The board of directors of Sheung Moon Holdings Limited announced that on 26 June 2024 (after trading hours), the Company entered into a non-legally binding memorandum of understanding (the MOU) with Nanjing Zhongke Micropoint Supply Chain Company Limited (the Potential Partner), in relation to the potential cooperation for adopting leading anti-counterfeiting technology in the Company's construction business (the Proposed Cooperation). As at the date of this announcement, the Potential Partner engages in promoting WA Microdot Technology WA (WA Microdot) and owns 7% equity interest in Zhongke Micropoint Technology Company Ltd. (ZM). In December 2023, ZM entered into a collaborative research initiative with the Institute of Data Science at the University of Science and Technology (Hefei) This partnership has resulted in the establishment of a joint technology.

research laboratory, providing valuable support and resources for the ZM's technology development. In May 2024, the Potential Partner and ZM entered into an agreement, pursuant to which, among other things, the Potential Partner is authorised by ZM to recruit distributors of WA Microdot globally; the Potential Partner is exclusively authorized to handle commercial arrangements in relation to WA Microdot, including but not limited to recruitment, negotiation and contracting; and ZM will provide the Potential Partner with the necessary technology and assistance to facilitate the Potential Partner's business development efforts. The Company and the Potential Partner are in the process of discussing possible ways of cooperation.

Pursuant to the MOU, the Company will leverage its business network and industry knowledge in the construction industry, as well as the advantages of being a listed company to jointly explore business opportunities with the Potential Partner on adopting the Potential Partner's and ZM's technology in the field of construction material supply. The Potential Partner, through its expertise and experience in promoting anti-counterfeiting technology, may collaborate with the Company to develop business models. Additionally, the Potential Partner and ZM may utilize ZM's Everything Digital Technology establish a construction material traceability platform for the Company.

This platform to will employ "microdot code map wave frequency technology and blockchain technology to achieve end-to-end traceability of construction materials from production to construction site, aiming to ensure material authenticity and reliability of the construction materials. The Potential Partner and ZM may also apply ZM's Everything Digital technology to projects jointly designed and developed by the Company and the Potential Partner. Not only can ZM's Everything Digital Technology be applicable to material traceability but also to the potential development of intelligent building solutions by integrating with the Internet of Things (the IoT), big data, and other technologies for the Company.

Possibilities being explored may include IoT-based building equipment monitoring systems, optimising project management through big data analysis, and more, which could potentially bring the Company more intelligent and efficient building operations. Exclusivity: During the period of 90 days from the date of MOU (or such later date(s) as the parties to the MOU may agree in writing) (the Exclusivity Period), each of the Company and the Potential Partner agrees not to enter into negotiations, whether formal or informal, with any party other than the Company or the Potential Partner concerning the Proposed Cooperation, and each of the Company and the Potential Partner shall promptly notify the other party of any inquiries by any third parties regarding the foregoing. Formal Agreement Each of the parties to the MOU agrees to use all reasonable endeavours to negotiate the terms and conditions of a legally binding cooperation agreement between the relevant parties in relation to the Proposed Cooperation (the Formal Agreement).

Termination: The parties to the MOU agree that: if the signing of the Formal Agreement does not take place within the Exclusivity Period, the MOU shall be terminated with immediate effect; or if the Company and the Potential Partner enter into the Formal Agreement within the Exclusivity Period, the MOU shall be terminated with immediate effect. The MOU shall be terminated at the occurrence of any of the above two events, whichever is earlier. Profit sharing: The profit sharing shall be further negotiated between the Company and the Potential Partner and be determined in the Formal Agreement.

Reasons for and benefits of entering into the MOU: The Group is a local contractor in the civil engineering construction industry and is principally engaged in the provision of site formation works, road and drainage work as well as structural works in both public and private sectors in Hong Kong. The Group is an approved contractor of the HKSAR Government, a registered general building contractor and a specialist contractor (site formation works) with the Hong Kong Buildings Department. The Board consider that it is beneficial for the Group to seek investment opportunities from time to time to develop its existing business portfolio and engage in a new line of business with growth potential and broaden its source of income.

The Directors are of the view that the possible cooperation between the Group and the Potential Partner, if materialised, represents an opportunity for the Group to diversify the revenue stream of the Group and is in the interests of the Company and the Shareholders as a whole. Nature of the MOU: The MOU does not constitute any legally binding commitment in respect of the possible business cooperation, save and except that each party agrees to be legally bound by certain clauses including confidentiality and the governing law. The possible business cooperation between the Group and the Potential Partner will only be finalised after the conclusion of negotiation and execution of the Formal Agreement between the relevant parties.