Huali Industrial: Responds to the Shanghai Stock Exchange's inquiries about the annual report, confirms that project income and investment accounting are compliant.

Huali Industrial announced that on May 25, 2026, the company received an inquiry letter from the Shanghai Stock Exchange regarding the 2025 annual report. After verification by the audit committee, it was determined that the two sewage treatment plant projects and the accounting error correction related to a large-scale water plant project, which were subject to qualified opinions, are not significantly different from similar municipal water projects. The reversal of the bidding timeline was due to government's urgent supervision of environmental protection projects, which is in line with industry practices. Both projects meet the revenue recognition criteria, and there is no premature recognition of revenue. In addition, the audit committee confirmed that the accounting treatment and disclosure of Huali Asia's equity investment in Ascend Clean is legal and compliant.