Gelonghui, April 17 | Baota Industrial (000595.SZ) announced that the holding subsidiary Guilin Haiwei Marine Electric Co., Ltd. (“Guilin Haiwei”) was suspended from participating in procurement activities from January 27, 2024 to October 26, 2024 by the Contract Supervision Bureau of the Equipment Development Department of the Central Military Commission. On February 28, 2024, Guilin Haiwei learned that a certain qualification may be suspended for a period of time, but no specific notice has been received, and no relevant documents have been received after inquiry, so it is impossible to determine whether the matter is true or not. Since then, Guilin Haiwei has communicated with customers several times without receiving this notice. After receiving the notice on April 8, 2024, Guilin Haiwei registered for storage, and immediately organized internal personnel to conduct a self-inspection to analyze the impact of the matter on Guilin Haiwei. On April 15, 2024, Guilin Haiwei reported the incident in writing to the company, and the company again organized personnel to verify the matter.

After learning that Guilin Haiwei was suspended from participating in procurement activities by the customer, the company attached great importance to it and immediately organized an inspection. It learned that the suspension was due to improper payment and use of funds related to Guilin Haiwei from 2013 to 2014. After communicating with the customer, Guilin Haiwei was not allowed to participate in its procurement activities during the suspension period, which affected the customer's order acquisition during the suspension period. However, contract orders that have been signed and are pending and are being fulfilled will not be affected. Currently, Guilin Haiwei's production is normal, and a contract has been signed to meet production tasks during the suspension period. The above matters have no significant adverse impact on the company's operations in the short term, and are expected to have little impact on the completion of the company's operating results this year.