Announcement of Progress in Jiangsu Southern Precision Engineering Co., Ltd.’s Use of Part of Idle Raised Funds to Purchase Financial Products

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Stock code: 002553 Stock abbreviation: Nanfang Precision Machinery Announcement No.: 2026-008

Jiangsu Nanfang Precision Machinery Co., Ltd.

Progress Announcement on the Use of Some Unused Proceeds for Purchasing Financial Products

The Company and all members of the Board of Directors guarantee that the information disclosed is true, accurate, and complete, and contains no false statements, misleading representations, or major omissions.

Jiangsu Nanfang Precision Machinery Co., Ltd. (hereinafter referred to as the “Company”) held the first meeting of the Seventh Session of the Board of Directors on December 22, 2025, and deliberated and approved the resolution on the use of some unused proceeds for cash management. The Company agreed to use unused proceeds of up to RMB 80,000,000 for cash management, with an investment term of no more than 12 months. Within the above limit and term, the funds may be used in a revolving manner. For details, please refer to the Announcement on the Use of Some Unused Proceeds for Cash Management (Announcement No.: 2025-080) disclosed by the Company on December 23, 2025 on the designated media and on the Juchao Information Network (www.cninfo.com.cn).

I. Details of the Purchase of Bank Financial Products This Time

1. Recently, the Company used RMB 20,000,000 of proceeds to purchase a financial product from Suzhou Bank Co., Ltd., Changzhou Branch. The specific details are as follows:

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II. Analysis of Investment Risks and Risk Control Measures

(I) Analysis of Investment Risks

1. Policy risk: This product is designed in accordance with the relevant regulations and policies currently in effect. If national macro policies and market-related regulatory policies change, it may affect the normal acceptance, investment, repayment, and other processes of the product, leading to reduced returns of the product or inability to obtain them.

2. Credit risk: In extreme circumstances in which Suzhou Bank experiences credit risk, such as Suzhou Bank declaring bankruptcy, the redemption of principal and returns for the structured deposit product may be affected. Sufficient awareness of this should be in place.

3. Liquidity risk: This product adopts a term structure design with one-time redemption at maturity. Customers have no right to terminate early. During the product’s existence period, if customers have liquidity needs, they may face liquidity risk arising from the inability to monetize the product at any time and the mismatch between the holding period and the timing of capital needs.

4. Market risk: Structured deposits only ensure the deposit principal and do not guarantee deposit returns. The return on this product depends on the market changes of the underlying reference asset. Affected by various factors in the market, during the product’s existence period, it may involve multiple market risks such as interest rate risk and exchange rate market risk, which may cause fluctuations in the product’s actual returns. Depending on different product design, unfavorable situations may occur, such as market interest rates rising significantly but the annualized return rate of the product not being adjusted upward in line with market interest rates, or situations where the underlying reference asset breaks through the target range, resulting in lower returns. The risk of uncertain returns is borne by the Company itself, and sufficient awareness should be in place.

5. Risk of managing counterparties: If cooperating counterparties breach the cooperation documents or handle matters improperly, it may affect the management of the product in this term, leading to losses of funds under this term’s product.

6. Risk of failure to establish the product: If, during the period from subscription start of this product to the end of subscription, the total subscription amount of the product does not reach the lower scale limit, or if there are significant market fluctuations, and after Suzhou Bank’s reasonable assessment it is difficult to provide this product to customers in accordance with the product prospectus, Suzhou Bank has the right to announce that this product is not established, and it will bear the risk that the investment deposit cannot be established.

7. Risk of early termination: During the investment period, if this structured deposit product occurs in the circumstances specified in the product prospectus for “early termination,” Suzhou Bank has the right to terminate this product early. Customers may face the risk of not being able to obtain the expected returns within the pre-set term and the risk of reinvestment.

8. Risk of delay: If, due to reasons such as delays in the underlying assets or asset portfolio under this product or inability to realize the assets, this product cannot pay returns or principal on time, or if risks arise due to technical factors such as computer system failures, this may result in a delay in the redemption of principal and returns. Customers will face the risk of extension of the term.

9. Risk of force majeure: Refers to the severe impact on the normal operation of financial markets due to the occurrence of force majeure factors such as natural disasters, wars, etc. It may affect the normal acceptance, investment, repayment, and other processes of the product, and even lead to reduced product returns or losses of principal. Any losses caused by force majeure risks shall be borne by customers themselves.

10. Risk of information transmission: If customers fail to check in a timely manner, or if customers are unable to promptly understand product information due to force majeure factors such as communication failures or system failures, the resulting responsibilities and risks shall be borne by customers.

11. Risk of the manager: The product manager or service institutions related to investment assets, due to limitations of experience, technology, and other factors, or due to improper handling of the above matters, may lead to the risk of losses in investment returns.

12. Risk of uncertain investment returns: Product return rates are affected by various market factors such as the underlying reference asset. In the event of the least favorable scenario (which may but may not occur), customers may obtain lower investment returns. The risk of uncertain investment returns is borne by the customer themselves. Customers should sufficiently identify and recognize it.

(II) Risk Control Measures

1. Within the above authorized limit, the Company’s funds are limited to purchasing short- and medium-term low-risk financial products and tools such as trust products, profit certificates, and structured deposits approved by regulatory institutions. The Company must not purchase tradable securities such as stocks and securities investment funds within or outside China, and their derivative products, as well as projects expressly prohibited from investment by regulatory authorities.

2. The Company will maintain close communication with the product issuing entity, promptly track the purchase status of the wealth management products, strengthen risk control and supervision, and strictly control the safety of funds.

3. The Company’s internal control audit department will conduct daily supervision over the usage and custody of funds of wealth management products, and will audit and verify the usage of funds on an irregular basis.

4. The Company’s independent directors and the audit committee of the Board of Directors have the right to supervise and inspect the usage of funds. If necessary, professional institutions may be engaged for auditing.

5. The Company will, in accordance with the relevant provisions of the Shenzhen Stock Exchange, timely disclose the investment status of wealth management products.

III. Impact on the Company

Using idle proceeds to purchase wealth management products is beneficial for improving the Company’s utilization efficiency of funds and the level of fund returns, increasing the Company’s profitability capability, and will not affect the Company’s normal business activities.

IV. The status of the Company’s use of some idle proceeds to purchase wealth management products during the twelve months prior to the date of this announcement

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This announcement is hereby issued.

Jiangsu Nanfang Precision Machinery Co., Ltd.

Board of Directors

April 3, 2026

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