Xiamen Hongxin Electronics Technology Group Inc(300657) : Announcement on increasing the factoring limit of accounts receivable of the company and its subsidiaries

Securities code: 300657 securities abbreviation: Xiamen Hongxin Electronics Technology Group Inc(300657) Announcement No.: 2022-010 Xiamen Hongxin Electronics Technology Group Inc(300657)

Announcement on increasing the factoring limit of accounts receivable of the company and its subsidiaries

The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.

1、 Overview

1. With the rapid growth of business of the company and its subsidiaries, the balance of accounts receivable of the company also increased synchronously. In order to reduce the balance of accounts receivable, accelerate the turnover of working capital and meet the needs of daily operating funds and further business expansion, Xiamen Hongxin Electronics Technology Group Inc(300657) (hereinafter referred to as “the company” or “the transferor”) held the 27th meeting of the third board of directors on August 24, 2021, and deliberated and adopted the proposal on the development of accounts receivable factoring business by the company and its subsidiaries, The company plans to carry out factoring business with Chinese financial institutions, similar financial institutions and other institutions with relevant business qualifications (hereinafter referred to as “cooperative institutions”) to revitalize accounts receivable. At this meeting, the total amount of accounts receivable authorized for transfer approved by the board of directors of the company shall not exceed RMB 300 million, and the period shall be 12 months from the date of deliberation and approval of the proposal by the board of directors.

2. The company held the 36th meeting of the third board of directors on January 19, 2022 and deliberated and adopted the proposal on increasing the factoring amount of accounts receivable. In order to further improve the efficiency of capital use and reduce the management cost of accounts receivable, The company and its wholly-owned subsidiary Xiamen Honghan Photoelectric Technology Co., Ltd. (hereinafter referred to as “Honghan photoelectric” or “Transferor”) intend to increase the amount of factoring of accounts receivable and continue to revitalize accounts receivable. The company plans to increase the amount of accounts receivable factoring business from 300 million yuan previously considered and approved to 600 million yuan. The company and its subsidiary Honghan optoelectronics can be used within the amount for a period of 12 months from the date when the proposal is considered and approved by the board of directors. The term of factoring business for single accounts receivable shall be subject to the specific contract.

3. According to the company law, Shenzhen Stock Exchange GEM Listing Rules, Shenzhen Stock Exchange GEM listed companies standardized operation guidelines and other laws and regulations and the articles of association, this transaction is within the approval authority of the board of directors and does not meet the approval standards of the shareholders’ meeting. The business does not constitute related party transactions or major asset restructuring.

2、 Main contents of factoring business

1. Business Overview: as the transferor, the company and its subsidiaries transfer the accounts receivable to the cooperative organization, and the cooperative organization pays factoring to the company or its subsidiaries according to the transferred accounts receivable.

2. Cooperative institutions: the cooperative institutions that the company and its subsidiaries intend to carry out factoring business are Chinese financial institutions, similar financial institutions and other institutions with relevant business qualifications. The specific cooperative institutions are selected by the management team authorized by the board of directors according to the cooperative relationship and comprehensive factors such as comprehensive capital cost, financing period and service ability.

3. Validity period of credit line: 12 months from the date when the proposal is considered and approved by the board of directors. The period of single factoring business shall be subject to the period agreed in the single factoring contract.

4. Factoring financing amount: it is proposed to increase the total amount of accounts receivable factoring from 300 million yuan previously considered and approved to 600 million yuan, which can be used by the company and its subsidiary Honghan optoelectronics.

5. Factoring method: outright transfer of accounts receivable creditor’s rights without recourse.

6. Factoring financing interest: determined by both parties through negotiation according to the market rate level.

3、 Main responsibilities and description

Carry out non recourse factoring business for accounts receivable. If relevant institutions of factoring business do not receive or fully receive accounts receivable within the agreed period, relevant institutions of factoring business have no right to recover the outstanding financing funds and corresponding interest from the company or subsidiaries.

4、 Impact on Listed Companies

After further increasing the factoring limit of accounts receivable, the balance of accounts receivable of the company and its subsidiaries can continue to decrease, which can accelerate the turnover of working capital of the company and meet the needs of further expansion of daily operating capital and business, will not have a significant impact on the daily operation of the company and its subsidiaries, will not affect the independence of the business of the company and its subsidiaries, and the risk is controllable.

5、 Opinions of the board of directors

The increase of factoring amount of accounts receivable by the company and its subsidiaries this time is conducive to further shorten the return time of accounts receivable, accelerate the company’s capital turnover, improve the efficiency of capital use, improve the asset liability structure and operating cash flow, so as to meet the needs of the rapid expansion of the company’s business, comply with the company’s development plan and overall interests, and comply with the provisions of relevant laws and regulations. The management team is authorized to go through relevant procedures for carrying out accounts receivable factoring business this time. 6、 Documents for future reference

1. Resolution of the 36th meeting of the third board of directors of the company.

Xiamen Hongxin Electronics Technology Group Inc(300657) board of directors January 19, 2022

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