Summary of Key Points Core Viewpoint The company, Qinglong Pipe Industry Group Co., Ltd., has provided guarantees for loans taken by its subsidiaries, indicating a strategic move to support its operational financing needs while maintaining a manageable risk profile. Group 1: Guarantee Overview - Qinglong Pipe Industry has provided guarantees for its subsidiaries, Ningxia Qinglong Plastic Pipe Co., Ltd. and Ningxia Qinglong Steel-Plastic Composite Pipe Co., Ltd., for loans from Ningxia Bank and the National Development Bank [1][4] - The total guarantee amount for the subsidiaries is set at RMB 30 million, with a current guarantee balance of RMB 5 million, representing 2.03% of the company's net assets [1][4] Group 2: Financial and Operational Context - The company has approved a total bank credit limit of up to RMB 3.2 billion for operational and investment needs, which includes various forms of financing such as working capital loans and letters of credit [2][3] - The company allows mutual guarantees among its subsidiaries, with a cumulative guarantee limit of RMB 1.1 billion, ensuring that subsidiaries with a debt ratio below 70% can receive up to RMB 1 billion in guarantees [2][3] Group 3: Subsidiary Financial Performance - Ningxia Qinglong Plastic Pipe Co., Ltd. reported total assets of RMB 52.11 million and a debt ratio of 54.22% as of March 31, 2025, with a net profit of RMB 165.35 million [5] - Ningxia Qinglong Steel-Plastic Composite Pipe Co., Ltd. had total assets of RMB 31.86 million and a debt ratio of 48.93%, with a net profit of RMB 524.77 million [6] Group 4: Guarantee Contract Details - The guarantee covers all principal, interest, penalties, and associated costs related to the loans, with a guarantee period extending up to three years after the last debt maturity [7][8] - The company has confirmed that the financial management of its subsidiaries is sound, and the risks associated with providing these guarantees are considered manageable [9][10]

Overview of Guarantee Situation - Qinglong Pipe Industry Group Co., Ltd. has signed a maximum guarantee contract for its subsidiary, Ningxia Qinglong Plastic Pipe Co., Ltd., with Huaxia Bank [2][3] - The company has obtained approval for a total bank credit limit of up to 3.2 billion RMB for operational and investment needs [2][3] - The company and its subsidiaries can mutually guarantee each other, with the cumulative guarantee balance not exceeding the approved credit limit [2] Details of the Guarantee - The company has authorized its general manager's office to make specific decisions regarding the credit limit and related agreements [3] - Ningxia Qinglong Plastic Pipe Co., Ltd. is a wholly-owned subsidiary with a registered capital of 100 million RMB [4][5] - The maximum debt amount guaranteed is 60 million RMB, covering principal, interest, penalties, and other related costs [6][7] Guarantee Contract Specifics - The guarantee is a joint liability guarantee, meaning the company is liable for the debts if the subsidiary defaults [7][9] - The guarantee period is set for three years, from March 27, 2025, to March 27, 2028 [9] Board of Directors' Opinion - The board believes that the guarantee will not adversely affect the company or its shareholders, as it maintains control over the subsidiary's operations [11] Cumulative Guarantee Amounts - After this guarantee, the total amount of external guarantees provided by the company and its subsidiaries is 723.47 million RMB, which is 31.82% of the company's audited net assets for 2023 [12] - The actual guarantee balance is 369.12 million RMB, accounting for 16.24% of the company's audited net assets for 2023 [12][13]