Sunfly Intelligent Technology Co.,Ltd. (300423.SZ) has announced the termination of its original plan to acquire an 85% stake in Hupu Energy Environmental Technology Co., Ltd. ("Hupu Energy" or "the target company") through the issuance of shares, along with a related fundraising initiative. The company will instead pursue a cash-based acquisition of Hupu Energy equity, having already signed a "Framework Agreement for Asset Purchase with Cash Payment" with five original shareholders of Hupu Energy and the target company itself.

The decision comes as a result of significant income declines. Hupu Energy's first-half 2026 operating revenue is projected to drop sharply compared to previous years, impacted by policy adjustments to electricity price market reforms and lower-than-expected returns from wind power generation projects that began commercial operation in April 2026. This has led to considerable depreciation risks for the company's power operating assets. To protect investor interests, enhance transaction efficiency, and reduce costs, Sunfly Intelligent Technology has decided, after careful evaluation and friendly negotiations with the transaction counterparties, to terminate the original share issuance proposal and proceed with further cash-based negotiations to acquire Hupu Energy equity.