Zoomlion Heavy Industry Science and Technology : (1) PROPOSED NON-PUBLIC ISSUANCE OF A SHARES AND (2) NOTICE OF EGM

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action you should take, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your H shares in Zoomlion Heavy Industry Science and Technology Co., Ltd.*, you should at once hand this circular and the accompanying proxy form to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

This circular appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of Zoomlion Heavy Industry Science and Technology Co., Ltd.

Zoomlion Heavy Industry Science and Technology Co., Ltd.*

中聯重科股份有限公司

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 1157)

1. PROPOSED NON-PUBLIC ISSUANCE OF A SHARES AND
2. 1. NOTICE OF EGM

A notice convening the EGM to be held at Multi-function Conference Room, Company Office Building, No. 361, Yin Pen South Road, Changsha City, Hunan Province, the PRC on Wednesday, 12 August 2020 at 2:00 p.m. is set out on pages EGM-1 to EGM-4 of this circular.

Whether or not you are able to attend the EGM, you are advised to read the notice of the EGM and to complete and return the enclosed proxy forms, in accordance with the instructions printed thereon. For holders of H Shares, the proxy form should be returned to the Company's H share registrar, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong in person or by post not less than 24 hours before the time stipulated for convening the EGM or any adjourned meeting thereof. Completion and return of the proxy forms will not preclude you from attending and voting at the EGM or at any adjourned meeting if you so wish.

*For identification purpose only

27 July 2020

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
2.	Proposed Non-public Issuance . . . . . . . . . . . . . . . . . . . . . . .	5
3.	EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28
4.	Voting by poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28
5.	Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . .	29
Appendix I - Feasibility analysis report on the use of proceeds of
	the Proposed Non-public Issuance . . . . . . . . . . . . . . . . .	I-1
Appendix II - Measures on making up diluted returns for the current period
	due to the Proposed Non-public Issuance . . . . . . . . . . . . . .	II-1
Appendix III - Shareholders' returns plan for the next three years (2020-2022) . . . . .	III-1
Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1

- i -

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

"A Share(s)"	domestic share(s) of RMB1.00 each in the share capital of the
	Company which are listed on the Shenzhen Stock Exchange and
	traded in RMB
"Administrative Measures"	Administrative Measures for the Issuance of Securities by Listed
	Companies 《( 上市公司證券發行管理辦法》)
"AGM"	the annual general meeting of the Company held on Monday, 29
	June 2020 at which, among other things, the General Mandate was
	granted by the Shareholders
"Announcement"	the announcement of the Company dated 5 July 2020 in relation
	to the Propose Non-public Issuance as supplemented by the
	announcements of the Company dated 6 July 2020 and 9 July 2020
"Articles"	the articles of association of the Company, as amended from time
	to time
"Benchmark Date"	the date on which the price of the A Shares to be issued under the
	Proposed Non-public Issuance was determined, being 6 July 2020
"Board"	the board of Directors
"Company"	中聯重科股份有限公司 (Zoomlion Heavy Industry Science and
	Technology Co., Ltd.*), a joint stock company incorporated in the
	PRC with limited liability
"Company Law"	the Company Law the PRC 《( 中華人民共和國公司法》)
"CSDC"	Chinese Securities Depository and Clearing Corporation Limited,
	Shenzhen branch
"CSRC"	the China Securities Regulatory Commission
"Director(s)"	director(s) of the Company
"EGM"	the extraordinary general meeting of the Company to be held at
	Multi-function Conference Room, Company Office Building, No.
	361, Yin Pen South Road, Changsha City, Hunan Province, the
	PRC at 2:00 p.m. on Wednesday, 12 August 2020
"General Mandate"	the general mandate granted by the Shareholders at the AGM to
	the Board to allot, issue and deal with not more than 20% of the
	number of A Shares in issue as at the date thereof
"Group"	the Company and its subsidiaries
*For identification purpose only

- 1 -

	DEFINITIONS
"H Share(s)"	overseas listed foreign share(s) of RMB1.00 each in the share
	capital of the Company which are listed on the Hong Kong Stock
	Exchange and traded in Hong Kong dollars
"Hainan Chengyisheng"	海南誠一盛企業管理合夥企業（有限合夥）(Hainan Chengyisheng
	Enterprise Management Partnership (Limited Partnership)*)
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
"Hong Kong Listing Rules"	the Rules Governing the Listing of Securities on The Stock
	Exchange of Hong Kong Limited
"Hong Kong Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Huaijin Cornerstone"	馬鞍山懷瑾基石股權投資合夥企業（有限合夥）(Maanshan Huaijin
	Cornerstone Equity Investment Partnership (Limited Partnership)*)
"Implementation Rules"	Implementation Rules of Non-public Issuance of Shares by Listed
	Companies 《( 上市公司非公開發行股票實施細則》)
"Jiaxing Chuangming"	嘉興創銘股權投資合夥企業（有限合夥）(Jiaxing	Chuangming
	Equity Investment Partnership (Limited Partnership)*)
"Latest Practicable Date"	24 July 2020, being the latest practicable date prior to the printing
	of this circular for the purpose of ascertaining certain information
	contained in this circular
"Ningbo Shituo"	寧波實拓企業管理有限公司	(Ningbo Shituo	Enterprise
	Management Co., Ltd.*)
"PRC" or "China"	the People's Republic of China excluding, for the purpose of this
	circular only, Hong Kong, Macau Special Administrative Region
	of the PRC, and Taiwan region
"Proposed Non-public Issuance"	the proposed non-public issuance of not more than 1,249,999,998
	A Shares to four Subscribers under the General Mandate
"RMB"	Renminbi, the lawful currency of the PRC
"Securities Law"	the Securities Law of the PRC 《(	中華人民共和國證券法》)
"Share(s)"	A Share(s) and H Share(s), or the context requires, either of them
"Shareholder(s)"	holder(s) of the Shares
"Shenzhen Listing Rules"	the Rules Governing Listing of Stocks on the Shenzhen Stock
	Exchange
"Strategic Cooperation Agreement I"	the strategic cooperation agreement entered into between the
	Company and Huaijin Cornerstone dated 4 July 2020

*For identification purpose only

- 2 -

DEFINITIONS

"Strategic Cooperation Agreement II" the strategic cooperation agreement entered into between the Company and Taiping Life Insurance dated 4 July 2020

"Strategic Cooperation Agreement III" the strategic cooperation agreement entered into between the Company and Hainan Chengyisheng dated 4 July 2020

"Strategic Cooperation Agreement IV" the strategic cooperation agreement entered into between the Company and Ningbo Shituo dated 4 July 2020

"Strategic Cooperation Agreements"	collectively, (i) the Strategic Cooperation Agreement I; (ii) the
	Strategic Cooperation Agreement II; (iii) the Strategic Cooperation
	Agreement III; and (iv) the Strategic Cooperation Agreement IV
"Subscribers"	Huaijin Cornerstone, Taiping Life Insurance, Hainan
	Chengyisheng and Ningbo Shituo
"Subscription Agreement I"	the subscription agreement entered into between the Company
	and Huaijin Cornerstone dated 4 July 2020 in relation to the
	subscription of 587,121,212 A Shares
"Subscription Agreement II"	the subscription agreement entered into between the Company
	and Taiping Life Insurance dated 4 July 2020 in relation to the
	subscription of 359,848,484 A Shares
"Subscription Agreement III"	the subscription agreement entered into between the Company
	and Hainan Chengyishang dated 4 July 2020 in relation to the
	subscription of 189,393,939 A Shares
"Subscription Agreement IV"	the subscription agreement entered into between the Company and
	Ningbo Shituo dated 4 July 2020 in relation to the subscription of
	113,636,363 A Shares
"Subscription Agreements"	collectively, (i) the Subscription Agreement I; (ii) the Subscription
	Agreement II; (iii) the Subscription Agreement III; and (iv) the
	Subscription Agreement IV
"Taiping Life Insurance"	太平人壽保險有限公司 (Taiping Life Insurance Co., Ltd.*)
"%"	per cent.
*For identification purpose only

- 3 -

LETTER FROM THE BOARD

Zoomlion Heavy Industry Science and Technology Co., Ltd.*

中聯重科股份有限公司

(a joint stock company incorporated in the People's Republic of China with limited liability)

	(Stock Code: 1157)
Members of the Board	Registered Office
Chairman and executive Director:	No. 361, Yin Pen South Road,
Dr. ZHAN Chunxin	Changsha City, Hunan Province,
	the PRC
Non-executive Directors:
Mr. HE Liu
Mr. ZHAO John Huan
Independent non-executive Directors:
Mr. ZHAO Songzheng
Mr. LAI Kin Keung
Ms. LIU Guiliang
Mr. YANG Changbo
Dear Shareholders,

1. PROPOSED NON-PUBLIC ISSUANCE OF A SHARES AND
2. 1. NOTICE OF EGM

1. INTRODUCTION

Reference is made to the Announcement.

As disclosed in the Announcement, the Board has approved the Proposed Non-public Issuance, pursuant to which the Company will allot and issue not more than 1,249,999,998 A Shares to four Subscribers under the General Mandate. The Proposed Non-public Issuance is expected to raise up to RMB6.6 billion in funds.

The purpose of this circular, of which this letter forms a part, is to give you notice of the EGM and to provide you with all the information reasonably necessary to enable you to make an informed decision on whether to vote for or against the proposed resolutions at the EGM.

*For identification purpose only

- 4 -

LETTER FROM THE BOARD

2. PROPOSED NON-PUBLIC ISSUANCE

A. Fulfilment of conditions for the Proposed Non-public Issuance

Having reviewed matters relevant to the Company based on the qualifications and conditions for non-public issuance of A shares by listed companies, the Board is of the view that the Company fulfils each criterion set out under the Company Law, the Securities Law, the Administrative Measures and the Implementation Rules.

1. Proposed Non-public Issuance
2. 1. Structure of the Proposed Non-public Issuance

Type and par value of A Shares with a par value of RMB1.00 each

  shares to be issued

Method and timing By way of a non-public offering, and the A Shares will be issued at an appropriate time to the Subscribers within the validity period approved by the CSRC

Subscribers and (1) Huaijin Cornerstone, an equity investment institution

• subscription method which focuses on investments into local Chinese enterprises, is controlled by Shenzhen Linxin Cornerstone Equity Investment Capital Management Partnership (Limited Partnership) (as general partner), which is indirectly wholly-owned by ShenZhen Co-Stone Asset Management Co., Ltd. ("Co-StoneAsset"). Co-Stone Asset is a well-established professional equity investment company dedicated to the equity investment of quality local companies in China for a long time. As at the Latest Practicable Date, Co-Stone Asset was controlled by Ma'anshan Shenzhou Cornerstone Equity Investment Partnership (Limited Partnership), which was held as to 40.31%, 18.45%, 14.06%, 12.11%, 11.97% and 3.10% by Zhang Wei, Lin Ling, Wang Qiwen, Tao Tao, Chen Yanli and Han Zaiwu, respectively, each a third party independent of and not connected with the Company and its connected persons (as defined in the Hong Kong Listing Rules);
• 1. Taiping Life Insurance, a group company of China Taiping Insurance Group Ltd. and a mid-large life insurance player in China headquartered in Shanghai, the PRC;
  2. Hainan Chengyisheng, a limited partnership which is principally engaged in corporate management, socio- economic consultancy service, financial consultancy service, investment with self-owned funds and management of corporate headquarters; and

- 5 -

LETTER FROM THE BOARD

1. Ningbo Shituo, an investment company which focuses on venture capital and private equity investments into new energy, new materials, artificial intelligence, industrial Internet, advanced manufacturing, environmental protection,
   technology innovation, mining and other industrial sectors, is controlled by China Minmetals Co., Ltd., (中國五

礦集團有限公司) ("China Minmetals"), which has a significant presence in the metallurgical engineering, property construction and metals and mining sectors and has established strategic cooperation in various aspects with major players of the construction industry in the PRC.

Each Subscriber will subscribe the A Shares to be issued in cash.

As at the Latest Practicable Date, Hainan Chengyisheng was held as to 24.48%, 6.49% and 6.49% by Dr. Zhan Chunxin (executive Director), Qin Xiuhong (senior manager of the Company) and Yang Duzhi (senior manager of the Company), respectively, each as a limited partner. The remaining interest in Hainan Chengyisheng was held as to 0.10% by Changsha Rongyisheng Technology Development Co., Ltd.* ("Changsha Rongyisheng") as general partner and 62.44% in aggregate by ten employees of the Company as follows, each as a limited partner:

Name	Shareholding (%)
Liu Jie	7.99
Huang Qun	7.99
Li Jiangtao	7.49
Dong Jun	6.49
Su Min	6.49
Hu Keman	5.99
Yuan Ye	5.00
Ren Huili	5.00
Chen Tiejian	5.00
Lu Qing	5.00

Changsha Rongyisheng was held by Lu Qing and Xiong

Xiaozhi, each an employee of the Company, in equal shares.

Benchmark Date for The Benchmark Date for determining the price of the A Shares

• price determination, to be issued is 6 July 2020.
• issue price and
• pricing principles The issue price will be RMB5.28 per A Share, which is not less than 80% of the average trading price of the A Shares in the 20 trading days prior to the Benchmark Date, in compliance with Article 38(1) of the Administrative Measures and Rule 7 of the Implementation Rules. The average trading price of the A Shares in the 20 trading days prior to the Benchmark Date equals to the aggregate turnover in value of the A Shares in the 20 trading days prior to the Benchmark Date divided by the total trading volume of the A Shares in the 20 trading days prior to the Benchmark Date.
• • 6 -

LETTER FROM THE BOARD

If the Company distributes dividend, bonus shares or there occurs any capitalisation issue or other ex-right and ex-dividend event during the period between the Benchmark Date to the date of issuance, the issue price of the A Shares will be adjusted in accordance with the relevant rules and regulations.

The closing price of the A Shares on 3 July 2020, being the last trading day prior to the date on which the terms of the issue were fixed, was RMB7.22 per A Share.

The closing price of H Shares on 3 July 2020, being the last trading day prior to the date of the Subscription Agreements, was HK$6.66 per H Share. The average closing price of the H Shares in the five trading days immediately prior to the date of the Subscription Agreements was HK$6.15 per H Share. Based on the middle exchange rate of HK$1 to RMB0.91142 announced by the People's Bank of China on 3 July 2020, the issue price of RMB5.28 per A Share is equivalent to approximately HK$5.79, which represents a discount of approximately 13.06% to the benchmarked price of the H Shares under Rule 13.36(5) of the Hong Kong Listing Rules.

Size of the issue	The	subscription amount	payable		by Huaijin	Cornerstone,
	Taiping Life Insurance, Hainan Chengyisheng and Ningbo
	Shituo under the Proposed Non-public Issuance will not be
	more than RMB3.1 billion, RMB1.9 billion, RMB1 billion
	and RMB600 million, respectively. Based on the issue price
	of RMB5.28 per A Share, a total number of not more than
	1,249,999,998 A Shares will be issued, representing not more
	than 20% of the total number of A Shares in issue on the date of
	the AGM. Details of the subscription are as follows:
							Proposed
				Proposed		number of
			subscription	A Shares to be
	No.	Subscriber	amount		subscribed	Percentage
		(RMB million)				(%)
	(1)	Huaijin Cornerstone	3,100	587,121,212	46.97
	(2)	Taiping Life	1,900	359,848,484	28.79
		Insurance
	(3)	Hainan	1,000	189,393,939	15.15
		Chengyisheng
	(4)	Ningbo Shituo	600	113,636,363	9.09
		Total	6,600		1,249,999,998	100.00

- 7 -

LETTER FROM THE BOARD

If the Company reduces the investment projects to which the fund raising relates pursuant to the requirements of the CSRC (including but not limited to reductions in the overall issue size and/or in any single investment project to which the fund raising relates) and therefore reduces the overall issue size, the final subscription amount payable under the relevant Subscription Agreement by a Subscriber will be reduced accordingly (i.e. the reduced subscription amount equals to the subscription amount before reduction multiplied by the issue size after reduction as divided by the total issue size of RMB6.6 billion before reduction). The issue size and the number of A Shares to be finally subscribed by a Subscriber will be adjusted accordingly.

If the Company distributes dividend, bonus shares or there occurs any capitalisation issue or other ex-right and ex-dividend event during the period between the Benchmark Date to the date of issuance, the issue price of the A Shares will be adjusted in accordance with the relevant rules and regulations.

Conditions precedent The Proposed Non-public Issuance is subject to the fulfilment of the following conditions:

(1) approval from the Shareholders at the EGM with respect to

			the Proposed Non-public Issuance; and
		(2)	approval from the CSRC of the Proposed Non-public
			Issuance.
Lock-up period	No transfer of any A Shares to be subscribed within 18 months
		from the date of completion of the issuance. During the
		period between the date of completion of the issuance and the
		expiration of the lock-up period, if a Subscriber obtains any
		additional A Shares through the distribution of bonus shares or
		capitalisation issue by the Company or for other reasons, these
		will be subject to the aforesaid agreed lock-up arrangement.
		In the event that any Subscriber reduces its shareholding in
		the	Company upon the expiration of the lock-up period, it
		is required to observe the relevant requirements under the
		Company Law, the Securities Law, the Shenzhen Listing Rules,
		other laws, regulations, rules and regulatory documents and the
		Articles.
Place of listing of	Upon expiration of the lock-up period, the A Shares to be issued
	the shares to	will be listed and traded on the Shenzhen Stock Exchange
	be issued
Rights attached to	The A Shares to be issued will rank pari passu with the existing
	the shares to	A Shares and H Shares in all respects
	be issued

- 8 -

LETTER FROM THE BOARD

Arrangement for	After completion of the issuance, all Shareholders will be
retained profits	entitled to receive the retained but undistributed profits of the

• before the issue Company in proportion to their respective shareholdings in the Company upon completion of the issuance

Validity period	The resolutions in respect of the issue will remain effective for
	12 months from the date on which such resolutions are approved
	in a general meeting of the Company.
	The number of A Shares to be issued will not exceed 20% of
	the total number of A Shares in issue as at date of the AGM.
	If the Company fails to obtain approval or permission from, or
	otherwise complete registration with, the regulatory authority
	with respect to the Proposed Non-public Issuance before the
	expiration of the General Mandate, the implementation of the
	Proposed Non-public Issuance can continue subject to the
	authorised limit under the general mandate to be refreshed and
	sought from the Shareholders in the following year in a general
	meeting of the Company. In such case, the Company will not be
	required to convene another general meeting or class meetings
	of Shareholders to reconsider and approve matters relating to the
	Proposed Non-public Issuance.
Use of proceeds	The total amount of gross proceeds from the Proposed Non-
	public Issuance will not exceed RMB6.6 billion, to be used in
	the following projects:
							Proposed
				Total		amount of
				investment	proceeds to be
	No.	Project name	amount		invested
				(RMB million)		(RMB million)
	(1)	Excavating machinery	3,083.13	2,400
			intelligent manufacturing
			project
	(2)	Project for upgrading of	829.77	350
			intelligent manufacturing
			of mixer product
	(3)	Key components intelligent	1,667.50	1,300
			manufacturing project
	(4)	Intelligent manufacturing	442.628	250
		project of key hydraulic
			parts (hydraulic valves)
	(5)	Liquidity replenishment	2,300	2,300
		Total	8,323.028		6,600

- 9 -

LETTER FROM THE BOARD

	If the actual net proceeds from the Proposed Non-public
	Issuance are less than the total amount of proceeds proposed to
	be invested in the above projects, the Company will adjust and
	finally determine the specific investment projects to be funded
	by the proceeds, their priority and the specific investment
	amount each project will receive based on the actual net
	proceeds and the priority and importance of the projects, and
	will make up the shortfall with its internal funds or through
	other financing methods.
	Pending the receipt of the proceeds from the Proposed Non-
	public Issuance and depending on the actual progress of the
	projects, the Company will implement such projects by raising
	funds via other means. Such capital will be replaced with the
	proceeds upon their receipt in accordance with the relevant
	regulations.
Impact on control of	The Company did not have prior to the Proposed Non-public
the Company	Issuance, and will not have after completion of the Proposed
	Non-public Issuance, a controlling Shareholder or an actual
	controller. As such, the Proposed Non-public Issuance will not
	result in a change of control in the Company.

1. Effect of the Proposed Non-public Issuance on the shareholding structure of the Company

As at the Latest Practicable Date, the total issued share capital of the Company was 7,899,644,788 Shares, comprising 1,388,207,086 H Shares and 6,511,437,702 A Shares.

To the best knowledge of the Directors, the shareholding structure of the Company (i) as at the Latest Practicable Date and (ii) immediately upon completion of the Proposed Non-public Issuance (assuming that there is no change in the number of Shares in issue between the Latest Practicable Date and the date of completion of the Proposed Non-public Issuance) is:

			Shareholding as			Shareholding immediately upon completion
		at the Latest Practicable Date	of the Proposed Non-public Issuance
				Approximate	Approximate			Approximate	Approximate
				percentage	percentage			percentage	percentage
				of the total	of the total			of the total	of the total
				number of	number of			number of	number of
	Class of	Number of		A Shares	Shares	Number of	A Shares	Shares
Name of shareholder	shares	shares		in issue	in issue	shares	in issue	in issue
			(%)			(%)				(%)		(%)
Huaijin Cornerstone	A	-		-	-	587,121,212		7.56		6.42
Taiping Life Insurance	A	-		-	-	359,848,484		4.64		3.93
Hainan Chengyisheng	A	-		-	-	189,393,939		2.44		2.07
Ningbo Shituo	A	-		-	-	113,636,363		1.46		1.24
Other A Shareholders	A	6,511,437,702	100			82.43		6,511,437,702		83.89		71.17
H Shareholders	H	1,388,207,086		-	17.57		1,388,207,086		-	15.17
Total		7,899,644,788	100.00		100.00	9,149,644,786	100.00	100.00

- 10 -

LETTER FROM THE BOARD

(III) General Mandate

The A Shares to be issued under the Proposed Non-public Issuance will be allotted and issued by the Company pursuant to the General Mandate, which allows the Board to allot, issue and deal with not more than 20% of the number of A Shares in issue as at the date of the AGM (being 1,302,010,311 A Shares).

(IV) Fund raising activities in the past 12 months

The Company has not raised any funds from the issue of equity securities in the 12 months immediately preceding the date of the Announcement.

(V) Reasons and benefits of the Proposed Non-public Issuance

To improve the level of intelligent manufacturing of the Company, further reduce costs and increase efficiency

Construction machinery falls within the scope of high-end equipment manufacturing industry, which is a typical capital- and technology-intensive industry requiring high level of investment and technical input. The manufacturing of construction machinery industry is characterised by wide product range, numerous parts and components, small output and complicated manufacturing processes. The intelligent manufacturing of construction machinery towards which the proceeds from the Proposed Non-public Issuance is proposed to be used will promote the ongoing optimisation of design, production, management, service and other aspects of the Company and procure their comprehensive integration, which is a necessary manoeuvre for the Company to foster effective transformation and upgrading. The intelligent manufacturing of construction machinery will involve the setting up of an automated plant in compliant with Industry 4.0 Standard, which enables a gradual implementation of data traceability at each production section and along the production process, in order to effectively enhance the operation efficiency, reduce production costs and laying a solid technical foundation for rapid and ongoing development of the Company.

To enhance self-sufficiency of core parts and components and increase competitiveness of the Company

Due to the long-term monopoly of technologies relating to core parts and components by developed countries as well as insufficient technicians and experts with innovative design capabilities and lack of key raw materials for certain core parts and components in China, the industry has long been relying on foreign imports of three core parts and components required for construction machinery in China, namely hydraulic parts and components, engines, and electronic control systems. The proceeds from the Proposed Non- public Issuance will be invested in upgrading key hydraulic parts, particularly focusing on developing key technologies, increasing investment in the research and development equipment of hydraulic parts and components so as to strengthen the inadequate hydraulic sector of both the Company and China, and also to develop its own core control technology in the hydraulic sector, strengthen the capabilities of technology research and development and transformation of industry, and increase competitiveness of the Company.

- 11 -

LETTER FROM THE BOARD

To replenish liquidity and facilitate sustainable operation of the Company

The manufacturing of construction machinery requires a wide range of costly equipment, thus involving high investment in fixed assets. Accordingly, the ability of a construction machinery company to make huge investment in purchasing advanced production equipment to manufacture high-end products with high reliability, precision and sensitivity that meets the requirements of downstream customers has become the key to its development. The construction machinery industry is also capital-intensive, where the industry players need substantial liquidity to support day-to-day manufacturing.

The proceeds from the Proposed Non-public Issuance will be used by the Company to satisfy its working capital requirements, providing financial support for the future business upgrade and technology development of the Company, laying a sound foundation for the continuous healthy development of subsequent business and for strengthening the competitive position in the industry. In addition, the Proposed Non-public Issuance will help to replenish liquidity of the Company, which will improve its financial strength, optimise its capital structure, increase flexibility and long-term sustainability of its funds, reduce financial risks and enhance overall risk resistant capacity.

To introduce strategic investors for promoting the long-term development of the Company

Through the Proposed Non-public Issuance, the Company intends to introduce Huaijin Cornerstone, Taiping Life Insurance, Hainan Chengyisheng and Ningbo Shituo as strategic investors to facilitate the development of the Company. Such strategic investors will contribute to the Company by fully capitalising their respective industrial resources, market channels and other advantages, and cooperate with the Company in principal businesses, financial services and other aspects. The Proposed Non-public Issuance will allow the Company to capture material strategic resources, facilitating further expansion of new product sales channels and promoting sales performance, which is conducive to the long- term development of the Company.

1. Proposal for the Proposed Non-public Issuance

Please refer to the overseas regulatory announcement of the Company dated 5 July 2020, which contains the full text of the proposal for the Proposed Non-public Issuance in the Chinese language.

1. Strategic Cooperation Agreements

As part of the Proposed Non-public Issuance, the Company proposes to enter into the Strategic Cooperation Agreements with the Subscribers.

1. Parties to the Strategic Cooperation Agreements
   1. Strategic Cooperation Agreement I
2. 1. The Company
   2. Huaijin Cornerstone

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LETTER FROM THE BOARD

1. 1. Strategic Cooperation Agreement II
   2. 1. The Company
      2. Taiping Life Insurance
   3. Strategic Cooperation Agreement III
   4. 1. The Company
      2. Hainan Chengyisheng
   5. Strategic Cooperation Agreement IV
   6. 1. The Company
      2. Ningbo Shituo
2. Date of the Strategic Cooperation Agreements
3. 1. July 2020

1. Key terms of the Strategic Cooperation Agreement I
   1. To promote technology research and development and upgrade of the products of the Company

Co-Stone Asset, which indirectly controls Huaijin Cornerstone, has a proven record of successful investments in and substantial resources of the machinery manufacturing sector, with investments in numerous sub-sectors and upstream and downstream sub-sectors, such as high-end manufacturing, intelligent equipment, industrial robots and construction machinery. Its investment targets include Tonly Heavy Industries, Western Heavy Industry, Sunward Intelligent, Efort, Huazhong Numerical Control and Yuandong Drive Shaft, etc. It has a deep understanding of the development pattern, technology and product development and management of the industry. SenseTime and 4paradigm, both leading artificial intelligence companies within the investment portfolio of Co-Stone Asset, will collaborate and provide core artificial intelligence technology with the Company in upgrading its products and production management and facilitating the Company to transform business into intelligent construction and agricultural machinery business which is the key strategy for leading industry players to upgrade their products in future. Co-Stone Asset will deploy and continue to deploy its strategic resources, including portfolio companies, business partners from upstream and downstream industry and funds' promoters, to collaborate with the Company in the joint research and development of product technology with the aim of achieving synergic development and improving the core competitiveness and innovation capability of the Company.

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LETTER FROM THE BOARD

2. To enhance the corporate management of the Company

The investment team of Co-Stone Asset comprises members from leading players in the industry, investment banks, investment institutes, consultants and other large financial institutions and with substantial experience in equity investment and corporate management. From the completion date of the Proposed Non-public Issuance, Huaijin Cornerstone will perform its duties and lawfully exercise rights as a Shareholder, such as the right to vote and the right to propose resolution, in a diligent manner. It will also actively participate in the governance of the Company, assist the Board to make rational decision through its nomination of directors, and protect the legitimate interests of the Shareholders. In addition to information support in deciding strategic development, such as industry development information, it will provide the Company with reasonable and rational proposals on governance improvements, staff incentives and market value management. It will also identify and recommend experience management talents to the Company to optimise its corporate governance structure and practice, and ultimately significantly enhance the management quality and inherent value of the Company.

3. To assist the Company in exploring market and business presence

Guangdong, Anhui, Shanghai and Zhejiang are the key provinces/municipality where Co-Stone Asset has established long-term cooperation with local government authorities, listed companies and other sales channels. Co-Stone Asset can offer abundant local resources relating to markets, channels and the industry to the Company for expansion of sales channels and business presence. It will actively promote cooperation between the Company and portfolio companies in order to create synergies in sales channels, brand resources and supply chains.

4. To provide financial service and capital support to the Company

Co-Stone Asset has accumulated extensive experience in financial market and established long-term cooperation with major financial institutes, whether local or foreign. It can provide financial service to the Company, such as recommending investment and fund-raising proposals and channels. Leveraged on its diversified investment capability, international investment perspective and practical experience in capital operation, Co- Stone Asset has completed numerous mergers and acquisitions and substantial development for portfolio companies. Currently, there is an increasing concentration degree of the construction machinery industry and increasing trend of exploring international market. By capitalising its fund management, industry resources and investment network, Co- Stone Asset will assist the Company in adjusting both local and international presence, conducting mergers and acquisitions, enhancing the Company's value, reinforcing the leading industry position of the Company and achieving substantial development of the Company in overseas market. Co-Stone Asset has the capability to manage sizable funds, through which it can provide equity investment support to the Company in the construction machinery and intelligent agricultural machinery and develop new emerging business and teams, which may become the areas for business growth of the Company.

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LETTER FROM THE BOARD

(IV) Key terms of the Strategic Cooperation Agreement II

1. To cooperate in the areas of life insurance and other related services

Upon the establishment of the strategic cooperation ties, the Company and Taiping Life Insurance may explore cooperation in the areas of life insurance and other related services. The comprehensive strength of Taiping Life Insurance in the insurance industry enable it to provide quality, comprehensive and customised insurance policy to the employees of the Company. Such insurance policy can help to address employees' worries and concerns about future, and in turn reinforce their loyalty to the Company and facilitate the development of the principal business of the Company.

2. To explore property sector for new area of business growth

Currently, there are 16 properties under construction and management of Taiping Group, the holding company of Taiping Life Insurance, across various cities, including Hong Kong, Beijing, Shanghai, Guangzhou, Shenzhen, Suzhou, Nanning, Wuhan, Hanzhou, Sanya and Jinan. Most of them are invested by Taiping Life Insurance. There is business synergy between these construction projects and the projects of the Company. After establishing the strategic cooperation ties, the Company and Taiping Life Insurance can jointly explore new area of business growth.

1. Key terms of the Strategic Cooperation Agreement III
2. 1. The technological and research and development strength and capability of the Company in the area of construction machinery and agricultural machinery will be further strengthened, under the leadership of the core management, with the aim of increasing the profitability of the Company.
   2. Leveraged on the core management's connection with downstream customers, the Company will explore downstream application and market for its construction machinery and agricultural machinery to increase the market share and operating results of the Company.
   3. With the industry background and resources of the core management, the Company will identify opportunities to make upstream or downstream investment and undergo merger and acquisition, which would extend the business lines, acquire new development and strengthen the competitiveness and profitability of the Company.
   4. The core management of the Company will diligently perform their relevant duties, actively participate in the corporate governance and enhance the governance standards of the Company in strict compliance with the applicable laws and the Articles.

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(VI) Key terms of the Strategic Cooperation Agreement IV

1. Business cooperation

Subsidiaries of China Minmetals indirect controller of Ningbo Shitou, have deep presence in metallurgical engineering, property construction and metals and mining sectors and have established strategic cooperation in various aspect with major players of the construction industry. Minmetals Innovation Investment Co., Ltd (五礦創新投 資有限公司) ("Minmetals Innovation Investment"), a wholly-owned subsidiary of China Minmetals, will encourage subsidiaries of China Minmetals to recommend and introduce the construction machinery products of the Company in their business involving construction. This will deliver markets and sale channels to the Company, facilitating the business development and promoting sales of the Company. In addition, Minmetals Innovation Investment will actively establish cooperation between the Company and subsidiaries of China Minmetals to assist the Company to have presence in both local and international markets.

2. Financial service

Minmetals Capital Company Limited (五礦資本股份有限公司) ("Minmetals Capital") is a wholly-owned subsidiary of China Minmetals with core business ranging from investments, trusts, financial lease, securities, futures, funds, banking to insurance. After the strategic cooperation has been set between the Company, Minmetals Innovation Investment and China Minmetals, Minmetals Innovation Investment can promote business cooperation between the Company and Minmetals Capital. This will expand the funding channel of the Company to have capital support for further development of its principal business.

3. Corporate governance

Upon completion of the Proposed Non-public Issuance, Ningbo Shituo will lawfully exercise its rights as a Shareholder, such as the right to vote and the right to propose resolution, reasonably participate in the governance of the Company, and assist the Board and its committees to make decision through its nomination of directors in accordance with laws, regulations and the Articles, and through its professional investment team and post-investment management team. Ningbo Shituo will play an active role in corporate governance and promote sustainable development of the Company, and ultimately protect the legitimate interests of the minority Shareholders.

4. Subsequent funding

To further the strategic cooperation in future, both parties unanimously agree that the Company will offer priority to Ningbo Shituo and its related parties if the Company or any member of the Group has to raise funds after the completion of the Proposed Non-public Issuance, subject to the applicable laws.

In addition to the above, after the completion of the Proposed Non-public Issuance, the Company will offer strategic preferential policy to Ningbo Shituo and its related parties in procuring construction machinery, subject to the applicable laws. Details of the policy will be otherwise negotiated and agreed by the parties.

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LETTER FROM THE BOARD

(VII)Other terms of the Strategic Cooperation Agreements

Provisions of term of cooperation, the Subscribers' participation in the Proposed Non- public Issuance, effectiveness and termination clause of each Strategic Cooperation Agreement are identical. Details are as follow:

1. Term of cooperation

The term of cooperation is 3 years commencing from the date of each Strategic Cooperation Agreement, provided that it must not be terminated prior to the expiry date of the lock-up period. The term can be extended upon mutual agreement of both parties.

2. Holding period and exit arrangement

Each Subscriber agrees to hold its portion of the A Shares to be subscribed for under the Proposed Non-public Issuance on a long term basis, and comply with the lock-up arrangement in respect of such new A Shares under the relevant Subscription Agreement.

3. Arrangement for Huaijin Cornerstone and Taiping Life Insurance to participate in the management of the Company

Upon completion of the subscription of the A Shares issued under the Proposed Non-public Issuance, Huaijin Cornerstone and Taiping Life Insurance can each nominate one director who will be appointed as a Director after the necessary approval process. From the completion date of the Proposed Non-public Issuance, Huaijin Cornerstone and Taiping Life Insurance will lawfully exercise their respective rights as Shareholders, reasonably participate in the governance of the Company and lawfully nominate Directors and senior management of the Company. Each of them will play an active role in corporate governance and protect the interests of the Shareholders as a whole. Huaijin Cornerstone and Taiping Life Insurance will assist the Board and the Company's management in making rational decision and improving investment decision and corporate governance standards.

4. Arrangement for Hainan Chengyisheng and Ningbo Shituo to participate in the management of the Company

From the completion date of the Proposed Non-public Issuance, Hainan Chengyisheng and Ningbo Shituo will lawfully exercise their respective rights as Shareholders, reasonably participate in the governance of the Company, and subject to consent of other Subscribers, lawfully nominate Directors and senior management of the Company jointly with other Subscribers. Each of them will play an active role in corporate governance and protect the interests of the Shareholders as a whole. Hainan Chengyisheng and Ningbo Shituo will assist the Board and the Company's management in making rational decision, improving investment decision and corporate governance standards and maximising the benefits of the Company through their respective professional teams and their advantages over resources.

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5. Effectiveness and termination

1. Conditions to the Strategic Cooperation Agreements becoming effective

Each Strategic Cooperation Agreement is established after due execution by the Company and the relevant Subscriber, and becomes effective after the approval of the Proposed Non-public Issuance at the meeting of the Board and the EGM and by the CSRC.

1. Each Strategic Cooperation Agreement shall terminate upon occurrence of any of the following circumstances:
2. 1. the relevant Subscription Agreement terminates;
   2. no approval of the Proposed Non-public Issuance is granted by the CSRC resulting in the termination by the Company, or the relevant Subscriber fails to subscribe under the Proposed Non-public Issuance for any reason;
   3. the term of cooperation as agreed in the relevant Strategic Cooperation Agreement expires; and
   4. both parties thereto unanimously agree to terminate the relevant Strategic Cooperation Agreement in writing.

(VIII) Reasons for and commercial rationality of strategic investments

1. Reasons for strategic investments

Through the Proposed Non-public Issuance, the Company intends to introduce Huaijin Cornerstone, Taiping Life Insurance, Hainan Chengyisheng and Ningbo Shituo as strategic investors to facilitate the development of the Company. Leveraged on their respective advantages over industry resources and sales channels, the strategic investors will cooperate with the Company in the principal business of the Company and other aspects such as financial services. The Proposed Non-public Issuance enables the Company to access vital strategic resources which will facilitate its further expansion of new products and sales channels, secure growing sales and ultimately benefit the long term development of the Company.

In addition, the introduction of strategic investors will further optimise the shareholders structure of the Company, improve its corporate governance, strengthen the reasonableness and rationality in decision making process, and in turn steadily enhance the competitiveness and shareholders' return of the Company.

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LETTER FROM THE BOARD

2. Commercial rationality of strategic investments

The strategic investors introduced through the Proposed Non-Public Issuance will launch strategic cooperation with the Company in the sectors of construction machinery and agricultural machinery, in which the Company operates its principal business. Further, the Company will be able to expand its business in financial services and insurance, metal resources and construction sectors. The introduction of strategic investors demonstrates a high commercial rationality since it is beneficial to the Company in achieving complementary development and win-win collaboration and enhance its competitiveness and profitability.

Based on the above, the introduction of strategic investors through the Proposed Non- Public Issuance demonstrates a high commercial rationality and is beneficial to the long term benefits of the Company and its minority Shareholders.

1. Subscription Agreements

As part of the Proposed Non-public Issuance, the Company proposes to enter into the Subscription Agreements with the Subscribers.

1. Parties to the Subscription Agreements
2. 1. Subscription Agreement I
   2. 1. The Company as issuer
      2. Huaijin Cornerstone as subscriber
   3. Subscription Agreement II
   4. 1. The Company as issuer
      2. Taiping Life Insurance as subscriber
   5. Subscription Agreement III
   6. 1. The Company as issuer
      2. Hainan Chengyisheng as subscriber
   7. Subscription Agreement IV
   8. 1. The Company as issuer
      2. Ningbo Shituo as subscriber

1. Date of the Subscription Agreements 4 July 2020

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1. Amount, size, price and method of subscription 1. Subscription amount and size

According to the Subscription Agreements, the Subscribers intend to subscribe for new A Shares under the Proposed Non-public Issuance as follows:

				Proposed
		Proposed	number of
		subscription	A Shares
No.	Subscribers	amount	to be subscribed
		(RMB million)
(1)	Huaijin Cornerstone	3,100	587,121,212
(2)	Taiping Life Insurance	1,900	359,848,484
(3)	Hainan Chengyisheng	1,000	189,393,939
(4)	Ningbo Shituo	600	113,636,363
	Total	6,600		1,249,999,998

If the Company reduces the investment projects to which the fund raising relates pursuant to the requirements of the CSRC (including but not limited to reductions in the overall issue size and/or in any single investment project to which the fund raising relates) and therefore reduces the overall issue size, the final subscription amount payable under the relevant Subscription Agreement by a Subscriber will be reduced accordingly (i.e. the reduced subscription amount equals to the subscription amount before reduction multiplied by the issue size after reduction as divided by the total issue size of RMB6.6 billion before reduction).

2. Subscription price

The purchase price of the A Shares newly issued will be a price no less than 80% of the average trading price of the A Shares in the 20 trading days prior to the Benchmark Date (the average trading price of the A Shares in the 20 trading days prior to the Benchmark Date equals to the aggregate turnover in value of the A Shares in the 20 trading days prior to the Benchmark Date divided by the total trading volume of the A Shares in the 20 trading days prior to the Benchmark Date). Upon negotiation and agreement, the purchase price is fixed at RMB5.28 per A Share.

If the Company distributes dividend, bonus shares or there occurs any capitalisation issue or other ex-right and ex-dividend event before the completion date, the purchase price will be adjusted in accordance with such ex-right(ex-dividend) reference price calculated according to the Shenzhen Listing Rules and the number of the A Shares to be issued under the Proposed Non-public Issuance shall be adjusted accordingly.

3. Subscription method

Each Subscriber will subscribe the A Shares to be issued under the Proposed Non- public Issuance in cash.

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(IV) Date and method of payment of subscription amount, and time and method of new registration

1. Date and method of payment of subscription amount

The completion date of the subscription by a Subscriber under the Proposed Non- public Issuance shall be the 15th business day after the satisfaction of all conditions referred to in clause 6.1.1 of the relevant Subscription Agreement, or such other date agreed by the Company and the Subscriber (provided that it must not be earlier than the date on which all such conditions are satisfied). If the conditions referred to in clauses 6.1.2, 6.1.3 and 6.1.4 of the relevant Subscription Agreement are not fully satisfied or waived on the completion date, the completion date shall be postponed to such later date on which all such conditions are satisfied (or duly waived) or such other date as agreed by the Company and the Subscriber.

On the completion date, each Subscriber shall deliver an irrevocable telegraphic transfer instruction duly signed by it to the Company. The instruction shall cause all subscription monies to transfer in one lump sum from the account of the Subscriber to a bank account ("Receiving Bank Account") opened by the sponsor of the Proposed Non- public Issuance specifically for this purpose.

2. Time and method of new registration

After the payment of the subscription monies by a Subscriber in accordance with the relevant Subscription Agreement, the Company shall designate a certified public accountant of the PRC to verify the said payment made by the relevant Subscriber and request the certified public accountant to issue a capital verification report ("Capital Verification Report") within ten business days after the subscription monies are fully paid to Receiving Bank Account. Upon issue of the Capital Verification Report, the Company shall submit a written application to the CSDC to register the relevant Subscriber as a Shareholder of the A Shares newly issued. Meanwhile, the Company shall warrant that such newly issued A Shares will be registered in the name of the relevant Subscriber with the CSDC within twenty business days after the subscription monies are fully transferred by the relevant Subscriber to the Receiving Bank Account or such other date as agreed by the Company and the Subscriber. Upon completion of the aforesaid registration, the relevant Subscriber is entitled to exercise its rights as a Shareholder of the A Shares newly issued.

3. Lock-up period

Unless otherwise permitted by the applicable laws or the regulatory policies formulated by the CSRC or the Shenzhen Stock Exchange, a Subscriber must not directly or indirectly transfer any A Shares newly issued within eighteen months from the date of completion of the issuance. For the avoidance of doubt, if the Subscriber obtains any additional A Shares through the distribution of bonus shares or capitalisation issue by the Company during the period from the completion of the issuance to the expiry of the lock-up period, these A Shares will also be subject to the aforesaid agreed lock-up arrangement.

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LETTER FROM THE BOARD

Subject to the lock-up period agreed in the relevant Subscription Agreement, the Subscriber shall give a lock-up undertaking in respect of the A Shares newly issued under the Proposed Non-public Issuance and complete the formalities therefore in accordance with the relevant laws, regulation and the relevant requirements of the CSRC and the Shenzhen Stock Exchange.

4. Effectiveness of the Subscription Agreements

Each Subscription Agreement is established after due execution by the Company and the relevant Subscriber, and becomes effective on the date on which approval of the Proposed Non-public Issuance is obtained from (i) the Board; (ii) the Shareholders at the EGM; and (iii) the CSRC.

1. Related party transaction
2. 1. Overview of the related party transaction

As part of the Proposed Non-public Issuance, the Company proposes to enter into the Subscription Agreement III with Hainan Chengyisheng, pursuant to which the Company conditionally agrees to allot and issue and Hainan Chengyisheng conditionally agrees to subscribe 189,393,939 A Shares. As at the Latest Practicable Date, Hainan Chengyisheng was held as to 24.48%, 6.49% and 6.49% by Dr. Zhan Chunxin (executive Director), Qin Xiuhong (senior manager of the Company) and Yang Duzhi (senior manager of the Company), respectively, each as a limited partner. Accordingly, Hainan Chengyisheng is a related party of the Company under the Shenzhen Listing Rules and entry into the Subscription Agreement III constitutes a related party transaction of the Company. However, Hainan Chengyisheng is not a connected person of the Company under the Hong Kong Listing Rules and therefore, entry into the Subscription Agreement III does not constitute a connected transaction of the Company under Chapter 14A of the Hong Kong Listing Rules.

1. Basic particulars of the related party 1. Basic particulars

Name of the company	Hainan Chengyisheng Enterprise Management
	Partnership (Limited Partnership)* (海南誠一盛企業
	管理合夥企業 (有限合夥))
Establishment Date	25 May 2020
Total subscription amount	RMB1.001 billion
Executive partner	Changsha Rongyisheng Technology Development Co.,
	Ltd.* (長沙融一盛科技發展有限公司)
Address	(2)-322 of No. 61 Qiongshan Avenue, Lingshan Town,
	Meilan District, Haikou City, Hainan Province

*For identification purpose only

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LETTER FROM THE BOARD

Scope of business	General items: corporate management, socio-economic
	consultancy service, financial consultancy service,
	investment with self-owned funds and management of
	corporate headquarters. (Other than permitted business,
	the company may conduct items other than those
	prohibited or restricted by the law at its discretion in
	accordance with the law) (The enterprise may conduct
	general operation items at its discretion and conduct
	permitted operation items with licenses or approval
	documents) (Items subject to approval from relevant
	authorities are only conducted after obtaining such
	approval)

1. Hainan Chengyisheng is an entity established for the purpose of the Proposed Non- public Issuance and has not actually commenced any business. After investigation, the above related party is not a dishonest person subject to enforcement in the PRC.
2. Relationship with the Company

Dr. Zhan Chunxin, the chairman of the Board and the chief executive of the Company, and Qin Xiuhong and Yang Duzhi, each a member of the Company's senior management, are limited partners of Hainan Chengyisheng.

(III) Historical related party transaction

The Company has not entered into any related party transaction with Hainan Chengyisheng in the past.

(IV) Subject of the related party transaction

The subject of the transaction is the A Shares with a par value of RMB1.00 each to be issued under the Proposed Non-public Issuance.

(V) Pricing principles of the related party transaction

The issue price will be RMB5.28 per A Share, which is not less than 80% of the average trading price of the A Shares in the 20 trading days prior to the Benchmark Date (exclusive). The average trading price of the A Shares in the 20 trading days prior to the Benchmark Date equals to the aggregate turnover in value of the A Shares in the 20 trading days prior to the Benchmark Date divided by the total trading volume of the A Shares in the 20 trading days prior to the Benchmark Date.

If the Company distributes dividend, bonus shares or there occurs any capitalisation issue or other ex-right and ex-dividend event during the period between the Benchmark Date to the date of issuance, the issue price of the A Shares under the Proposed Non-public Issuance will be adjusted in accordance with the relevant rules and regulations.

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LETTER FROM THE BOARD

(VI) Purpose of the related party transaction and impact on the Company

1. Purpose of the transaction
2. 1. To enhance the capital strength of the Company, satisfy the increasing liquidity needs due to the expansion of the major business and facilitate the development of the business of the Company by implementation of the Proposed Non-public Issuance.
   2. To fully leverage the existing financing channels of the Company for enhancing the efficiency of financing and increasing profitability.
   3. To reduce the gearing ratio, optimise the capital structure and enhance the risk resistant capability.
3. Impact of the transaction on the Company

The transaction will not have a significant impact on the structure of the major business of the Company. It does not involve any acquisition of assets and therefore does not result in any integration of business and asset of the Company. The Proposed Non- public Issuance will enhance the capital strength, increase the asset size and improve the risk resistant capability of the Company, which will improve the overall competitiveness and the market position of the Company and procure the sustainable development of the Company. Once the proceeds from the Proposed Non-public Issuance are received and available for use, the total assets and the net assets of the Company will increase, the working capital will be further replenished and the debt financing and financial expenses will be reduced, thus optimising the financial structure of the Company, reducing the financial risks and further enhancing the profitability of the Company.

1. Feasibility analysis report on the use of proceeds of the Proposed Non-public Issuance

Please refer to Appendix I for the full text of the feasibility analysis report on the use of proceeds of the Proposed Non-public Issuance. In the event of any discrepancy between the English translation and the Chinese version of the document, the Chinese version prevails.

1. Statement of exemption from the preparation of a report on the use of proceeds from previous fund raising activities

As approved by the CSRC (Zheng Jian Xu Ke [2010] No. 1654) and Hong Kong Stock Exchange, after 869,582,800 H Shares were issued by the Company and listed on the Main Board of the Hong Kong Stock Exchange on 23 December 2010, 130,437,400 H Shares which were issued pursuant to the full exercise of the over-allotment option on 5 January 2011 were listed and traded on the Main Board of the Hong Kong Stock Exchange on 13 January 2011. A total of 1,000,020,200 H Shares were issued by the Company in its initial public offering, with the total proceeds raised being HK$14,980,302,596. Five accounting years have lapsed since the date of receipt of proceeds from the last fund raising exercise by the Company.

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LETTER FROM THE BOARD

According to the relevant requirements of the Regulations relating to the Report on the Use of Proceeds from Previous Fund Raising Activities 《( 關於前次募集資金使用情況報告的規定》)

(Zheng Jian Fa Xing Zi [2007] No. 500) issued by the CSRC: "For companies which have applied to issue securities and if the period between the date of receipt of proceeds from the previous fund raising activities till now is less than five accounting years, the board of directors shall prepare relevant report on the use of proceeds from previous fund raising activities in accordance with this regulation, and provide details on the last use of proceeds (whether onshore or offshore) from the closing date of the last audited financial statements relating to the application documents for issuance, then the board of directors shall resolve on reporting the use of proceeds from previous fund raising activities and submit the report for approval at a general meeting of shareholders". Since the Company has not launched any fund raising activity by way of placing of shares or issuance of new shares, convertible corporate bonds or other types of securities under the Administrative Measures for the last five accounting years, five accounting years have lapsed since the date of receipt of proceeds from the last fund raising exercise by the Company. The Company therefore is not required to prepare a report on the use of proceeds from previous fund raising activities for the purpose of the Proposed Non- public Issuance, nor is it required to engage a certified public accountant to issue an assessment report on the use of proceeds from previous fund raising activities.

1. Measures on making up diluted returns for the current period due to the Proposed Non- public Issuance

Please refer to Appendix II for the measures on making up diluted returns for the current period due to the Proposed Non-public Issuance. In the event of any discrepancy between the English translation and the Chinese version of the document, the Chinese version prevails.

1. Undertakings in relation to the measures on making up diluted returns for the current period due to the Proposed Non-public Issuance

Please refer to section E of Appendix II for the undertakings in relation to the measures on making up diluted returns for the current period due to the Proposed Non-public Issuance. In the event of any discrepancy between the English translation and the Chinese version of the document, the Chinese version prevails.

1. Shareholders' returns plan for the next three years (2020-2022)

Please refer to Appendix III for the shareholders' returns plan for the next three years (2020-

2022). In the event of any discrepancy between the English translation and the Chinese version of the document, the Chinese version prevails.

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LETTER FROM THE BOARD

1. Authorisation to the Board

It is proposed at the EGM to authorise the Board and its authorised persons to handle all matters relating to the Proposed Non-public Issuance within the scope permitted by the relevant laws and regulations at their full discretion, including but not limited to the following:

1. to authorise the Board to formulate and implement the specific proposal for the Proposed Non-public Issuance in accordance with the proposal for issuance as approved at the EGM and the actual circumstances at the time of issuance, including but not limited to, target subscribers, timing of issuance, number of A Shares to be issued, issuance period, issue price, specific methods of subscription and other matters relating to determination of the issue price;

1. to authorise the Board to supplement, amend and modify the specific proposal, the relevant application documents and accompanying documents in accordance with the relevant laws and regulations, change in policies, change in market conditions and the requirements from the relevant departments;

1. to authorise the Board to handle the reporting matters of the Proposed Non-public Issuance and draft, revise and submit the reporting materials for the Proposed Non-public Issuance in accordance with the requirements of the securities regulatory authorities;

(IV) to authorise the Board to determine and engage intermediaries such as sponsor (lead underwriter) and to revise, supplement, sign, submit, report and execute all agreements and documents relating to the Proposed Non-public Issuance, including but not limited to, underwriting and sponsoring agreements, the Subscription Agreements, the Strategic Cooperation Agreements and material contracts involved in the implementation of investment projects to which the fund raising relates;

1. to authorise the Board to set up a designated account for the Proposed Non-public Issuance which shall be used solely for depositing, management and use of the proceeds raised, and execute a tripartite custodian agreement with the sponsor and the relevant commercial bank in which the proceeds are deposited within one month upon the receipt of the proceeds. Such designated account for the proceeds may not be used for any deposit other than the proceeds or for other purposes;

(VI) to increase the registered capital of the Company, amend relevant articles of the Articles and handle the formalities for change of registration with the industrial and commercial authority and other filing procedures in accordance with the actual results of the Proposed Non-public Issuance;

(VII) to authorise the handling of the relevant matters such as registration, lock-up and listing of the A Shares under the Proposed Non-public Issuance with the Shenzhen Stock Exchange and CSDC upon completion of the Proposed Non-public Issuance;

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(VIII) to make adjustments to the specific arrangement on the investment projects to which the fund raising relates within the scope as approved at the EGM;

(IX) to adjust the proposal for and the use of the proceeds from the Proposed Non-public Issuance in accordance with the relevant requirements (including the feedback on the application for the Proposed Non-public Issuance after review) issued by the state, the relevant governmental authorities and securities regulatory authorities, and continue to handle any matter relating to the Proposed Non-public Issuance if there is any new requirement provided in the laws and regulations or otherwise promulgated by the securities regulatory authorities concerning the Proposed Non-public Issuance, and there is any change to market condition, except any matter that requires new approval at the general meeting of shareholders in accordance with the relevant laws and regulations and the Articles;

1. to authorise the handling of other matters relating to the Proposed Non-public Issuance and reporting, listing and other issues within the scope permitted under the laws and regulations, regulatory documents and the Articles;

(XI) to authorise the Board to determine whether to continue with the Proposed Non-public Issuance in accordance with the actual circumstances if there is any material change in market condition, polices or laws;

(XII) to handle any other matter in connection with the Proposed Non-public Issuance other than those listed in items (I) to (XI) above;

(XIII) to authorise the Board to determine the matters relating to the Proposed Non-public Issuance, such as the Benchmark Date, issue price and lock-up period, in accordance with the amended regulations, and supplement, amend and modify the relevant application documents and accompanying documents if the regulators such as the CSRC and stock exchanges subsequently amend the rules relating to the Proposed Non-public Issuance, such as the Benchmark Date, issue price and lock-up period;

(XIV) to authorise the Board to delegate each authorisation herein to the chairman of the Board and the persons authorised by the chairman of the Board save as otherwise provided in the relevant laws and regulations, regulatory documents and the Articles, subject to the approval of each authorisation herein at the EGM; and

(XV) each authorisation aforementioned shall remain effective for 12 months from the date on which it is considered and approved at the EGM.

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LETTER FROM THE BOARD

3. EGM

A notice convening the EGM to be held at Multi-function Conference Room, Company Office Building, No. 361, Yin Pen South Road, Changsha City, Hunan Province, the PRC on Wednesday, 12 August 2020 at 2:00 p.m. is set out on pages EGM-1 to EGM-4 of this circular. Dr. Zhan Chunxin, being a related Director pursuant to the Shenzhen Listing Rules, abstained from voting on the relevant resolutions of the Board. The following related Shareholders will also be required to abstain from voting on the relevant resolutions to be proposed at the EGM:

	Number of
	Shares held
	as at the Latest
Shareholder	Practicable Date	Shareholding
		(%)
Changsha Hesheng Science and Technology
Investment Co., Ltd.	386,517,443	4.91
Changsha Yifang Technology Investment Co., Ltd.	156,864,942	1.99
Zhonghang Trust [2018] No. 220 Zoomlion Single
Capital Trust	138,819,479	1.76
Good Excel Group Limited	29,816,201	0.38
Shanghai Hongsheng Zhiyuan Enterprise Management
Partnership (Limited Partnership)	28,000,000	0.35
Fair Sun (Hong Kong) Holdings Limited	5,250,000	0.07
Related parties of Hainan Chengyisheng

• (being Zhan Chunxin, Su Min, Huang Qun, Li Jiangtao,
• Liu Jie, Hu Keman, Yuan Ye, Ren Huili, Chen Tiejian,

Lu Qing and Xiong Xiaozhi)	17,764,806	0.22
TOTAL	763,032,871	9.68

If you intend to appoint a proxy to attend and vote at the EGM, you are required to complete and return the accompanied respective proxy form in accordance with the instructions printed thereon to the Company's H share registrar, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong in person or by post not less than 24 hours before the time appointed for holding the EGM or any adjourned meeting thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or at any adjourned meeting should you so wish.

4. VOTING BY POLL

According to Rule 13.39(4) of the Hong Kong Listing Rules, any vote of shareholders at a general meeting must be taken by poll. Accordingly, the chairman of the EGM will demand a poll in relation to all the proposed resolutions at the EGM in accordance with the Articles.

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LETTER FROM THE BOARD

5. RECOMMENDATIONS

The Board considers that all resolutions to be proposed at the EGM are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of all the proposed resolutions to be proposed at the EGM.

By order of the Board

Zoomlion Heavy Industry Science and Technology Co., Ltd.*

Zhan Chunxin

Chairman

Changsha, the PRC, 27 July 2020

*For identification purpose only

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APPENDIX I	FEASIBILITY ANALYSIS REPORT ON THE USE OF
	PROCEEDS OF THE PROPOSED NON-PUBLIC ISSUANCE

Feasibility analysis report on use of proceeds of the Proposed Non-public Issuance

1. Plan of use of proceeds

The total amount of gross proceeds of the Proposed Non-public Issuance will not exceed RMB6.6 billion (inclusive). The net proceeds after deducting the relevant expenses of the Proposed Non-public Issuance are intended to be used in the following projects:

			Proposed amount
		Total investment	of proceeds
No.	Project name	amount	to be invested
		(RMB million)	(RMB million)

1. Excavating machinery intelligent manufacturing

project

3,083.13

2,400

1. Project for upgrading of intelligent manufacturing of

	mixer product	829.77	350
(3)	Key components intelligent manufacturing project	1,667.50	1,300

1. Intelligent manufacturing project of

	key hydraulic parts (hydraulic valves)	442.628	250
(5)	Liquidity replenishment	2,300		2,300
Total		8,323.028	6,600

If the actual net proceeds of the Proposed Non-public Issuance are less than the total amount of proceeds proposed to be invested in the above projects, the Company will adjust and finally determine the specific investment projects to be funded by the proceeds, their priority and the specific investment amount each project will receive based on the actual net proceeds and the priority and importance of the projects, and will make up the shortfall with its internal funds or through other financing methods.

Pending the receipt of the proceeds of the Proposed Non-public Issuance and depending on the actual progress of the projects, the Company will implement such projects by raising funds via other means. Such capital will be replaced with the proceeds upon their receipt in accordance with the relevant regulations.

2. Feasibility analysis of the investment projects to be funded by the proceeds of the Proposed Non-pubic Issuance

1. Overview of the projects
2. 1. Excavating machinery intelligent manufacturing project 1. Overview of the project

In this project, it is intended to build a new excavating machinery intelligent factory initially including a material preparation centre, a mini excavator part workshop, a mid- large excavator part workshop, a mini excavator assembly workshop, a commissioning workshop, a mid-large excavator commissioning workshop, etc., and to improve the relevant roads, landscape and pipes and networking within the zone. The site area of the project is 668,627.86 sq. metres and the total gross area of the project is 240,760.30 sq. metres.

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APPENDIX I	FEASIBILITY ANALYSIS REPORT ON THE USE OF
	PROCEEDS OF THE PROPOSED NON-PUBLIC ISSUANCE

2. Estimated investment of the project

The total investment of the project is RMB3,083,130,000. Details of the investment allocation are as follows:

			Investment
No.	Type of investment	amount	Percentage
			(RMB'000)
1		Construction investment	3,074,016	99.70%
	1.1	Construction cost	2,393,966	77.65%
	1.2	Other cost of project construction	482,807		15.66%
	1.3	Reserve fund	197,242		6.4%
2		Interest payment during
		construction period	9,114		0.30%
Total		3,083,130		100.00%

3. Project construction period

The project period is 15 years, of which construction period is 1.33 years (15 months) and the operation period is 13.67 years.

4. Benefit analysis for project

Upon estimation, the after-tax internal rate of return of the project is 28.00% and after-tax return period is 6 years. The project generates good economic benefits.

5. Filing and approval of the project

As of the date of this report, matters such as filing and environmental assessment of the project are not yet completed. The Company will perform the approval or filing procedures according to the relevant requirements.

1. Project for upgrading of intelligent manufacturing of mixer truck product 1. Overview of the project

In this project, it is intended to build an internationally and domestically leading mixer truck intelligent manufacturing base including a mixer truck automation, an intelligent equipment production line and ancillary facilities such as a modern production plant and research and development (R&D) premises equipped with leading knowhow, equipment and production management. Upon completion of the construction, the production capacity is 10,000 mixer trucks and 450 dry-mix trucks. The site area of the project is 240,848.30 sq. metres and the total gross area is 142,306.00 sq. metres.

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APPENDIX I	FEASIBILITY ANALYSIS REPORT ON THE USE OF
	PROCEEDS OF THE PROPOSED NON-PUBLIC ISSUANCE

2. Estimated investment of the project

The total investment of the project is RMB829,770,000. Details of the investment allocation are as follows:

			Investment
No.	Type of investment	amount	Percentage
			(RMB'000)
1		Construction investment	805,110	97.03%
	1.1	Construction cost	650,330	78.37%
	1.2	Other cost of project construction	95,140		11.47%
	1.3	Reserve fund	59,640		7.19%
2		Interest payment during
		construction period	24,660		2.97%
Total		829,770		100.00%

3. Project construction period

The project period is 15 years, of which construction period is 2 years (48 months) and the operation period is 13 years.

4. Benefit analysis for project

Upon estimation, the after-tax internal rate of return of the project is 22.54% and after-tax return period is 6.94 years. The project generates good economic benefits.

5. Filing and approval of the project

As of the date of this report, approval procedures of the project such as filing and environmental assessment are completed.

1. Key components intelligent manufacturing project 1. Overview of the project

The project will engage in the production of intelligent high-strength steel and metal sheet in Zoomlion Intelligent Industrial City, leveraged on Zoomlion Heavy Industry Technology Centre and the State Key Laboratory of Key Technology of Construction Machinery. The construction of the project includes a material preparation centre, a metal sheet workshop, a dispatch workshop, an office and an inspection and testing centre. Upon completion of the project, the annual production capacity will be 350,000 tonnes of high- strength steel and 75,000 sets of metal sheets. The site area of the project is 199,951.94 sq. metres and the total gross area of the project is 175,995.05 sq. metres.

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APPENDIX I	FEASIBILITY ANALYSIS REPORT ON THE USE OF
	PROCEEDS OF THE PROPOSED NON-PUBLIC ISSUANCE

2. Estimated investment of the project

The total investment of the project is RMB1,667,500,000. Details of the investment allocation are as follows:

			Investment
No.	Type of investment	amount	Percentage
			(RMB'000)
1		Construction investment	662,598	99.71%
	1.1	Construction cost	1,362,084	81.68%
	1.2	Other cost of project construction	186,468		11.18%
	1.3	Reserve fund	114,045		6.84%
2		Interest payment during
		construction period	4,902		0.29%
TOTAL	1,667,500		100.00%

3. Project construction period

The project period is 15 years, of which construction period is 1.33 years (15 months) and the operation period is 13.67 years.

4. Benefit analysis for project

Upon estimation, the after-tax internal rate of return of the project is 24.86% and after-tax return period is 5.82 years. The project generates good economic benefits.

5. Filing and approval of the project

As of the date of this report, matters such as filing and environmental assessment of the project are not yet completed. The Company will perform the approval or filing procedures according to the relevant requirements.

(IV) Intelligent manufacturing project of key hydraulic parts (hydraulic valves)

1. Overview of the project

In this project, it is intended to build an intelligent manufacturing base of key hydraulic part in Deshan Economic Development Zone, Changde, Hunan province. The construction includes office and plants for R&D, production, testing, laboratory and storage of high-end hydraulic parts. It is intended to install digital production lines such as FMS digital processing, intelligent logistics, automated storage, spray painting robots and full-automated assembly and testing and commissioning, as well as hard- and software installation such as digital research and production platform and digital management platform, to achieve a production capacity of 250,000 pieces of hydraulic valves of different kinds and manufactures local hydraulic valves to support the Company's pump trucks, excavator trucks and other products of the Group. The site area of the project is 109,581.33 sq. metres and the total gross area of the project is 47,079.60 sq. metres.

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APPENDIX I	FEASIBILITY ANALYSIS REPORT ON THE USE OF
	PROCEEDS OF THE PROPOSED NON-PUBLIC ISSUANCE

2. Estimated investment of the project

The total investment of the project is RMB442,628,000. Details of the investment allocation are as follows:

		Investment
No.	Type of investment	amount	Percentage
		(RMB'000)
1	Construction cost	42,213.00	95.37%
2	Other cost of project construction	427.90	0.97%
3	Reserve funds	1621.90	3.66%
Total		44,262.80		100.00%

3. Project construction period

The project period is 15 years, of which construction period is 4 years and the operation period is 15 years.

4. Benefit analysis for project

Upon estimation, the after-tax internal rate of return of the project is 23.62% and after-tax return period is 6.16 year. The project generates good economic benefits.

5. Filing and approval of the project

As of the date of this report, matters such as filing and environmental assessment of the project are not yet completed. The Company will perform the approval or filing procedures according to the relevant requirements.

(V) Liquidity replenishment

The Company intends to use RMB2,300,000,000 of the proceeds of the Non-public Issuance to replenish the liquidity of the Company, in order to satisfy the capital requirements of the Company for future development, optimise the capital structure, improve the capital strength and enhance the ongoing profitability of the Company.

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APPENDIX I	FEASIBILITY ANALYSIS REPORT ON THE USE OF
	PROCEEDS OF THE PROPOSED NON-PUBLIC ISSUANCE

1. Necessity and feasibility of the projects
2. 1. Construction machinery intelligent manufacturing projects

Both the excavating machinery intelligent manufacturing project and the project for upgrading intelligent manufacturing of mixer trucks are construction machinery intelligent manufacturing projects. The necessity and feasibility of the projects is as follow:

1. Necessity of the projects

1. The construction machinery industry is on the upward trend with rapid growth in domestic demand

The construction machinery industry of the PRC has already on its upward trend since 2017. Combined with factors such as growth in domestic infrastructure investment and improvement in the property industry, the domestic construction machinery market has been growing rapidly, resulting in record high in sales of major products.

The development of the construction machinery industry has long been driven by the State policy of infrastructure investment. On 17 April 2020, the Political Bureau reinstated at its meeting "to strengthen traditional and innovative infrastructure investment". Thereafter, proposals have been announced by various provinces to strengthen the country by constructing transportation infrastructures with those "super construction projects" such as high-speed railways along the coast, intelligent highways and rail transport, as the key projects. High-technology and high- technique innovative infrastructures, such as 5G base stations, ultra-high voltage (UHV) transmission, intra-citieshigh-speed railway and rail transportation, together with investment to advanced manufacturing industrial sector will stimulate the development of the construction machinery industry.

Property development and construction sector is another important sector which applies construction machinery. In 2019, new construction area of the PRC was 2.27 billion square metres, representing a year-on-year increase of 8.5%. In the same year, the accumulated investment in property development reached RMB1.32 billion, representing a year-on-year increase of 9.9%. Increase in both new construction area and investment in property development has driven the substantial growth of the construction machinery industry. Despite the economic slump and decline in new construction area and investment in property development in the PRC due to the global coronavirus disease and oil price since January 2020, investment in property development has rapidly bounced back when the disease is under better control and work and production has been gradually resumed. In light of the increasing land supply and improvement in financing ability of companies, it is expected that the property investment remains resilient and continues to have driving force to the construction machinery industry.

In view of the increasing market demand, the Company needs to speed up its adjustment to and upgrade of industry structure in order to secure sound and sustainable development in future.

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APPENDIX I	FEASIBILITY ANALYSIS REPORT ON THE USE OF
	PROCEEDS OF THE PROPOSED NON-PUBLIC ISSUANCE

1. To improve product quality of the Company to enhance market competitiveness

Construction machinery industry falls within high-end equipment manufacturing sector requiring extremely high level of technology. It is a typical capital- and technology-intensive industry. Construction machinery intelligent manufacturing projects adopt new knowhow, technology, material and equipment and emphasise improvements in key knowhow, key process and underperforming section along production to ensure product quality.

Intelligent manufacturing process in construction machinery production integrates digitalization and smart technology along the entire production process. Upon completion of the project, the Company will be able to effectively control R&D, production, sales and marketing and after-sale service through big-data and cloud analysis, which will in turn provide data for decision-making, ultimately enhancing products' competitiveness.

1. To enhance production efficiency to better satisfy market demand

The construction machinery intelligent manufacturing project can optimise production process, enhance production efficiency and secure production reasonableness, efficiency and rationality through process improvement and intelligent and automated production. In the excavating machinery intelligent manufacturing project, 75% of the parts will be assembled by robots. Assembly of one excavator can be completed in every 12 minutes. Production efficiency can be enhanced.

In addition, benefited from the flexibility in improving production lines, the Company will be able to keep launching new products according to the changing market demand and offering high quality products to satisfy customers.

2. Feasibility of the projects

1. The Company has strong R&D capability and a comprehensive R&D system

As a global leading high-end equipment manufacturer, the Company has strong R&D capability and comprehensive R&D system, together with a pool of talented calibres. The Company is one of the First Batch of National Innovative Enterprises, a National Modal Enterprise of New Technology, a Pilot Enterprise of Design of National Industrial Products and a National Modal Enterprise of Intellectual Property accredited by ministries and commissions of the PRC, including the Ministry of Science and Technology, the Ministry of Industry and Information Technology and the Ministry of Finance. The Company is also the first player in the concrete machinery industry to receive the State Scientific and Technological Progress Award. In 2014, the "Key Technology of Mega Tower Crane and its Application" was granted the State Scientific and Technological Progress Award - Second Class. This is the highest award so far received by the industry participants.

Leveraged on the comprehensive R&D system, a big talent pool and strong R&D capability of the Company, the project will be smoothly implemented.

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APPENDIX I	FEASIBILITY ANALYSIS REPORT ON THE USE OF
	PROCEEDS OF THE PROPOSED NON-PUBLIC ISSUANCE

1. The national environmental policy and measures addressing excessive production capacity create new demand generating from vehicle replacement

During recent years, the national environmental and safety control policies have been tightened. Small-mid machinery enterprises with low R&D capability and technology level, as well as their obsolete capacity, are gradually eliminated. Capitalised on advantages over technology, products and financial strength, leading players continue to capture market share. For instance, in the concrete mixer truck industry, the inventory of equipment of China III vehicle emission standards and of below standards represents more than 30% of the total number. Mixer trucks are mainly used for transport concrete for highways. Since they are subject to the diesel emission policy, the market will need approximately 20,000 new mixer trucks per annum from 2020 to 2023, in addition to the demand creating from vehicle replacement. Furthermore, overloading is common in the mixer truck industry. Due to the regulation combating overloading, demand for compliant mixer trucks will grow rapidly. Environmental policy and regulation combating overloading will accelerate equipment replacement which will create new demand for the market.

Therefore, construction machinery satisfying national environmental policy and loading standards will be chosen as the replacement in the next couple of years, creating substantial market demand for the project.

1. Key components intelligent manufacturing project
   1. Necessity of the project
2. 1. High-strengthsteel and metal sheet are the key material for light-weight products of the Company

Light-weight products have become the future trend for the construction machinery industry due to the increasing urbanisation and industrialisation of the PRC, strong government support to environmental protection and active promotion of low energy-consumption and emission car. In light of the market trend of large- size light-weight products, high-strength steel and metal sheet are widely applied to manufacture structural and wear-resistant parts. For instance, the 5-axle67-Meter steel boom pump truck, the star product of the Company, is made of 1,100MPa ultra high-strength steel with a hollow design. It is well received by the industry. High- strength steel and metal sheet are also the integral part of the Company's products, such as excavator, crane, pump truck, aerial work platform.

Competition in the global construction machinery market is increasingly keen. The Company is required to achieve intelligent manufacturing for key components, launch wide-ranged and diversified products and enhance product quality to satisfy market needs. It also needs to align with market trend and establish competitive advantages in the market.

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APPENDIX I	FEASIBILITY ANALYSIS REPORT ON THE USE OF
	PROCEEDS OF THE PROPOSED NON-PUBLIC ISSUANCE

1. Intelligent manufacturing of high-strength steel and metal sheet can greatly enhance the manufacturing efficiency

Intelligent manufacturing of high-strength steel and metal sheet has higher technology requirements than traditional manufacturing where precision of products made of traditional steel cannot be secured. Therefore, mid- and high-end digital steel bar and intelligent workshop are the options to ensure quality and efficiency of key parts and components.

The project will introduce various mid- to high-end digital processing equipment, such as fibre laser cutting machines, one-headed plasma cutting machines, and multi-headed digital flame cutting machines. Also, intelligent manufacturing workshops will be designed in such a way compatible with the production scale, product features and knowhow requirements in order to achieve a high output ratio. The project will invest in various intelligent manufacturing equipment which enables higher automation and efficiency of production lines. Design concept of shortest distance will be adopted in workshops to reduce repeated or unnecessary logistics distance.

1. Centralised production of high-strength steel and metal sheet can achieve higher efficiency in cost

The current production bases of high-strength steel and metal sheet of the Company are scattered across Changsha, Weinan and other cities in the PRC. The scattered distribution leads to difficulty in overall management of parts and components and in monitoring sub-standard output, resulting in material wastage. Besides, numerous production bases also increase the transportation costs of the Company in adjusting and dispatching resources in between these bases.

Key components intelligent manufacturing project can resolve the above problems. Firstly, centralised production facilitates the promotion and application of intelligent manufacturing and new high technology. It helps to save investment, shorten production flow, and achieve safe production. Further, the project is located at an area with good transportation network. Centralized and sizable production not only reduces raw material wastage and quality risks, but also achieves greater cost benefits. Centralised production base also facilitates the Company to demonstrate its production capability, enhance corporate image and gain international connection.

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APPENDIX I	FEASIBILITY ANALYSIS REPORT ON THE USE OF
	PROCEEDS OF THE PROPOSED NON-PUBLIC ISSUANCE

2. Feasibility of the project

1. The Company has a pool of talent from various disciplines and professions

After more than 20 years' development, the Company has established a pool of talent who are high-quality, energetic and committed to innovation, and come from various disciplines and professions. We also have talents from intelligent manufacturing. In order to achieve the objective of the project, the Company will offer necessary training to production personnel who are on board after production commencement. These training include modern management and operation training for management; and ongoing training on product design, knowhow, electrical and hydraulic technology, foreign languages and computer skills to technical staff. Workers in workshop are required to have training from specialised schools, possess skill to operate production and hold relevant certificates. Inspection and sales personnel can only be on board after professional training. Leveraged on the abundant talent pool and systematic pre-work training, the project will be implemented smoothly.

1. The Company possesses comprehensive R&D system and abundant R&D resources

Zoomlion Technology Centre is a State-accredited "Enterprise Technology Centre" recognized by the National Development and Reform Commission, the Ministry of Technology, the Ministry of Finance, the State Taxation Administration and the General Administration for Customs in November 2005. It is committed to R&D of new construction machinery products, R&D and promotion and application of new knowhow and technology, setting industry standards, and collection and study of information on technology. Zoomlion Technology Centre, as the core R&D support to the Company, averagely completes 300 scientific research projects, and undertakes 19 projects of national and provincial level under the State Project 863 and the support projects under the State 11th Five Year Plan every year.

The State Key Laboratory of Key Technology of Construction Machinery was approved by the Ministry of Technology in 2008. The laboratory, backed up by the Company, contains 4 laboratories for structural, transmission, hydraulics and electric studies and 4 complete-vehicle laboratories for concrete machinery, with an area of 160,000 sq. metres. It is committed to research of key and common technology of construction machinery industry.

Therefore, the Company will be able to engage in technological R&D smoothly with the support from Zoomlion Technology Centre and the State Key Laboratory of Key Technology of Construction Machinery. Upon commencement of production of the project to be funded by the proceeds, it can achieve its objective to produce high- strength steel and metal sheet.

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APPENDIX I	FEASIBILITY ANALYSIS REPORT ON THE USE OF
	PROCEEDS OF THE PROPOSED NON-PUBLIC ISSUANCE

1. Intelligent manufacturing project of key hydraulic parts (hydraulic valves)
   1. Necessity of the project
2. 1. To develop core hydraulic technology to improve the competitiveness of the Company

Hydraulic component for construction machinery is a type of hydraulic part with high adaptability and distinct function. Technological level of hydraulic component, as an ancillary part of construction machinery, has been upgraded, driven by the rapid development and increasing technological level of construction machinery in the PRC. Construction machinery of advanced level, high energy-saving function, high safety and comfort, and integration of mechanics, hydraulics and electrics has undoubtedly become the market trend. There are numerous manufacturers of hydraulic valves, as an ancillary part for construction machinery, in the PRC. However, there remains a gap with international players in terms of advancement level. The core technology level remains low in the PRC. Therefore, the PRC relies heavily on imported hydraulic valves for local large-scale construction machineries. Manual control and proportional hydraulic control valves are the main technology adopted by products in the PRC while the proportion electric control valve remains an empty sector due to lack of core technology. Since the processing equipment and knowhow adopted by products in other countries are more advanced, such products demonstrate a high stability and reliance over domestic products.

After implementation of this funded project, the Company will increase investment in hydraulic machinery sector and R&D of hydraulic components through recruiting and training R&D calibre. Such efforts enable the Company to strengthen the area where it and the PRC underperform, to develop core hydraulic technology and to enhance R&D and capacity-switching capability and ultimately the competitiveness of the Company.

1. To reduce reliance on imported high-end hydraulic products and enhance the risk tolerance of the Company

After several technical reforms of the hydraulic component industry of the PRC, both product quality and technology level have been greatly enhanced. Despite such enhancement, a gap remains between the local and international level. Substantial key construction projects still reply import for high performance and specialised high- tech products. Excessive reliance on imported high-end hydraulic component and huge demand in domestic hydraulic market are the features of the current hydraulic market of the PRC. The construction machinery industry in the PRC faces various issues, including high price of imported products, untimely supply of ancillary parts, high requirements set by operators, and high training and maintenance cost. In addition, import of hydraulic components is subject to risk of supply restriction under the Sino-American trade war. The PRC needs to achieve local production instead of import from foreign countries. Thus, producing advanced level and price competitive hydraulic components for large construction machineries to replace imported products has become the common objective of the industry. Adjustment to industry structure as well as industry upgrade is necessary.

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APPENDIX I	FEASIBILITY ANALYSIS REPORT ON THE USE OF
	PROCEEDS OF THE PROPOSED NON-PUBLIC ISSUANCE

Upon implementation of this funded project, the Company will upgrade the hydraulic components of Changde Zoomlion Hydraulics Co., Ltd.*, a wholly-owned subsidiary of the Company. It is expected to establish a R&D and production base for high-end components in Hunan province in 5 to 10 years' time, in order to promote the overall development of the hydraulic industry, replace imported products with local products and contribute to the development and technology advancement of the Company and the national construction machinery industry. This can ultimately reduce reliance on imported products and enhance the risk tolerance of the Company and the entire industry amid the trade war.

1. To satisfy the growing demand from the Company and the market for hydraulic valves

During 2020 and 2023, both operating income and product sales of the Company are expected to grow steadily. The successful R&D of series of new products, with hydraulic valves as the representing product, will optimize the product mix and overall performance, delivering positive impact on the overall strategic production of the Company. Coupled with the expansion of the Company and overseas business department and in light of the high quality requirements of exported hydraulic valves, the Company is required to increase and accelerate input to the production of hydraulic valves as soon as possible to improve products' technology level and competitiveness and capture the market where competition will become keen in future.

Upon implementation of this funded project, the Company will establish a new hydraulic component production base in Deshan Economic Development Zone, Changde, Hunan which will have a production capacity of 250,000 pieces of hydraulic valves of various types. The production base will support the hydraulic valves required by the Company's pump trucks, excavators and other products. It will also complete the hydraulic product chain of the Company, securing reliable supply of high quality hydraulic valves for the Company.

2. Feasibility of the project

1. The Company has leading R&D and technology strength

The predecessor of the Company is Changsha Construction Machinery Research Institute under the former Ministry of Construction. It was the place of origin of the construction machinery and technology of the PRC, with more than 60 years of history. The Company is a party setting the construction machinery industry standards of the PRC. It takes part and leads the setting and revision of more than 300 national and industry standards, and was the secretariat to the first standards setting organisation of the Chinese construction machinery industry. It not only represents the interest of the whole industry, but also enhances the chance for the Chinese machinery industry to access to the international market. The Company possesses

6 national-level innovation platforms, namely a State-accredited "Enterprise Technology Centre", the State Key Laboratory of Key Technology of Construction Machinery, a national concrete machinery technology research centre, a state-local joint research centre of mobile crane technology, a state-local joint research centre

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APPENDIX I	FEASIBILITY ANALYSIS REPORT ON THE USE OF
	PROCEEDS OF THE PROPOSED NON-PUBLIC ISSUANCE
	of modern agricultural equipment and a national level post-doctorate R&D work
	station. The Company ranks first in the industry in terms of the number of innovation
	platforms. Leveraged on the core industrial technology, the Company is able to
	research and develop numerous innovative and maximised products satisfying the
	huge construction needs in the PRC. The Company has received various National
	Science and Technology Progress Awards and plays a leading role in technology and
	product development.
	The established technology and strong R&D capability of the Company form a
	solid foundation for product upgrade, R&D and production. The project to be funded
	by the Proposed Non-public Issuance will capitalise the R&D experience to explore
	front-end technology and knowledge, keep improving the R&D capability and deliver
	support to the strategic development of the Company.
	(2) Huge demand for hydraulic parts from construction machinery
	In 2019, the construction machinery industry grew rapidly benefited from the
	combined effects of factors, such as the bounce back of infrastructure investment,
	resilience of property investment, increasing investment from private sector,
	environmental policy and growing export demand. In addition, the construction
	machinery industry is expecting another new cycle. The machinery products sold at
	the peak during 2009 and 2013 will have to be replaced or eliminated in the next three
	years. Export of construction machinery and equipment from the PRC is promoted by
	the One-BeltOne-Road policy, under which infrastructure investment support from
	the PRC government to the underdeveloped countries in terms of technology, man
	power and funds has greatly improved the infrastructure investment in these countries
	in recent years. Therefore, the combined force driven by internal demand and export
	will position the construction machinery industry into an upward trend in the next 3 to
	5 years.
	Hydraulic component industry is an industry providing ancillary parts to main
	engines. Its demand is linked with the performance of the main engine industry.
	Construction machinery industry is the largest downstream user of hydraulic products
	in the PRC, accounting for more than 35% of the domestic hydraulic products. In
	future, sales increase in construction machinery is undoubtedly linked with the sales
	of key hydraulic component. Therefore, demand for key hydraulic components from
	the construction machinery industry is expected to grow year by year.
	(3) National policies support the development of the hydraulic component industry
	The PRC government has promulgated various infrastructure development
	policies, such as "One-BeltOne-Road", policy of new form of urbanisation and policy
	to strengthen the country by transportation infrastructure. In early 2020, the PRC
	government has proposed new initiatives to stimulate economic development through
	innovative and traditional infrastructure development. Supported by the series of state
	policies, the construction machinery sector and its upstream hydraulic component
	industry are expecting new business opportunities.

- I-13 -

APPENDIX I	FEASIBILITY ANALYSIS REPORT ON THE USE OF
	PROCEEDS OF THE PROPOSED NON-PUBLIC ISSUANCE
	Meanwhile, the PRC has launched various policies, including the
	4-Infrastructure Development Catalogue (2016 edition), the Plan for Standardising
	and Upgrading Quality of Equipment Manufacturing Industry, the Development Plan
	of Construction Machinery Industry under the 13th Five Year Plan and the Guiding
	Opinion on Accelerating Improvement in Industrial Infrastructure, to support the
	development of the equipment manufacturing and hydraulic components industry.
	After contribution and efforts in the past 5-10 years since the initiatives were
	proposed by the National Development and Reform Commission, the Ministry of
	Industry and Information Technology, the Ministry of Technology and the Ministry
	of Finance, some of the domestic core basic spare parts and components and key
	basic material have becoming leading products in the world, supporting the overall
	development of the industry and providing foundation for further construction and
	infrastructure and in turn the national economy of the PRC.
	The intelligent manufacturing project of key hydraulic parts (hydraulic valves)
	to be funded by the proceeds of the Proposed Non-public Issuance is in line with the
	development direction of the PRC and falls within the sectors which is the highlight
	area under the macro-economic and industry policy of the PRC. Therefore, the project
	is feasible.

(IV) Liquidity replenishment

1. Necessity of the project

1. To satisfy the capital requirements of the Company in expanding core business

As the downstream customers engaging in the national infrastructure and property development and mining operation have increasing demand for quality products, the Company is required to keep improving the design and technology of the relevant construction machinery products so as to secure sustainable business growth. During recent years, the Company has expanded its operation scale following the increasing market of the construction machinery industry. Therefore, the Company has a higher requirement of capital in raw material procurement and R&D. The Proposed Non-public Issuance will further satisfy the capital requirement of the Company in expanding core business.

1. To optimise the capital structure and enhance sustainable profitability of the Company

Construction machinery industry is a high-end equipment manufacturing industry with extremely high requirement of investment size and technology level. It is a typical capital- and technology-intensive industry. Besides, it is the practice for the construction machinery companies to provide certain credit period to downstream customers, and therefore substantial liquidity is required to support daily operation. The Proposed Non-public Issuance can not only replenish the liquidity, reduce financial burden and optimise the capital structure of the Company, but also improve risk tolerance and improve the profitability of the Company.

- I-14 -

APPENDIX I	FEASIBILITY ANALYSIS REPORT ON THE USE OF
	PROCEEDS OF THE PROPOSED NON-PUBLIC ISSUANCE

2. Feasibility of the project

The use of proceeds for liquidity replenishment is compliant with the relevant laws, regulations and policy as well as the liquidity requirement under the Regulatory Q&A - Regulatory Requirements Governing the Fundraising of Listing Companies (Revised). Therefore, the plan is practicable and feasible.

The use of proceeds for liquidity replenishment is in line with the current status of the industry and relevant policies, and therefore, the plan is feasible. The proceeds, upon receipt, can help to meet the capital requirements of the Company, optimise its financial structure and improve profitability and competitiveness of the Company, which in turn is of the interest of the Shareholders as a whole.

3. Effect of the Proposed Non-public Issuance on the operation, management and financial position of the Company

1. Effect of the Proposed Non-public Issuance on the operation and management of the Company

The proceeds of the Proposed Non-public Issuance is mainly used for the construction machinery intelligent manufacturing project, the key components intelligent manufacturing project and the intelligent manufacturing project of key hydraulic parts (hydraulic valves). Upon completion of the projects and their commencement in production, the competitiveness and performance of the products of the Company will be improved while the production costs can be lowered. In addition, the R&D of system management can be enhanced which in turn can strengthen the R&D capability of the Company, upgrade product, reinforce the leading position and secure sustainable development of the Company.

1. Effect of the Proposed Non-public Issuance on the financial position of the Company

Upon completion of the Proposed Non-public Issuance, the total current assets and total net asset of the Company will both increase while the gearing ratio will decrease. Pressure on working capital will be effectively relieved. Since the liquidity and solvency will be improved, the capital structure and risk tolerance of the Company will also be improved and strengthened.

1. Effect of the Proposed Non-public Issuance on the returns of the current period

Upon completion of the Proposed Non-public Issuance, the total share capital of the Company will increase. Since it will take a certain period of time for the Company to realise the operating income from the projects to be funded by the proceeds, the earning per Share is likely to be diluted in the short term. In order to recover the shareholders' return, the Company intends to improve asset quality and achieve sustainable development of the Company through speeding up the investment of the concerned projects, strengthening the management of the proceeds of the Proposed Non-public Issuance, improving corporate governance, refining and strictly executing the profit allocation policy and optimising mechanism of shareholders' return.

- I-15 -

APPENDIX I	FEASIBILITY ANALYSIS REPORT ON THE USE OF
	PROCEEDS OF THE PROPOSED NON-PUBLIC ISSUANCE

4. Approval status of the investment projects to be funded by the Proposed Non-public Issuance

The issue of A Shares under the Proposed Non-public Issuance is considered and approved at the 3rd provisional meeting of the 6th session of the Board. The independent Directors have issued their independent opinion approving the same.

The Proposed Non-public Issuance is subject to the approval of the Shareholders at the EGM and the approval of the CSRC, in accordance with the relevant laws and regulations, such as the Company Law, the Securities Law, the Administrative Measures and the Implementation Rules.

Upon approval of the CSRC, the Company will apply to Shenzhen Stock Exchange and CSDC for issuance, registration and listing of stock.

5. Conclusion

On conclusion, after prudent analysis, the Board considers that the investment projects to be funded by the proceeds of the Proposed Non-public Issuance are in line with the relevant industry policies, laws and regulations of the PRC, meet the strategic development of the Company and have promising market prospectus and sound economic efficiency. After the application of the proceeds of the Proposed Non- public Issuance, the working capital of the Company can be replenished, the current assets, net assets, liquidity and solvency of the Company will increase, and the capital structure and risk tolerance of the Company will be improved and strengthened. In addition, product performance can be improved while product cost can be lowered. Enhancement in R&D capability and product upgrade can be achieved in order to reinforce the industry position of the Company. All of these form a solid foundation for the Company's sustainable development and are of the interest of the Shareholders as a whole.

- I-16 -

APPENDIX II	MEASURES ON MAKING UP DILUTED RETURNS FOR THE
	CURRENT PERIOD DUE TO THE PROPOSED NON-PUBLIC ISSUANCE

Measures on making up diluted returns for the current period due to the Proposed Non- public Issuance

Pursuant to the Opinions of the General Office of the State Council on Further Strengthening the

Protection of the Legitimate Rights and Interests of Minority Investors in the Capital Market (Guo Ban Fa [2013] No. 110) 《( 國務院辦公廳關於進一步加強資本市場中小投資者合法權益保護工作的意見》)

(國辦發 [2013] 110號), the Opinions of the State Council on Further Promoting the Sound Development of Capital Market (Guo Fa [2014] No. 17) 《( 國務院關於進一步促進資本市場健康發展的若干意見》) (國

發 [2014] 17號) and the Guidance Opinions in Relation to the Matters Relating to the Dilution of Returns

for the Current Period by Initial Public Offering, Refinancing and Material Assets Reorganization (CSRC Notice [2015] No. 31) 《( 關於首發及再融資、重大資產重組攤薄即期回報有關事項的指導意見》)

(證監會公告 [2015] 31號) and the requirements of other relevant documents, the Company has truly and properly conducted an analysis on the dilution of returns for the current period due to the Proposed Non- public Issuance and proposed specific measures to make up the returns, in order to protect the rights to knowledge and safeguard the interests of minority Shareholders. The relevant parties undertake to properly implement the make-up measures of the Company, and the specific conditions of which are as follows:

Special reminder: Investors are minded to take note that the Company makes no guarantee to future earnings by formulation of these make-up measures.

1. Analysis of the impact of the Proposed Non-public Issuance on major financial indicators

A. Assumptions

1. Assuming that there is no major adverse change in the situation of the macro-economic environment and securities market, and no major adverse change in the operation environment of the Company;

1. Assuming that the Proposed Non-public Issuance will be completed in November 2020. Such time of completion is used to measure the impact of the dilution of returns for the current period due to the Proposed Non-public Issuance on major financial indicators only, which does not constitute any commitment to the actual time of completion and will be subject to the actual time of completion as approved by the CSRC;

1. Assuming that the number of A Shares to be issued under the Proposed Non-public Issuance is 1,249,999,998 A Shares, which does not exceed 20% of the total number of A Shares in the share capital as at the date of the 2019 annual general meeting of the Company. If the Company distributes dividend, bonus shares or there occurs any capitalization issue or other ex-right and ex-dividend event during the period between the Benchmark Date to the date of issuance, the number of A Shares to be issued under the Proposed Non-public Issuance will be adjusted in accordance with the relevant rules and regulations;

- II-1 -

APPENDIX II	MEASURES ON MAKING UP DILUTED RETURNS FOR THE
	CURRENT PERIOD DUE TO THE PROPOSED NON-PUBLIC ISSUANCE

(IV) According to the 2019 annual report of the Company, the net profits attributable to owners of the parent company before and after extraordinary items for 2019 were RMB4,371,456,600 and RMB3,514,297,500 respectively, assuming that there is the occurrence of the following situations in respect of the net profits attributable to owners of the parent company before and after extraordinary items that: (1) they are the same as that of 2019; (2) they have a growth of 10% comparing to that of 2019; (3) they have a growth of 20% comparing to that of 2019. This assumption is used to measure the impact of the Proposed Non-public Issuance on the returns of the Company for the current period only, which does not represent any judgment on the condition and trend of operation of the Company, nor does it constitute a profit forecast;

1. The effect of the proceeds from the Proposed Non-public Issuance on the production, operation and financial status (such as financial expenses and investment income) of the Company is not considered, and the profit distribution is not considered;

(VI) When making an estimation about the total share capital and a calculation of the earnings per A Share after the Proposed Non-public Issuance by the end of 2020, the impact of the Proposed Non-public Issuance on the total share capital is considered only and other possible changes in A Shares that may occur during such period are not considered; and

(VII) The assumptions on the number of A Shares to be issued, the amount of proceeds to be raised and the time of issuance under the Proposed Non-public Issuance are made only for calculation purpose, and will be subject to the number of A Shares to be issued, issuance results and actual date of issuance as approved by the CSRC.

The above assumptions are used to measure the impact of the dilution of returns for the current period due to the Proposed Non-public Issuance on the major financial indicators only, which do not represent any judgment on the operation condition and financial status of the Company for 2020, nor does it constitute a profit forecast. The profitability of the Company for 2020 depends on various factors such as national macro-economic policies, industrial development, market competition and business development of the Company, and there are lots of uncertainties. Investors should not make investment decisions based on this report, and the Company shall not be liable for any loss so incurred to the investors.

- II-2 -

APPENDIX II	MEASURES ON MAKING UP DILUTED RETURNS FOR THE
	CURRENT PERIOD DUE TO THE PROPOSED NON-PUBLIC ISSUANCE

1. Impact on major financial indicators

Based on the above assumptions, the impact of the dilution of returns for the current period due to the Proposed Non-public Issuance is as follows:

		For the year of 2020/
		As at 31 December 2020
	For the year of	Before the	After the
	2019/As at 31	Proposed Non-	Proposed Non-
Description	December 2019	public Issuance	public Issuance
Total share capital
(in 10,000 A Shares)	787,497.49	789,877.82	914,877.82
Total amount of proceeds raised by
the Proposed Non-public
Issuance (in RMB10,000)			660,000.00

Assuming that: the net profits attributable to owners of the parent company before and

• after extraordinary items for 2020 is the same as that of 2019 Net profits attributable to equity
• Shareholders of the Company

	(in RMB10,000)	437,145.66	437,145.66	437,145.66
Net profits attributable to equity
Shareholders of the Company
	after extraordinary items
	(in RMB10,000)	351,429.75	351,429.75	351,429.75
Basic earnings per A Share
	(RMB per A Share)	0.58	0.55	0.55
Diluted earnings per A Share
	(RMB per A Share)	0.58	0.55	0.55
Basic earnings per A Share after
	extraordinary items
	(RMB per A Share)	0.47	0.45	0.44
Diluted earnings per A Share after
	extraordinary items
	(RMB per A Share)	0.47	0.45	0.44
Weighted average return on
	net assets	10.82%	10.67%	10.53%
Weighted average return on
net assets (after extraordinary
	items)	8.70%	8.58%	8.46%

- II-3 -

APPENDIX II	MEASURES ON MAKING UP DILUTED RETURNS FOR THE
CURRENT PERIOD DUE TO THE PROPOSED NON-PUBLIC ISSUANCE
		For the year of 2020/
		As at 31 December 2020
	For the year of	Before the	After the
	2019/As at 31	Proposed Non-	Proposed Non-
Description	December 2019	public Issuance	public Issuance

Assuming that: the net profits attributable to owners of the parent company before and

• after extraordinary items for 2020 have a growth of 10% comparing to that of 2019 Net profits attributable to equity
• Shareholders of the Company

	(in RMB10,000)	437,145.66	480,860.22	480,860.22
Net profits attributable to equity
Shareholders of the Company
	after extraordinary items
	(in RMB10,000)	351,429.75	386,572.73	386,572.73
Basic earnings per A Share
	(RMB per A Share)	0.58	0.61	0.60
Diluted earnings per A Share
	(RMB per A Share)	0.58	0.61	0.60
Basic earnings per A Share after
	extraordinary items
	(RMB per A Share)	0.47	0.49	0.48
Diluted earnings per A Share after
	extraordinary items
	(RMB per A Share)	0.47	0.49	0.48
Weighted average return on
	net assets	10.82%	11.67%	11.52%
Weighted average return on
net assets (after extraordinary
	items)	8.70%	9.39%	9.26%

Assuming that: the net profits attributable to owners of the parent company before and

• after extraordinary items for 2020 have a growth of 20% comparing to that of 2019 Net profits attributable to equity
• Shareholders of the Company

	(in RMB10,000)	437,145.66	524,574.79	524,574.79
Net profits attributable to equity
Shareholders of the Company
	after extraordinary items
	(in RMB10,000)	351,429.75	421,715.70	421,715.70
Basic earnings per A Share
	(RMB per A Share)	0.58	0.66	0.66
Diluted earnings per A Share
	(RMB per A Share)	0.58	0.66	0.66

- II-4 -

APPENDIX II	MEASURES ON MAKING UP DILUTED RETURNS FOR THE
CURRENT PERIOD DUE TO THE PROPOSED NON-PUBLIC ISSUANCE
		For the year of 2020/
		As at 31 December 2020
	For the year of	Before the	After the
	2019/As at 31	Proposed Non-	Proposed Non-
Description	December 2019	public Issuance	public Issuance
Basic earnings per A Share after
extraordinary items
(RMB per A Share)	0.47	0.53	0.53
Diluted earnings per A Share after
extraordinary items
(RMB per A Share)	0.47	0.53	0.53
Weighted average return on
net assets	10.82%	12.67%	12.51%
Weighted average return on
net assets (after extraordinary
items)	8.70%	10.19%	10.05%

Note 1: The formulas for calculating the basic earnings per A Share and diluted earnings per A Share are subject to the requirements of the Guidance Opinions in relation to the Matters relating to Dilution of Returns for the Current Period by Initial Public Offering, Refinancing, and Material Assets Reorganisation issued by the CSRC, and based on the Rules for Preparation of Information Disclosure by Companies engaging in Public Issuance of Securities No. 9 - Calculation and Disclosure of the Return on Net Assets and Earnings Per Share 《( 公開發

行證券的公司信息披露編報規則第9號 - 淨資產收益率和每股收益的計算及披露》).

2. The risk alert for the dilution of returns for the current period due to the Proposed Non-public Issuance

After completion of the Proposed Non-public Issuance, the size of the total share capital and net assets of the Company will be increased accordingly. Since a certain period of time is required for the preparation and implementation of the investment projects to which the fund raising relates, the financial indicators such as return on net assets and earnings per A Share may reduce to a certain extent in the short run. Investors are reminded that there is a risk of the dilution of returns to the Shareholders for the current period.

In the medium and long run, as those projects will be progressively completed and will then generate income, the continual profitability of the Company will be further enhanced. It is expected that the earnings per A Share and return on net assets will be gradually increased.

3. Necessity and rationality of the Proposed Non-public Issuance

For the analysis of the necessity and rationality of the Proposed Non-public Issuance, please refer to Appendix I of this circular.

- II-5 -

APPENDIX II	MEASURES ON MAKING UP DILUTED RETURNS FOR THE
	CURRENT PERIOD DUE TO THE PROPOSED NON-PUBLIC ISSUANCE

4. Relationship between the investment projects to which the fund raising relates and the existing business of the Company, and the reserves in personnel, technology, market and other aspects of the Company in respect of those projects

1. Relationship between the investment projects to which the fund raising relates and the existing business of the Company

The Company is mainly engaged in the research and development, manufacturing, sales and other services of construction machinery and agricultural machinery. Construction machinery includes concrete machinery, crane machinery, infrastructure construction machinery, pile foundation machinery, work-at-height machinery, fire-fighting machinery, road building and maintenance machinery, forklift truck and other products, which are mainly used for infrastructure and real estate construction; agricultural machinery includes farming machinery, harvesting machinery, drying machinery, agricultural equipment and other products, which are mainly used throughout the entire agricultural production process including breeding, field preparation, sowing, field management, harvesting, drying, storage and other procedures.

The investment projects to which the fund raising relates are an extension and expansion of the existing principal businesses of the Company. By the implementation of these projects, the Company can strengthen its existing principal businesses, improve its research and development capabilities, strive for expansion of its market share, strengthen its market competitiveness and profitability and promote its sustainable development in the long run.

1. Reserves in terms of personnel, technology, market and other aspects of the Company
2. 1. Technological reserves

The Company, whose predecessor was the former Construction Machinery Research Institute of Changsha, has more than 60 years of technical experience and is the origin of construction machinery technology in China. The Company is a promoter of the standards for construction machinery industry in China, which has led, participated in, formulated and amended more than 300 national and industrial standards, and is the first company in the construction machinery industry in China named as a secretariat of a committee of the International Organization for Standardisation, allowing it to represent the interests of the entire industry and enhancing the access of Chinese construction machinery to the international market; the Company has 6 innovative platforms at national level, namely a corporate technological center at national level, a national key laboratory for critical technologies relating to construction machinery, a national concrete machinery technology research center, a national cooperative engineering research center for mobile crane technology, a national cooperative engineering research center for modern agricultural equipment and a postdoctoral research workstation at national level, allowing it to stay at the forefront in terms of the number of innovation platforms at national level; it also captures the core technologies in the industry and develops numerous innovative and cutting-edge products based on the needs of major construction works in China and won numerous national scientific and technological awards for outstanding performance, thus leading the development of technologies and products in the industry.

- II-6 -

APPENDIX II	MEASURES ON MAKING UP DILUTED RETURNS FOR THE
	CURRENT PERIOD DUE TO THE PROPOSED NON-PUBLIC ISSUANCE

The international standards of ISO 19720-1:2017 known as "Building Construction Machinery and Equipment - Plants for the Preparation of Concrete and Mortar - Part 1: Terminology and Commercial Specifications" was officially published in June 2017, which has become the first international standards led and officially issued by a Chinese company in the global construction machinery industry; the international standards of ISO10245-3 known as "Cranes - Limiting and Indicating Devices - Part 3: Tower Cranes" was officially published in March 2019, which has become the first international standards in the crane segment the revision of which was led and completed by a Chinese company; in 2019, the Company formed various project teams for leading the revision of the international standards of ISO 12480-1, known as "Cranes - Safe use - Part 1: General" and ISO 9928-3 known as "Cranes - Crane Operating Manual - Part 1: General" respectively.

In conclusion, the Company has made sufficient technological reserves for the implementation of these investment projects to which the fund raising relates.

(II) Personnel reserves

The core management team of the Company has extensive experience in the research and development, manufacturing, sales, marketing and quality control in production of construction machinery and agricultural machinery, and has a deep and comprehensive understanding of the future development trends of the construction machinery and agricultural machinery industry, and is rather forward looking in making judgments on market trends and technological directions.

As at 31 December 2019, the Company had a total of 19,016 employees worldwide, of which 7,134 employees received undergraduate degrees or above qualifications and 1,228 employees received master degrees or above qualifications. In terms of occupational structure, the Company had 8,089 production staff, 2,938 sales staff, 4,390 research and development staff, 474 financial staff and 3,125 administrative staff. The Company will continue to retain outstanding talents and experts through recruitment, training, promotion and other methods in order to maintain the level of quality service and leading professional status of the Company in the industry and continue to satisfy the needs of customer. As such, the Company has sufficient and reasonably structured personnel reserves to ensure the effective implementation of the investment projects to which the fund raising relates.

In conclusion, the Company has reasonable and experienced personnel reserves to ensure the smooth implementation of the investment projects to which the fund raising relates.

- II-7 -

APPENDIX II	MEASURES ON MAKING UP DILUTED RETURNS FOR THE
	CURRENT PERIOD DUE TO THE PROPOSED NON-PUBLIC ISSUANCE

(III) Capabilities of market development

Since the Company pays concern to the integration of high quality resources from a global perspective for the purpose of promoting rapid expansion, it has built a global manufacturing, sales and service network. In terms of manufacturing bases, it has established various industrial manufacturing bases worldwide through the integration and composition of industrial parks within and outside China. In terms of product sales and service networks, the product market of the Company has covered more than 100 countries and regions around the world, and through which it has established a global market structure and a global logistics network and spare parts supply system, in particular setting up constituent companies and representative offices along the routes of "One Belt One Road". As an equipment manufacturing company capitalized on the key strategies under "One Belt One Road", the Company has strived to explore foreign markets. Through the ownership of industrial parks or production bases in countries along the routes of "One Belt One Road", such as Belarus, Kazakhstan, India, Pakistan, Indonesia, Thailand and other countries, the strategy of the Company for foreign development has evolved from "going out" to "going in", i.e. the localisation of operation, thus creating new opportunities for development of the Company.

By progressively acquiring dozens of companies locally and in the overseas since 2001, the Company has become a pioneer for integration of foreign resources in the construction machinery industry in China; amongst which, the acquisition of Compagnia Italiana Forme Acciaio (CIFA), an Italian company, in 2008 represented a rapid absorption and re-innovation by the Company of the highest level of technology in the world, allowing the Company to become a pioneer and leader for internationalization of the Chinese construction machinery. The management team has accumulated experience in the course of a series of acquisitions, and through which it has derived five principles for successful acquisitions: "Tolerance, Responsibility, Regulation, Co-creation and Sharing". The corporate culture of the Company has allowed the merged companies to smoothly integrate into the management system of the Company and attracted abundant outstanding and experienced talents and experts, successfully solving the management problems after the acquisitions. Especially in the course of foreign acquisitions and resource integration, the Company insisted on the leading role of its corporate culture, seized the strategic control, intensified coordination and exploration so as to implement the principles of "leadership, intensification and penetration".

Forward-looking strategic decisions reflect the strategic views and insights of corporate managers. The Company has an acute awareness of economic development trends in the international and local realms, and it promotes corporate strategic transformation and upgrading in a timely manner, gains a foothold in the product and capital markets respectively and promotes the respective integrations of production and internet as well as industry and finance. The Company focuses on the construction machinery and agricultural machinery segments, optimises and strengthens its core businesses and fully enhances the position and influence of the Company in the global market by way of cross-border acquisitions and international cooperation.

In conclusion, the well-developed marketing network and sufficient customer resources of the Company have laid a sound market foundation for the investments projects to which the fund raising relates.

- II-8 -

APPENDIX II	MEASURES ON MAKING UP DILUTED RETURNS FOR THE
	CURRENT PERIOD DUE TO THE PROPOSED NON-PUBLIC ISSUANCE

5. Specific measures on making up diluted returns for the current period due to the Proposed Non-public Issuance

Considering the potential impact of the dilution of returns to the Shareholders for the current period due to the Proposed Non-public Issuance and in order to protect the interests of the Shareholders, especially minority Shareholders, the Company will adopt the following measures to enhance the profitability and Shareholders' returns, in order to make up the diluted returns to the Shareholders for the current period due to the Proposed Non-public Issuance:

1. To accelerate the development of the investment projects to which the fund raising relates and realise the expected returns of these projects as soon as possible

The implementation of the investment projects to which the fund raising relates will help to extend the influence of the Company in the market, further enhance its competitive advantages and improve its sustainable development capabilities that are beneficial to the realisation and maintenance of the interests of the Shareholders in the long run.

The Company will accelerate the implementation of the investment projects to which the fund raising relates and strive to complete them as soon as possible so as to contribute to the improvement of its operation results and profitability and facilitate the making up of diluted returns to the Shareholders for the current period due to the Proposed Non-public Issuance.

1. To continuously improve the level of corporate governance and safeguard the development of the Company through the regulatory regime

The Company will strictly adhere to the Company Law, the Securities Law, the Code of Corporate Governance for Listed Companies 《( 上市公司治理準則》) and other requirements of

relevant laws and regulations and regulatory documents, and continuously improve its corporate governance structure, in order to ensure that the Shareholders are able to fully exercise their rights and the Board can perform its duty in accordance with the laws and regulations and the Articles and make decisions in a scientific, prompt and prudent manner; and ensure that independent Directors can perform their duties diligently and protect the interests of the Company as a whole, especially the legitimate rights and interests of minority Shareholders; and ensure that the board of supervisors can independently and effectively exercise the rights of supervision and inspection over managers and other senior management personnel and also the financial status of the Company so as to safeguard the development of the Company through the regulatory regime.

1. To strengthen the management of the proceeds raised and ensure the uses of the proceeds are regulated

Pursuant to the Company Law, the Securities Law, the Administrative Measures, the Regulatory

Guidance No. 2 of Listed Companies - Supervision and Administration Requirements for Listed Companies on the Management and Use of Raised Funds 《( 上市公司監管指引第2號 - 上市 公司募集資金管理和使用的監管要求》), the Shenzhen Listing Rules and other requirements

of relevant laws and regulations and regulatory documents and the Articles, the Company has formulated the Fund Raising Management Mechanism to expressly regulate the deposit, use, change in use, management and supervision of the accounts specialised for the proceeds raised. In order to ensure that the proceeds will be used by the Company in a regulated and effective way, the Board

- II-9 -

APPENDIX II	MEASURES ON MAKING UP DILUTED RETURNS FOR THE
	CURRENT PERIOD DUE TO THE PROPOSED NON-PUBLIC ISSUANCE

will continue to monitor the deposit and use of the proceeds received from the Proposed Non-public Issuance, regularly conduct internal audits on the proceeds and cooperate with regulatory banks and sponsors on the inspection and supervision of the proceeds so as to ensure that the proceeds will be used in a reasonable and regulated manner and avoid the risks of improper use.

1. To strictly implement the bonus policies and protect the returns to the Shareholders

Pursuant to the Company Law, the CSRC's Notice on Further Implementation of Cash Dividend Distribution by Listed Companies (Zheng Jian Fa [2012] No.37) 《( 關於進一步落實上市公司現金分 紅有關事項的通知》) (證監發 [2012] 37號) and the Regulatory Guidance No. 3 of Listed Companies

• Cash Dividend Distribution by Listed Companies (CSRC Notice [2013] No.43) 《( 上市公司監管 指引第3號 - 上市公司現金分紅》) (證監會公告 [2013] 43號) and other requirements of relevant laws, regulations and regulatory documents and the Articles, and after fully considering factors such as corporate profitability, business development plan, Shareholders' returns, social capital costs and external financing environment, the Company has formulated the Shareholders' returns plan for the next three years (2020-2022) to further clarify and improve the principles and methods of profit distribution of the Company, in particular the specific conditions and proportion for distribution of cash dividends and the conditions for distribution of stock dividends, in order to improve the decision- making procedures and mechanism for profit distribution of the Company and the decision-making procedures for adjustment of profit distribution policies.

In the future, the Company will continue to strictly implement its bonus policies and strengthen its investors' returns mechanism so as to ensure that the interests of the Shareholders of the Company, especially minority Shareholders, are protected, and will strive to improve the Shareholders' returns.

1. Commitments made by the Directors and senior management of the Company in relation to the measures on making up diluted returns for the current period due to the Proposed Non- public Issuance

Pursuant to the Opinions of the State Council on Further Promoting the Sound Development of Capital Market (Guo Fa [2014] No. 17), the Opinions of the General Office of the State Council on Further Strengthening the Protection of the Legitimate Interests of Minority Investors in the Capital Market (Guo Ban Fa [2013] No. 110) and the Guidance Opinions in Relation to the Matters Relating to the Dilution of Returns for the Current Period by Initial Public Offering, Refinancing and Material Assets Reorganization (CSRC Notice [2015] No. 31) promulgated by the State Council, the CSRC and other departments respectively, the directors and senior management of the Company make the following commitments in relation to the measures on making up diluted returns for the current period due to the Proposed Non-Public Issuance respectively:

1. I undertake not to transfer benefits to other units or individuals at nil consideration or on unfair conditions, or otherwise damage the interests of the Company in any manner whatsoever;

(II) I undertake to restrict my consumption behaviour during the performance of duties;

1. I undertake not to use the assets of the Company for investment and consumption activities that are not related to the performance of duties;

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APPENDIX II	MEASURES ON MAKING UP DILUTED RETURNS FOR THE
	CURRENT PERIOD DUE TO THE PROPOSED NON-PUBLIC ISSUANCE

(IV) I undertake to support the collaboration between the remuneration mechanism formulated by the Board or its remuneration and appraisal committee and the implementation of the measures on making up returns by the Company;

1. if the Company formulates any share incentive plan in the future, I undertake to support the collaboration between the conditions for exercise of the share incentive plan of the Company and the implementation of the measures on making up returns by the Company;

(VI) After the making of these commitments, if the CSRC, Shenzhen Stock Exchange and other regulatory authorities promulgate any other new regulations relating to the measures on making up returns and the relevant commitments, and the above commitments are not able to comply with those regulations, I undertake to provide supplementary commitments in accordance with the latest regulations at that time; and

(VII) I undertake to truly and properly perform these commitments. If I violate these commitments and as a result the Company or investors suffer losses, I am willing to accept the related administrative penalties or regulatory measures, and willing to assume the liability for compensation to the Company or investors in accordance with the law.

- II-11 -

APPENDIX III	SHAREHOLDERS' RETURNS PLAN
	FOR THE NEXT THREE YEARS (2020-2022)

Shareholders' returns plan for the next three years (2020-2022)

In order to improve and optimise the shareholders' return mechanism of the Company, increase the transparency and operation effectiveness of the decision making on profit distribution policies, actively provide returns to investors, effectively protect the legitimate interests of public investors and encourage investors to develop long-term and rational investment concepts, and after fully considering the actual corporate condition and future development needs, the Company has formulated the shareholders' returns plan for the next three years (2020-2022) (the "Plan") in accordance with the Company Law and the relevant regulations of the CSRC and the Articles. Details of the Plan is as follows:

1. Factors considered by the Company in formulating the Plan

The Company has committed to procure the long-term and sustainable corporate development. Based on a comprehensive analysis of the actual condition of business development, development strategy, corporate profitability and social capital costs of the Company and also the external financing environment, the Company has fully considered the characteristics of industry, current stage of development, its own business model, level of profitability, cash flow status, capital requirements for project investments, bank credit, debt financing environment and other conditions, in order to establish a sustainable, stable and scientific dividend returns plan and mechanism for investors and ensure the continuity and stability of the profit distribution policies of the Company.

1. Principles for formulation of the Plan
2. 1. The Plan shall be formulated in compliance with the Company Law, the Articles and other requirements of relevant laws and regulations and regulatory documents.
   2. The profit distribution of the Company shall emphasise the provision of reasonable investment returns to investors, safeguard the legitimate interests of all investors and the sustainable development of the Company, and the Company shall maintain the continuity and stability of the profit distribution policies.
   3. In the process of decision making, discussion and review by the Board, board of supervisors and the Shareholders at the general meeting, the opinions of independent Directors and public investors shall be fully considered.
3. Shareholders' returns plan for the next three years (2020-2022)
4. 1. Method of profit distribution

The Company may distribute dividends in the form of cash, stocks or a combination of cash and stocks, and place priority on the profit distribution method of cash dividends. The Company may distribute mid-term and annual profits.

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APPENDIX III	SHAREHOLDERS' RETURNS PLAN
	FOR THE NEXT THREE YEARS (2020-2022)

1. Specific conditions and ratios for distribution of cash dividends by the Company

The Board shall fully consider the characteristics of industry, stage of development, the Company's own business model, level of profitability and whether there is any arrangement for material capital expenditure and then propose a diversified cash dividend policies in accordance with the procedures set out in the Articles:

1. if the Company reaches the mature stage of development and there is not any arrangement for material capital expenditure, the minimum cash dividend ratio in this profit distribution shall be up to 80% when the profit distribution is made;

1. if the Company reaches the mature stage of development and there is an arrangement for material capital expenditure, the minimum cash dividend ratio in this profit distribution shall be up to 40% when the profit distribution is made;

1. if the Company is in the growth stage of development and there is an arrangement for material capital expenditure, the minimum cash dividend ratio in this profit distribution shall be up to 20% when the profit distribution is made; and

(IV) if the stage of development of the Company is difficult to identify but it has an arrangement for material capital expenditure, the requirements set forth in the above paragraphs shall apply.

Upon satisfaction of the conditions that the profits and the accumulated undistributed profits are positive, and there is no major adverse change in the industry and the distribution of cash dividends will not affect the continual operation of the Company for a particular year, the cash dividends to be distributed by the Company will not be lower than RMB3.17 per 10 A Shares under the profit distribution plan for the years from 2020 to 2022, and the accumulated distributable profits in cash in the last three years were not be less than 30% of the annual average distributable profits realised in the last three years.

1. Specific conditions for the issue of stock dividends by the Company

Based on the profitability and the cash flow status of the Company and under the condition that the minimum cash dividend ratio is guaranteed and the size of share capital and equity structure of the Company are reasonable, the profit distribution can be made in the form of stock dividends.

4. Decision-making procedures and mechanism for profit distribution

The profit distribution proposal of the Company is prepared by the Board in accordance with the Articles and after taking account of the operation condition of the Company. In the process of discussion and review of the profit distribution proposal, the Board shall thoroughly discuss with the independent Directors and the Company's supervisors and formulate a profit distribution proposal based on the consideration of providing returns to all Shareholders in a sustainable, stable and scientific way. The independent Directors shall express their independent opinions. After obtaining approval from the Board, the profit distribution proposal shall be submitted to the general meeting of the Shareholders for approval. For the purpose of considering the specific cash dividend plan by the Shareholders at the general meeting, the Company shall actively communicate and interact with the Shareholders, especially minority

- III-2 -

APPENDIX III	SHAREHOLDERS' RETURNS PLAN
	FOR THE NEXT THREE YEARS (2020-2022)

Shareholders, through various channels (including but not limited to email, fax, telephone, invitation to minority Shareholders for attending the meeting on site), fully attend to the opinions and needs of minority Shareholders and promptly answer any question of concern to minority Shareholders.

If the Company gains profit but the Board does not propose to distribute cash dividends in a particular year, the reasons and explanation together with the purpose and plan for the use of funds shall be disclosed in the annual report for that year. The independent Directors shall express their independent opinions in this regard. After obtaining approval from the Board, such plan shall be submitted to the general meeting of the Shareholders for approval.

The Company shall strictly implement the cash dividend policies as required in the Articles and the specific cash dividend proposal as approved by the general meeting of the Shareholders. If there is an event of force majeure such as war or natural disasters that materially affects the production and operation of the Company, or there is any material change in its operation condition, the Company may make adjustment to the profit distribution policies. The opinions of independent Directors on the proposal for adjustment of the profit distribution policies are required to be obtained in advance. Independent directors shall express their independent opinions. After obtaining approval from the Board, the above proposal shall be submitted for approval by more than two-thirds of the voting rights held by the Shareholders at the general meeting. The Company shall disclose detailed information about the formulation, implementation and other conditions of the cash dividend policies in the periodic reports in strict compliance with the relevant regulations.

5. Others

Any matter not covered in the Plan shall be implemented in accordance with the relevant laws, regulations, regulatory documents and the Articles. The Board is responsible for the interpretation of the Plan. The Plan shall take effect from the date on which it is approved by the general meeting of the Shareholders.

- III-3 -

NOTICE OF EGM

Zoomlion Heavy Industry Science and Technology Co., Ltd.*

中聯重科股份有限公司

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 1157)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN by the board (the "Board") of directors (the "Directors") of Zoomlion Heavy Industry Science and Technology Co., Ltd. (the "Company") that the extraordinary general meeting of the Company (the "EGM") will be held at Multi-function Conference Room, Company Office Building, No. 361, Yin Pen South Road, Changsha City, Hunan Province, the People's Republic of China ("PRC") at 2:00 p.m. on Wednesday, 12 August 2020 by way of physical meeting. Details of the EGM are as follows:

SPECIAL RESOLUTIONS

1. To consider and approve the resolution on the fulfilment of the conditions for the Proposed Non- public Issuance (as defined in the circular of the Company dated 27 July 2020).
2. To consider and approve the Proposed Non-public Issuance:
3. 1. class and nominal value of shares to be issued;
   2. issue method and time;
   3. target subscribers;
   4. subscription method;
   5. price determination date and issue price;
   6. subscription price and issue size;
   7. lock-upperiod;
   8. arrangement of accumulated profit distribution prior to completion of the issue;
   9. listing venue;
   10. use of proceeds; and
   11. validity period of the resolution.
4. To consider and approve the proposal for the Proposed Non-public Issuance.

* For identification purpose only

- EGM-1 -

NOTICE OF EGM

1. To consider and approve introduction of strategic investors and entry into conditional strategic cooperation agreements with the subscribers of the Proposed Non-public Issuance:
2. 1. To consider and approve introduction of Maanshan Huaijin Cornerstone Equity Investment Partnership (Limited Partnership) as the Company's strategic investor and execution by the Company with it of a conditional strategic cooperation agreement.
   2. To consider and approve introduction of Taiping Life Insurance Co., Ltd. as the Company's strategic investor and execution by the Company with it of a conditional strategic cooperation agreement.
   3. To consider and approve introduction of Hainan Chengyisheng Enterprise Management Partnership (Limited Partnership) ("Hainan Chengyisheng") as the Company's strategic investor and execution by the Company with it of a conditional strategic cooperation agreement.
   4. To consider and approve introduction of Ningbo Shituo Enterprise Management Co., Ltd. as the Company's strategic investor and execution by the Company with it of a conditional strategic cooperation agreement.
3. To consider and approve entry into conditional subscription agreements with subscribers of the Proposed Non-public Issuance.
4. To consider and approve entry into a related party transaction by the Company with Hainan Chengyisheng in relation to the Proposed Non-public Issuance.
5. To consider and approve the feasibility analysis report on the use of proceeds of the Proposed Non-public Issuance.
6. To consider and approve the statement of exemption from the preparation of a report on the use of proceeds from previous fund raising activities.
7. To consider and approve the measures on making up diluted returns for the current period due to the Proposed Non-public Issuance.
8. To consider and approve the undertakings in relation to the measures on making up diluted returns for the current period due to the Proposed Non-public Issuance.
9. To consider and approve the shareholders' returns plan for the next three years (2020-2022).

- EGM-2 -

NOTICE OF EGM

12. To consider and approve the authorisation to the Board and its authorised persons to handle all matters relating to the Proposed Non-public Issuance within the scope permitted by the relevant laws and regulations at their discretion.

By order of the Board

Zoomlion Heavy Industry Science and Technology Co., Ltd.*

Zhan Chunxin

Chairman

Changsha, the PRC, 27 July 2020

As at the date of this notice, the executive Director is Dr. Zhan Chunxin; the non-executive Directors are Mr. He Liu and Mr. Zhao John Huan; and the independent non-executive Directors are Mr. Zhao Songzheng, Mr. Lai Kin Keung, Ms. Liu Guiliang and Mr. Yang Changbo.

*For identification purpose only

Notes:

1. Eligibility for Attending the EGM and closure of H shares register of members
   The H share register of members of the Company will be closed for the purpose of determining entitlement of holders of H shares to attend and vote at the EGM, from Monday, 10 August 2020 to Wednesday, 12 August 2020 (both days inclusive), during which period no transfer of shares will be registered. In order to attend and vote at the EGM, holders of H shares should ensure that all transfer documents, accompanied by the relevant share certificates, are lodged with the Company's H share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-16, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong not later than 4:30 p.m. on Friday, 7 August 2020.
2. Proxy
3. 1. Each shareholder entitled to attend and vote at the EGM may appoint one or more proxies in writing to attend and vote on his behalf. A proxy need not be a shareholder of the Company.
   2. The instrument appointing a proxy must be in writing by the appointor or his attorney duly authorised in writing, or if the appointor is a legal entity, either under seal or signed by a director or a duly authorised attorney. If that instrument is signed by an attorney of the appointor, the power of attorney authorising that attorney to sign or other authorisation document must be notarised.
   3. To be valid, for holders of H shares, the proxy form and notarised power of attorney or other authorisation document must be delivered to the Company's H share registrar, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong, not less than 24 hours before the time appointed for the EGM (proxy form for use at the EGM is attached herewith). If a shareholder appoints more than one proxy, such proxies shall only exercise the right to vote by poll.
4. Registration procedures for attending the EGM
   A shareholder or his proxy should produce proof of identity when attending the EGM. If a shareholder is a legal entity, its legal representative or other person authorised by the board of directors or other governing body of such shareholder may attend the EGM by producing a copy of the resolution of the board of directors or other governing body of such shareholder appointing such person to attend the meeting.

- EGM-3 -

NOTICE OF EGM

1. Voting by poll
   According to Rule 13.39(4) of Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, any vote of shareholders at a general meeting must be taken by poll. Accordingly, the chairman of the EGM will demand a poll in relation to all the proposed resolutions at the EGM in accordance with the Articles.
2. Miscellaneous
3. 1. The EGM is expected to last for no more than half a day. Shareholders (or their proxies) attending the meeting in person are responsible for their own transportation and accommodation expenses.
   2. The address of Computershare Hong Kong Investor Services Limited is: 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong.
   3. The registered office of the Company is: No. 361, Yin Pen South Road, Changsha City, Hunan Province, the PRC.
      Telephone: [phone]. Fax: [phone]. Email: [e-mail].

- EGM-4 -