HongGuang Lighting : SUPPLEMENTAL ANNOUNCEMENT IN RELATION TO DISCLOSEABLE TRANSACTION PROPOSED ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF THE TARGET COMPANY INVOLVING ISSUE OF CONSIDERATION SHARES UNDER GENERAL MANDATE

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

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of HongGuang Lighting Holdings Company Limited.

HONGGUANG LIGHTING HOLDINGS COMPANY LIMITED

宏 光 照 明 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 6908)

SUPPLEMENTAL ANNOUNCEMENT

IN RELATION TO

DISCLOSEABLE TRANSACTION

PROPOSED ACQUISITION OF THE ENTIRE ISSUED SHARE

CAPITAL OF THE TARGET COMPANY INVOLVING ISSUE OF

CONSIDERATION SHARES UNDER GENERAL MANDATE

Reference is made to the announcement of the Company dated 25 February 2021 in relation to the Sale and Purchase Agreement and the issue of Consideration Shares under the General Mandate (the ''Announcement''). Unless the context otherwise requires, capitalised terms used herein shall have the same meanings as those defined in the Announcement.

The Company would like to update the Shareholders and the potential investors of the Company and provide further information in relation to the Sale and Purchase Agreement and, in particular the sales contract entered into by the Target Group (the ''Contract'') and the patents application of the Target Group as disclosed in the Announcement.

UPDATES ON THE SALE AND PURCHASE AGREEMENT

The Company would like to update the Shareholders and the potential investors of the Company that save for the Conditions Precedent (c) and (i) as disclosed under the section headed ''Conditions Precedent'' in the Announcement pending the grant of the listing approval by the Listing Committee of the Stock Exchange, other Conditions Precedent have been fulfilled. The Company expects that Completion will take place by the long stop date provided in the Sale and Purchase Agreement (i.e. three months from the date of the Sale and Purchase Agreement) and would make further announcement upon Completion.

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THE CONTRACT

The Company would like to provide further information about the Contract. As disclosed under the section headed ''Information of the Target Group'' of the Announcement, the Target Group entered into the Contract with a total contract sum of not more than approximately RMB1.5 billion with an Independent Third Party pursuant to which the Target Group shall sell, and the Independent Third Party shall purchase or the Independent Third Party shall form joint ventures with local government authorities of the PRC to purchase a total quantity of approximately 0.47 million of fast charging products in the PRC in the coming five years.

The principal terms of the Contract are as follows:

Date: 6 February 2021

The parties: (1) the Target Subsidiary as the vendor; and

1. Beijing Dianxiaoer Network Technology Co., Ltd.* (北京電小二網路科技有限公 司) (''Beijing Dianxiaoer''), a company established in the PRC with limited liability, as the purchaser. To the best knowledge, information and belief of the Directors, Beijing Dianxiaoer trades under the brand names of ''張飛充電'' and ''張飛出行'', and is principally engaged on the provision of charging, battery swapping, sales of accessories and financial services to the electric bicycle riders.

Subject matter

Pursuant to the terms of the Contract, the Target Subsidiary shall sell, and Beijing Dianxiaoer shall purchase (or shall form joint ventures with local government authorities of the PRC to purchase), (i) fast charging battery pack (the ''Fast Charging Battery Pack''); and (ii) 12-pack fast charging switch station (the ''Fast Charging Switch Station'', together with the Fast Charging Battery Pack, the ''Fast Charging Products''), with total quantity of approximately 0.47 million.

Quantities of the Fast Charging Products to be sold

Pursuant to the terms of the Contract, total quantities of the Fast Charging Battery Packs and Fast Charging Switch Stations to be sold by the Target Subsidiary to Beijing Dianxiaoer in the coming five years are 452,510 and 19,905 respectively.

To the best knowledge of the Directors, the quantities were determined with reference to the expected demand of the Fast Charging Products of Beijing Dianxiaoer based on the market condition and the expected production capacity of the Target Company. As disclosed in the Announcement, the COVID- 19 pandemic has necessitated the food delivery for restaurants, therefore further increased the demand for food delivery riders. Given the increasing demand and cultural climate, it is expected that there is substantial potential for the electric bicycles industry in the PRC. In light of the increasing demand for food delivery riders and electric bicycles, a faster charging battery solution is extremely important to food delivery riders as it can largely reduce the time required for charging and in turn raise the

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efficiency and income of food delivery riders. Therefore, with the expected demand in electric bicycles, the Directors (including the non-executive Director and independent non-executive Directors) believe that the Fast Charging Products to be sold by the Target Company will be a preferred choice by the fast growing food delivery industry in the PRC, and the Target Group will be able to achieve the sales target as stipulated in the Contract.

After the entering into of the Contract and on 1 April 2021, the Target Subsidiary and Beijing Dianxiaoer confirmed in writing that Beijing Dianxiaoer would purchase the Fast Charging Products for five years in total contract sum of approximately RMB1.5 billion and in such quantities as stipulated in the Contract. Based on the advice obtained by the Target Subsidiary from the PRC counsel, the Contract, together with the above written confirmation, constitutes legal binding obligations on both parties for the supply of the Fast Charging Products.

Commercialization of the Fast Charging Products

Despite the entering into of the Contract, as disclosed in the Announcement, the Target Group has yet to commence commercialization of the Fast Charging Products, which are still under their development stage.

To the best knowledge of the Directors, as at the date of this announcement, the Target Group has completed the circuit design and functional verification of the Fast Charging Products.

The Company plans to achieve manufacturing readiness, in terms of team, plants, machinery, as well as supply chain and to commence the manufacturing of the Fast Charging Products after completion of the Sale and Purchase Agreement. As at the date of this announcement, the commercialisation process has been on the track and the Directors do not notice any events that may lead to a material delay of the commercialisation process. Based on the following reasons, the Directors also believe that the chance that the Fast Charging Products cannot be commercialized and hence the Target Subsidiary cannot fulfil its obligations under the Contract is minimal:

1. there is substantial market potential for the Fast Charging Products as disclosed in the Announcement;
2. after conducting market research of fast charging industry and based on the comparison between the Fast Charging Products and other fast charging solutions in the market conducted by the Group's electronic engineers, the Directors believed that the Fast Charging Products can achieve a higher efficiency in terms of energy loss as compared to other charging solutions in the market due to the Target Company's special circuit design, enhanced PCB layout, re-organizedhand-shaking algorithm and redesigned adapter interface. By the achievement of the increase in efficiency, together with appropriate implementation, the charging time of the battery using the fast charging solution offered by the Target Group can be reduced while having no significant impact on the life time of the battery;

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1. to the best knowledge, information and belief of the Directors after conducting the necessary research, in the prevailing industry in the PRC, currently there are no existing patents that would prohibit the Target Group from delivering and producing the Fast Charging Products. Therefore, the Directors are optimistic that the Target Group could gain the exclusivity on the commercialization and production of the Fast Charging Products applicable to the electric bicycles in the PRC;
2. the Target Group's management team has extensive experience in and is well connected within the fast-charging battery industry. Vendor Guarantor A, one of the key management of the Target Group, and the core research and development team of the Target Group, including the two key personnel the biography of whom are set out below under the section headed ''Management and Operation of the Target Group after Completion of the Acquisition'' in this announcement, agree to continue to serve the Target Group after Completion;
3. both the Light-emitting diode (the ''LED'') beads products of the Group and the Fast Charging Products are electronic products which are pertaining to the same semiconductors industry context and the technology, technical know-how, expertise and raw materials categories of the parts and components of the two products are inter-related. The Group has experienced electronics engineers who have the necessary expertise have to achieve the commercialisation of the Fast Charging Products. They have worked in the field of electronics engineering for not less than 20 years, not only possess knowledge in LED products but also possess knowledge in the electronics engineering field and they have the expertise to understand the technology and technical know- how behind electronics products once they are provided with the necessary technical specification documents. The Group's electronic engineers have conducted preliminary assessment of the production process and the prototype of the Fast Charging Products and reviewed the designs, research papers, technical specifications and documentations of the patents and are confident that they could make use of the technology behind the Fast Charging Products. Based on the findings of the Group's electronic engineers, the Board took the view that the Group possesses the technical know-how and expertise to handle the assembly of the Fast Charging Products; and
4. to the best knowledge, information and belief of the Directors, after conducting the necessary research, the Directors are optimistic that the Target Group could lease premises which already have the necessary production facilities, licenses and permits to conduct mass production of the Fast Charging Products after Completion without material delay.

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PATENTS IN RELATION TO THE FAST CHARGING PRODUCTS

As disclosed in the Announcement, the Target Group has made three applications for registration of patents in the PRC in relation to fast charging battery system, charging conversion system and charging module for charging stations, and fast charging equipment adaptable to charging stations for electric vehicles (the ''Patents'').

As at the date of this announcement, the applications for registration of the Patents are still in process. The Directors consider that the chance that the Patents' registration will not be granted is low for the reasons below:

1. before entering into the Sale and Purchase Agreement, the Target Subsidiary had sought legal advice from a PRC patents lawyer who advised that in relation to the Patents applications, the Patents possess the novelty and creativity that are required for patent grant. According to the opinion given by the PRC patents lawyer, the probability of unsuccessful application is low and there is a relatively optimistic prospect for grant of patent; and
2. to the best knowledge, information and belief of the Directors after conducting the necessary research, in the prevailing industry in the PRC, currently there have no existing patents that would prohibit the Target Subsidiary from delivering and producing the fast-charging solutions nor the fast-charging products.

If the three applications for registration of the Patents were unsuccessful, even though the Group would have less protection in terms of intellectual property rights, the Group would proceed with the commercialisation of the Fast Charging Products and it would not substantially hinder the Group's commercialisation plans on the Fast Charging Products.

MANAGEMENT AND OPERATION OF THE TARGET GROUP AFTER COMPLETION OF THE ACQUISITION

As disclosed above, both the LED beads products of the Group and the Fast Charging Products pertain to the same semiconductors industry context and the technology, technical know-how and expertise of the two products are inter-related. A LED is a semiconductor light source that emits light when current flows through its LED chip, the core component with its main functions are converting the electrical energy into light. While the core component of the Fast Charging Products is the fast charging chip as the main controller.

The electronic engineers of the Group have worked in the field of electronics engineering for not less than 20 years. They not only possess knowledge in LED products but also possess knowledge in the electronics engineering field and they have the expertise to understand the technology and technical know-how behind electronics products including the Fast Charging Products once they are provided with the necessary technical specification documents. The Target Subsidiary has possessed the technical know-how and inventions in relation to the Fast Charging Products and has made three applications for registration of invention patents in respect of the Inventions in the PRC. Therefore, the Acquisition creates a synergy effect for the Group and the Target Group. After Completion, the Group will

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cooperate closely with the Target Group to devise and implement the manufacturing plan of the Fast Charging Products based on the Target Group's invention patents, and identify any further opportunities to diversify the product categories of the Group by the fast charging technology and technical know- how.

In achieving commercialisation of the Fast Charging Products and to further develop the business of the Target Group, the Group will try to retain the key management and the core research and development team of the Target Group. The Group has been in active negotiations with the Target Group's staff and up to the date of this announcement, in addition to Vendor Guarantor A (one of the patents inventors), two key management of the Target Group, namely Mr. Min Junhui (one of the patents inventors) and Mr. Cheng Chaohu, have indicated their interests that they will continue to be retained by the Target Group after Completion. The biographies of two key management of the Target Group (whom the Target Group is finalizing the terms of employment and expects to enter into employment contracts effective upon Completion) are as follows:

Mr. Min Junhui

Mr. Min graduated from the Changchun Institute of Applied Chemistry, Chinese Academy of Sciences, and is engaged in the design and development of Organic Light-Emitting Diode (''OLED'') materials and supercapacitor materials.

He previously researched in replacement of expensive iridium complexes with neutral copper complexes as new high-performance,low-cost OLED materials, and has published more than ten research papers and invention patents. In 2010, Mr. Min received investment from Golden Sand Venture Capital Co., Ltd. to engage in the research and development of flexible color OLED displays. The technical team led by Mr. Min successfully combined Roll-to-Roll technology with vacuum small molecule coating technology to manufacture color flexible OLED displays, and won the first place in the Shaanxi Province Entrepreneurship Competition in 2016. The ruthenium oxide (''RuO2'') which is designed and developed by Mr. Min has good particle size and redox reversibility, can significantly improve the charging and discharging capacity of supercapacitors, and can significantly accelerate the application of supercapacitors in the fields of energy storage and fast charging.

Recently, Mr. Min and his team have successfully developed fast charging modules for electric bicycles and electric vehicles and played the main role in preparing the patents applied by the Target Company. Mr. Min also has fruitful financing, team building, and technical research and development experience.

Mr. Cheng Chaohu

Mr. Cheng graduated from the Department of Mechanical Engineering of Northeastern University with a master's degree.

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After graduation, he worked in a research institute of China North Industries Group and engaged in the development of a variety of automation equipment and mechanisms, including steel plate deburring machines, oil field shaft drag reduction rollers, train bogie preload tonnage machines, and the design of a variety of transformer boxes and power distribution cabinet. He previously also worked as the chief designer of the assembly line of reducer for Fast Nanjing Company.

Mr. Cheng is responsible for the metallic structure and sheet metal processing of the fast charging equipment, and has completed the design of the Fast Charging Battery Pack of the electric bicycle and the Fast Charging Switch Station.

The fast charging industry is competitive in the PRC and the Directors believe that the research and development capability and the ability to launch new innovative products are of utmost importance. The Group plans to devote resources in acquiring industry talents and develop and capture technology know-how in this industry. Therefore, save for the above key management of the Target Group, the Group will also actively solicit industry talents and management expertise who are experience in the relevant electronic product industry in order to strengthen the overall research and development and business development capability of the Group. The Group will continue to provide a stable working environment and consider providing attractive remuneration package, including monetary remuneration, fringe benefit and the benefit under the share options scheme of the Company as long term incentive plan to retain and solicit key management staff. Therefore, the Directors believe that the Fast Charging Products will be successfully commercialised.

As disclosed in the Announcement, there is substantial market potential for the Fast Charging Products and Beijing Dianxiaoer is the first customer of the Group. By leveraging on the technology advancement of the Fast Charging Products, the Directors believe that the Group can capitalize the demand of the Fast Charging Products to capture market share in the fast charging market in the PRC. The Group will expand its sales and marketing team in view of the anticipated increasing business volume.

As discussed in the paragraph headed ''Commericalisation of the Fast Charging Products'' above, the Directors are optimistic that the Target Group could lease premises which already have the necessary production facilities, licenses and permits to conduct mass production of the Fast Charging Products after Completion. As at the date of this announcement, the Target Group is in the process of identifying the suitable production facilities which can meet short to medium term demands of the Fast Charging Products. The Group will also make necessary preparation for the commmercialisation, including but not limited to, purchase of machineries, recruitment of production staff, supply chain management and trial run of production. It is expected the commercialisation of the Fast Charging Product to commence in September 2021.

Should there be any major development as discussed above, the Company will make announcements in accordance with the requirements under the Listing Rules as and when appropriate.

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CONCLUSION

In view of the above, the Board is optimistic about the potential for the Fast Charging Products and is of the view that the Acquisition would provide opportunities for synergies and in turn, bring in great investment opportunities to increase the Shareholders' values and in the interests of the Company and the Shareholders as a whole.

By order of the Board

HongGuang Lighting Holdings Company Limited

Zhao Yi Wen

Chairman and Executive Director

Hong Kong, 29 April 2021

As at the date of this announcement, the executive Directors are Mr. Zhao Yi Wen, Mr. Lin Qi Jian and Mr. Chan Wing Kin; the non-executive Director is Mr. Chiu Kwai San; and the independent non-executive Directors are Professor Chow Wai Shing, Tommy, Mr. Wu Wing Kuen, B.B.S. and Mr. Chan Chung Kik, Lewis.

If there is any inconsistency in this announcement between the Chinese and English versions, the English version shall prevail.

• For identification purposes only

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