Shanghai Taihe Water Technology Development Co., Ltd. Fifth Risk Warning Announcement Regarding the Possible Delisting of the Company's Stock

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Stock code: 605081 Stock abbreviation: *ST Taihe Announcement No.: 2026-019

Shanghai Taihe Water Technology Development Co., Ltd.

Announcement on the Fifth Risk Reminder Regarding the Possibility That the Company’s Stock May Be Delisted

The board of directors of the Company and all directors hereby guarantee that this announcement contains no false records, misleading statements, or material omissions, and assume legal responsibility for the authenticity, accuracy, and completeness of the contents.

Key Matters Highlighted:

● The Company faces the risk of delisting. The figures in this period’s performance forecast have not been audited. The Company’s stock was subject to delisting risk warnings on April 29, 2025. If, in respect of the audited financial data for fiscal year 2025, the relevant indicators for financial-type delisting as stipulated in the《Shanghai Stock Exchange Stock Listing Rules》are still met or there are other circumstances that cannot eliminate the delisting risk warning, the Company’s stock will be delisted.

● On March 20, 2026, the Company disclosed the《Announcement of the Reply of Shanghai Taihe Water Technology Development Co., Ltd. to the Regulatory Work Letter Concerning the Matters Related to the 2025 Annual Performance Forecast》(Announcement No.: 2026-012). The risks included are as follows:

(1) There is uncertainty in the recognition of revenue from the Company’s engineering project business. Some project customers and suppliers are related parties, which may trigger a delisting scenario where revenue is less than RMB 300 million and net profit is negative

In 2025, the Company recognized revenue from engineering projects of RMB 305 million. Of this, RMB 272 million was recognized in the fourth quarter, accounting for 89.13%. The Company’s actual cash receipts for project revenues this year were less than expected; the actual cash receipt ratio was approximately 30.22%, and the settlement ratio with suppliers was lower. The actual payment ratio was approximately 44.30%. Some project customers and suppliers are related parties. The auditors also need to obtain additional audit evidence to further demonstrate the sufficiency of the Company’s control over the projects and its significant investments. As to whether the projects are executed under the Company’s control and whether the procurement prices are fair, the auditors have doubts. For whether the relevant businesses are genuine and have commercial substance, and whether they meet the revenue recognition conditions, based on the audit procedures already implemented and the audit evidence already obtained, the assessment has not yet been completed. As of now, the annual audit work of the auditors is still in progress, and it is still not possible to determine whether the Company’s operating revenue after deducting business revenue unrelated to the main business and revenue lacking commercial substance for fiscal year 2025 is below RMB 300 million, or whether the Company expects to eliminate the circumstances of financial-type delisting indicators.

(2) Risk of deduction from operating revenue for newly added engineering business. In 2025, operating revenue from newly added engineering business was RMB 210 million. The auditors believe that, for newly added municipal engineering project types, there are differences from the original principal business in terms of application scenarios, core technologies, core products, etc. Whether revenue should be deducted needs to be further demonstrated with the help of industry experts.

(3) Risk of adjustments to revenue from integrated business. The auditors believe that in the Company’s system integration projects, six projects’ primary performance obligations are actually led and executed by the suppliers, and therefore should be accounted for using the net method; the Company should make standardized adjustments to the method used to recognize revenue for the relevant projects, with a cumulative difference amount of RMB 2.7826 million.

(4) The flow of reserve funds has not yet been clarified; the risk of funds being occupied cannot be ruled out. The auditors believe that among the personnel involved in the top ten reserve funds, there are individuals who have a family relationship with He Wenhui, the Company’s second-largest shareholder. Those individuals do not constitute statutory related parties. Because the auditors have not yet obtained personal bank transaction records for the personnel who borrowed reserve funds, as well as for the Company’s directors, supervisors, senior management, and key management personnel, the auditors are currently unable to complete comprehensive verification of the ultimate flow of funds and whether there is indirect occupation of company funds by related parties, etc. The relevant matters can be concluded only after additional materials are obtained and further audit procedures are performed.

(5) Risk that performance commitments cannot be fulfilled. By the end of 2025, the actual operating revenue of ZK Yanyun did not reach the performance commitment target for the period. The auditors believe that the financial condition of the party making the performance commitment is currently insufficient to support its obligation to fulfill the performance commitment compensation; there is a major risk of performance failure.

● On March 31, 2026, the Company disclosed the《Announcement of Shanghai Taihe Water Technology Development Co., Ltd. on the Preparation of the 2025 Annual Report and the Latest Audit Progress》(Announcement No.: 2026-017). As of the date of disclosure of this announcement, the audit work is still ongoing. Based on auditing standards, the audit institution has carried out a series of audit procedures around items in the Company’s financial statements, including but not limited to verifying document records, conducting on-site visits, etc. It focuses on key areas such as revenue recognition and the flow of reserve funds, with the aim of obtaining sufficient and appropriate audit evidence to express an appropriate audit opinion on the financial statements. As of the date of disclosure of this announcement, the audit institution still cannot determine whether the Company’s operating revenue after deducting business revenue unrelated to the main business and revenue lacking commercial substance for fiscal year 2025 is below RMB 300 million, or whether the Company expects to eliminate the circumstances of financial-type delisting indicators.

● On January 30, 2026, February 13, 2026, March 7, 2026, and March 21, 2026, the Company respectively disclosed the《Risk Reminder Announcement Regarding the Possibility That the Company’s Stock May Be Delisted》(Announcement No.: 2026-006),《Second Risk Reminder Announcement Regarding the Possibility That the Company’s Stock May Be Delisted》(Announcement No.: 2026-007),《Third Risk Reminder Announcement Regarding the Possibility That the Company’s Stock May Be Delisted》(Announcement No.: 2026-011), and《Fourth Risk Reminder Announcement Regarding the Possibility That the Company’s Stock May Be Delisted》(Announcement No.: 2026-013). According to the relevant provisions of the《Shanghai Stock Exchange Stock Listing Rules》and the《Shanghai Stock Exchange Listed Company Self-Regulatory Supervision Guideline No. 2—Business Handling》，for financial-type delisting risk companies, after the first risk reminder announcement is disclosed and until the annual report is disclosed, a risk reminder announcement shall be published once every 10 trading days. This announcement is the Company’s fifth risk reminder announcement. Investors are kindly requested to pay attention to investment risks.

I. Reasons why the stock may be delisted

On April 26, 2025, the Company disclosed the《Announcement of Shanghai Taihe Water Technology Development Co., Ltd. on the Implementation of Delisting Risk Warning and Suspension》 (Announcement No.: 2025-029). Because the Company’s audited net profits for fiscal year 2024, before and after deducting non-recurring profit or loss, were both negative, and the operating revenue after deducting business revenue unrelated to the main business and revenue lacking commercial substance was less than RMB 300 million, the Company’s stock was subject to the delisting risk warning starting from April 29, 2025. If the Company’s 2025 annual report shows circumstances as stipulated in Article 9.3.7 of the《Shanghai Stock Exchange Stock Listing Rules》，the Company’s stock may be delisted by the Shanghai Stock Exchange. Investors are kindly requested to pay attention to investment risks.

If any of the following circumstances are triggered, the Company’s stock will be delisted:

1. In the audited financial accounting reports, any of the circumstances stipulated in Item (1) and Item (2) of Article 9.3.2, Paragraph 1 of the《Shanghai Stock Exchange Stock Listing Rules》exists;

2. The audited financial accounting reports are accompanied by an audit report with a qualified opinion, an opinion disclaimer, or an adverse opinion;

3. The internal control over financial reporting is accompanied by an audit report with an opinion disclaimer or an adverse opinion, or the internal control over financial reporting audit report is not disclosed in accordance with the relevant rules; however, exceptions apply where, due to bankruptcy reorganization, a reorganization listing, or a major asset reorganization, the Company is unable to disclose the internal control over financial reporting audit report in accordance with the relevant rules;

4. Failure to disclose the annual report within the statutory deadline;

5. More than half of the directors are unable to ensure the authenticity, accuracy, and completeness of the annual report disclosed by the Company, and do not rectify the issue within the statutory deadline.

If the Company does not meet the conditions to remove the delisting risk warning as specified above, or fails to apply to remove the delisting risk warning within the prescribed time limit, the Company’s stock will face the risk of being delisted.

II. Disclosure of prior risk reminder announcements regarding delisting

On January 30, 2026, the Company disclosed the《Risk Reminder Announcement Regarding the Possibility That the Company’s Stock May Be Delisted》(Announcement No.: 2026-006). On February 13, 2026, the Company disclosed the《Second Risk Reminder Announcement Regarding the Possibility That the Company’s Stock May Be Delisted》(Announcement No.: 2026-007). On March 7, 2026, the Company disclosed the《Third Risk Reminder Announcement Regarding the Possibility That the Company’s Stock May Be Delisted》(Announcement No.: 2026-011). On March 21, 2026, the Company disclosed the《Fourth Risk Reminder Announcement Regarding the Possibility That the Company’s Stock May Be Delisted》(Announcement No.: 2026-013).

According to the relevant provisions of the《Shanghai Stock Exchange Stock Listing Rules》and the《Shanghai Stock Exchange Listed Company Self-Regulatory Supervision Guideline No. 2—Business Handling》，for financial-type delisting risk companies, within one month after the end of the accounting year in which their stock was subject to delisting risk warning, they shall disclose a risk reminder announcement regarding the possibility that their stock may be delisted, and shall disclose a risk reminder announcement once every 10 trading days between the disclosure of the first risk reminder announcement and the disclosure of the annual report. This announcement is the Company’s fifth risk reminder announcement. Investors are kindly requested to pay attention to investment risks.

III. Other matters

As of the date of this announcement, the audit work for the Company’s 2025 annual report is underway, and the final financial data shall be based on the audited 2025 annual report officially disclosed by the Company. Investors are kindly requested to pay attention to investment risks.

The Company hereby solemnly reminds investors that the Company’s information shall be subject to the relevant announcements published on the website of the Shanghai Stock Exchange (www.sse.com.cn) and in the Company’s designated information disclosure media. Investors are kindly requested to pay attention to investment risks.

Announcement is hereby given.

Board of Directors of Shanghai Taihe Water Technology Development Co., Ltd.

April 4, 2026

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