sun Holdings Limited

Unit 803–4, 8/F, Everbright Centre, 108 Gloucester Road, Wanchai, Hong Kong

Dear Sir/Madam,

• RE: Valuation Report of 濟源大峪江山光伏發電有限公司 and 寶豐縣鑫泰光伏電力科技 開發有限公司 for Circular Reference for Kong Sun Holdings Limited

In accordance with the instruction of Kong Sun Holdings Limited (‘‘Kong Sun’’), we have made an appraisal of the equitable values of 100% equity interest in 濟源大峪江山光伏發 電有限公司 and 50% equity interest in 寶豐縣鑫泰光伏電力科技開發有限公司 for circular reference as at the valuation date (28 February 2022).

The details and conclusion of the valuation are presented in the attached valuation report, which outlines the factors considered, valuation methodology, basis and assumptions employed in formulating our opinion of values.

Valor Appraisal & Advisory Limited (‘‘Valor’’) is an independent firm providing full range of valuation and advisory services. This report has been prepared independently. Neither Valor nor any authors of this report hold any interest in Kong Sun or its related parties. The fee for providing this report is based on Valor’s normal professional rates, whilst expenses (if incurred) are being reimbursed at cost. Payment of fees and reimbursements are not contingent upon the conclusions drawn in the report.

Yours faithfully, For and on behalf of

Valor Appraisal & Advisory Limited Haydn Y.C. Lee CFA CPA (Aust.) MRICS MAusIMM RBV Director

– II-1 –

VALUATION REPORT

APPENDIX II

1. INTRODUCTION & PURPOSE OF VALUATION

In accordance with the instruction of Kong Sun Holdings Limited (‘‘Kong Sun’’ or the ‘‘Company’’), Valor Appraisal & Advisory Limited (‘‘Valor’’) is required to provide an independent valuation report (the ‘‘Valuation Report’’) to assess the equitable values (the ‘‘Equitable Values’’) of 100% equity interest in 濟源大峪江山光伏發電有限公司 (translated as Jiyuan Dayu Jiangshan Photovoltaic Power Generation Limited and hereinafter referred to as the ‘‘First Project Company’’) and 50% equity interest in 寶豐縣鑫泰光伏電力科技開發有限 公司 (translated as Baofeng Xintai Photovoltaic Power Technology Development Limited and hereinafter referred to as the ‘‘Second Project Company’’) (collectively the ‘‘Equity Interests’’) for circular reference as at 28 February 2022 (the ‘‘Valuation Date’’). The First Project Company and the Second Project Company are hereinafter collectively referred to as the ‘‘Project Companies’’.

Relevant enquiries have been made and required information have been obtained that Valor considers to be necessary in forming an independent opinion of the Equitable Values of the Equity Interests, as at the Valuation Date.

This Valuation Report states valuation methodology and approach adopted in assessing the Equitable Values of the Equity Interests, as well as outlines Valor’s latest findings and valuation conclusion, which is prepared solely for the purpose of circular reference for Kong Sun and its subsidiaries (collectively referred to as the ‘‘Group’’).

In this Valuation Report, words in the singular number include the plural and vice versa; the words asset or assets are deemed to include liability or liabilities, except where it is expressly stated otherwise, or is clear from the context that liabilities are excluded; headings are inserted for convenient reference only and have no effect in limiting or extending the language to which they refer.

2. BACKGROUND INFORMATION OF THE PROJECT COMPANIES

The following background information of the Project Companies has been complied with reference to the documents received from and representation by the management of the Group and the Project Companies (the ‘‘Management’’), which are assumed to be accurate and relied upon when conducting this valuation exercise.

The Project Companies are established in the People’s Republic of China (the ‘‘PRC’’) with limited liability and principally engaged in solar power generation.

3. SCOPE OF WORK

In conducting this valuation exercise, Valor’s appraisers have:

• . gathered all relevant information;

• . discussed with the Management;

• . collected market data from reliable sources;

– II-2 –

VALUATION REPORT

APPENDIX II

• . investigated into the information, and considered the basis and assumptions of the opinion of values;

• . analysed the financial information of companies in a similar industry; and

• . designed an appropriate valuation model to derive the Equitable Values of the Equity Interests.

4. BASIS OF VALUATION

The valuation was carried out on an Equitable Value basis. According to International Valuation Standards 2020 (‘‘IVS 2020’’) issued by International Valuation Standards Council (‘‘IVSC’’), Equitable Value is defined as ‘‘the estimated price for the transfer of an asset or liability between identified knowledgeable and willing parties that reflects the respective interests of those parties’’. In particular, the Equitable Values of the Equity Interests in this valuation exercise refer to the equity value, which is defined as ‘‘the value of a business to all of its equity shareholders’’ in accordance with International Valuation Standard 200 Businesses and Business Interests in IVS 2020.

5. BASIS OF OPINION

The valuation was conducted in accordance with IVS 2020 issued by IVSC. The valuation procedure includes review of the financial and economic conditions of the subject business interests, an assessment of key assumptions, estimates, and representations made by the Management. All matters essential to the proper understanding of the valuation are disclosed in the valuation report. Opinion of values included in the valuation report is impartial, independent and unbiased.

The following factors also form a considerable part of the basis of opinion:

• . assumptions on the market and on the subject business interests that are considered to be fair and reasonable;

• . financial performance that shows a consistent trend of the operations of the subject business interests;

• . consideration and analysis on the micro and macro economic factors; and

• . analytical review of the subject business interests.

In the course of conducting the valuation, all the information and explanations considered necessary have been obtained so that there are sufficient evidences and reasonable basis in forming the opinion of values on the subject business interests.

– II-3 –

VALUATION REPORT

APPENDIX II

6. SOURCES OF INFORMATION

In conducting the valuation of the subject business interests, the following key information, including but not limited to those provided by the Management and derived from the public have been considered, reviewed, and relied upon:

• . Management accounts of the Project Companies as at 31 December 2021 and 28 February 2022;

• . IVS 2020 issued by IVSC;

• . Overview of the nature of the subject business interests;

• . Discussions with the Management;

• . Discount for Lack of Marketability — Job Aid for IRS Valuation Professional issued by Internal Revenue Service (the ‘‘IRS DLOM Job Aid’’);

• . 2021 Edition of the Stout Restricted Stock Study Companion Guide;

• . Navigating Valuations in the World of COVID-19 compiled by PwC China;

• . Control Premium Study, 1st Quarter 2020, FactSet Mergerstat, LLC;

• . Annual reports and results, interim reports and announcements of Concord New Energy Group Limited (182:HK), GCL New Energy Holdings Limited (451:HK), Beijing Energy International Holding Co Ltd (686:HK), Shunfeng International Clean Energy Limited (1165:HK), Beijing Enterprises Clean Energy Group Limited (1250:HK), Xinyi Energy Holdings Limited (3868:HK), CECEP Solar Energy Co., Ltd. (000591:CH) and Jiawei Renewable Energy Co., Ltd. (300317:CH); and

• . Hong Kong Exchanges and Clearing Limited (‘‘HKEX’’), Hong Kong Monetary Authority, Shenzhen Stock Exchange, Google, Yahoo, Reuters and other reliable sources of market data.

In arriving at the opinion of the Equitable Values, the accuracy and completeness of the information reviewed for the purpose of this valuation have been assumed and relied on. In addition, the statements, information, opinion and representations provided by Kong Sun and the Project Companies have been relied upon.

Research was conducted using various sources including government statistical releases and other publications to assess the reasonableness and fairness of information provided.

The opinion is based upon economic, market, financial and other conditions as exist and can be evaluated on the date of this report and no responsibility is assumed to update or revise the opinion based on events or circumstances occurring after the date of this report. In reaching the opinion, assumptions have been made with respect to such economic, market, financial and other conditions and other matters, many of which are beyond the control of Valor or any party involved in this valuation exercise.

– II-4 –

VALUATION REPORT

APPENDIX II

7. VALUATION APPROACH AND METHODOLOGY

In carrying out this valuation exercise, the following approaches and methodologies have been considered:

Cost Approach — The cost approach provides an indication of value using the economic principal that a buyer will pay no more for an asset than the cost to obtain an asset of equal utility, whether by purchase or by construction. This approach is based on the principle that the price that a buyer in the market would pay for the asset being valued would, unless undue time, inconvenience, risk or other factors are involved, be not more than the cost to purchase or construct an equivalent asset. Often the asset being valued will be less attractive than the alternative that could be purchased or constructed because of age or obsolescence. Where this is the case, adjustments may need to be made to the cost of the alternative asset depending on the required basis of value.

The cost approach cannot normally be applied to the valuation of a business or business interest except in the case of early stage or start-up businesses where profits and/or cash flow cannot be reliably determined and adequate market information is available on the entity’s assets.

Unlike market and income approaches which either incorporate market sentiments or future earnings capacity of an asset as a function to determine its current value, cost approach considers the fundamental cost it takes to form the asset. In our opinion this approach is inapplicable to the current analysis as there is no convincing association of the values of the subject business interests with their costs.

Income Approach — The income approach provides an indication of value by converting future cash flows to a single current capital value. This approach considers the income that an asset will generate over its useful life and indicates value through a capitalisation process. Capitalisation involves the conversion of income into a capital sum through the application of an appropriate discount rate. The income stream may be derived under a contract or contracts, or be non-contractual, for example the anticipated profit generated from either the use of or holding of the asset.

Enterprise value is typically derived through the capitalisation of profits or cash flows through the application of a capitalisation rate or discount rate before debt servicing costs. The capitalisation or discount rate applied is the weighted average cost of capital of an appropriate mix of debt and equity. The market value of the interest bearing debt is deducted from the enterprise value to determine the overall equity value. Redundant, ie non-operating, assets need to be considered when calculating enterprise or equity value.

This approach is not preferred in this exercise because there are relevant market comparables to the subject business interests and reliable projections of the amounts and timing of future income streams are not available for the subject business interests as at the Valuation Date.

– II-5 –

VALUATION REPORT

APPENDIX II

Market Approach — The market approach provides an indication of value by comparing the subject asset with identical or similar assets for which price information is available. Under this approach the first step is to consider the prices for transactions of identical or similar assets that have occurred recently in the market. If few recent transactions have occurred, it may also be appropriate to consider the prices of identical or similar assets that are listed or offered for sale provided the relevance of this information is clearly established and critically analysed. It may be necessary to adjust the price information from other transactions to reflect any differences in the terms of the actual transaction and the basis of value and any assumptions to be adopted in the valuation being undertaken. There may also be differences in the legal, economic or physical characteristics of the assets in other transactions and the asset being valued.

The market approach compares the subject business to similar businesses, business ownership interests and securities that have been exchanged in the market and any relevant transactions of shares in the same business. Prior transactions or offers for any component of the business may be also indicative of value.

In this valuation exercise, the values of the subject business interests were developed through the application of the market approach techniques known as guideline transactions method and guideline publicly-traded comparable method. The guideline transaction method utilizes information on transactions involving assets that are the same or similar to the subject asset to arrive at an indication of value, whereas the guideline publicly-traded method utilizes information on publicly-traded comparables that are similar to the subject asset to arrive at an indication of value.

The guideline transactions method and guideline publicly-traded method require the proper selection of valuation metrics/comparable evidence and calculation of the selected valuation metrics of comparable transactions and companies to derive the values of the subject business interests.

Under guideline transactions method, the valuation metrics adopted are price-to-book ratio (‘‘PB Ratio’’) and price-to-earnings ratio (‘‘PE Ratio’’) and the final result is the average of values calculated by PB Ratio and PE Ratio. Both PB Ratio and PE Ratio were adopted under guideline transactions method because both the asset and earnings sides of transactions were considered and the final result gives a more balanced and comprehensive indication of value.

Under guideline publicly-traded method, the valuation metrics adopted are PB Ratio and enterprise value-to-earnings before interest and taxes ratio (‘‘EV/EBIT Ratio’’) and the final result is the average of values calculated by PB Ratio and EV/EBIT Ratio. Both PB Ratio and EV/EBIT Ratio were adopted under guideline publicly-traded method because both the asset and earnings sides of publicly-traded comparables were considered and the final result gives a more balanced and comprehensive indication of value.

– II-6 –

VALUATION REPORT

APPENDIX II

8. KEY ASSUMPTIONS

Key Assumptions

The assumptions considered having significant sensitivity effects in this valuation have been evaluated in arriving at the assessed values with key assumptions listed as follows:

• . there will be no material change in the existing political, legal, technological, fiscal or economic conditions which might adversely affect the economy in general and the operations of the Project Companies;

• . there will be no major changes in the current taxation laws in the PRC;

• . there will be no material fluctuation of the finance costs and availability of finance in the PRC;

• . The Project Companies will fulfil all legal and regulatory requirements for the principal operations;

• . the development of the subject business interests will not be constrained by the availability of finance and there will be no material fluctuation of the finance costs;

• . there will not be any adverse events beyond the control of the management of the Project Companies, including natural disasters, catastrophes, fire, explosion, flooding, riots, acts of terrorism, epidemics and pandemics that may adversely affect the operations of the subject business interests;

• . the future movement of exchange rates and interest rates will not differ materially from prevailing market rates; and

• . The Project Companies will retain competent management, key personnel and technical staff for its operation and the relevant shareholders will support its ongoing operation.

– II-7 –

VALUATION REPORT

APPENDIX II

9. GUIDELINE TRANSACTIONS METHOD

Comparable Transactions

Since the subject entities are principally engaged in operations of solar power plants in the PRC, with a view to selecting appropriate comparable transactions, we focus on those transactions of solar power plants which are located in the PRC and are in operation (instead of in development and construction).

Selection criteria of comparable transactions are listed as follows:

1. Solar power plant transactions undertaken by listed companies in Hong Kong and the PRC;

2. Transactions of solar power plants which are located in the PRC and are in operation (instead of in development and construction);

3. Connected transactions and sale and leaseback transactions are excluded;

4. Transactions of solar power plants which are at losses are excluded since the Project Companies are profitable in 2020 and 2021; and

5. The announcement dates of transactions are within the period from 1 January 2021 to 28 February 2022.

Based on the above selection criteria, we have selected the following comparable transactions:

Transaction: 1 Announcement Date: 1 April 2021 Target Company: 榆林隆源光伏電力有限公司, 榆林市榆神工業區東投 能源有限公司 Installed Capacity: 256MW (Estimated) Consideration: RMB867,900,000 Equity Interest: 100% Net Asset: RMB676,805,000 (31 December 2020) Net Profit After Income Tax: RMB121,739,000 (2020) PB Ratio: 1.28 PE Ratio: 7.13

– II-8 –

VALUATION REPORT

APPENDIX II

Transaction:	2
Announcement Date:	1 April 2021
Target Company:	靖邊協鑫光伏電力有限公司
Installed Capacity:	43MW (Estimated)
Consideration:	RMB79,704,000
Equity Interest:	98.4%
Net Asset:	RMB85,922,000 (31 December 2020)
Net Profit After Income Tax:	RMB13,781,000 (2020)
PB Ratio:	0.94
PE Ratio:	5.88
Transaction:	3
Announcement Date:	1 April 2021
Target Company:	橫山晶合太陽能發電有限公司
Installed Capacity:	171MW (Estimated)
Consideration:	RMB302,603,400
Equity Interest:	80.35%
Net Asset:	RMB247,247,000 (31 December 2020)
Net Profit After Income Tax:	RMB50,271,000 (2020)
PB Ratio:	1.52
PE Ratio:	7.49

– II-9 –

VALUATION REPORT

APPENDIX II

Transaction:	4
Announcement Date:	26 April 2021
Target Company:	定安協鑫光伏電力有限公司
Installed Capacity:	31MW (Estimated)
Consideration:	RMB41,000,000
Equity Interest:	100%
Net Asset:	RMB41,788,919 (28 February 2021)
Net Profit After Income Tax:	RMB8,209,000 (2020)
PB Ratio:	0.98
PE Ratio:	4.99
Transaction:	5
Announcement Date:	26 April 2021
Target Company:	羅甸協鑫光伏電力有限公司, 遂溪協鑫光伏電力有限
	公司
Installed Capacity:	70MW (Estimated)
Consideration:	RMB116,642,300
Equity Interest:	100%
Net Asset:	RMB127,695,068 (31 December 2020)
Net Profit After Income Tax:	RMB14,579,000 (2020)
PB Ratio:	0.91
PE Ratio:	8.00

– II-10 –

VALUATION REPORT

APPENDIX II

Transaction: 6 Announcement Date: 26 April 2021 Target Company: 海南意晟新能源有限公司 Installed Capacity: 25MW (Estimated) Consideration: RMB53,023,300 Equity Interest: 88.37% Net Asset: RMB48,388,000 (28 February 2021) Net Profit After Income Tax: RMB9,744,000 (2020) PB Ratio: 1.24 PE Ratio: 6.16 Transaction: 7 Announcement Date: 26 April 2021 Target Company: 英德協鑫光伏電力有限公司 Installed Capacity: 20MW (Estimated) Consideration: RMB38,027,500 Equity Interest: 90.1% Net Asset: RMB32,893,000 (31 December 2020) Net Profit After Income Tax: RMB5,053,000 (2020) PB Ratio: 1.28 PE Ratio: 8.35

– II-11 –

VALUATION REPORT

APPENDIX II

Transaction:	8
Announcement Date:	26 April 2021
Target Company:	冊亨協鑫光伏電力有限公司, 六枝協鑫光伏電力有限
	公司
Installed Capacity:	138MW (Estimated)
Consideration:	RMB219,160,000
Equity Interest:	100%
Net Asset:	RMB187,713,000 (31 December 2020)
Net Profit After Income Tax:	RMB34,157,000 (2020)
PB Ratio:	1.17
PE Ratio:	6.42
Transaction:	9
Announcement Date:	7 May 2021
Target Company:	永城鑫能光伏電力有限公司
Installed Capacity:	86MW
Consideration:	RMB193,000,000
Equity Interest:	100%
Net Asset:	RMB136,971,269 (31 October 2020)
Net Profit After Income Tax:	RMB26,413,000 (2020)
PB Ratio:	1.41
PE Ratio:	7.31

– II-12 –

VALUATION REPORT

APPENDIX II

Transaction:	10
Announcement Date:	29 January 2021
Target Company:	烏拉特後旗源海新能源有限責任公司
Installed Capacity:	50MW
Consideration:	RMB52,550,000
Equity Interest:	100%
Net Asset:	RMB72,904,000 (30 September 2020)
Net Profit After Income Tax:	RMB20,307,000 (2019)
PB Ratio:	0.72
PE Ratio:	2.59
Transaction:	11
Announcement Date:	8 February 2021
Target Company:	內蒙古明華新能源股份有限公司
Installed Capacity:	115MW
Consideration:	RMB300,580,000
Equity Interest:	100%
Net Asset:	RMB239,721,000 (23 December 2020)
Net Profit After Income Tax:	RMB64,006,000 (2019)
PB Ratio:	1.25
PE Ratio:	4.70

– II-13 –

VALUATION REPORT

APPENDIX II

Transaction: 12 Announcement Date: 5 July 2021 Target Company: 峨山永鑫光伏發電有限公司 Installed Capacity: 50MW Consideration: RMB43,100,000 Equity Interest: 100% Net Asset: RMB7,473,193 (31 December 2020) Net Profit After Income Tax: RMB25,993,000 (2020) PB Ratio: 5.77 PE Ratio: 1.66 Transaction: 13 Announcement Date: 21 July 2021 Target Company: 阜寧縣鑫源光伏電力有限公司, 灌雲縣協鑫光伏電力 有限公司, 東海縣協鑫光伏電力有限公司, 沛縣鑫日 光伏電力有限公司, 徐州鑫輝光伏電力有限公司, 淮 安鑫源光伏電力有限公司, 淮安融高光伏發電有限公 司, 鎮江鑫利光伏電力有限公司, 鎮江鑫龍光伏電力 有限公司, 張家港協鑫光伏電力有限公司, 南通協鑫 新能源有限公司, 連雲港鑫眾光伏電力有限公司, 新 沂鑫日光伏電力有限公司, 句容信達光伏發電有限公 司, 南京鑫日光伏發電有限公司, 寶應協鑫光伏電力 有限公司 Installed Capacity: 301MW Consideration: RMB475,983,100 Equity Interest: 100% Net Asset: RMB526,478,046 (28 February 2021) Net Profit After Income Tax: RMB66,138,000 (2020) PB Ratio: 0.90 PE Ratio: 7.20

– II-14 –

VALUATION REPORT

APPENDIX II

Transaction:	14
Announcement Date:	30 August 2021
Target Company:	神木市平元電力有限公司,	神木市平西電力有限公
	司,神木縣晶登電力有限公司,		西咸新區協鑫光伏電
	力有限公司
Installed Capacity:	271MW
Consideration:	RMB297,707,700
Equity Interest:	100%
Net Asset:	RMB276,957,001 (30 April	2021)
Net Profit After Income Tax:	RMB79,443,000 (2020)
PB Ratio:	1.07
PE Ratio:	3.75
Transaction:	15
Announcement Date:	13 September 2021
Target Company:	神木市晶富電力有限公司, 神木市晶普電力有限公司
Installed Capacity:	198MW
Consideration:	RMB236,858,900
Equity Interest:	100%
Net Asset:	RMB366,656,603 (30 April	2021)
Net Profit After Income Tax:	RMB25,994,000 (2020)
PB Ratio:	0.65
PE Ratio:	9.11

– II-15 –

VALUATION REPORT

APPENDIX II

Transaction:	16
Announcement Date:	24 September 2021
Target Company:	河北三龍電力科技有限公司, 尚義縣順能光伏電力有
	限公司
Installed Capacity:	93MW
Consideration:	RMB170,000,000
Equity Interest:	100%
Net Asset:	RMB86,835,000 (30 June 2021)
Net Profit After Income Tax:	RMB15,961,000 (2020)
PB Ratio:	1.96
PE Ratio:	10.65
Transaction:	17
Announcement Date:	25 January 2022
Target Company:	寧夏鑫墾簡泉光伏電力有限公司
Installed Capacity:	30MW
Consideration:	RMB6,520,000
Equity Interest:	100%
Net Asset:	RMB6,346,120 (31 August 2021)
Net Profit After Income Tax:	RMB12,030,000 (2020)
PB Ratio:	1.03
PE Ratio:	0.54

– II-16 –

VALUATION REPORT

APPENDIX II

Valuation Metrics for Guideline Transactions Method

1. The valuation metrics adopted for guideline transactions method are PB Ratio and PE Ratio.

2. Consideration of comparable transactions was taken as numerators in calculating the PB Ratio and PE Ratio of comparable transactions.

3. Net asset of comparable transactions was taken as denominator in calculating the PB Ratio of comparable transactions.

4. Net profit after tax was taken as denominator in calculating the PE Ratio of comparable transactions.

5. Installed capacity of comparable transactions was taken as the weighting factor in calculating the weighted PB Ratio and weighted PE Ratio of comparable transactions.

6. Since the PB Ratio of transaction 12 is abnormally high when compared to PB Ratios of other comparable transactions, this transaction is considered an outlier and excluded from the calculation of weighted average PB Ratio.

7. The weighted average PB Ratio of remaining comparable transactions was calculated to be 1.13.

8. Since the PE Ratios of transactions 12 and 17 are abnormally low when compared to PE Ratios of other comparable transactions, these transactions are considered outliers and excluded from the calculation of weighted average PE Ratio.

9. The weighted average PE Ratio of remaining comparable transactions was calculated to be 6.72.

10. Net asset of the First Project Company as at 28 February 2022 is RMB34,817,000, as per management accounts of the First Project Company as at 28 February 2022.

11. Net profit after tax of the First Project Company for the year 2021 is RMB5,094,000, as per management accounts of the First Project Company as at 31 December 2021.

12. The value of 100% equity interest in the First Project Company calculated by applying PB Ratio under guideline transactions method is RMB39,384,000.

13. The value of 100% equity interest in the First Project Company calculated by applying PE Ratio under guideline transactions method is RMB34,238,000.

14. By taking the average of values calculated using PB Ratio and PE Ratio, the value of the 100% equity interest in the First Project Company under guideline transactions method was calculated to be RMB36,811,000.

– II-17 –

VALUATION REPORT

APPENDIX II

1. Net asset of the Second Project Company as at 28 February 2022 is RMB153,775,000, as per management accounts of the Second Project Company as at 28 February 2022.

2. Net profit after tax of the Second Project Company for the year 2021 is RMB5,827,000, as per management accounts of the Second Project Company as at 31 December 2021.

3. The value of 50% equity interest in the Second Project Company calculated by applying PB Ratio under guideline transactions method is RMB86,973,000.

4. The value of 50% equity interest in the Second Project Company calculated by applying PE Ratio under guideline transactions method is RMB19,582,000.

5. By taking the average of values calculated using PB Ratio and PE Ratio, the value of 50% equity interest in the Second Project Company under guideline transactions method was calculated to be RMB53,278,000.

10. GUIDELINE PUBLICLY-TRADED METHOD

Selection of Comparable Listed Companies

With a view to selecting appropriate comparable listed companies, we focus on those companies listed in Hong Kong and the PRC which are principally engaged in operation of solar power plants in the PRC.

Selection criteria of comparable companies are listed as follows:

1. Companies listed in Hong Kong and the PRC; and

2. Companies principally engaged in operation of solar power plants in the PRC.

The following searching procedures have been adopted in order to obtain a full and exhaustive list of potential comparable companies:

• . Using search engine to search comparable companies based on the above criteria; and

• . Cross checking the list of comparable companies with financial websites.

Upon procuring the list of potential comparable companies, the following review procedures have been adopted in order to select the appropriate comparable companies:

• . Reviewing the potential comparable companies’ annual reports, news and announcements; and

• . Cross checking the potential comparable companies’ segment revenue in their annual reports to ensure relevancy and comparability.

– II-18 –

VALUATION REPORT

APPENDIX II

Based on the above selection criteria, searching and review procedures, we have selected the following comparable companies:

Stock Code Company Name Company Description 451:HK GCL New Energy ‘‘GCL New Energy Holdings Limited is a Holdings Limited Hong Kong-based investment holding company principally engaged in energy and printed circuit board (PCB) businesses. The Company operates through two segments. Solar Energy segment is engaged in the sales of electricity and the construction, operation and management of solar power plants. PCB segment is mainly engaged in the manufacture and sales of PCBs. The Company is also involved in the holding of properties.’’ (Source: HKEX) 686:HK Beijing Energy ‘‘Beijing Energy International Holding Co International Ltd, formerly Panda Green Energy Group Holding Co Ltd, Ltd, is an investment holding company principally engaged in solar power plants businesses. The Company is principally engaged in development, investment, operation and management of solar power plants and other renewable energy projects. The renewable energy projects include photovoltaic, wind power, hydropower and other clean energy investment operations. The Company’s new energy projects cover China and some overseas regions, including Inner Mongolia, Qinghai, Ningxia, Shanxi, Hubei, Xinjiang, Gansu, Yunnan, Shandong, Jiangsu, Hebei, Guangdong and other places.’’ (Source: HKEX) 1165:HK Shunfeng International ‘‘Shunfeng International Clean Energy Clean Energy Limited is a China-based company Limited principally involved in the provision of clean energy and low-carbon energy-saving integrated solutions. The Company operates two segments: Solar Power Generation in China segment and Manufacturing and Sales of Light Emitting Diode (LED) Products segments. Its products mainly include power, LED chips, LED packages and other LED products. The Company mainly conducts its businesses in Mainland China.’’ (Source: HKEX)

– II-19 –

VALUATION REPORT

APPENDIX II

Stock Code Company Name Company Description

• 3868:HK Xinyi Energy ‘‘Xinyi Energy Holdings Limited is a ChinaHoldings Limited based investment holding company. The Company is principally engaged in the management and operation of solar farms through its subsidiaries, and generates revenue by selling the electricity to subsidiaries of the State Grid. The Company operates Jinzhai Solar Farm, Sanshan Solar Farm, Nanping Solar Farm, Lixin Solar Farm, Binhai Solar Farm, HongAn Solar Farm and Wuwei Solar Farm, among others. These solar farms are mainly located in Anhui, Tianjin, Fujian and Hubei Provinces in China. The Company mainly conducts its businesses in domestic market.’’ (Source: HKEX)

• 000591:CN CECEP Solar Energy ‘‘CECEP Solar Energy Co., Ltd., formerly Co., Ltd. CHONGQING TONG JUN GE CO., LTD., is a China-based company principally engaged in the investment and operation of solar photovoltaic power stations, as well as the production and sale of solar cell modules. The Company operates through three segments: solar power, solar products and others. The Company’s main products include electric power and photovoltaic components. The Company principally operates its businesses within the domestic market.’’ (Source: Reuters)

Valuation Metrics for Guideline Publicly-Traded Method

1. The valuation metrics adopted for guideline publicly-traded method are PB Ratio and EV/EBIT Ratio.

2. Market capitalization of comparable companies as at 28 February 2022 was taken as numerator in calculating the PB Ratio of comparable companies.

3. Latest equity attributable to equity holders of comparable companies was taken as denominator in calculating the PB Ratio of comparable companies.

4. The median PB Ratio of comparable companies was calculated to be 1.42.

5. Enterprise value of comparable companies as at 28 February 2022 was taken as numerator in calculating the EV/EBIT Ratio of comparable companies.

– II-20 –

VALUATION REPORT

APPENDIX II

1. Latest earnings before interest and taxes of comparable companies was taken as denominator in calculating the EV/EBIT Ratio of comparable companies.

2. The median EV/EBIT Ratio of comparable companies was calculated to be 20.20.

Control Premium

Control Premiums are applied to reflect differences between the comparables and the subject asset with regard to the ability to make decisions and the changes that can be made as a result of exercising control. All else being equal, participants would generally prefer to have a control over an asset than not. Circumstances where control premiums should be considered include where shares of public companies generally do not have the ability to make decisions related to the operations of the company (they lack control). As such, when applying the guideline public comparable method to value a subject asset that reflects a controlling interest, a control premium may be appropriate.

Since the Equity Interests of the Project Companies are controlling interests whereas shares of the comparable listed companies are minority interests, a control premium has been applied to reflect the difference of the ability to make decisions as a result of exercising control. According to Navigating Valuations in the World of COVID-19 compiled by PwC China, there has been a gradual decline in value and count in global merger and acquisition quarterly activity since second quarter of 2018 with a significant drop in first quarter of 2020 in both volume and deal value. Average control premiums have followed a similar trend with a drop to around 10% in first quarter of 2020 versus an average premium of around 20% in 2018 and 2019. However, with the introduction of COVID-19 vaccines, the control premium is expected to be reverted to the normal. A control premium of 20% has been applied in this valuation exercise.

Discount for Lack of Marketability

According to the IRS DLOM Job Aid, marketability is defined as ‘‘the ability to quickly convert property to cash at minimal cost … with a high degree of certainty of realizing the anticipated amount of proceeds’’ and a discount for lack of marketability (‘‘DLOM’’) is defined as ‘‘an amount or percentage deducted from the value of an ownership interest to reflect the relative absence of marketability’’. It is expected that a higher price will be paid by investors for business interest with high marketability and a lesser price will be paid by investors for business interest with low marketability.

In this valuation exercise, a DLOM has been applied to reflect that Project Companies are private companies, hence having lower marketability than the comparable listed companies. With reference to the 2021 Edition of the Stout Restricted Stock Study Companion Guide, the Stout Restrict Stock Study have examined 763 private placement transactions of unregistered common stock, with and without registration rights, issued by publicly traded companies from July 1980 through December 2020. For the First Project Company, a DLOM of 42.9% has been adopted in this valuation exercise, which is with reference to 42.9% median discount for the 5th quintile of these 763 transactions. The median discount in the 5th quintile has been with reference to because the median book value of equity in the 5th quintile is US$6.8 million, which is higher than and comparable

– II-21 –

VALUATION REPORT

APPENDIX II

to the Equitable Value of the First Project Company. For the Second Project Company, a DLOM of 15.8% has been adopted in this valuation exercise, which is with reference to 15.8% median discount for the 3rd quintile of these 763 transactions. The median discount in the 3rd quintile has been with reference to because the median book value of equity in the 3rd quintile is US$22.4 million, which is lower than and comparable to the Equitable Value of the Second Project Company.

Values Estimated by Guideline Publicly-Traded Method

1. Values of the Project Companies under the guideline publicly-traded method were calculated by taking the average of values calculated using PB Ratio and EV/EBIT Ratio, then adjusting for the control premium and DLOM.

2. The value of 100% equity interest in the First Project Company under guideline publicly-traded method was calculated to be RMB35,421,000.

3. The value of 50% equity interest in the Second Project Company under guideline publicly-traded method was calculated to be RMB85,130,000.

11. WEIGHTING FACTOR

1. An equal weighting factor, viz 50/50, has been given to the guideline transactions method and guideline publicly-traded method. An equal weighting factor will give a more balanced result considering the pros and cons of both methods.

2. The final result is calculated by taking the average of values calculated under guideline transactions method and guideline publicly-traded method.

12. VALUATION COMMENTS

As part of the analysis, the information and documents provided by the Management, the financial and business information from public sources with such available financial information, client representation, project documentation and other pertinent data concerning the Equity Interests have been reviewed. The accuracy of such information have been assumed and relied on to a considerable extent in arriving at the opinion of values.

Relevant searches and enquiries have been made and such further information as considered necessary has been obtained for the purpose of this valuation exercise.

The opinion of values is based on accepted valuation procedures and practices that rely substantially on the use of numerous assumptions and the consideration of many uncertainties, not all of which can be easily quantified or ascertained. Further, while the assumptions and consideration of such matters are regarded to be reasonable, they are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Kong Sun, the Project Companies and Valor. No assurance is provided on the achievability of any financial results estimated by Kong Sun and/or the Project Companies because events and circumstances frequently do not occur as expected; differences

– II-22 –

VALUATION REPORT

APPENDIX II

between actual and expected results may be material; and achievement of the financial results is dependent on actions, plans and assumptions of the management. In addition, the other limiting and general service conditions are attached in Appendix I.

13. RISK FACTORS

The recent outbreak of COVID-19 worldwide may result in the slowdown of economy

The recent outbreak of COVID-19 since December 2019 has increased uncertainties to the global economy. If the development of COVID-19 persists or intensifies, the global economy may be adversely affected. In such event, the resultant unfavourable global economic conditions, dampened market sentiment and decreased purchasing power of the global economy could be adversely impact business operations and financial performances of the Project Companies.

Economic, political and social considerations

Any unfavourable global and regional economic condition such as the trade war between the United States and its key trading partners like China and the decision by the United Kingdom to exit the European Union, may have a detrimental impact on the businesses of the Project Companies. Due to the uncertainties in economic situation, there is no guarantee that the expected financial performance will materialize. Any changes in global political, economic and social conditions, laws, regulations and policies may have significant impacts on the projections of the future incomes of the Project Companies. In view of the current situation, the possibility of trade protectionism cannot be ruled out. None of these changes can be foreseen with certainty.

Technological changes

Any change in the technological developments and advancements may have significant impacts on the future financial results of the Project Companies. To remain competitive in the industry, the Project Companies may be required to make substantial capital expenditures to keep up with technological changes.

Inflation

The expansionary monetary policies adopted by the central banks in many developed and developing countries, coupled with supply shortage brought about by recent outbreak of COVID-19, pose a significant risk of inflation, which may erode the profitability of the Project Companies.

Company specific risk

The operation of the Project Companies may perform better or worse than the expectation, and the resulting earnings and cash flows will be very different from the estimates. The possibility of severe operational incidence, whether it is exogenous or endogenous, cannot be precluded.

– II-23 –

VALUATION REPORT

APPENDIX II

14. OPINION OF VALUES

Based on the investigation and analysis outlined in this report, we are of the opinion that as at the Valuation Date, which is 28 February 2022, the total Equitable Value of 100% equity interest in the First Project Company and 50% equity interest in the Second Project Company repeated is RMB105,320,000 (RENMINBI ONE HUNDRED FIVE MILLION THREE HUNDRED TWENTY THOUSAND), with breakdown as follows:

Subject 100% Equity Interest in First Project Company 50% Equity Interest in Second Project Company Total	Guideline Transactions Method RMB36,811,000 RMB53,278,000 RMB90,089,000	Guideline Publicly-traded Comparable Method RMB35,421,000 RMB85,130,000 RMB120,551,000	Equitable Value RMB36,116,000 RMB69,204,000
			RMB105,320,000

Yours faithfully, For and on behalf of Valor Appraisal & Advisory Limited Haydn Y.C. Lee CFA CPA (Aust.) MRICS MAusIMM RBV Director

Mr. Haydn Y.C. Lee is a Chartered Financial Analyst charterholder, member of CPA Australia, professional member of Royal Institution of Chartered Surveyors, member of the Australasian Institute of Mining & Metallurgy and Registered Business Valuer. He has over 13 years’ experience in business valuation. He oversees the business valuation services of Valor and has provided a wide range of valuation services to listed companies and private entities in different industries in the PRC, Hong Kong and Singapore.

– II-24 –

VALUATION REPORT

APPENDIX II

Appendix I — Limiting and General Service Conditions

1. As part of the analysis, Valor’s appraisers have reviewed financial and business information from public sources together with such financial information, client representation, project documentation and other pertinent data concerning the project made available to Valor during the course of the valuation. Valor’s appraisers have assumed the accuracy of, and have relied on the information and client representations provided in arriving at the opinion of value. We have not audited, reviewed, or compiled the financial information provided to us and, accordingly, we express no audit opinion or any other form of assurance on this information.

2. Our report was used as part of the analysis of the Group in reaching their conclusion of value and the ultimate responsibility of the determination of value of the subject asset rests solely with the Group.

3. It is assumed that the Management is responsible to ensure proper books of accounts are maintained, and the financial statements give a true and fair view and have been prepared in accordance with the relevant companies’ ordinance.

4. Valor shall not be required to give testimony or attendance in court or to any government agency by reason of this valuation and with reference to the project described herein unless prior arrangements have been made.

5. No opinion is intended to be expressed for matters which require legal or other specialised expertise or knowledge, beyond what is customarily employed by Valor’s appraisers.

6. The conclusions assume continuation of prudent client policies over whatever period of time that is considered to be necessary in order to maintain the character and integrity of the asset valued.

7. It is assumed that there are no hidden or unexpected conditions associated with the asset valued that might adversely affect the reported value. Further, it is assumed that no responsibility for changes in market conditions after the date of this report.

8. This valuation report has been prepared solely for the use of the designated parties. The valuation report should not be otherwise referred to, in whole or in part, or quoted in any document, circular or statement in any manner, or distributed in whole or in part or copied to any third party without prior written consent from Valor.

9. This report is confidential to the client for the specific purpose to which it refers. In accordance with Valor’s standard practice, it is stated that this report and valuation is for the use only of the party to whom it is addressed and no responsibility is accepted with respect to any third party for the whole or any part of its contents.

10. Valor have made no investigation of and assumed no responsibility for the title to or any liabilities against the asset appraised.

– II-25 –

VALUATION REPORT

APPENDIX II

1. In the event that Valor becomes involved in any capacity in any action, proceedings or investigation brought by or against any person, in connection with or as a result of either the Valor’s engagement or any matter referred to in the service engagement, the Group will reimburse the Valor for all legal and other expenses incurred in connection therewith. Except where it is determined by final judgement of a court to have resulted from wilful default or gross negligence of Valor or its officers, the Group will fully indemnify and hold Valor harmless against any and all losses, claims, damages or liabilities to any such person in connection with or as a result of either the Valor’s engagement or any matter referred to in the service engagement. The reimbursement, indemnity and contributions to each of its associates shall ensure to the benefit of the Valor’s successors, assigns, heirs and personal representatives of the Valor, any such affiliate and any such persons. In the event the Valor is subject to any liability in connection with this service engagement, such liability will be limited to the amount of fees received for this engagement.

2. The Group agrees that itself or any of its associates will make no claim against Valor or any of its associates in connection with the engagement of the Valor except as a result of the Valor’s wilful default or gross negligence, and that neither Valor nor any of its associates will have any direct or indirect liability to the Group or except where it is determined by final judgement of a court to have resulted from wilful default or gross negligence of Valor or its officers.

– II-26 –

GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors’ and Chief Executive’s Interests and Short Positions

As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executive in the Shares, underlying Shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he/she is taken or deemed to have under such provisions of SFO), or as recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the ‘‘Model Code’’) in the Listing Rules were as follows:

Interest in underlying Shares of the Company

Name of Director Nature of interest Executive Director Jin Yanbing (Chairman) Beneficial owner	Number of Shares held/ interested in 12,000,000	Approximate percentage of shareholding 0.08%

Save as disclosed above, as at the Latest Practical Date, none of the Directors and chief executive of the Company, or their respective associate, had any interests or short positions in the Shares, underlying Shares or debentures of the Company or its associated corporations (within the meaning of Part XV of SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he is taken or deemed to have under such provisions of SFO), or, as recorded in the register required to be kept by the Company under section 352 of the SFO or required to be notified to the Company or the Stock Exchange under the Model Code.

– III-1 –

GENERAL INFORMATION

APPENDIX III

(b) Substantial Shareholders’ Interests

So far as is known to any Director, as at the Latest Practicable Date, the following persons, other than a Director or chief executive of the Company, had or deemed or taken to have an interest or short position in the Shares or underlying Shares of the Company would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company under Section 336 of the SFO:

		Number of Shares
		or underlying	Percentage of
Name	Nature of Interest	Shares held	shareholding(2)
Miao Yu	Deemed interest in	4,169,300,000 (L)	27.86%
	controlled corporation(1)
Prospect Ace Limited	Beneficial owner(1)	4,169,300,000 (L)	27.86%
Xiang Jun	Beneficial owner	756,831,000 (L)	5.06%

Notes:

• (1) Miao Yu owns 100% equity interest of Prospect Ace Limited. Accordingly, Miao Yu is deemed to be interested in a long position of an aggregate of 4,169,300,000 Shares held by Prospect Ace Limited.

• (2) The percentage represents the number of ordinary shares interested divided by the number of the Company’s issued shares as at the Latest Practicable Date, being 14,964,442,519 Shares.

• (3) The letter ‘‘L’’ denotes the person’s long position in such securities.

Save as disclosed above and as at the Latest Practicable Date, the Company had not been notified by any person, other than a Director or chief executive of the Company, who had interests or short positions in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company under section 336 of the SFO.

3. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group which will not expire or is not determinable by such member of the Group within one year without payment of compensation (other than statutory compensation).

– III-2 –

GENERAL INFORMATION

APPENDIX III

4. DIRECTORS’ INTEREST IN ASSETS

As at the Latest Practicable Date, so far as the Directors are aware, none of the Directors had any interest, either directly or indirectly, in any asset which has since 31 December 2021 (being the date to which the latest published audited consolidated financial statements of the Group were made up), up to the Latest Practicable Date, been acquired or disposed of by or leased to, any member of the Group or are proposed to be acquired or disposed of by, or leased to, any member of the Group.

5. DIRECTORS’ INTEREST IN CONTRACT OR ARRANGEMENT OF SIGNIFICANCE

As at the Latest Practicable Date, no Director and/or his/her respective close associates had a material interest, either directly or indirectly, in any subsisting contract or arrangement of significance to the business of the Group to which the Company or any of its subsidiaries was a party.

6. COMPETING INTERESTS

As at the Latest Practicable Date, as far as the Directors are aware, none of the Directors nor their respective close associates is and was interested in any business which competes or may compete, either directly or indirectly, with the business of the Group.

7. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries was involved in any litigation or arbitration of material importance and no litigation or claim of material importance known to the Directors to be pending or threatened by or against the Company or any of its subsidiaries.

8. EXPERTS AND CONSENTS

The following is the qualification of the expert who has given opinion or advice which is contained in this circular:

Name Qualification

Valor Appraisal & Advisory Limited Professional valuer BDO Limited Certified Public Accountants

– III-3 –

GENERAL INFORMATION

APPENDIX III

As at the Latest Practicable Date, each of the experts above (i) had no shareholding in any member of the Group and did not have any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in any member of the Group; (ii) had no direct or indirect interest in any assets which had been, since 31 December 2021 (the date to which the latest published audited consolidated financial statements of the Group were made up), acquired, disposed of by, or leased to any member of the Group, or were proposed to be acquired, disposed of by, or leased to any member of the Group; and (iii) has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter or report and the reference to its name included herein in the form and context in which it appears.

9. MATERIAL CONTRACTS

The following material contracts (not being contracts in the ordinary course of business) have been entered into by members of the Group within the two years preceding the date of this circular and up to the Latest Practicable Date and are or may be material:

• (a) the Disposal Agreements;

• (b) the disposal agreements dated 2 November 2021 entered into between, among others, Kong Sun Yongtai, Xinjiang Chengshi and 新華電力發展投資有限公司 (Xinhua Electricity Development Investment Limited*) (‘‘Xinhua Electricity’’) in relation to the Previous Disposals for a total consideration of RMB242,130,000;

• (c) the disposal agreements dated 10 July 2021 entered into between, among others, Kong Sun Yongtai, Jiaxing Shengshi Limited Partnership, 常熟宏略光伏電站開發有 限公司 (Changshu Honglue Photovoltaic Power Plants Development Co., Ltd.), an indirect wholly-owned subsidiary of the Company and Suzhou Junsheng Limited Partnership (as the case may be) and Xinhua Electricity in relation to the disposals of the entire equity interests of 金塔縣永嘉新能源有限公司 (Jinta Yongjia New Energy Limited), 甘肅宏遠光電有限責任公司 (Gansu Hongyuan Photovoltaic Limited), 敦煌萬發新能源有限公司 (Dunhuang Wanfa New Energy Limited Company), 化隆 縣瑞啟達新能源有限公司 (Hualong County Ruiqida New Energy Limited), 黃驊市 正陽新能源有限公司 (Huanghua Zhengyang New Energy Limited), 嘉峪關協合新 能源有限公司 (Jiayuguan Xiehe New Energy Co. Ltd.) and 臨潭天朗新能源科技有 限公司 (Lintan Tianlang New Energy Technology Co., Ltd.) for a total consideration of RMB1,285,814,000;

• (d) the disposal agreement dated 14 December 2020 entered into between, among others, Kong Sun Yongtai and 中核山東能源有限公司 (CNNP Shandong Energy Co., Ltd.) in relation to the disposal of the entire equity interest of 玉門市永聯科技新能源有限 公司 (Yumen Yonglian Technology New Energy Limited Company) for a total consideration of RMB33,580,000;

– III-4 –

GENERAL INFORMATION

APPENDIX III

• (e) the equity transfer agreement dated 4 December 2020 entered into between 江山豐融 投資有限公司 (Jiangshan Fengrong Investment Company Limited), an indirect wholly-owned subsidiary of the Company, 北京聯合榮邦新能源科技有限公司 (Beijing United Rongbang New Energy Technology Co., Ltd.) (‘‘Beijing United Rongbang’’) and 榆林市江山永宸新能源有限公司 (Yulin City Jiangshan Yongchen New Energy Limited*) (‘‘Yongchen’’) in relation to the disposal of Yongchen at a consideration of approximately RMB1,177,829,000;

• (f) the disposal agreements dated 22 October 2020 entered into between, among others, Kong Sun Yongtai and 濟南天冠能源科技有限公司 (Jinan Tianguan Energy Technology Co., Ltd.), an indirect wholly-owned subsidiary of the Company (as the case may be) and Beijing United Rongbang in relation to the disposals of 威縣天 海光伏發電有限公司 (Weixian Tianhai Photovoltaic Power Generation Co., Ltd.), 平山縣天匯能源科技有限公司 (Pingshan Tianhui Energy Technology Co., Ltd.), 山 東新泰樓德佳陽光伏發電有限公司 (Shandong Xintailou Dejia Solar Power Co., Ltd.) and 德州市陵城區乾超兄弟能源科技有限公司 (Dezhou City Lingcheng District Qianchao Brothers Energy Technology Co., Ltd.*) for a total consideration of RMB100,210,000; and

• (g) the disposal agreement dated 21 September 2020 entered into between, among others, Kong Sun Yongtai and 國投電力控股股份有限公司 (Guotou Electric Holding Co., Ltd.) in relation to the disposal of the entire equity interest of 靖邊縣智光新能 源開發有限公司 (Jingbian Zhiguang New Energy Development Co., Ltd.) for a total consideration of RMB82,000,000 subject to adjustment.

10. MISCELLANEOUS

• (a) The company secretary of the Company is Mr. Ching Kin Wai, who has been a member of the Hong Kong Institute of Certified Public Accountants since July 2013;

• (b) The registered office and the principal place of business of the Company is at Unit 803–4, 8/F, Everbright Centre, 108 Gloucester Road, Wanchai, Hong Kong;

• (c) The share registrar of the Company is Computershare Hong Kong Investor Services Limited, at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong; and

• (d) This circular has been prepared in both English and Chinese. In the case of any discrepancies, the English texts shall prevail over their respective Chinese texts.

– III-5 –

GENERAL INFORMATION

APPENDIX III

11. DOCUMENTS ON DISPLAY

Copies of the following documents will be available on display online on the Stock Exchange’s website (www.hkexnews.hk) and on the Company’s website (www.kongsun.com) for a period of 14 days from the date of this circular:

• (a) the Disposal Agreements;

• (b) the valuation report issued by Valor Appraisal & Advisory Limited, the text of which is set out in Appendix II to this circular;

• (c) the written consent referred to in the paragraph headed ‘‘Experts and consents’’ in this appendix; and

• (d) the material contracts referred to in the paragraph headed ‘‘Material contracts’’ in this appendix.

– III-6 –

NOTICE OF THE EGM

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KONG SUN HOLDINGS LIMITED 江山控股有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 295)

NOTICE IS HEREBY GIVEN THAT an extraordinary general meeting (the ‘‘EGM’’) of Kong Sun Holdings Limited (the ‘‘Company’’) will be held at Unit 803–4, 8/F, Everbright Centre, 108 Gloucester Road, Wanchai, Hong Kong on Friday, 24 June 2022 at 11:00 a.m. for the purposes of considering and, if thought fit, passing, with or without amendments, the following resolutions as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

Words and expressions that are not expressly defined in this notice shall bear the same meaning as that defined in the circular dated 19 May 2022 of the Company.

1. ‘‘THAT:

2. (i) the Disposal Agreements (copies of which have been tabled at the meeting marked ‘‘A’’ and signed by the chairman of the meeting for identification purpose) and the transactions contemplated thereunder, be and are hereby approved, ratified and confirmed; and

3. (ii) any one Director be and is authorised to do all such things and take all such actions as he or she may consider necessary or desirable to implement and/or give effect to the Disposal Agreements and the transactions contemplated thereunder.’’

4. ‘‘THAT:

5. (i) the Guarantees (copies of which have been tabled at the meeting marked ‘‘B’’ and signed by the chairman of the meeting for identification purpose) be and are hereby approved, ratified and confirmed; and

– EGM-1 –

NOTICE OF THE EGM

• (ii) any one Director be and is authorised to do all such things and take all such actions as he or she may consider necessary or desirable to implement and/or give effect to the Guarantees.’’

By Order of the Board Kong Sun Holdings Limited Mr. Jin Yanbing Executive Director

Hong Kong, 19 May 2022

Notes:

1. Any member of the Company entitled to attend and vote at the meeting is entitled to appoint one or more proxies (who must be an individual) to attend and, on a poll, vote in his/her stead. A proxy need not be a member of the Company.

2. To be valid, the form of proxy, together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy thereof must be lodged with the Company’s share registrar, Computershare Hong Kong Investors Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude a member from attending and voting in person at the meeting.

3. Where there are joint registered holders of any share, any one of such persons may vote at any meeting, either personally or by proxy, in respect of such share as if he/she were solely entitled thereto; but if more than one of such joint holders are present at any meeting personally or by proxy, that one of the said persons so present being the most or, as the case may be, the more senior shall alone be entitled to vote in respect of the relevant joint holding and, for this purpose, seniority shall be determined by reference to the order in which the names of the joint holders stand on the register of members in respect of the relevant joint holding.

As of the date of this notice, the Board comprises two executive Directors, Mr. Jin Yanbing and Mr. Qin Hongfu, one non-executive Director, Mr. Jiang Hengwen and three independent non-executive Directors, Mr. Lang Wangkai, Ms. Wu Wennan and Mr. Xu Xiang.

– EGM-2 –