Guangzhou Hongya CNC Machinery Group Co., Ltd. Announcement on the Completion of the First Grant Registration of the 2025 Stock Option Incentive Plan

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Guangzhou Hongya Numerical Control Machinery Group Co., Ltd.

Announcement on the Completion of Initial Grant Registration of the 2025 Stock Option Incentive Plan

The company and all members of the board of directors guarantee that the content of the information disclosure is true, accurate, and complete, with no false records, misleading statements, or major omissions.

Special reminders:

1. Stock option abbreviation: Hongya JLC1

2. Stock option code: 037956

3. Initial grant date of stock options: March 4, 2026

4. Completion date of initial grant registration of stock options: March 17, 2026

5. Initial grant quantity of stock options: 11.445 million (adjusted)

6. Number of individuals registered for the initial grant of stock options: 190 (adjusted)

7. Exercise price: 11.99 yuan per share.

Guangzhou Hongya Numerical Control Machinery Group Co., Ltd. (hereinafter referred to as the “Company”) has completed the initial grant registration work of the 2025 Stock Option Incentive Plan (hereinafter referred to as “this Incentive Plan”) in accordance with the “Regulations on the Management of Equity Incentives for Listed Companies” (hereinafter referred to as “the Regulations”), the rules of the Shenzhen Stock Exchange, and the Shenzhen branch of China Securities Depository and Clearing Corporation Limited, the specific situation is announced as follows:

I. Decision-making Procedures and Information Disclosure Completed

1. On December 29, 2025, the company convened the 13th meeting of the 5th board of directors, which reviewed and approved the proposal on the “2025 Stock Option Incentive Plan (Draft) and Its Summary”, the proposal on the “Implementation Assessment Management Measures for the 2025 Stock Option Incentive Plan”, and the proposal on “Requesting the Company’s Shareholders’ Meeting to Authorize the Board of Directors to Handle Matters Related to the 2025 Stock Option Incentive Plan”. The compensation and assessment committee of the board of directors expressed its opinion. Guohao Law Firm (Shenzhen) issued a legal opinion on the compliance of this incentive plan; Shanghai Rongzheng Enterprise Consulting Service (Group) Co., Ltd. issued an independent financial advisor report on the company’s implementation of this incentive plan.

2. From December 31, 2025, to January 10, 2026, the company publicized the list of incentive objects in the company’s announcement column. During the publicity period, the compensation and assessment committee of the board of directors did not receive any objections to the proposed incentive objects of this incentive plan. On January 15, 2026, the company disclosed the “Explanation of the Publicity of the List of Initial Grant Incentive Objects for the 2025 Stock Option Incentive Plan by the Compensation and Assessment Committee of the Board of Directors and Verification Opinions”, and on the same day, the company disclosed the “Self-Examination Report on Insider Trading of Company Stocks and Convertible Bonds by Insiders and Incentive Objects of the 2025 Stock Option Incentive Plan”.

3. On January 23, 2026, the company held the first extraordinary shareholders’ meeting of 2026, which reviewed and approved the proposal on the “2025 Stock Option Incentive Plan (Draft) and Its Summary”, the proposal on the “Implementation Assessment Management Measures for the 2025 Stock Option Incentive Plan”, and the proposal on “Requesting the Company’s Shareholders’ Meeting to Authorize the Board of Directors to Handle Matters Related to the 2025 Stock Option Incentive Plan”.

4. On March 4, 2026, the company held the 14th meeting of the 5th board of directors, which reviewed and approved the proposal on “Adjusting Matters Related to the 2025 Stock Option Incentive Plan” and the proposal on “Initial Granting of Stock Options to Incentive Objects of the 2025 Stock Option Incentive Plan”. The compensation and assessment committee of the board of directors verified the list of incentive objects for this grant and expressed its verification opinion. Guohao Law Firm (Shenzhen) issued a legal opinion.

II. Initial Grant and Registration of Stock Options

1. Stock option abbreviation: Hongya JLC1

2. Stock option code: 037956

3. Initial grant date: March 4, 2026.

4. Completion date of initial grant registration: March 17, 2026.

5. Source of shares: The company issues ordinary shares of company A to the incentive objects in a targeted manner.

6. Number of individuals registered for the initial grant: 190 (adjusted).

7. Exercise price: 11.99 yuan per share.

8. Initial grant quantity and distribution (adjusted): The company intends to grant 11.445 million stock options to the incentive objects, accounting for 2.70% of the total share capital of 424.232 million shares at the time of the announcement of this incentive plan draft.

The distribution of stock options granted in this incentive plan is shown in the following table:

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Note: ① None of the above incentive objects has been granted shares of the company through all effective stock incentive plans exceeding 1% of the total share capital at the time of the announcement of this incentive plan draft. The total number of underlying shares involved in all effective incentive plans of the company does not exceed 10% of the total share capital at the time of the announcement of this incentive plan draft.

② The incentive objects of this incentive plan do not include independent directors and shareholders or actual controllers and their spouses, parents, and children who separately or collectively hold more than 5% of the company’s shares.

③ The initial grant incentive objects of this incentive plan include one foreign employee, who is a key personnel for the corresponding position in the company and plays an important role in the company’s business development. The equity incentive for this foreign employee will help lead the company towards more long-term goals, aligning with the company’s actual situation and development needs, and is also beneficial for maintaining the long-term interests of the vast shareholders, in accordance with the provisions of the “Listing Rules of the Shenzhen Stock Exchange” and other relevant laws and regulations, and is necessary and reasonable.

④ Any discrepancy between the total sums and the individual detailed figures is due to rounding.

9. Validity period, grant date, waiting period, and exercise date of the stock options

(1) Validity period

The validity period of the stock options is from the initial grant date of the stock options until the date when the incentive objects have exercised all the granted stock options or the options are canceled, with a maximum of 60 months.

(2) Grant date

The grant date must be determined by the board of directors after the shareholders’ meeting approves this incentive plan and must be a trading day. The company must grant stock options and complete the announcement and registration within 60 days after the shareholders’ meeting approval. If the company fails to complete the above work within 60 days, the implementation of this incentive plan will be terminated, and the ungranted stock options will become invalid. The grant of reserved rights must be clarified within 12 months after the shareholders’ meeting approves this incentive plan.

(3) Waiting period

The stock options granted to the incentive objects of this incentive plan are subject to different waiting periods, calculated from the corresponding stock option grant date. The waiting periods for the initial grant are 13 months, 25 months, and 37 months, respectively. The incentive objects may not transfer, use as collateral, or repay debts with the stock options granted under this incentive plan during the waiting period.

(4) Exercise date

After the shareholders’ meeting approves this incentive plan, the stock options can start to be exercised after the waiting period ends. The exercise date must be a trading day, but exercise is not allowed during the following periods:

① Within 15 days prior to the announcement of the company’s annual report or semi-annual report; if the announcement date is postponed for special reasons, it is calculated from 15 days prior to the original scheduled announcement date to the day before the announcement;

② Within 5 days prior to the announcement of the company’s quarterly report, performance forecast, or performance quick report;

③ From the day a major event occurs or enters the decision-making process that may have a significant impact on the trading price of the company’s stocks and their derivatives until the day of legal disclosure;

④ Other periods specified by the China Securities Regulatory Commission and the Shenzhen Stock Exchange.

The aforementioned “major events” refer to transactions or other significant matters that the company should disclose according to the “Listing Rules of the Shenzhen Stock Exchange”. If relevant laws, regulations, or departmental rules provide other restrictions on the exercise period, those provisions shall prevail.

The waiting period, exercise times, and exercise ratios for the stock options granted in this incentive plan are arranged as follows:

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Upon satisfying the conditions for exercising stock options, the company will handle the exercise of stock options for the incentive objects during the exercise period. If the conditions for exercising stock options are not met during the period, the stock options cannot be exercised or will be deferred to the next exercise period, and the stock options for the current period will be canceled by the company. After the end of each exercise period, any stock options not exercised by the incentive objects will terminate, and the company will cancel them.

10. Conditions for exercising stock options

(1) Company-level performance assessment requirements

The assessment years for this incentive plan are the three accounting years from 2026 to 2028, with an evaluation conducted for each accounting year. The performance assessment targets for the initial grant of stock options for each year are shown in the following table:

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Note: ① The above “operating income” refers to the audited consolidated operating income of the company;

② The “net profit attributable to shareholders of the parent company” for the assessment years excludes the share-based payment expenses arising from this and other equity incentive plans and employee stock ownership plans (if any) implemented during the assessment period;

③ The above performance assessment indicators do not constitute the company’s performance forecast and actual commitment to investors.

If the company does not meet the above performance assessment targets, all stock options granted to the corresponding incentive objects for that assessment year that have not been exercised will not be exercisable and will be canceled by the company.

(2) Individual-level performance assessment requirements

According to the assessment methods formulated by the company, the performance evaluation results of the incentive objects are divided into four levels, and the assessment evaluation form applies to the assessment objects. Specifics are shown in the following table:

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If the company-level performance assessment is met, the number of stock options exercised by the incentive objects in that year = the number of stock options planned to be exercised by the individual that year × individual-level exercise ratio.

The incentive objects will exercise according to the actual number of stock options exercised, and any stock options that cannot be exercised in the assessment year will be canceled by the company.

III. Explanation of Consistency Between Stock Options Granted to Incentive Objects and Company Website Publicity

According to the relevant provisions of this incentive plan and the authorization of the first extraordinary shareholders’ meeting of 2026, on March 4, 2026, the 14th meeting of the 5th board of directors of the company reviewed and approved the proposal on “Adjusting Matters Related to the 2025 Stock Option Incentive Plan”, and the board of directors agreed to adjust the list of initial grant incentive objects and the number of grants, processing the 15,000 stock options that the incentive objects voluntarily waived as invalid. After adjustment, the number of initial grant incentive objects for this incentive plan was changed from 191 to 190, and the total amount of stock options to be granted to the incentive objects was adjusted from 12.66 million to 12.645 million, of which the initial grant of stock options was adjusted from 11.46 million to 11.445 million, while the number of reserved stock options remained unchanged.

Except for the above adjustments, other contents of the implemented incentive plan are consistent with the incentive plan approved by the first extraordinary shareholders’ meeting of 2026. According to the authorization of the first extraordinary shareholders’ meeting of 2026, the above adjustments fall within the scope of matters authorized by the shareholders’ meeting to the board of directors and do not harm the interests of the company and shareholders, especially minority shareholders; they comply with the relevant provisions on adjustments to incentive plans in the “Regulations” and other laws, regulations, and normative documents, and the content and approval process are legal and compliant.

IV. Impact of Rights Grant on the Company’s Financial Status

(A) Fair value of stock options and determination method

According to the relevant provisions of “Accounting Standards for Enterprises No. 11 - Share-based Payment” and “Accounting Standards for Enterprises No. 22 - Recognition and Measurement of Financial Instruments”, the company uses the Black-Scholes model (B-S model) as the pricing model to calculate the fair value of stock options and measures the granted stock options using this model on the grant date. The specific parameter selection is as follows:

1. Underlying stock price: 17.82 yuan/share (closing price on grant date March 4, 2026)

2. Validity periods: 13 months, 25 months, 37 months (terms from the grant date to the first exercise date for each period)

3. Historical volatility: 20.73%, 24.73%, 22.30% (using the historical annualized volatility of the Shenzhen Composite Index for the last 13 months, 25 months, 37 months, respectively)

4. Risk-free interest rate: 1.3018%, 1.3323%, 1.3628% (using the yield of 1-year, 2-year, and 3-year government bonds disclosed by China Bond Information Network)

5. Dividend rate: 0

(B) Expected Impact of This Incentive Plan on Each Period’s Operating Performance

The company determines the fair value of stock options on the grant date according to accounting standards and relevant valuation tools, and eventually confirms the share-based payment expenses for this incentive plan. Such expenses will be amortized during the implementation of this incentive plan according to the exercise arrangement ratio. The incentive costs arising from this incentive plan will be included in regular profits and losses.

According to Chinese accounting standards, the amortization situation of the rights costs for the initial grant in this incentive plan will impact the accounting costs for each period as shown in the following table:

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Note: ① The above results do not represent the final accounting costs. Actual accounting costs are related to the actual grant date, grant date stock price, and grant quantity, as well as the actual effectiveness and invalidity of the quantity.

② The final result of the impact on the company’s operating results will be subject to the annual audit report issued by the accounting firm.

Based on current information, the company preliminarily estimates that the amortization of related rights costs will impact net profits in each year within the validity period. However, at the same time, the implementation of this incentive plan will further enhance employee cohesion, team stability, and effectively stimulate the enthusiasm of the management team, thereby improving operational efficiency and bringing higher operating performance and intrinsic value to the company.

This announcement is hereby made.

Board of Directors of Guangzhou Hongya Numerical Control Machinery Group Co., Ltd.

March 18, 2026

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