Perfectech International Holdings Limited is principally engaged in the manufacture and sale of novelties, decoration and toy products. In order to diversify its products and broaden its source of revenue, the board of directors of the Company is pleased to announced that the Group intends to develop the businesses of manufacturing and construction of new energy infrastructure, including power storage facilities and power transmission stations. The Board has observed that as the People's Republic of China (the ?PRC'') recognises the importance of developing sustainable sources of energy, governments of various levels begin introducing policies to encourage development of sustainable energy infrastructure in the local regions under their control.

The Board is of the view that the new energy sector, supported by governmental policies as well as advancement in technology facilitating mass production of related infrastructure and devices, provides a good opportunity for the Group to develop in such market by investing in the construction and supply of such infrastructure and facilities. To execute the abovementioned plan, the Board announced that the Company has, on 1 August 2023, entered into a non-binding cooperation framework agreement (the ``Framework Agreement'') with the People's Government of Liangzhou District, Wuwei City, Gansu Province, the PRC and Huaneng Jinxin Hengshun New Energy Co. Ltd. under which the parties to the Framework Agreement agreed to, subject to the execution of formal project agreement(s), join forces in providing infrastructure and facilities to boost the new energy sector in Liangzhou District.

Under the Framework Agreement, the Group shall, among other things, establish corporate entity(-ies) in the PRC which shall in turn invest in (a) the construction, operation and management of a factory of power storage systems (the ``Factory'') in Liangzhou District; and (b) the construction of a power transmission station in Liangzhou District. The Liangzhou Government shall, among other things, introduce favourable policies and procedures for the Group's aforesaid investment, give priority to the Group's products in its procurement of power storage facilities and systems, as well as power transmission station. Huaneng New Energy shall, among other things, co-invest with and monitor the Group in commencing and completing the construction of the Factory.

The Board considers that the business plan envisaged in the Framework Agreement (the ``Business Plan''), if materialised, could diversify the Group's product portfolio and income streams, thereby improving the profitability in the long term. Depending on the actual timeframe of eventual implementation of the Business Plan, the Group plans to fund the Business Plan by the Group's internal resources at this stage, and may seek external financing when such needs arise. Accordingly, the Board is of the view that the commencement of the Business Plan Agreement will be in the interest of the Company and the Shareholders as a whole.