Sinotruk (Hong Kong) Limited 中國重汽 (香港) 有限公司

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any aspect of this circular or as to the action to be taken, 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 shares in Sinotruk (Hong Kong) Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the 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.

SINOTRUK (HONG KONG) LIMITED 中國重汽(香港) 有限公司 (incorporated in Hong Kong with limited liability) (Stock Code: 03808)

(1) RENEWAL OF EXISTING CONTINUING CONNECTED TRANSACTIONS (2) POSSIBLE CONTINUING CONNECTED TRANSACTIONS (3) RE-ELECTION OF MS. LI XIA AS AN EXECUTIVE DIRECTOR AND (4) SUPPLEMENTAL NOTICE OF ANNUAL GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and Independent Shareholders

This circular should be read together with the circular issued by the Company to the Shareholders dated 30 April 2021 and the notice convening the AGM dated 30 April 2021 (the “AGM Notice”). A supplemental notice of the AGM, which should be read in conjunction with the AGM Notice, is set out on pages AGM-1 to AGM-3 of this circular. A letter from the Board is set out on pages 8 to 24 of this circular and a letter from the independent board committee of the Company, containing its recommendation to the independent shareholders of the Company, is set out on pages 25 to 26 of this circular. A letter from Gram Capital containing its advice to the Independent Board Committee and Independent Shareholders of the Company is set out on pages 27 to 44 of this circular. Whether or not you are able to attend the meeting in person, please complete the enclosed supplemental form of proxy in accordance with the instructions printed thereon and return it to the Company’s share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as practicable and in any event not later than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Completion and return of the supplemental form of proxy will not preclude you from attending and voting in person at the meeting or any adjourned meeting should you so wish.

PRECAUTIONARY MEASURES FOR THE ANNUAL GENERAL MEETING Please see page 1 of this circular for measures to be taken in attempt to prevent and control the spread of the novel coronavirus (COVID-19) pandemic at the AGM, including: • compulsory temperature checks • submission of health declarations • wearing of surgical face masks • no distribution of corporate gifts, refreshments or drinks Any person who does not comply with the precautionary measures may be denied entry into the AGM venue, at the absolute discretion of the Company as permitted by law. In light of the continuing risks posed by the COVID-19 pandemic, the Company strongly encourages Shareholders NOT to attend the AGM in person, and advises Shareholders to appoint the chairman of the AGM as their proxy to vote according to their indicated voting instructions as an alternative to attending the AGM in person.

21 May 2021 TABLE OF CONTENTS

Pages

Precautionary measures for the annual general meeting ...... 1

Definitions ...... 3

Letter from the Board ...... 8

Letter from the Independent Board Committee ...... 25

Letter from Gram Capital ...... 27

Appendix I — General information ...... I-1

Appendix II — Biographical details of the executive Director proposed to be re-elected ...... II-1

Supplemental notice of annual general meeting ...... AGM-1

−i− PRECAUTIONARY MEASURES FOR THE ANNUAL GENERAL MEETING

In view of the ongoing novel coronavirus (COVID-19) pandemic and recent requirements for prevention and control of its spread, the Company will implement the following preventive measures at the AGM to protect attending Shareholders, staff and other stakeholders from the risk of infection:

(i) Compulsory body temperature checks will be conducted on every Shareholder, proxy and other attendees at the entrance of the AGM venue. Any person with a body temperature of over 37.4 degrees Celsius may be denied entry into the AGM venue or be required to leave the AGM venue.

(ii) All Shareholders, proxies and other attendees are required to complete and submit at the entrance of the AGM venue a health declaration form. Any person who does not comply with this requirement may be denied entry into the AGM venue or be required to leave the AGM venue. Anyone subject to quarantine, has any flu-like symptoms or has travelled overseas within 14 days immediately before the AGM (“recent travel history”), or has close contact with any person under quarantine or with recent travel history will not be permitted to attend the AGM.

(iii) All attendees are recommenced to wear surgical face masks inside the AGM venue at all times. To ensure compliance with the relevant government policies then in force, the Company may adopt other measures at the AGM as may be necessary to avoid over-crowding.

(iv) There will be no corporate gifts, and no refreshments or drinks will be served.

To the extent permitted under law, the Company reserves the right to deny entry into the AGM venue or require any person to leave the AGM venue in order to ensure the safety of the attendees at the AGM.

In the interest of all stakeholders’ health and safety and consistent with recent COVID-19 guidelines for prevention and control, the Company reminds all Shareholders that physical attendance in person at the AGM is not necessary for the purpose of exercising voting rights. As an alternative, by using proxy forms with voting instructions inserted, Shareholders may appoint the chairman of the AGM as their proxy to vote on the relevant resolutions at the AGM instead of attending the AGM in person.

The supplemental proxy form is attached to this circular for Shareholders who opt to receive physical circulars. Alternatively, the supplemental proxy form can be downloaded from the “Shareholders’ Meeting” tab under the “Investor Relations” section of the Company’s website at (www.sinotruk.com) and the website of Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk. If you are not a registered Shareholder (if your Shares are held via banks, brokers, custodians or the Hong Kong Securities Clearing Company Limited), you should consult directly with your banks or brokers or custodians (as the case may be) to assist you in the appointment of proxy.

−1− PRECAUTIONARY MEASURES FOR THE ANNUAL GENERAL MEETING

If Shareholders choosing not to attend the AGM in person have any questions about the relevant resolutions, or about the Company or any matters for communication with the Board, they are welcome to contact the Company via its investor relations contact as follows:

Public and Investor Relations Email: [email protected] Tel: 852 2851 1038

If Shareholders have any questions relating to the AGM, please contact Computershare Hong Kong Investor Services Limited, the Company’s share registrar, as follows:

Computershare Hong Kong Investor Services Limited 17M Floor, Hopewell Centre 183 Queen’s Road East Wanchai, Hong Kong E-mail: [email protected] Tel: 852 2862 8555 Fax: 852 2865 0990

−2− DEFINITIONS

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

“2020 Weichai Possible Parts the parts purchase agreement entered into between the Purchase Agreement” Company (for itself and on behalf of its subsidiaries) and Weichai Holdings (for itself and on behalf of its subsidiaries) dated 16 December 2019 in relation to the purchase of raw materials, components, parts and semi-finished products by the Group from the Weichai Group

“2021 Parts Purchase Agreement” the parts purchase agreement entered into between CNHTC (for itself and on behalf of its associates but excluding the Group) as supplier and the Company (for itself and on behalf of its subsidiaries) as purchaser on 26 March 2018, under which the CNHTC Group agreed to supply raw materials, parts, components, semi-finished products, etc. to the Group

“2021 Products Purchase the products purchase agreement entered into between Agreement” CNHTC (for itself and on behalf of its associates but excluding the Group) as supplier and the Company (for itself and on behalf of its subsidiaries) as purchaser on 26 March 2018, under which the CNHTC Group agreed to sell products including refitted trucks, etc. to the Group

“2021 Weichai Parts Purchase the agreement dated 31 March 2021 entered into between the Agreement” Company (for itself and on behalf of its subsidiaries) and Weichai Holdings (for itself and on behalf of its associates but excluding the Group), details of which are set out in the section headed “NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS — 2. 2021 Weichai Parts Purchase Agreement” in the letter from the Board contained in this circular

“2023 Products Purchase the agreement dated 31 March 2021 entered into between the Agreement” Company (for itself and on behalf of its subsidiaries) and CNHTC (for itself and on behalf of its associates but excluding the Group), details of which are set out in the section headed “NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS — 1. 2023 Products Purchase Agreement” in the letter from the Board contained in this circular

“AGM” the annual general meeting of the Company

“Articles” the articles of association of the Company

−3− DEFINITIONS

“Annual CCT Review Reporting” has the meaning ascribed thereto under the section headed “NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS — 1. 2023 Products Purchase Agreement — Internal control procedures” in the letter from the Board contained in this circular

“associate(s)” has the meaning ascribed to it under the Listing Rules

“Board” the board of Directors

“CNHTC” 中國重型汽車集團有限公司 (China National Heavy Duty Truck Group Company Limited*), a state-owned enterprise organised under the laws of the PRC with limited liability, being the substantial shareholder of the Company

“CNHTC Group” CNHTC and its associates but excluding the Group

“CNHTC Interested Director(s)” Mr. Cai Dong, Mr. Liu Zhengtao, Mr. Dai Lixin, Ms. Qu Hongkun (until her resignation as a Director on 11 May 2021), Mr. Li Shaohua, Ms. Li Xia (since her appointment as a Director on 11 May 2021) and Mr. Jiang Kui

“Company” Sinotruk (Hong Kong) Limited (中國重汽(香港)有限公司), a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Main Board of the Stock Exchange

“connected person(s)” has the meaning ascribed to it under the Listing Rules

“Continuing Connected the continuing transaction(s) between the Group and Transaction(s)” connected person(s) that constitutes continuing connected transactions pursuant to Chapter 14A of the Listing Rules

“controlling shareholder” has the meaning ascribed to it under the Listing Rules

“Datong Gear Company” 中國重汽集團大同齒輪有限公司 (China National Heavy Duty Truck Group Datong Gear Co., Ltd.*), a company established in the PRC with limited liability

“Director(s)” the director(s) of the Company

“Gratuitous Transfer” the transfer of 45% of the equity interest in CNHTC by 濟南市人民政府國有資產監督管理委員會 (State-owned Assets Supervision and Administration Commission of the Ji’nan Government) to SHIG for nil consideration (無償劃轉)

“Gratuitous Transfer the announcements of the Company dated 29 September Announcements” 2019, 13 December 2019 and 20 December 2019 relating to the Gratuitous Transfer

−4− DEFINITIONS

“Group” the Company and its subsidiaries

“Group Finance Department” has the meaning ascribed thereto under the section headed “NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS — 1. 2023 Products Purchase Agreement — Internal control procedures” in the letter from the Board contained in this circular

“Group Internal Audit has the meaning ascribed thereto under the section headed Department” “NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS — 1. 2023 Products Purchase Agreement — Internal control procedures” in the letter from the Board contained in this circular

“Group Securities Department” has the meaning ascribed thereto under the section headed “NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS — 1. 2023 Products Purchase Agreement — Internal control procedures” in the letter from the Board contained in this circular

“Hong Kong” the Hong Kong Special Administrative Region of the PRC

“Independent Board Committee” the independent board committee of the Company comprising Mr. Lyu Shousheng, Dr. Lin Zhijun, Mr. Yang Weicheng, Dr. Wang Dengfeng, Mr. Zhao Hang and Mr. Liang Qing

“Independent Financial Adviser” Gram Capital Limited, a licensed corporation to carry out or “Gram Capital” Type 6 (advising on corporate finance) regulated activity under the SFO, and the independent financial adviser advising the Independent Board Committee and the Independent Shareholders in respect of the transactions contemplated under the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement

“Independent Shareholders” Shareholders who are not required to abstain from voting at the general meeting of the Company in respect of the transactions contemplated under the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement

“Latest Practicable Date” 17 May 2021, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

−5− DEFINITIONS

“Monthly CCT Transactions has the meaning ascribed thereto under the section headed Summary” “NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS — 1. 2023 Products Purchase Agreement — Internal control procedures” in the letter from the Board contained in this circular

“New Cap(s)” the new annual cap(s) for the Continuing Connected Transactions as set out in the section headed “NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS” in the letter from the Board contained in this circular

“Non-exempt Continuing being the Continuing Connected Transaction(s) as set out in Connected Transaction(s)” the section headed “NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS” in the letter from the Board contained in this circular, which are subject to reporting, announcement, annual review, and the Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules

“Parts for Purchase” has the meaning ascribed thereto under the section headed “NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS — 2. 2021 Weichai Parts Purchase Agreement” in the letter from the Board contained in this circular

“Performance Appraisal Index” has the meaning ascribed thereto under the section headed “NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS — 1. 2023 Products Purchase Agreement” in the letter from the Board contained in this circular

“PRC” the People’s Republic of China, for the purpose in this circular, excluding Hong Kong, Macao Special Administrative Region and Taiwan

“Quarterly Internal Review” has the meaning ascribed thereto under the section headed “NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS — 1. 2023 Products Purchase Agreement — Internal control procedures” in the letter from the Board contained in this circular

“Refitted Products” has the meaning ascribed thereto under the section headed “NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS — 1. 2023 Products Purchase Agreement” in the letter from the Board contained in this circular

−6− DEFINITIONS

“Regular CCT Meetings” has the meaning ascribed thereto under the section headed “NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS — 1. 2023 Products Purchase Agreement — Internal control procedures” in the letter from the Board contained in this circular

“RMB” Renminbi, the lawful currency of the PRC

“SASAC” State-owned Assets Supervision and Administration Commission of the State Council of the PRC

“SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

“Share(s)” ordinary share(s) in the capital of the Company

“Shareholder(s)” holder(s) of the Share(s)

“SHIG” 山東重工集團有限公司 (Shandong Heavy Industry Group Co., Ltd.), a company established in the PRC with limited liability which will become a controlling shareholder of the Company upon completion of the Gratuitous Transfer

“SHIG Group” SHIG and its subsidiaries

“Stock Exchange” The Stock Exchange of Hong Kong Limited

“substantial shareholder(s)” has the meaning ascribed to it under the Listing Rules

“Weichai Group” Weichai Holdings and its associates

“Weichai Holdings” 濰柴控股集團有限公司 (Weichai Group Holdings Limited*), a company established in the PRC with limited liability which will become a connected person of the Company upon completion of the Gratuitous Transfer

“Weichai Power” 濰柴動力股份有限公司 (Weichai Power Co., Ltd.), a company organised under the laws of the PRC with limited liability which shares are listed on the Main Board of the Stock Exchange (stock code: 02338) and on the Shenzhen Stock Exchange (stock code: 000338)

“%” per cent

* For identification purpose only

−7− LETTER FROM THE BOARD

SINOTRUK (HONG KONG) LIMITED 中國重汽(香港) 有限公司 (incorporated in Hong Kong with limited liability) (Stock Code: 03808)

Executive Directors: Headquarter: Mr. Cai Dong (Chairman) Sinotruk Tower Mr. Liu Zhengtao (President) No. 777 Hua’ao Road Mr. Liu Wei Innovation Zone Mr. Dai Lixin Ji’nan City, Shandong Province Mr. Richard von Braunschweig PRC Mr. Li Shaohua Post code: 250101 Ms. Li Xia Registered office: Non-executive Directors: Units 2102-03 Mr. Jiang Kui China Merchants Tower Ms. Annette Danielski Shun Tak Centre Mr. Matthias Gründler 168-200 Connaught Road Central Dr. h.c. Andreas Tostmann Hong Kong

Independent non-executive Directors: Dr. Lin Zhijun Mr. Yang Weicheng Dr. Wang Dengfeng Mr. Zhao Hang Mr. Liang Qing Mr. Lyu Shousheng

21 May 2021

To the Shareholders

Dear Sir/Madam,

−8− LETTER FROM THE BOARD

INTRODUCTION

Reference is made to the Company’s announcement dated 31 March 2021 in respect of, inter alia, (i) the 2023 Products Purchase Agreement and (ii) the 2021 Weichai Parts Purchase Agreement.

The purpose of this circular is to provide you with further details in relation to the Non-exempt Continuing Connected Transactions contemplated under the 2023 Products Purchase Agreement, the 2021 Weichai Parts Purchase Agreement and the relevant proposed New Caps, a letter from the Independent Board Committee and a letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders in relation to the same.

Reference is also made to the Company’s announcement dated 11 May 2021 in respect of, inter alia, the appointment of Ms. Li Xia as an executive Director. At the AGM, an additional resolution will be proposed to consider, and, if thought fit, approve the re-election of Ms. Li Xia as an executive Director in accordance with the Articles.

A supplemental notice convening the AGM is set out on pages AGM-1 to AGM-3 to this circular.

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

Reference is made to (i) the Company’s announcements dated 26 March 2018 and 16 December 2019, respectively, and the Company’s circular dated 9 May 2018 in respect of certain continuing connected transactions detailed therein. As disclosed in the aforesaid announcements and circular, the 2021 Products Purchase Agreement is due to expire on 31 December 2021 whereas the 2020 Weichai Possible Parts Purchase Agreement has expired on 31 December 2020.

In order to continue the existing continuing connected transactions under the 2021 Products Purchase Agreement, on 31 March 2021, the Company (for itself and on behalf of its subsidiaries) and CNHTC (for itself and on behalf of its associates but excluding the Group) entered into the 2023 Products Purchase Agreement, with a term of two years commencing on 1 January 2022 and ending on 31 December 2023.

Further, reference is made to the Gratuitous Transfer Announcements relating to the Gratuitous Transfer. As disclosed in the Gratuitous Transfer Announcements, upon the implementation and completion of the Gratuitous Transfer, SHIG will be entitled to exercise 65% voting rights in the general meetings of CNHTC. As such, upon completion of the Gratuitous Transfer, SHIG will become a substantial shareholder of the Company, and Weichai Holdings, being a wholly-owned subsidiary of SHIG, will then become a connected person of the Company under Chapter 14A of the Listing Rules. Insofar as the Company is aware, as at the Latest Practicable Date, the Gratuitous Transfer has not completed and therefore the transactions between the Group and the SHIG Group (including the Weichai Group) do not constitute continuing connected transactions of the Company. However, upon completion of the Gratuitous Transfer, transactions between the Group and the SHIG Group (including the Weichai Group) will constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules. In view of the possible completion of the Gratuitous Transfer and for the

−9− LETTER FROM THE BOARD purpose of continuing the existing transactions with the Weichai Group following the completion of Gratuitous Transfer, on 31 March 2021, the Company entered into, inter alia, the 2021 Weichai Parts Purchase Agreement with Weichai Holdings to govern the principal terms of certain such transactions for the year ending 31 December 2021.

Set out below are the details of the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement.

1. 2023 Products Purchase Agreement

The principal terms of the 2023 Products Purchase Agreement and the transactions contemplated thereunder are as follows:

Date : 31 March 2021

Parties : (i) CNHTC

(ii) The Company

Term : Two years from 1 January 2022 to 31 December 2023 (both days inclusive)

Subject matter:

Pursuant to the 2023 Products Purchase Agreement, the CNHTC Group has agreed to sell vehicles, refitted trucks, chassis, and add-on products such as trunk, flatbed, tank, etc. (the “Refitted Products”) to the Group.

Other terms and details:

The terms of the 2023 Products Purchase Agreement are substantially the same as those of the 2021 Products Purchase Agreement.

Pursuant to the 2023 Products Purchase Agreement, separate agreements will be entered into by the Group and the CNHTC Group which will further provide the details of the products to be purchased including the payment terms, product specifications, delivery time and quantity. The payment terms for each batch of products will be based on normal commercial terms or industry practices provided that full payment shall be made by way of cash, cheques, notes, bills or letters of credit within 90 days from the date of purchase.

Pricing

Pursuant to the terms of the 2023 Products Purchase Agreement, the CNHTC Group will supply products including chassis and the Refitted Products to the Group for tailor-making the final products for sale to its customers in accordance with their specifications. The prices for the transactions contemplated under the 2023 Products Purchase Agreement will be determined on the following basis:

−10− LETTER FROM THE BOARD

(i) for the Refitted Products

The trucks produced by the Group for sales are ready for operation and running. Some customers of the Group not only purchase the Group’s trucks but also request for the Refitted Products. In order to secure the sales of the trucks of the Group, the Group will cooperate with some refitting companies (including the CNHTC Group) to meet the additional specifications and demand from its customers. The Group will prepare an authorised providers list of the Refitted Products.

Certain customers of the Group may negotiate the prices of the Refitted Products directly with the CNHTC Group and advise such prices to the Group. Based on the instructions from its customers, the Group will purchase the Refitted Products from the CNHTC Group at the prices agreed directly between the customers and the CNHTC Group. The Group will then sell the final products to its customers at a price which covers the price of the trucks produced by the Group and the agreed price of the Refitted Products between the customers of the Group and the CNHTC Group. On the other hand, certain customers of the Group may request the Group to purchase the Refitted Products on their behalf. The Group will select the authorised provider for its customers, which may or may not be the CNHTC Group. If the CNHTC Group is selected as the authorised provider, the Group will purchase the Refitted Products from the CNHTC Group at stipulated prices and sell the final products to the customers at the price which covers the price of the trucks produced by the Group and the stipulated prices of the Refitted Products.

(ii) for chassis, vehicles and refitted trucks that are only available from the CNHTC Group

The Group does not produce certain trucks such as all-wheels driven chassis and trucks and specialty vehicles which the CNHTC Group may produce. If certain customers approach the Group for such types of products, the Group will source the same from the CNHTC Group and sell to the customers. The Group will refer to the product price list compiled by the CNHTC Group which is applicable to all its customers including independent customers and the Group and confirm the price of these products with its customers. Upon confirmation of the orders by the customers, the Group will purchase the relevant products from the CNHTC Group at such prices. The Group will then sell the relevant products to its customers with expected profit margins from 5% to 20% which were determined with reference to (a) the average profit margin of vehicles and the related manufacturing industry as published by the SASAC which were summarised in the 「企業績效評價標準值2020」(Overall Enterprises Performance Appraisal Index — 2020*) published by the SASAC in 2020 (the “Performance Appraisal Index”) and (b) the historical profit margins of similar products sold to independent customers of the Group.

國務院國資委考核分配局 (Bureau of Performance Evaluation and Remuneration of SASAC*) prepared the Performance Appraisal Index in accordance with the relevant national regulations of the PRC and complied the performance indicators including the profit margins of different industries including the automobile industry in 2019. These performance indicators were determined by mathematical statistics methods with reference to the financial statements of the state-owned enterprises of the relevant industries, the statistics data provided by the relevant

−11− LETTER FROM THE BOARD

statistics authorities of the PRC, the performance information of the relevant industrial associations and the objective analysis of the operation status of the various industries of national economy in the PRC in 2019. The sales profit margins published in the Performance Appraisal Index are neither government-prescribed price nor guidance price.

In light of the above and considering (i) the terms of the 2023 Products Purchase Agreement, and (ii) the relevant internal control procedures (described in the sub-section headed “Internal control procedures” below in this section), the Board is of the view that the above methods and procedures can ensure that the transactions contemplated under the 2023 Products Purchase Agreement will be conducted on normal commercial terms and not prejudicial to the interests of the Company and its minority Shareholders.

Existing annual caps

The following table summarises the existing annual caps for the transactions contemplated under the 2021 Products Purchase Agreement for each of the three years ending 31 December 2021, respectively:

For the For the For the year ended year ended year ending 31 December 31 December 31 December 2019 2020 2021 RMB’000 RMB’000 RMB’000

Existing annual caps 3,147,000 3,386,000 3,647,000

Historical transaction amounts

The following table summarises the approximate historical amounts under the 2021 Products Purchase Agreement for the two years ended 31 December 2020 and the two months ended 28 February 2021, respectively:

For the For the For the year two months year ended ended ended 31 December 31 December 28 February 2019 2020 2021 RMB’000 RMB’000 RMB’000

Historical transaction amounts 2,515,358 1,892,245 188,091

−12− LETTER FROM THE BOARD

Proposed New Caps and basis

The following table shows the proposed New Caps for the two years ending 31 December 2023 for the transactions contemplated under the 2023 Products Purchase Agreement:

For the For the year ending year ending 31 December 2022 31 December 2023 RMB’000 RMB’000

Proposed New Caps 2,921,000 3,281,000

The proposed New Caps for the two years ending 31 December 2023 for the transactions contemplated under the 2023 Products Purchase Agreement were determined after considering the following factors:

(i) the historical transaction amounts under the 2021 Products Purchase Agreement for the two years ended 31 December 2020 and the two months ended 28 February 2021;

(ii) the implementation of major infrastructure projects by the government since 2020 is expected to increase demand in the Group’s construction vehicles and special purpose vehicles in carrying out the relevant development and construction works, which in turn is expected to increase the Group’s procurement needs for Refitted Products and chassis for specified vehicles;

(iii) the increased emphasis by the government on environmental protection enforcement and the implementation of urbanisation policies in the PRC are expected to bring a steady increase in demand in the Group’s special purpose vehicles such as garbage trucks, firetrucks, refrigerated transport vehicles, dangerous cargo transport vehicles which require refitting services;

(iv) certain members of the CNHTC Group, being located in the proximity of the Group’s production facilities, have been providing the Refitted Products to the Group of reliable quality. Against such track record, it is expected that more refitting service jobs will be assigned to the CNHTC Group directly by the customers and by the Group during the term of the 2023 Products Purchase Agreement;

(v) as a result of the further effective control of the COVID-19 outbreak in the first half of 2020, the gradual resumption of economic activities in the PRC with a further release of the market demand, and the expected GDP growth of the PRC of over 6% in 2021;

(vi) the stable macroeconomic environment in the PRC, with an expected GDP growth of approximately 6% for each of the two years ending 31 December 2023; and

(vii) a 5% buffer for any price fluctuations during the term of 2023 Products Purchase Agreement.

−13− LETTER FROM THE BOARD

Taking into account and on the basis of the aforesaid factors, in particular (i) the expected increase in the purchase of the relevant products under the 2023 Products Purchase Agreement in each of the years 2021 and 2022 as compared to the transaction amount of RMB1,892 million for the year ended 31 December 2020, and (ii) that the annual caps for the years ended 31 December 2019 and 31 December 2020 have not been fully utilised, the proposed New Cap for the year ending 31 December 2022 has been adjusted downwards to RMB2,921 million from the existing cap for the year ending 31 December 2021 of RMB3,647 million, and it is estimated that the relevant transaction amount will increase by approximately 12.3% for the year ending 31 December 2023.

The 2023 Products Purchase Agreement and the relevant proposed New Caps are subject to the reporting, announcement, annual review, and the Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

Internal control procedures

In order to ensure that the prices of each of the transactions made under this sub-section 1 are determined in accordance with the pricing policy applicable to the 2023 Products Purchase Agreement and the prices are no less favourable than those provided to the Group by independent third parties, the Group has implemented the following internal control procedures:

(i) for the Refitted Products

The Group prepares an authorised providers list of the Refitted Products (including the CNHTC Group and independent providers). The Group will invite the authorised providers (including at least two to three independent providers) for quotations to give a reference on the prevailing market prices for the Refitted Products. The authorised providers list is ultimately approved by the senior management of the Group. The Group’s business department will base on the price, delivery time, location of the authorised provider and other commercial considerations to choose the appropriate provider. When there are significant changes in materials costs or labour costs or at the request of the authorised providers, the Group will re-invite all such providers (including at least two to three independent providers) to give quotations for updating the prevailing market prices for the Refitted Products.

(ii) for chassis, vehicles and refitted trucks that are only available from the CNHTC Group

For chassis, vehicles or refitted trucks ordered by the Group’s customers that are only available from the CNHTC Group, an officer of the business department of the Group will prepare the purchase order for such products and another officer or supervisor will check the agreed prices.

Further, the Company has established procedures for monitoring the Continuing Connected Transactions under this sub-section 1 in which various departments of the Group will be responsible for the implementation, monitoring and review of such procedures. The Group’s investment management and securities department (“Group Securities Department”) carries out regular meetings on the management and control of connected transactions (“Regular CCT Meetings”) to monitor and ensure that all the relevant Continuing Connected Transactions are in compliance with the relevant rules and regulations. The Group’s finance Department (“Group Finance Department”) prepares, on a monthly basis, the maximum day-end balance and/or the accumulated annual

−14− LETTER FROM THE BOARD transaction amount (as the case may be) of each Continuing Connected Transaction (“Monthly CCT Transactions Summary”) and check this against the respective pre-approved annual cap. If any maximum day-end balance and/or the accumulated annual transaction amount (as the case may be) exceeds 70% of the pre-approved annual cap, the relevant Continuing Connected Transaction will be reported to the Group Securities Department for monitoring, follow-up and, if necessary, revision of the annual cap in accordance with the requirements of the Listing Rules. The Group’s internal audit department (“Group Internal Audit Department”) will conduct quarterly reviews to check whether these transactions are conducted in accordance with the established procedures and internal controls (“Quarterly Internal Review”) and assess the effectiveness of the internal controls. In addition, the Company will engage the external auditors of the Company to conduct an annual review of the relevant Continuing Connected Transactions of the Group to report to the Board whether there are any unapproved Continuing Connected Transactions or any non-compliance, in all material respects, of the pricing policies and terms of the Continuing Connected Transactions, including any exceeding of the pre-approved annual caps (“Annual CCT Review Reporting”).

Reasons for and benefits of entering into the 2023 Products Purchase Agreement

The Group has been purchasing refitted vehicles and specialty vehicle chassis from the CNHTC Group mainly to satisfy the orders from its customers for a long time. The 2021 Products Purchase Agreement, which governs such transactions, will expire by the end of 2021 and the Group intends to continue the relevant transactions with the CNHTC Group.

As a result of the long-term business relationship between the Group and the CNHTC Group, the Board (including the independent non-executive Directors after considering the advice of Gram Capital but excluding the CNHTC Interested Directors) believes that the CNHTC Group is familiar with the Group’s products and will continue to be able to respond quickly and in a cost efficient manner to any new requirements that the Group may have. In addition, over the years, the CNHTC Group has been providing products which meet the quality requirements and standards of the Group. As such, the Board (including the independent non-executive Directors after considering the advice of Gram Capital but excluding the CNHTC Interested Directors) believes that it is in the best interest of the Group to continue purchasing products including the Refitted Products, vehicles, refitted trucks and chassis from the CNHTC Group.

The terms of the 2023 Products Purchase Agreement were made after arm’s length negotiations between the Company and CNHTC. The Board (including the independent non-executive Directors after considering the advice of Gram Capital but excluding the CNHTC Interested Directors) is of the view that the transactions contemplated under the 2023 Products Purchase Agreement are on normal commercial terms, or on terms no less favourable than those available from independent third parties under prevailing local market conditions, the 2023 Products Purchase Agreement was entered into in the ordinary and usual course of business of the Group, and the terms of the transactions under the 2023 Products Purchase Agreement (including the proposed New Caps) are fair and reasonable, and are in the interests of the Company and the Shareholders as a whole.

−15− LETTER FROM THE BOARD

2. 2021 Weichai Parts Purchase Agreement

The principal terms of the 2021 Weichai Parts Purchase Agreement and the transactions contemplated thereunder are as follows:

Date : 31 March 2021

Parties : (i) Weichai Holdings

(ii) The Company

Term : One year from 1 January 2021 to 31 December 2021 (both days inclusive)

Subject matter:

Pursuant to the 2021 Weichai Parts Purchase Agreement, the Weichai Group has agreed to sell raw materials, parts, components, semi-finished products (including gearboxes, engine gears, support assemblies, pedals and guard assemblies), etc. (the “Parts For Purchase”) to the Group.

Other terms and details:

The terms of the 2021 Weichai Parts Purchase Agreement are substantially the same as those of the 2020 Weichai Possible Parts Purchase Agreement, and similar to those of the 2021 Parts Purchase Agreement.

Pursuant to the 2021 Weichai Parts Purchase Agreement, separate agreements will be entered into by relevant members of the Group and relevant members of the Weichai Group which will further provide the details of the parts to be purchased including the payment terms, product specifications, delivery time and quantity. The payment terms for each batch of parts will be based on normal commercial terms or industry practices provided that full payment shall be made by way of cash, cheques, notes, bills or letters of credit within 90 days from the date of purchase.

Pricing

Pursuant to the terms of the 2021 Weichai Parts Purchase Agreement, the Weichai Group will provide the Group with a selling price list of its parts which is applicable to all of its customers. Based on the aforesaid price list provided by the Weichai Group and the price quotation offered by other qualified suppliers, the Group will negotiate with all qualified suppliers including the Weichai Group to determine the agreed prices of all the parts, after taking into consideration the market conditions at the relevant time, the size of orders and the technical conditions, and all the purchases of parts from independent suppliers and the Weichai Group will be fixed at these agreed selling prices. The Group will prepare a parts purchase price list, which summarises all agreed parts purchase prices with independent parts suppliers and the Weichai Group, for all procurement departments of the Group to follow. Accordingly, the prices for the transactions under the 2021 Weichai Parts Purchase Agreement will be determined in accordance with the market price approach to ensure that the prices for the parts supplied by the Weichai Group are no less favourable to the Group than those offered by independent third parties.

−16− LETTER FROM THE BOARD

In light of the above and considering (i) the terms of the 2021 Weichai Parts Purchase Agreement, and (ii) the relevant internal control procedures (described in the sub-section headed “Internal control procedures” below in this section), the Board is of the view that the above methods and procedures can ensure that the transactions contemplated under the 2021 Weichai Parts Purchase Agreement will be conducted on normal commercial terms and not prejudicial to the interests of the Company and its minority Shareholders.

Historical transaction amounts

The following table summarises the approximate historical amounts in respect of the purchase of the Parts For Purchase from the Weichai Group (which will only become a connected person of the Company following completion of the Gratuitous Transfer) for the two years ended 31 December 2020 and the two months ended 28 February 2021, respectively;

For the year For the year For the two ended ended months ended 31 December 31 December 28 February 2019 2020 2021 RMB’000 RMB’000 RMB’000

Historical transaction amounts 317,000 5,671,000 1,194,429

Proposed New Cap and basis

The following table shows the proposed New Cap for the year ending 31 December 2021 for the transactions contemplated under the 2021 Weichai Parts Purchase Agreement:

For the year ending 31 December 2021 RMB’000

Proposed New Cap 16,309,000

The proposed New Cap for the year ending 31 December 2021 for the transactions contemplated under the 2021 Weichai Parts Purchase Agreement was determined after considering the following factors:

(i) the historical transaction amounts of purchase from the Weichai Group, in particular, the relevant purchase amount for the two months ended 28 February 2021, demonstrating a trend of substantial increase in the demand for the Parts For Purchase supplied by the Weichai Group;

(ii) the expected substantial increase in the Group’s purchase of engines from the Weichai Group as well as parts and components (being auxiliary to the engines supplied by the Weichai Group) from the Weichai Group for the year ending 31 December 2021.

−17− LETTER FROM THE BOARD

As the Group’s sales volume is expected to keep growing and our existing production capacity of heavy duty truck engines has been fully utilised, the purchase of heavy duty truck engines from the Weichai Group can cover the shortage of production capacity and/or models of the Group’s self-produced engines and meet production needs. In terms of light duty truck engines, the Group does not manufacture small-displacement engines, making procurement of such engines from third parties necessary. As the Weichai Group’s engines have a greater market advantage, the Group will fully cooperate with the Weichai Group in terms of light duty truck engines. At the same time, some customers of the Group have requested to purchase commercial vehicles equipped with the Weichai Group’s engines, and the purchase of relevant engines from the Weichai Group can meet the needs of the Group’s customers. In general, the purchase of engines from the Weichai Group has greatly promoted the Group’s sales volume. Since 2019, the Group has been acquiring the Parts For Purchase (including engines) from the Weichai Group. During the year ended 31 December 2020, the Group had purchased the Parts For Purchase amounting to RMB5,671 million from the Weichai Group. With continual growth of the commercial vehicle market and the Group’s vehicles installed with the Weichai Group’s engines being well received by the market, the sales of the Group’s vehicles has been performing well. In order to capture such growth potential, new products installed with the Weichai Group’s engines have been gradually launched, and a closer cooperation between the Group and the Weichai Group during the year 2021 is expected. For the year ending 31 December 2021, the Group intends to purchase approximately 90,000 units of heavy duty truck engines and 240,000 units of light duty truck engines from the Weichai Group, representing a year-to-year growth of over 114% and 172%, respectively, which is estimated to result in an increase of the purchase amount of approximately RMB8,955 million compared with that for the year ended 31 December 2020. Further, the Group’s demands for other parts, components and assemblies of the Weichai Group such as auxiliary products for engine, gearbox assemblies and support assemblies (being auxiliary to the engines supplied by the Weichai Group) from the Weichai Group are also expected to increase accordingly by approximately RMB906 million during the year ending 31 December 2021 compared with that for the year ended 31 December 2020;

(iii) based on (ii) above, with the expected continual high-level operation of the commercial vehicle market and an enhanced market recognition of the Group’s vehicles installed with the Weichai Group’s engines, the Group intends to continue launching vehicle models installed with the Weichai Group’s engines throughout the term of the 2021 Weichai Parts Purchase Agreement in order to capture the business expansion opportunity. Hence, a high level of cooperation between the Group and the Weichai Group during the year ending 31 December 2021 is anticipated, which in turn, is expected to result in a further growth in the Group’s procurement of the Parts For Purchase from the Weichai Group, with a high growth momentum for the year ending 31 December 2021;

(iv) as a result of the further effective control of the COVID-19 outbreak in the first half of 2020, the gradual resumption of economic activities in the PRC with a further release of the market demand, and the expected GDP growth of the PRC of over 6% in 2021; and

(v) a 5% buffer for any price fluctuations during the term of the 2021 Weichai Parts Purchase Agreement.

−18− LETTER FROM THE BOARD

Taking into account and on the basis of the aforesaid factors, it is estimated that the relevant transaction amount will increase significantly by approximately RMB10,638 million for the year ending 31 December 2021 as compared to the actual transaction amount in 2020.

The 2021 Weichai Parts Purchase Agreement and the relevant proposed New Cap are subject to the reporting, announcement, annual review, and the Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

Internal control procedures

In order to ensure that the prices of each of the transactions made under this sub-section 2 are determined in accordance with the pricing policy applicable to the 2021 Weichai Parts Purchase Agreement and the prices are no less favourable than those provided to the Group by independent third parties, the Group will ask for quotations from the independent third party suppliers and the Weichai Group. Based on these quotations, it will cross check the prices of the parts offered by the independent third party suppliers and the Weichai Group. If the Group also produces such parts, it will also compare the intragroup selling prices of the Group against those offered by the Weichai Group. The Group will then negotiate with the independent third party suppliers and the Weichai Group to finalise the prices of the parts and compile the parts price list for the relevant parts to be purchased, after taking into consideration the market conditions at the relevant time and the technical conditions. By conducting the aforesaid comparisons of the prices of the parts offered by the Weichai Group, the Group ensures that the prices of the parts offered by the Weichai Group are fair and reasonable.

In addition, the procurement department of subsidiaries or the Group may use the open tender for procurement by inviting at least two to three independent suppliers and the Weichai Group. The quotation review committee of the Group comprising experts from the procurement department, the technical department and finance department will review and assess the quotations from both technical, commercial and financial perspectives and make recommendations to the responsible management or executive Directors. The legal department will oversee the quotation review process to ensure that the prices of the parts to be purchased from the Weichai Group are competitive and comparable to those offered by independent third parties.

Further, the Company has established procedures for monitoring the Continuing Connected Transactions under this sub-section 2 in which various departments of the Group will be responsible for the implementation, monitoring and review of such procedures. The Group Securities Department carries out Regular CCT Meetings to monitor and ensure all the relevant Continuing Connected Transactions are in compliance with the relevant rules and regulations. The Group Finance Department prepares the Monthly CCT Transactions Summary and checks the maximum day-end balance and/or the accumulated annual transaction amount (as the case may be) of each Continuing Connected Transaction against the respective pre-approved cap. If any maximum day-end balance and/or the accumulated annual transaction amount (as the case may be) exceeds 70% of the pre-approved annual cap, the relevant Continuing Connected Transaction will be reported to the Group Securities Department for monitoring, follow-up and, if necessary, revision of the annual cap in accordance with the requirements of the Listing Rules. The Group Internal Audit Department will conduct Quarterly Internal Review and assess the effectiveness of the internal controls. In addition, the Company will engage the external auditors of the Company to conduct Annual CCT Review Reporting.

−19− LETTER FROM THE BOARD

Reasons for and benefits of entering into the 2021 Weichai Parts Purchase Agreement

In view of the possible completion of the Gratuitous Transfer (details of which is disclosed above) during the term of the 2021 Weichai Parts Purchase Agreement, which would result in members of the SHIG Group (including the Weichai Group) becoming connected persons of the Company and accordingly, the transactions contemplated under the 2021 Weichai Parts Purchase Agreement will become continuing connected transactions of the Company.

Following cooperation with the Weichai Group in recent years, the use of engines produced by the Weichai Group has been met with a positive response within the market and customers of the Group often have requested for engines from the Weichai Group to be installed on their commercial vehicles. In view of such demand and recognition of the Group’s vehicles installed with the Weichai Group’s engines, the Board considers it an optimum opportunity for the Group to further expand its business operations. Accordingly, the Group intends to continue launching and promoting the sales of vehicle models installed with the Weichai Group’s engines throughout the term of the 2021 Weichai Parts Purchase Agreement. Whilst this would result in a substantial increase in the Group’s procurement of the Parts For Purchase from the Weichai Group, the expected increased sales of the Group’s vehicles installed with the Weichai Group’s engines is expected to increase the overall sale volumes of the products of the Group and, in turn, revenue of the Group. In addition, a further expansion of the procurement by the Group from the Weichai Group will enable the Group to better adjust to the transition in emission standards and tightening of environmental regulations and broaden the Group’s understanding of the segment markets. Accordingly, the Board (including the independent non-executive Directors after considering the advice of Gram Capital and excluding the CNHTC Interested Directors) believes that it is in the best interest of the Group to continue purchasing Parts For Purchase from the Weichai Group.

The terms of the 2021 Weichai Parts Purchase Agreement were made after arm’s length negotiations between the Company and Weichai Holdings. The Board (including the independent non-executive Directors after considering the advice of Gram Capital and excluding the CNHTC Interested Directors) is of the view that the transactions contemplated under the 2021 Weichai Parts Purchase Agreement are on normal commercial terms, no less favourable than those available from independent third parties under prevailing local market conditions, the 2021 Weichai Parts Purchase Agreements was entered into in the ordinary and usual course of business of the Group, and the terms of the transactions under the 2021 Weichai Parts Purchase Agreement (including the proposed New Cap) are fair and reasonable, and are in the interests of the Company and the Shareholders as a whole.

GENERAL INFORMATION RELATING TO THE PARTIES TO THE 2023 PRODUCTS PURCHASE AGREEMENT AND THE 2021 WEICHAI PARTS PURCHASE AGREEMENT

The Company

The Company is principally engaged in investment holding. The Group primarily specialises in the research, development and manufacturing of heavy duty trucks, medium-heavy duty trucks, light duty trucks, buses, etc. and related key assemblies, parts and components including engines, cabins, axles, steel frames and gearboxes as well as the provision of financial services. The Company is ultimately governed and controlled by 山東省人民政府 (Shandong Provincial People’s Government*).

−20− LETTER FROM THE BOARD

CNHTC

As at the Latest Practicable Date, CNHTC held the entire issued share capital of Sinotruk (BVI) Limited, which in turn was the holder of 51% of the Shares. CNHTC is therefore a connected person of the Company for the purpose of the Listing Rules. CNHTC is a commercial vehicles manufacturer and a controlling shareholder of the Company. It is a state-owned enterprise organised under the laws of the PRC with limited liability and is ultimately governed and controlled by 山東省人民政府 (Shandong Provincial People’s Government*).

Weichai Holdings

Weichai Holdings is a company established in the PRC with limited liability. According to the public information available, the Weichai Group (including Weichai Power and its subsidiaries) is principally engaged in the manufacturing and sale of engines, heavy duty trucks, gear boxes, parts and components of heavy duty trucks and hydraulics controlling parts.

To the best knowledge, information and belief of the Directors and having made all reasonable enquiries, Weichai Holdings is wholly-owned by SHIG. SHIG is owned as to 70% by 山東省人民政府國有資產監督管理委員會 (State-owned Assets Supervision and Administration Commission of the Shandong Government*), 20% by 山東國惠投資有限公司(Shandong Guohui Investment Co., Ltd.*) and 10% by 山東省社會保障基金理事會(Shandong Provincial Council for Social Security Fund*). To the best knowledge, information and belief of the Directors and having made all reasonable enquiries, 山東國惠投資有限公司 (Shandong Guohui Investment Co., Ltd.*) and 山東省社會保障基金理事會 (Shandong Provincial Council for Social Security Fund*) are both PRC state-owned entities.

LISTING RULES IMPLICATIONS

CNHTC is a substantial shareholder of the Company and a connected person of the Company. Accordingly, the transactions between the Group and the CNHTC Group as contemplated under the 2023 Products Purchase Agreement constitute continuing connected transactions of the Company.

As disclosed in the Gratuitous Transfer Announcements, upon completion of the Gratuitous Transfer, SHIG would be entitled to exercise 65% of the voting rights in the general meetings of CNHTC. As such, SHIG will then become a substantial shareholder of the Company, and Weichai Holdings, being a wholly-owned subsidiary of SHIG, will then become a connected person of the Company under Chapter 14A of the Listing Rules. Insofar as the Company is aware, as at the Latest Practicable Date, the Gratuitous Transfer has not been completed and therefore the transactions between the Group and the Weichai Group do not constitute connected transactions of the Company. However, upon completion of the Gratuitous Transfer, the transactions contemplated under the 2021 Weichai Parts Purchase Agreement will become continuing connected transactions of the Company.

−21− LETTER FROM THE BOARD

As the highest percentage ratio calculated pursuant to the Listing Rules in respect of the transactions contemplated under the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement (on an annual basis) exceeds 5%, such transactions constitute Non-exempt Continuing Connected Transactions of the Company and accordingly the 2023 Products Purchase Agreement, the 2021 Weichai Parts Purchase Agreement and their proposed New Caps will be subject to the reporting and announcement requirements, the annual review requirements, and the Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

At the Board meeting held on 31 March 2021 approving, inter alia, the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement, in view of their respective positions in the relevant connected persons, the CNHTC Interested Directors, namely Mr. Cai Dong, Mr. Liu Zhengtao, Mr. Dai Lixin, Ms. Qu Hongkun, Mr. Li Shaohua and Mr. Jiang Kui have abstained from voting on the resolutions approving the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement, and the transactions contemplated thereunder. Save as disclosed above, none of the Directors has a material interest in the 2023 Products Purchase Agreement, the 2021 Weichai Parts Purchase Agreement and the transactions contemplated thereunder.

APPROVAL BY INDEPENDENT SHAREHOLDERS

According to Chapter 14A of the Listing Rules, the Company will seek approval from the Independent Shareholders for the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement (including the relevant proposed New Caps), and the transactions contemplated thereunder at the general meeting of the Company. CNHTC and its associates will abstain from voting in relation to the relevant resolutions. As at the Latest Practicable Date, CNHTC was interested in 1,408,106,603 Shares, representing 51% of the total issued share capital of the Company.

An Independent Board Committee has been formed to advise the Independent Shareholders with respect to the Non-exempt Continuing Connected Transactions (including the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement and the relevant proposed New Caps). Gram Capital has been appointed as the independent financial adviser to make recommendations to the Independent Board Committee and the Independent Shareholders regarding the same.

ADDITIONAL RESOLUTION — RE-ELECTION OF EXECUTIVE DIRECTOR

At the AGM, an additional resolution will be proposed to consider, and, if thought fit, approve the re-election of Ms. Li Xia as an executive Director and the authorisation of the Board to fix her remuneration as an executive Director.

According to article 82 of the Articles, any Director appointed by the Board to fill a casual vacancy or by way of addition to their number shall hold office only until the next following annual general meeting of the Company (i.e. the forthcoming AGM), and shall then be eligible for re-appointment.

Reference is made to the announcement of the Company dated 11 May 2021 with respect to the appointment of Ms. Li Xia as an executive Director. According to the Articles, Ms. Li Xia shall retire at the AGM and shall be eligible to offer herself for re-election at the AGM.

−22− LETTER FROM THE BOARD

Biographical details and certain other information of Ms. Li Xia who is proposed to be re-elected as an executive Director at the AGM are set out in Appendix II to this circular.

Save as disclosed herein (including Appendix II), as at the Latest Practicable Date, and to the best knowledge and belief of the Board, the Board confirmed that:

(a) Ms. Li Xia does not have any relationship with any Director, senior management, substantial shareholder or controlling shareholder of the Company;

(b) Ms. Li Xia has no interests in the shares of the Company within the meaning under Part XV of the SFO;

(c) Ms. Li Xia has not held any other directorships in public companies the securities of which are listed on any securities market in Hong Kong or overseas in the last three years;

(d) there is no other information that needs to be disclosed pursuant to any of the requirements as set out in paragraphs (h) to (v) of Rule 13.51(2) of the Listing Rules; and

(e) the Company is not aware of any other matter that needs to be brought to the attention of the Shareholders and the Stock Exchange in relation to the aforesaid retiring Director.

ANNUAL GENERAL MEETING

A supplemental notice of the AGM to be held at 10:00 a.m. on Tuesday, 29 June 2021 at Theatre B, Hong Kong General Chamber of Commerce, 22/F, United Centre, 95 Queensway, Hong Kong is set out on pages AGM-1 to AGM-3 of this circular.

A supplemental form of proxy for the AGM is also enclosed herewith. Whether or not you intend to be present at the AGM, you are requested to complete the supplemental form of proxy and return it to the Company’s share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong in accordance with the instructions printed thereon as soon as practicable but in any event no later than 48 hours before the time appointed for holding the AGM. The completion of the supplemental form of proxy will not preclude you from attending and voting at the AGM in person should you so wish.

The AGM of the Company will be held on Tuesday, 29 June 2021. The record date for determining the entitlement of the Shareholders to attend and vote at the AGM is Tuesday, 29 June 2021 and the register of members of the Company will be closed from Thursday, 24 June 2021 to Tuesday, 29 June 2021 (both days inclusive), during which period no transfer of Shares will be registered. In order to qualify to attend and vote in the AGM, holders of Shares must lodge their Share certificates together with the relevant Share transfer documents with Computershare Hong Kong Investor Services Limited, the Share registrar of the Company, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not later than 4:30 p.m. on Wednesday, 23 June 2021.

−23− LETTER FROM THE BOARD

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. At the AGM, the chairman of the AGM will therefore demand a poll for every resolution put to vote of the AGM pursuant to article 61 of the Articles.

Save as disclosed, no Shareholder is required to abstain from voting in respect of any of the resolutions to be proposed at the AGM.

RECOMMENDATIONS

The Board considers that (i) the terms of the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement are fair and reasonable, on normal commercial terms or better and in the ordinary and usual course of business of the Group, and (ii) the entering into the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement (including the relevant proposed New Caps) and the relevant transactions contemplated thereunder are in the interests of the Company and the Shareholders as a whole and, accordingly, recommends the Shareholders to vote in favour of the relevant resolutions in relation to the foregoing at the forthcoming AGM.

Your attention is also drawn to the letter from the Independent Board Committee which is set out on pages 25 to 26 of this circular. The Independent Board Committee, having taken into account the advice of the Independent Financial Adviser, considers that the terms of the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement (including the relevant proposed New Caps) are fair and reasonable as far as the Independent Shareholders are concerned. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the resolutions to approve the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement (including the relevant proposed New Caps) and the transactions thereunder to be proposed at the AGM.

The Board also considers that the re-election of Ms. Li Xia, the retiring executive Director is in the interests of the Company and the Shareholders as a whole and, accordingly, recommend the Shareholders to vote in favour of the relevant resolutions in relation to the foregoing at the forthcoming AGM.

Yours faithfully By order of the Board Sinotruk (Hong Kong) Limited Cai Dong Chairman of the Board

* For identification purpose only

−24− LETTER FROM THE INDEPENDENT BOARD COMMITTEE

SINOTRUK (HONG KONG) LIMITED 中國重汽(香港) 有限公司 (incorporated in Hong Kong with limited liability) (Stock Code: 03808)

21 May 2021

To the Independent Shareholders

Dear Sir/Madam,

We refer to the circular (the “Circular”) of the Company dated 21 May 2021 of which this letter forms part. Terms defined in the Circular shall have the same meanings in this letter unless the context otherwise requires.

We have been appointed as members of the Independent Board Committee to consider the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement (including the relevant proposed New Caps), and to advise the Independent Shareholders on whether the same are fair and reasonable so far as the Independent Shareholders are concerned and are in interests of the Company and the Shareholders as a whole. Gram Capital has been appointed as the Independent Finance Adviser to give recommendations to the Independent Board Committee and the Independent Shareholders in respect of the above matters.

We wish to draw your attention to the letter from the Board set out on pages 8 to 24 of the Circular and the letter from the Independent Finance Adviser set out on pages 27 to 44 of the Circular.

Having considered the information set out in the letter from the Board, the terms of the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement and the advice of the Independent Financial Adviser in relation thereto, we are of the view that the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement are on normal commercial terms, in the ordinary and usual course of business of the Group; the terms of the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement (including the relevant proposed New Caps) are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole.

−25− LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Accordingly, we recommend the Independent Shareholders to vote in favour of the resolutions to be proposed at the AGM to approve the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement (including the relevant proposed New Caps).

Yours faithfully For and on behalf of the Independent Board Committee

Lyu Shousheng Independent non-executive Director

Lin Zhijun Independent non-executive Director

Yang Weicheng Independent non-executive Director

Wang Dengfeng Independent non-executive Director

Zhao Hang Independent non-executive Director

Liang Qing Independent non-executive Director

−26− LETTER FROM GRAM CAPITAL

Set out below is the text of a letter received from Gram Capital, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the 2023 Products Purchase Agreement and the 2021 Weichai Parts Purchase Agreement, and the transactions contemplated thereunder for the purpose of inclusion in this circular.

Room 1209, 12/F. Nan Fung Tower 88 Connaught Road Central/ 173 Des Voeux Road Central Hong Kong

21 May 2021

To: The independent board committee and the independent shareholders of Sinotruk (Hong Kong) Limited

Dear Sir/ Madam,

RENEWAL OF CONTINUING CONNECTED TRANSACTIONS

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of (i) the Group’s purchase of raw material, parts, components, semi-finished products, etc. from the Weichai Group as contemplated under the 2021 Weichai Parts Purchase Agreement (“Weichai Parts Purchase Transactions”) and (ii) the Group’s purchase of vehicles, refitted trucks, chassis and add-on products such as trunk, flatbed, tank, etc. from the CNHTC Group as contemplated under the 2023 Products Purchase Agreement (“CNHTC Products Purchase Transactions”, together with the Weichai Parts Purchase Transactions, the “Transactions”). Details of the Transactions are set out in the letter from the Board (the “Board Letter”) contained in the circular dated 21 May 2021 issued by the Company to the Shareholders (the “Circular”), of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

On 31 March 2021, the Company entered into, among other things, (i) the 2023 Products Purchase Agreement with CNHTC; and (ii) the 2021 Weichai Parts Purchase Agreement with Weichai Holdings.

With reference to the Board Letter, the Transactions constitute non-exempt continuing connected transactions of the Company and are subject to the reporting, annual review, announcement and Independent Shareholders’ approval requirement under Chapter 14A of the Listing Rules.

The Independent Board Committee comprising Mr. Lyu Shousheng, Dr. Lin Zhijun, Mr. Yang Weicheng, Dr. Wang Dengfeng, Mr. Zhao Hang and Mr. Liang Qing (all being independent non-executive Directors) has been established to advise the Independent Shareholders on (i) whether the terms of the Transactions are on normal commercial terms and are fair and reasonable; (ii) whether the Transactions are in the interests of the Company and the Shareholders as a whole and are

−27− LETTER FROM GRAM CAPITAL conducted in the ordinary and usual course of business of the Group; and (iii) how the Independent Shareholders should vote in respect of the resolution(s) to approve the Transactions at the AGM. We, Gram Capital Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

INDEPENDENCE

During the past two years immediately preceding the Latest Practicable Date, Gram Capital was engaged as the independent financial adviser in respect of possible renewal of the Company’s existing continuing connected transactions (which was not proceeded).

Notwithstanding the aforesaid past engagement, as at the Latest Practicable Date, we were not aware of any relationships or interests between Gram Capital and the Company or any other parties that could be reasonably regarded as hindrance to Gram Capital’s independence to act as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Transactions.

Besides, apart from the advisory fee and expenses payable to us in connection with our aforesaid engagement and this engagement as the Independent Financial Adviser, there was no arrangement whereby we shall be entitled to receive any other fees or benefits from the Company.

Having considered the above, in particular (i) none of the circumstances as set out under the Rule 13.84 of the Listing Rules existed as at the Latest Practicable Date; and (ii) the aforesaid past engagement was only independent financial adviser engagement, we are of the view that we are independent to act as the Independent Financial Adviser.

BASIS OF OUR OPINION

In formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have relied on the statements, information, opinions and representations contained or referred to in the Circular and the information and representations as provided to us by the Directors. We have assumed that all information and representations that have been provided by the Directors, for which they are solely and wholly responsible, are true and accurate at the time when they were made and continue to be so as at the Latest Practicable Date. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were reasonably made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Company, its advisers and/or the Directors, which have been provided to us. Our opinion is based on the Directors’ representation and confirmation that there is no undisclosed private agreement/arrangement or implied understanding with anyone concerning the Transactions. We consider that we have taken sufficient and necessary steps on which to form a reasonable basis and an informed view for our opinion in compliance with Rule 13.80 of the Listing Rules.

−28− LETTER FROM GRAM CAPITAL

The Circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement as contained in the Circular or the Circular misleading. We, as the Independent Financial Adviser, take no responsibility for the contents of any part of the Circular, save and except for this letter of advice.

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent in-depth investigation into the business and affairs of the Company, CNHTC Group, Weichai Group or their respective subsidiaries or associates, nor have we considered the taxation implication on the Group or the Shareholders as a result of the Transactions. Our opinion is necessarily based on the financial, economic, market and other conditions in effect and the information made available to us as at the Latest Practicable Date. Shareholders should note that subsequent developments (including any material change in market and economic conditions) may affect and/or change our opinion and we have no obligation to update this opinion to take into account events occurring after the Latest Practicable Date or to update, revise or reaffirm our opinion. In addition, nothing contained in this letter should be construed as a recommendation to hold, sell or buy any Shares or any other securities of the Company.

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources, it is the responsibility of Gram Capital to ensure that such information has been correctly extracted from the relevant sources.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the Transactions, we have taken into consideration the following principal factors and reasons:

1. Background of and reasons for the Transactions

Information on the Group

With reference to the Board Letter, the Company is principally engaged in investment holding. The Group primarily specialises in the research, development and manufacturing of heavy duty trucks, medium-heavy duty trucks, light duty trucks, buses, etc. and related key assemblies, parts and components including engines, cabins, axles, steel frames and gearboxes as well as the provision of financial services.

Information on CNHTC and Weichai Holdings

With reference to the Board Letter, CNHTC is a commercial vehicles manufacturer. It is a state-owned enterprise organized under the laws of the PRC with limited liability. As at the Latest Practicable Date, CNHTC holds the entire issued share capital of Sinotruk (BVI) Limited, which in turn is the holder of 51% of the Shares.

−29− LETTER FROM GRAM CAPITAL

With reference to the Board Letter, Weichai Holdings is a company established in the PRC with limited liability. According to the public information available, the Weichai Group (including Weichai Power and its subsidiaries) is principally engaged in the manufacturing and sale of engines, heavy duty trucks, gear boxes, parts and components of heavy duty trucks and hydraulics controlling parts. To the best knowledge, information and belief of the Directors and having made all reasonable enquiries, Weichai Holdings is wholly-owned by SHIG. As at the Latest Practicable Date, SHIG was owned as to 70% by 山東省人民政府國有資產監督管理委員會 (State-owned Assets Supervision and Administration Commission of the Shandong Government*), 20% by 山東國惠投資有限公司 (Shandong Guohui Investment Co., Ltd.*) and 10% by 山東省社會保障基金理事會 (Shandong Provincial Council for Social Security Fund*).

According to the Company’s announcement dated 29 September 2019, among other things, (i) pursuant to an agreement dated 25 September 2019 and made between 濟南市人民政府國有資產監督管理委員會 (State-owned Assets Supervision and Administration Commission of the Ji’nan Government) (“Ji’nan SASAC”) and SHIG, Ji’nan SASAC will, for nil consideration, transfer (無償劃轉) 45% of the equity interest in CNHTC to SHIG (the “Gratuitous Transfer”); and (ii) pursuant to an agreement dated 27 September 2019 and made between 山東省國有資產投資控股有限公司 (Shandong State-owned Assets Investment Holdings Co., Ltd.) (“Shandong Investment”) and SHIG, Shandong Investment will, for nil consideration, delegate (授權委託) (the “Delegation”) the equity holders’ rights (including the voting rights), but excluding the asset and income rights (資產收益權), attached to its 20% equity interest in CNHTC to SHIG.

As at the Latest Practicable Date, the Gratuitous Transfer has not been completed and therefore the transactions between the Group and the SHIG Group (including the Weichai Group) do not constitute continuing connected transactions of the Company. However, upon completion of the Gratuitous Transfer, SHIG will constitute an associate of CNHTC and the transactions between the Group and the SHIG Group (including the Weichai Group) will constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

Reasons for and benefits of the Transactions

With reference to the Board Letter, the Group has been purchasing, among other things, refitted trucks (including specialty vehicles) from the CNHTC Group to mainly satisfy the orders from its customers. As a result of the long-term business relationship between the Group and the CNHTC Group, the Directors believe that the CNHTC Group is familiar with the Group’s products, materials and parts and will continue to be able to respond quickly and in a cost efficient manner to any new requirements that the Group may have. In addition, over the years, the CNHTC Group has been providing products which meet the quality requirements and standards of the Group. As such, the Group intends to continue such transactions with the CNHTC Group. In addition, following cooperation with the Weichai Group in recent years, the use of engines produced by the Weichai Group has been met with a positive response within the market and customers of the Group often have requested for engines from the Weichai Group to be installed on their commercial vehicles. In view of such demand and recognition of the Group’s vehicles installed with the Weichai Group’s engines, the Board considers it an optimum opportunity for the Group to further expand its business operations. As such, the Group also intends to continue such transactions with the Weichai Group.

−30− LETTER FROM GRAM CAPITAL

As mentioned above, upon completion of the Gratuitous Transfer, SHIG will constitute an associate of CNHTC and the transactions between the Group and the SHIG Group (including the Weichai Group) will constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As the Transactions are entered into in the ordinary and usual course of business of the Group and on a frequent and regular basis, it would be costly and impracticable to make regular disclosure of each of the relevant transactions and obtain the prior approval from the Independent Shareholders, as required by the Listing Rules (if necessary). Accordingly, the Directors are of the view that the Transactions will be beneficial to the Company and the Shareholders as a whole. We concur with the Directors in this regard.

Having considered the above and that (i) the Transactions are conducted in the ordinary and usual course of business of the Group; (ii) the Group has long-established relationship and synergy with the CNHTC Group, which improves efficiency and reduce procurement/selling costs of the Group; (iii) it would be costly and impracticable to make regular disclosure of each of the relevant transactions and obtain the prior approval from the Independent Shareholders, as required by the Listing Rules (if necessary); and (iv) the possible completion of the Gratuitous Transfer during the year ending 31 December 2021 (“FY2021”), we concur with the Directors that the Transactions are conducted in the ordinary and usual course of business of the Group and the Transactions are in the interest of the Company and the Shareholders as a whole.

2. Principal terms of the Transactions

I. Weichai Parts Purchase Transactions

Set out below are the key terms of the Weichai Parts Purchase Transactions, details of which are set out under the section headed “2021 Weichai Parts Purchase Agreement ” of the Board Letter.

Date: 31 March 2021

Parties: The Company; and Weichai Holdings

Nature of transactions: The Weichai Group has agreed to sell raw materials, parts, components, semi-finished products (including gearboxes, engine gears, support assemblies, pedals and guard assemblies), etc., to the Group

Term: One year from 1 January 2021 to 31 December 2021 (both days inclusive)

−31− LETTER FROM GRAM CAPITAL

Pricing Policies : The Weichai Group will provide the Group with a selling price list of its parts which is applicable to all of its customers. Based on the aforesaid price list provide by the Weichai Group and the price quotation offered by other qualified suppliers, the Group will negotiate with all qualified suppliers including the Weichai Group to determine the agreed prices of all the parts, after taking into consideration the market conditions at the relevant time, the size of orders and the technical conditions, and all the purchases of parts from independent suppliers and the Weichai Group will be fixed at these agreed selling prices. The Group will prepare a parts purchase price list, which summarises all agreed parts purchase prices with independent parts suppliers and the Weichai Group (the “Parts Purchase Price List”), for all procurement departments of the Group to follow. Accordingly, the prices for the transactions under the 2021 Weichai Parts Purchase Agreement will be determined in accordance with the market price approach to ensure that the prices for the parts supplied by the Weichai Group are no less favourable to the Group than those offers by independent third parties.

Payment terms: The payment terms for each batch of products will be based on normal commercial terms or industry practices provided that full payment shall be made by way of cash, cheques, notes, bills or letters of credit within 90 days from the date of purchase.

With reference to the Board Letter, the Company adopted various internal control procedures (the “Parts Purchase IC”) to ensure that the prices of each of the transactions are in accordance with the pricing policies under the 2021 Weichai Parts Purchase Agreement. Details of the Parts Purchase IC are set out under the sub-section headed “Internal control procedures” under section headed “2021 Weichai Parts Purchase Agreement” of the Board Letter.

Having considered, among other things,

(i) the Parts Purchase Price List summarises all agreed price (determined with reference to price from the Weichai Group’s price list and quotations from independent third parties) for all procurement departments of the Group to follow;

(ii) various departments of the Group will be responsible for the implementation, monitoring and review of relevant procedures;

(iii) the quotation review committee of the Group will review and assess the quotations from technical, commercial and financial perspective and make recommendation to the responsible management or executive Directors; and

−32− LETTER FROM GRAM CAPITAL

(iv) if any accumulated annual transaction amount exceeds 70% of the pre-approved annual cap, the relevant continuing connected transaction will be reported to the Group Securities Department for monitoring, follow-up and, if necessary, revision of the annual cap in accordance with the requirements of the Listing Rules, we consider that the Parts Purchase IC are sufficient for the Company to monitor the Parts Purchase Transactions.

We noted that the payment terms under the 2021 Weichai Parts Purchase Agreement were in line with the payment arrangement of the transactions between the Weichai Group and the Group regardless of the payment or receipt of fees (i.e. 2021 Weichai Parts Sales Agreement). As such, we consider that the payment terms under the 2021 Weichai Parts Purchase Agreement is acceptable.

In light of the above factors and having reviewed the 2021 Parts Purchase Agreement, we are of the view that the terms of the 2021 Weichai Parts Purchase Agreement are on normal commercial terms and are fair and reasonable.

Weichai Parts Purchase Caps

The table below demonstrates (i) the historical transactions amounts of the Weichai Parts Purchase Transactions for the two years ended 31 December 2020 and two months ended 28 February 2021; and (ii) the annual cap (the “Weichai Parts Purchase Cap”) for FY2021:

For the year ended For the year ended For the year ending 31 December 2019 31 December 2020 31 December 2021 RMB’000 RMB’000 RMB’000

Historical transaction amounts 317,000 5,671,000 1,194,429 (Note)

For the year ending 31 December 2021 RMB’000

Weichai Parts Purchase Cap 16,309,000

Note: the figure was for the two months ended 28 February 2021.

As advised by the Directors, in arriving at the Weichai Parts Purchase Cap for the year ending 31 December 2021, the Directors considered factors set out under the sub-section headed “Proposed New Caps and basis” under the section headed “2021 Weichai Parts Purchase Agreement” of the Board Letter.

−33− LETTER FROM GRAM CAPITAL

According to the above table, the Weichai Parts Purchase Cap represented significant increases as compared to the historical transaction amounts of the Group’s purchase of parts from the Weichai Group. As advised by the Directors, such significant increase was mainly based on the expectation of substantial increase in the Group’s purchase of engines, parts and components (being auxiliary to the engines) from the Weichai Group. The expected substantial increase in the Group’s purchase of engines, parts and components (being auxiliary to the engines) from the Weichai Group for FY2021 was determined after taking into account of the following factors:

• With reference to the Board Letter, as the Group’s sales volume is expected to keep growing and its existing production capacity of heavy duty truck engines has been fully utilised, the purchase of heavy duty truck engines from the Weichai Group can cover the shortage of production capacity and/or models of the Group’s self-produced engines and meet production needs. In terms of light duty truck engines, the Group does not manufacture small-displacement engines, making procurement of such engines from third parties necessary. As the Weichai Group’s engines have a greater market advantage, the Group will fully cooperate with the Weichai Group in terms of light duty truck engines. At the same time, some customers of the Group have requested to purchase commercial vehicles equipped with the Weichai Group’s engines, and the purchase of relevant engines from the Weichai Group can meet the needs of the Group’s customers.

• We also understood from the Directors that the expected increase in the Group’s demand from the Weichai Group’s engines was also made with reference to the requirement of transitional phase from China V Emission Standard to China VI Emission Standard for medium heavy duty trucks (the “Requirement”).

According to the Requirement, during the transitional phase from China V Emission Standard to China VI Emission Standard for medium heavy duty trucks, the Group was required to replace older types of engines gradually. With the Group’s current China VI Emission Standard engine production capacity being fully utilised, external procurement became a necessity in the Group’s continued expansion. In order to meet with such procurement need and with the customers of the Group often have requested for engines from the Weichai Group to be installed in their commercial vehicles, purchases from the Weichai Group allows the Group to meet the expectations from its customers.

• We further understood that the Group has been acquiring the Parts For Purchase (including engines) from the Weichai Group since 2019, during which the Group recorded purchase amounts of Parts For Purchase from the Weichai Group of approximately RMB317 million. The Group further recorded Parts For Purchase from the Weichai Group of approximately RMB5,671 million during FY2020.

• The Directors consider that with continual growth of the commercial vehicle market and the Group’s vehicles installed with the Weichai Group’s engines being well received by the market, the sales of the Group’s vehicles have been performing well. In order to capture with such growth potential, new products installed with the Weichai Group’s engines have been gradually launched, and a closer cooperation between the Group and the Weichai Group during the year 2021 is expected.

−34− LETTER FROM GRAM CAPITAL

Upon our further request, we obtained the detailed calculation for the Weichai Parts Purchase Cap for FY2021 (the “Weichai Parts Purchase Calculation”). The Weichai Parts Purchase Calculation was prepared based on the possible demand of parts under the 2021 Weichai Parts Purchase Agreement by the Group from members of the Weichai Group.

Save for the Weichai Parts Purchase Calculation, we also reviewed Weichai Power’s announcement dated 25 February 2021, statistics data as published by CAAM, statistics data as published by National Bureau of Statistics, information in respect of the Group’s purchase volume of engine from the Weichai Power Group, etc. to form our view in respect of the fairness and reasonableness of the Weichai Parts Purchase Cap for FY2021.

According to the Weichai Parts Purchase Calculation, estimated demand of parts by the Group from the Weichai Power and/or its subsidiaries (the “Weichai Power Group”) (i.e. approximately RMB14,072 million) accounted for approximately 91% to the total estimated demand of parts from the Weichai Group (i.e. approximately RMB15,532 million) for FY2021. The Weichai Parts Purchase Cap was then calculated with reference to the total estimated demand of parts from the Weichai Group and a buffer of 5%.

As advised by the Directors, the estimated demand of parts from the Weichai Power Group mainly comprised the estimated demand of heavy duty truck engines and light duty truck engines for FY2021 (representing over 95% of the estimated demand of parts by the Group from the Weichai Power Group for FY2021). The Group intends to purchase approximately 90,000 units of heavy duty truck engines and 240,000 units of light duty truck engines from the Weichai Power Group for FY2021. Upon our further request, the Directors advised us the average estimated selling price of the heavy duty truck engines and light duty truck engines. For our due diligence purpose, we also obtained invoices of the Group’s purchase of heavy duty truck engines and light duty truck engines from the Weichai Power Group. Based on our review of the historical selling price of heavy duty truck engines and light duty truck engines from the Weichai Power Group, we consider the average estimated selling price of the heavy duty truck engines and light duty truck engines from the Weichai Power Group to be reasonable. Accordingly, we consider the estimated demand of heavy duty truck engines and light duty truck engines from the Weichai Power Group for FY2021 to be reasonable.

Furthermore, we noted from Weichai Power’s announcement dated 25 February 2021 that Weichai Power entered into a sale agreement with CNHTC on 25 February 2021. Pursuant to the sale agreement, among other things, the Weichai Power Group shall sell vehicles, vehicle parts and components and related products, engines, engine parts and components and related products and relevant services (as the case may be) to CNHTC and/or its associates (as the case may be) at market prices and settled on a monthly basis, for a term of one year ending 31 December 2021, upon the expiry of which the parties shall have an option to renew the same for a period of three years on a mutually agreed basis.

According to the announcement, the proposed sale amount by the Weichai Power Group (i.e. proposed new cap) for FY2021 amounted to RMB16,600 million.

−35− LETTER FROM GRAM CAPITAL

The estimated demands of Parts For Purchase by the Group from the Weichai Power Group for FY2021 was lower than the proposed sale amount by the Weichai Power Group. Based on the above analysis regarding the estimated demand on parts by the Group from Weichai Power Group, which represented approximately 91% to the total estimated demand on parts by the Group from the Weichai Group for FY2021, we consider that Group’s total estimated demand on Parts For Purchase from the Weichai Group to be fair and reasonable.

We also noted from the Weichai Parts Purchase Calculation, when determining the Weichai Parts Purchase Cap for FY2021, an additional buffer of approximately 5% was applied on the Group’s possible demand on Parts For Purchase from the Weichai Group for FY2021. As the additional buffer (which forms approximately 5% of the Weichai Parts Purchase Caps for FY2021) was applied for unforeseeable circumstances, for instance, the unpredictable increase in selling price of parts under the Weichai Parts Purchase Transactions, we consider that a buffer of 5% is acceptable.

In light of the above factors, we consider that the Weichai Parts Purchase Cap for FY2021 to be fair and reasonable.

Shareholders should note that as the proposed annual caps are relating to future events and were estimated based on assumptions which may or may not remain valid for the entire period up to 31 December 2021, and they do not represent forecasts of revenue/expenses/costs to be recorded/incurred from the Weichai Parts Purchase Transactions. Consequently, we express no opinion as to how closely the actual revenue/expenses to be incurred from the Weichai Parts Purchase Transactions will correspond with the proposed annual caps.

II. CNHTC Products Purchase Transactions

Set out below are the key terms of the CNHTC Products Purchase Transactions, details of which are set out under the section headed “2023 Products Purchase Agreement” of the Board Letter.

Date: 31 March 2021

Parties: The Company; and

CNHTC

Subject matter: The CNHTC Group has agreed to sell vehicles, refitted trucks, chassis, and add-on products such as trunk, flatbed, tank, etc. (the “Refitted Products”) to the Group.

Term: Two years from 1 January 2022 to 31 December 2023 (both days inclusive)

−36− LETTER FROM GRAM CAPITAL

Pricing Policies: The CNHTC Group will supply products including chassis and the Refitted Products to the Group for tailor-making the final products for sale to its customers in accordance with their specifications. The prices for the transactions contemplated under the 2023 Products Purchase Agreement will be determined on the following basis:

(i) for Refitted Products

The trucks produced by the Group for sales are ready for operation and running. Some customers of the Group not only purchase the Group’s trucks but also request for Refitted Products. In order to secure the sales of the trucks of the Group, the Group will cooperate with some refitting companies (including the CNHTC Group) to meet the additional specifications and demand from its customers. The Group will prepare an authorised providers list of the Refitted Products. (“Providers List”).

On the other hand, certain customers of the Group may request the Group to purchase the Refitted Products on their behalf. The Group will select the authorised provider for its customers, which may or may not be the CNHTC Group. If the CNHTC Group is selected as the authorised provider, the Group will purchase the Refitted Products from the CNHTC Group at stipulated prices and sell the final products to the customers at the price which covers the price of the trucks produced by the Group and the stipulated prices of the Refitted Products.

(ii) for chassis, vehicles and refitted trucks that are only available from the CNHTC Group

−37− LETTER FROM GRAM CAPITAL

The Group does not produce certain trucks such as all-wheels driven chassis and trucks and specialty vehicles which the CNHTC Group may produce. If certain customers approach the Group for such types of products, the Group will source the same from the CNHTC Group and sell to the customers. The Group will refer to the product price list compiled by the CNHTC Group which is applicable to all its customers including independent customers and the Group and confirm the price of these products with its customers. Upon confirmation of the orders by the customers, the Group will purchase relevant products from the CNHTC Group at such prices. The Group will then sell relevant products to its customers with expected profit margins from 5% to 20% which were determined with reference to (a) the average profit margin of vehicles and the related manufacturing industry as published by SASAC which were summarised in the Performance Appraisal Index; and (b) the historical profit margins of similar products sold to independent customers of the Group.

To assess reasonableness of profit margins from 5% to 20% for the relevant products, we obtained extracts regarding automobile manufacturing of the Performance Appraisal Index. The Performance Appraisal Index was published by 國務院國資委財務監督與考核局 (Financial Administration and Appraisal Bureau of SASAC*) in 2020. According to the Performance Appraisal Index, it compiled performance indicators, including but not limited to the profit margin of the automobiles industry as well as other industries in the PRC. The indicators were determined by mathematical statistics methods with reference to the financial statements of the respective state-owned enterprises of the relevant industry. The corresponding statistics were provided by relevant statistics authorities of the PRC. With reference to the Performance Appraisal Index and as advised by the Directors, the profit margin of the large state-owned enterprises engaged in automobile manufacturing industry ranged from approximately -9.5% to 11.6% in 2019. As mentioned above, the Group will then sell relevant products to its customers with expected profit margins from 5% to 20%. The expected profit margin range of 5% to 20% was better than the profit margin of the large state-owned enterprises engaged in automobile manufacturing industry. Accordingly, we consider the expected profit margin range will be beneficial to the Group.

−38− LETTER FROM GRAM CAPITAL

With reference to the Board Letter, the Company adopted various internal control procedures (the “Products Purchase IC”) to ensure that the prices of each of the transactions are in accordance with the pricing policies under the 2023 Products Purchase Agreement. Details of the Products Purchase IC are set out under the sub-section headed “Internal control procedures” under section headed “2023 Products Purchase Agreement” of the Board Letter.

Having considered the followings:

(i) for Refitted Products, the Group will prepare an authorized providers list of the Refitted Products and the Group will then sell the final products to its customers at a price which covers the price of the trucks produced by the Group and the agreed price of the Refitted Products between the customers of the Group and the CNHTC Group or between the Group and the CNHTC Group;

(ii) for chassis and trucks that are only available from the CNHTC Group, an officer of the Group’s business department will prepare relevant purchase order and another officer or supervisor will cross check the agreed prices;

(iii) various departments of the Group will be responsible for the implementation, monitoring and review of relevant procedures; and

(iv) if any accumulated annual transaction amount exceeds 70% of the pre-approved annual cap, the relevant continuing connected transaction will be reported to the Group Securities Department for monitoring, follow-up and, if necessary, revision of the annual cap in accordance with the requirements of the Listing Rules, we consider that the Products Purchase IC are sufficient for the Company to monitor the CNHTC Products Purchase Transactions.

Having also considered our findings on CNHTC Products Purchase Transactions as mentioned above, we do not doubt the effectiveness of implementation of the above measures.

We noted that the payment terms under the 2023 Products Purchase Agreement were in line with the payment arrangement of the transactions between the CNHTC Group and the Group regardless of the payment or receipt of fees (i.e. 2023 Products Purchase Agreement, 2023 CNHTC Technology Support and Services Agreement and 2023 CNHTC Parts Sales Agreement). As such, we consider that the payment terms under the 2023 Products Purchase Agreement are acceptable.

In light of the above factors, we are of the view that the terms of the 2023 Products Purchase Agreement are on normal commercial terms and are fair and reasonable.

−39− LETTER FROM GRAM CAPITAL

CNHTC Products Purchase Caps

The table below demonstrates (i) the historical transactions amounts of the CNHTC Products Purchase Transactions for the two years ended 31 December 2020 and two months ended 28 February 2021 with existing annual caps; and (ii) the annual caps (the “CNHTC Products Purchase Cap(s)”) for the two years ending 31 December 2023:

For the year ended For the year ended For the year ending 31 December 2019 31 December 2020 31 December 2021 RMB’000 RMB’000 RMB’000

Existing annual caps 3,147,000 3,386,000 3,647,000 Historical transaction amounts 2,515,358 1,892,245 188,091 (Note) Utilisation rate 79.9% 55.9% N/A

For the year ending For the year ending 31 December 2022 31 December 2023 RMB’000 RMB’000

CNHTC Products Purchase Cap 2,921,000 3,281,000

Note: the figure was for the two months ended 28 February 2021.

As advised by the Directors, in arriving at the CNHTC Products Purchase Caps for the two years ending 31 December 2023, the Directors considered factors set out under the sub-section headed “Proposed New Caps and basis” under the section headed “2023 Products Purchase Agreement” of the Board Letter.

Upon our request, we obtained the detailed calculation for the CNHTC Products Purchase Caps for the two years ending 31 December 2023 (the “CNHTC Products Purchase Calculation”). The CNHTC Products Purchase Calculation was prepared based on the possible demand of products under the 2023 Products Purchase Agreement by the Group from each of members of the CNHTC Group with reference to the respective actual demand for FY2020.

According to the CNHTC Products Purchase Calculation, the estimation on products by the Group for FY2022 as set out mainly as follows:

• the Group’s estimated demand on products from a member of the CNHTC Group (“Member A”) for FY2022 (representing approximately 28% to the Group’s total estimated demand for FY2022) increased by approximately 4.2% as compared to transaction amounts on the Group’s estimated demand on products from Member A for FY2021, which represented approximately 27.4% as compared to that for FY2020.

−40− LETTER FROM GRAM CAPITAL

• the Group’s estimated demand on products from a member of the CNHTC Group (“Member B”) for FY2022 (representing approximately 38% to the Group’s total estimated demand for FY2022) increased by approximately 17.3% as compared to transaction amounts on the Group’s estimated demand on products from Member B for FY2021, which represented approximately 39.9% as compared to that for FY2020.

• the Group’s estimated demand on products from a member of the CNHTC Group (“Member C”) for FY2022 (representing approximately 18% to the Group’s total estimated demand for FY2022) increased by approximately 17.1% as compared to transaction amounts on the Group’s estimated demand on products from Member C for FY2021, which represented approximately 9.7% as compared to that for FY2020.

• the Group’s estimated demand on products from a member of the CNHTC Group (“Member D”) for FY2022 (representing approximately 16% to the Group’s total estimated demand for FY2022) increased by approximately 14.6% as compared to transaction amounts on the Group’s estimated demand on products from Member D for FY2021, which represented approximately 18.4% as compared to that for FY2020.

We noted that the estimated demand of products from members of the CNHTC Group for FY2021 represented a substantial increase as compared to those for FY2020; and for FY2022 also represented a substantial increase as compared to those for FY2021.

As advised by the Directors, they expected the estimated demand of products from members of the CNHTC Group for FY2022 mainly refer to the Group’s historical sales of trucks and the performance of the industry.

We consider the estimated demand on products from members of the CNHTC Group to be reasonable after taking into account of following factors:

• According to statistics from CAAM, the sales volume of HDT increased by 37.9% year-on-year to approximately 1.619 million units. The HDT industry performed beyond expectations. In the LDT market, “new infrastructure” projects launched gradually with the effective prevention and control of the domestic epidemic while the upgrade of environmental protection accelerated the promotion of the scrapping of obsolete diesel trucks, together with the combined effects of short and medium distance cold chain logistics and the rising demand for transportation from the e-commerce express industry, resulting in a market growth when compared to the same period last year. According to statistics from CAAM, the sales volume of LDT increased by 16.8% year-on-year to approximately 2.199 million units.

• With reference to the Company’s annual report for FY2020, during FY2020, the Group’s total sales volume of products increased by approximately 64.2% year-on-year to 459,656 units, of which the sales volume of HDTs increased by 64.3% year-on-year to 278,415 units, and the sales volume of LDTs increased by 65.6% year-on-year to 181,013 units.

−41− LETTER FROM GRAM CAPITAL

• Pursuant to the 2023 Products Purchase Agreement, the CNHTC Group will supply products including chassis and the Refitted Products to the Group for tailor-making the final products for sale to its customers in accordance with their specifications.

• Upon our discussion with the Directors, we understood that as the PRC government’s development of major infrastructural construction projects and tightened environmental protection requirement, it may lead to the increase in demand of engineering vehicle (工程車) and intelligent slag truck (智能化渣土車) by the Group’s clients, which may also lead to the increase in the Group’s demand of products from the CNHTC Group (as requested by the Group’s clients).

Based on the above analysis in respect of the Group’s estimated demand on products from the CNHTC Group, representing approximately 100% to the Group’s total estimated demand on products for FY2022 (the “2022 Group’s Demand on Products”), we consider that the 2022 Group’s Demand on Products to be fair and reasonable.

With also reference to the CNHTC Products Purchase Calculation, the increase in Group’s estimated demand in products from the CNHTC Group during the year ending 31 December 2023 is approximately 12%.

With reference to the Board Letter, the CNHTC Products Purchase Caps were determined after considering, among other things, the stable macroeconomic environment in the PRC, with an expected GDP growth of over 6% for each of the two years ending 31 December 2023. According to the PRC National Bureau of Statistics, the PRC’s GDP increased by approximately 6.9%, 6.7%, 6.0% and 2.3% during 2017, 2018, 2019 and 2020 respectively, therefore, we consider the expected GDP growth for each of the two years ending 31 December 2023 to be justifiable. Accordingly, we consider the estimated demand in products from the CNHTC Group for the year ending 31 December 2023 to be reasonable.

We also noted from the CNHTC Products Purchase Calculation, when determining the CNHTC Products Purchase Caps for the two years ending 31 December 2023, an additional buffer of approximately 5% was applied on the estimated demand for the two years ending 31 December 2023. As the additional buffer (which forms approximately 5% of the CNHTC Products Purchase Caps for each of the two years ending 31 December 2023) was applied for unforeseeable circumstances, for instance, the unpredictable increase in selling price of products under the CNHTC Products Purchase Transactions, we consider that a buffer of 5% is acceptable.

In light of the above factors, we consider that the CNHTC Products Purchase Caps for the two years ending 31 December 2023 to be fair and reasonable.

−42− LETTER FROM GRAM CAPITAL

Shareholders should note that as the proposed annual caps are relating to future events and were estimated based on assumptions which may or may not remain valid for the entire period up to 31 December 2023, and they do not represent forecasts of revenue/expenses/costs to be recorded/incurred from the CNHTC Products Purchase Transactions. Consequently, we express no opinion as to how closely the actual revenue/expenses to be incurred from the CNHTC Products Purchase Transactions will correspond with the proposed annual caps.

3. Listing Rules implication regarding the continuing connected transactions

The Directors confirmed that the Company shall comply with the requirements of Rules 14A.53 to 14A.59 of the Listing Rules pursuant to which (i) the values of the continuing connected transactions must be restricted by their respective proposed annual cap for the period; (ii) the terms of the continuing connected transactions (including their respective annual caps) must be reviewed by the independent non-executive Directors annually; (iii) details of independent non-executive Directors’ annual review on the terms of the continuing connected transactions of the Company must be included in the Company’s subsequent published annual reports.

Furthermore, it is also required by the Listing Rules that the auditors of the Company must provide a letter to the Board confirming, among other things, whether anything has come to their attention that causes them to believe that the continuing connected transactions of the Company (i) have not been approved by the Board; (ii) were not, in all material respects, in accordance with the pricing policies of the Group if the transactions involve the provision of goods or services by the Group; (iii) were not entered into, in all material respects, in accordance with the relevant agreement governing the transactions; and (iv) have exceeded their respective annual caps.

In the event that the total amounts of the continuing connected transactions of the Company are anticipated to exceed their respective annual caps, or that there is any proposed material amendment to the terms of their relevant agreements, as confirmed by the Directors, the Company shall re-comply with the applicable provisions of the Listing Rules governing continuing connected transaction.

Given the above stipulated requirements for continuing connected transactions pursuant to the Listing Rules, we are of the view that there are adequate measures in place to monitor the continuing connected transactions of the Company and thus the interest of the Independent Shareholders would be safeguarded.

−43− LETTER FROM GRAM CAPITAL

RECOMMENDATION

Having taken into consideration the factors and reasons as stated above, we are of the opinion that (i) the terms of the Transactions are on normal commercial terms and are fair and reasonable; and (ii) the Transactions are in the interests of the Company and the Shareholders as a whole and are conducted in the ordinary and usual course of business of the Group. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the resolution(s) to be proposed at the AGM to approve the Transactions and we recommend the Independent Shareholders to vote in favour of the resolution(s) in this regard.

Yours faithfully, For and on behalf of Gram Capital Limited Graham Lam Managing Director

Note: Mr. Graham Lam is a licensed person registered with the Securities and Futures Commission and a responsible officer of Gram Capital Limited to carry out Type 6 (advising on corporate finance) regulated activity under the SFO. He has over 25 years of experience in investment banking industry.

* For identification purposes only

−44− APPENDIX I GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, include particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. INTERESTS OF DIRECTORS AND CHIEF EXECUTIVE IN THE SECURITIES OF THE COMPANY

As at the Latest Practicable Date, as far as the Directors are aware, none of the Directors and chief executive of the Company had any interest and short position in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO), or were required, pursuant to section 352 of the SFO, to be entered in the register required to be kept by the Company, or were required, pursuant to the Model Code for Securities Transaction by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules adopted by the Company, to be notified to the Company and the Stock Exchange.

3. SUBSTANTIAL SHAREHOLDERS’ INTERESTS

As at the Latest Practicable Date, so far as was known to the Directors or the chief executive of the Company based on the register maintained by the Company pursuant to Part XV of the SFO, the following person (other than a Director or the chief executive of the Company) had, or were deemed or taken to have interests or short positions in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or, were directly or indirectly, interested in 5% or more of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group:

− I-1 − APPENDIX I GENERAL INFORMATION

(a) The Company

Long position

Approximate Capacity in which Number of percentage of Name of Shareholder interests are held Note Shares held shareholding

SHIG Interest in controlled (a) 1,408,106,603 51% corporation CNHTC Interest in controlled (b) 1,408,106,603 51% corporation Sinotruk (BVI) Limited Beneficial owner 1,408,106,603 51% FPFPS Interest in controlled (c) 690,248,336 25% corporation Ferdinand Porsche Interest in controlled (d) 690,248,336 25% Familien- corporation Holding GmbH Ferdinand Alexander Interest in controlled (e) 690,248,336 25% Porsche GmbH corporation Familie Porsche Interest in controlled (f), (l) 690,248,336 25% Beteiligung GmbH corporation Porsche Automobil Interest in controlled (g), (m) 690,248,336 25% Holding SE corporation Volkswagen AG Interest in controlled (h) 690,248,336 25% corporation Volkswagen Finance Interest in controlled (i) 690,248,336 25% Luxemburg S.A. corporation TRATON SE Interest in controlled (j) 690,248,336 25% corporation MAN SE Interest in controlled (k) 690,248,336 25% corporation MAN Finance and Beneficial owner 690,248,336 25% Holding S.A.

Notes:

(a) For the purpose of Part XV of the SFO, SHIG has interest in a total of 65% of the voting rights in CNHTC, and therefore, is deemed to have interest in all the Shares held (or deemed to be held) by CNHTC under the SFO.

(b) CNHTC holds the entire issued share capital of Sinotruk (BVI) Limited. CNHTC is deemed to have interest in all the Shares held (or deemed to be held) by Sinotruk (BVI) Limited under the SFO.

(c) FPFPS holds 90% interest in Ferdinand Porsche Familien- Holding GmbH. FPFPS is deemed to have interest in all the Shares held (or deemed to be held) by Ferdinand Porsche Familien-Holding GmbH under the SFO.

− I-2 − APPENDIX I GENERAL INFORMATION

(d) Ferdinand Porsche Familien-Holding GmbH holds 73.85% interest in Ferdinand Alexander Porsche GmbH. Ferdinand Porsche Familien-Holding GmbH is deemed to have interest in all the Shares held (or deemed to be held) by Ferdinand Alexander Porsche GmbH under the SFO.

(e) Ferdinand Alexander Porsche GmbH holds 100% interest in Familie Porsche Beteiligung GmbH. Ferdinand Alexander Porsche GmbH is deemed to have interest in all the Shares held (or deemed to be held) by Familie Porsche Beteiligung GmbH under the SFO.

(f) Familie Porsche Beteiligung GmbH holds 51.69% interests in Porsche Automobil Holding SE. Familie Porsche Beteiligung GmbH is deemed to have interest in all the Shares held (or deemed to be held) by Porsche Automobil Holding SE under the SFO.

(g) Porsche Automobil Holding SE holds 50.73% interest in Volkswagen AG. Porsche Automobil Holding SE is deemed to have interest in all the Shares held (or deemed to be held) by Volkswagen AG under the SFO.

(h) Volkswagen AG holds 100% interest in Volkswagen Finance Luxemburg S.A. Volkswagen AG is deemed to have interest in all the Shares held (or deemed to be held) by Volkswagen Finance Luxemburg S.A. under the SFO.

(i) Volkswagen Finance Luxemburg S.A. holds 89.72% voting interest in TRATON SE. Volkswagen Finance Luxemburg S.A. is deemed to have interest in all the Shares held (or deemed to be held) by TRATON SE under the SFO.

(j) TRATON SE holds 94.68% voting interest in MAN SE. TRATON SE is deemed to have interest in all the Shares held (or deemed to be held) by MAN SE under the SFO.

(k) MAN SE holds 100% voting interest in MAN Finance and Holding S.A. MAN SE is deemed to have interest in all the Shares held (or deemed to be held) by MAN Finance and Holding S.A. under the SFO.

(l) Notwithstanding the information recorded in the register required to be kept by the Company under section 336 of Part XV of the SFO, the Company has been informed that, as at 31 December 2020, Famille Porsche Beteiligung GmbH held a 27.73% interest in the capital of Porsche Automobil Holding SE and had a voting interest of 55.46% in this entity.

(m) Notwithstanding the information recorded in the register required to be kept by the Company under section 336 of Part XV of the SFO, the Company has been informed that, as at 31 December 2020, Porsche Automobil Holding SE held a 31.42% interest in the capital of Volkswagen AG and had a voting interest of 53.35% in this entity.

− I-3 − APPENDIX I GENERAL INFORMATION

(b) Members of the Group

Long position

Approximate percentage Nature of Name of the member of of equity Name of equity holder interests the Group interest held

Liuzhou Yunli Investment Co., Beneficial owner Sinotruk Liuzhou Yunli 40% Ltd. Special Vehicles Co., Ltd. Yongan Fudi Investment Co., Beneficial owner Sinotruk Fujian Haixi 20% Ltd. Vehicles Co., Ltd. Chengdu Dachenggong Beneficial owner Sinotruk Chengdu 20% Mechanics Co., Ltd. Wangpai Commercial Vehicles Co., Ltd. Suizhou Huawei Investment Beneficial owner Sinotruk Hubei Huawei 40% Holdings Co., Ltd. Special Vehicle Co., Ltd. Kodiak America LLC. Beneficial owner Sinotruk Liuzhou Yunli 49% Kodiak Machinery Co., Ltd. CNHTC Beneficial owner Sinotruk Auto Finance 6.7% Co., Ltd. Shandong International Trust Beneficial owner Sinotruk Auto Finance 10% Co., Ltd. Co., Ltd. Weichai Power Co., Ltd. Beneficial owner Sinotruk (Chongqing) 40% Light Vehicle Co., Ltd.

Save as disclosed above, as at the Latest Practicable Date, so far as is known to the Directors or chief executive of the Company, no other persons (not being a Director or chief executive of the Company) had any interests or short positions in the Shares or underlying Shares which are required to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, nor were there any persons, directly or indirectly, interested in 5% or more of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

4. CLAIMS AND LITIGATIONS

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened against any member of the Group.

− I-4 − APPENDIX I GENERAL INFORMATION

5. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with the Company or any member of the Group other than contracts expiring or by the employer within one year without payment of compensation (other than statutory compensation).

6. COMPETING INTERESTS

As at the Latest Practicable Date, Mr. Cai Dong was the general manager of CNHTC; Mr. Liu Zhengtao was the deputy general manager of CNHTC; Mr. Dai Lixin was the chief investment officer of CNHTC; Mr. Li Shaohua was the deputy general manager of CNHTC; Ms. Li Xia was the financial controller and the departmental head of the value engineering department of CNHTC; Mr. Jiang Kui was the general manager of SHIG and a non-executive director of Weichai Power; Mr. Richard von Braunschweig was the head of cooperations, M&A in MAN Truck & Bus SE and the managing director for Human Resources and Legal Affairs of MAN Truck & Bus Österreich GesmbH; Ms. Annette Danielski was the head of group finance within TRATON SE, a member of the supervisory board of MAN SE as well as MAN Truck & Bus SE; Mr. Matthias Gründler was the chief executive officer of TRATON SE, chairman of the supervisory board of MAN SE and MAN Truck & Bus SE, the chairman of the board of Scania AB and Scania CV AB (indirect non-wholly owned subsidiaries of TRATON SE) and a member of the supervisory board of VW Financial Services AG; and Dr. h.c. Andreas Tostmann was a member of the executive board of TRATON SE as well as the chief executive officer of MAN SE and MAN Truck & Bus SE. Save as disclosed above, as at the Latest Practicable Date, none of the Directors and their respective close associates had any interests in a business, apart from the interest in the Group’s business, which competes or may compete with the business of the Group.

7. DIRECTORS’ INTERESTS

(a) As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any asset which had been, since 31 December 2020, being the date to which the latest published audited financial statements of the Company were made up, acquired or disposed of by or leased to, or were proposed to be acquired or disposed of by or leased to, any member of the Group.

(b) As at the Latest Practicable Date, save for the following agreements and the respective prior continuing connected transactions entered into between the Group and the CNHTC Group in which Mr. Cai Dong, Mr. Liu Zhengtao, Mr. Dai Lixin, Mr. Li Shaohua, Ms. Li Xia and Mr. Jiang Kui were required to (or would have been required to) abstain from voting, and between the Group and MAN SE and its associates, in which Mr. Richard von Braunschweig, Ms. Annette Danielski, Mr. Matthias Gründler and Dr. h.c. Andreas Tostmann were required to (or would have been required to) abstain from voting, none of the Directors were materially interested in any contract or arrangement entered into by any member of the Group which was subsisting as at the Latest Practicable Date and which was significant in relation to the business of the Group:

(i) the 2021 Products Sales Agreement (as defined in the announcement of the Company dated 31 March 2021);

− I-5 − APPENDIX I GENERAL INFORMATION

(ii) the 2021 Parts Sales Agreement (as defined in the announcement of the Company dated 31 March 2021);

(iii) the 2021 Products Purchase Agreement;

(iv) the 2021 Parts Purchase Agreement;

(v) the 2021 Financial Services Agreement (as defined in the announcement of the Company dated 31 March 2021);

(vi) the 2023 CNHTC Products Sales Agreement (as defined in the announcement of the Company dated 31 March 2021);

(vii) the 2023 CNHTC Parts Sales Agreements (as defined in the announcement of the Company dated 31 March 2021);

(viii)the 2021 Weichai Parts Sales Agreement (as defined in the announcement of the Company dated 31 March 2021);

(ix) the 2023 Financial Services Agreement (as defined in the announcement of the Company dated 31 March 2021);

(x) the 2023 Products Purchase Agreement; and

(xi) the 2021 Weichai Parts Purchase Agreement.

(c) As at the Latest Practicable Date, so far as is known to the Directors, the following Directors held offices in the substantial Shareholders set out in section 3 of this appendix above:

Name of Director Positions held

Mr. Cai Dong General manager of CNHTC

Mr. Liu Zhengtao Deputy general manager of CNHTC

Mr. Dai Lixin Chief investment officer of CNHTC

Mr. Li Shaohua Deputy general manager of CNHTC

Ms. Li Xia Financial controller and departmental head of the value engineering department of CNHTC

Mr. Jiang Kui General manager of SHIG

− I-6 − APPENDIX I GENERAL INFORMATION

8. MATERIAL ADVERSE CHANGE

The Directors confirm that there has been no material adverse change in the financial or trading position of the Group since 31 December 2020, being the date to which the latest published audited financial statements of the Company were made up.

9. QUALIFICATION OF EXPERTS AND CONSENTS

The following is the qualification of the expert who has given opinion or advice which is contained in this circular:

Name Qualification

Gram Capital Limited A license corporation to carry out Type 6 (advising on corporate finance) regulated activity under the SFO

As at the Latest Practicable Date, Gram Capital had no shareholding interest in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for any securities in any member of the Group.

As at the Latest Practicable Date, Gram Capital had no direct or indirect interest in any asset which had been, since 31 December 2020, being the date to which the latest published audited financial statements of the Company were made up, acquired or disposed of by or leased to, or were proposed to be acquired or disposed of by or leased to, any member of the Group.

Gram Capital has given and has not withdrawn its written consent to the issue of this circular with the inclusion therein a copy of its advice and references to its name, in the form and context in which they respectively appear. The letter of the Independent Financial Adviser contained herein was issued on 21 May 2021 and was made by Gram Capital for incorporation in this circular.

10. MISCELLANEOUS

This circular has been prepared in both English and Chinese. In the case of any discrepancy, the English text shall prevail.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the office of the Company at Units 2102-03, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong during normal business hours on any weekday up to and including Monday, 28 June 2021:

(a) the 2023 Products Purchase Agreement;

(b) the 2021 Weichai Parts Purchase Agreement;

− I-7 − APPENDIX I GENERAL INFORMATION

(d) the letter from the Independent Financial Adviser, the text of which is set out on pages 27 to 44 of this circular;

(e) the written consent of Gram Capital referred to in paragraph 9 of this Appendix;

(f) the annual report of the Company for the year ended 31 December 2020;

(g) the circular of the Company dated 30 April 2021; and

(h) this circular.

− I-8 − APPENDIX II BIOGRAPHICAL DETAILS OF THE EXECUTIVE DIRECTOR PROPOSED TO BE RE-ELECTED

Below are the biographical details and certain other information of Ms. Li Xia, the retiring executive Director proposed to be re-elected at the AGM:

Ms.LiXia(李霞女士) (“Ms. Li”), born in January 1980, is a senior accountant. She graduated from 山東經濟學院 (Shandong Economics University*) in the PRC in July 2002 with a bachelor’s degree majoring in accounting. She also obtained a master’s degree in business administration from 青島科技大學 (Qingdao University of Science and Technology), the PRC in June 2019.

From July 2002 to January 2014, Ms. Li served as the general business manager and the assistant to the departmental head at the finance department of Weichai Power. From February 2014 to April 2016, Ms. Li was the financial controller and concurrently the departmental head of the finance department of 濰柴重機股份有限公司 (Weichai Heavy-duty Machinery Co., Ltd.*, the shares of which are listed on the Shenzhen Stock Exchange (stock code: 000880)). From April 2016 to April 2021, Ms. Li held various managerial positions at Weichai Power including the departmental head of the finance department and the deputy financial controller. Since June 2018, Ms. Li has been serving as a director of 揚州亞星客車股份有限公司 (Yangzhou Yaxing Motor Coach Co., Ltd., the shares of which are listed on the Shanghai Stock Exchange (stock code: 600213)). Since April 2021, Ms. Li has been the head of the value engineering department of the Group and CNHTC. Since May 2021, Ms. Li has been serving as an executive Director, a member of the executive committee of the Company, a member of the strategy and investment committee of the Company and the financial controller of the Group and CNHTC.

Ms. Li has entered into a service agreement with the Company for a term of three years commenced from 11 May 2021. She receives an emolument of approximately RMB672,400 per annum and is subject to retirement by rotation and re-election in accordance with the Articles. The remuneration was determined by the Board with reference to the remuneration of all executive Directors and also her responsibilities.

* For identification purpose only

− II-1 − SUPPLEMENTAL NOTICE OF ANNUAL GENERAL MEETING

SINOTRUK (HONG KONG) LIMITED 中國重汽(香港) 有限公司 (incorporated in Hong Kong with limited liability) (Stock Code: 03808)

SUPPLEMENTAL NOTICE OF ANNUAL GENERAL MEETING

Reference is made to the notice of the annual general meeting (the “AGM”) of Sinotruk (Hong Kong) Limited (the “Company”) dated 30 April 2021, which sets out the time and venue of the AGM and contains the resolutions to be tabled before the AGM for shareholders’ approval.

SUPPLEMENTAL NOTICE IS HEREBY GIVEN that the AGM will be held as originally scheduled at 10:00 a.m. on Tuesday, 29 June 2021 at Theatre B, Hong Kong General Chamber of Commerce, 22/F, United Centre, 95 Queensway, Hong Kong for the purposes of passing the following resolutions, with or without amendments, as ordinary resolutions of the Company, in addition to the resolutions set out in the notice of AGM dated 30 April 2021:

ORDINARY RESOLUTIONS

To consider and, if thought fit, pass (with or without modification) the following resolutions as ordinary resolutions of the Company:

5. “THAT:

A. the execution of the 2023 Products Purchase Agreement (as defined in the circular of the Company dated 21 May 2021 (the “Circular”)) be and is hereby ratified, confirmed and approved;

B. all transactions contemplated under the 2023 Products Purchase Agreement and the proposed annual caps therefor for the two years ending 31 December 2023 as set out in the Circular be and are hereby approved; and

C. any Director be and is hereby authorised to do all acts and execute and deliver (whether under seal) all such documents for and on behalf of the Company as he/she considers necessary or desirable in connection with the 2023 Products Purchase Agreement, the transactions contemplated thereunder and the proposed annual caps for the two years ending 31 December 2023.”

− AGM-1 − SUPPLEMENTAL NOTICE OF ANNUAL GENERAL MEETING

6. “THAT:

A. the execution of the 2021 Weichai Parts Purchase Agreement (as defined in the Circular) be and is hereby ratified, confirmed and approved;

B. all transactions contemplated under the 2021 Weichai Parts Purchase Agreement and the proposed annual cap therefor for the year ending 31 December 2021 as set out in the Circular be and are hereby approved; and

C. any Director be and is hereby authorised to do all acts and execute and deliver (whether under seal) all such documents for and on behalf of the Company as he/she considers necessary or desirable in connection with the 2021 Weichai Parts Purchase Agreement, the transactions contemplated thereunder and the proposed annual cap for the year ending 31 December 2021.”

7. A. To re-elect Ms. Li Xia, a retiring Director, as an executive Director.

B. To authorise the board of Directors to fix the remuneration of Ms. Li Xia as an executive Director.

By order of the Board Sinotruk (Hong Kong) Limited Cai Dong Chairman of the Board

Ji’nan, the PRC, 21 May 2021

As at the date of this supplemental notice, the board of the Company consists of seven executive directors of the Company including Mr. Cai Dong, Mr. Liu Zhengtao, Mr. Liu Wei, Mr. Dai Lixin, Mr. Richard von Braunschweig, Mr. Li Shaohua and Ms. Li Xia; four non-executive directors of the Company including, Mr. Jiang Kui, Ms. Annette Danielski, Mr. Matthias Gründler and Dr. h.c. Andreas Tostmann; and six independent non-executive directors of the Company including Dr. Lin Zhijun, Mr. Yang Weicheng, Dr. Wang Dengfeng, Mr. Zhao Hang, Mr. Liang Qing and Mr. Lyu Shousheng.

Notes:

1. A member entitled to attend and vote at the meeting of the Company is entitled to appoint one or more proxies to attend and on a poll vote on his behalf. A proxy need not be a member of the Company.

2. In order to be valid, a supplemental proxy form and the power of attorney or other authorisation (if any) under which it is signed, or a notarially certified copy of such power of attorney or authorisation, must be deposited at the share registrar of the Company, Computershare Hong Kong Investor Services Limited, 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not less than 48 hours before the time fixed for holding the meeting or any adjournment thereof. Completion and return of the proxy form will not preclude any member from attending and voting in person at the meeting or any adjourned meeting should he/she so wishes.

− AGM-2 − SUPPLEMENTAL NOTICE OF ANNUAL GENERAL MEETING

3. The AGM of the Company will be held on Tuesday, 29 June 2021 and the register of members of the Company will be closed from Thursday, 24 June 2021 to Tuesday, 29 June 2021 (both days inclusive), during which period no transfer of shares will be registered. In order to qualify to attend and vote in the AGM, holders of the Company’s shares must lodge their share certificates together with the relevant share transfer documents with Computershare Hong Kong Investor Services Limited, the share registrar of the Company, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not later than 4:30 p.m. on Wednesday, 23 June 2021.

4. Where there are joint holders of any share of the Company, any one of such joint holders may vote, either in person or by proxy, in respect of such share as if he/she/it were solely entitled thereto, but if more than one of such joint holders are present at the meeting, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

5. The supplemental proxy form for use at the AGM is enclosed with the Circular.

6. The supplemental form of proxy only serves as a supplement to the original proxy form for the AGM.

7. The supplemental form of proxy will not affect the validity of any form of proxy duly completed and delivered by you in respect of the resolution set out in the notice of the AGM dated 30 April 2021. If you have validly appointed a proxy to attend and act for you at the AGM but do not duly complete and deliver the supplemental form of proxy, your proxy will be entitled to vote at the discretion on the ordinary resolutions set out in the supplemental notice of the AGM dated 21 May 2021. If you do not duly complete and deliver the original form of proxy for the AGM but have duly completed and delivered the supplemental form of proxy and validly appointed a proxy to attend and act for you at the AGM, your proxy will be entitled to vote at the discretion on the resolutions set out in the notice of the AGM dated 30 April 2021.

8. If the proxy being appointed to attend the AGM under the supplemental form of proxy is different from the proxy appointed under the original form of proxy and both proxies attended the AGM, the proxy validly appointed under the original form of proxy shall be designated to vote at the AGM.

9. No corporate gifts, refreshments or drinks will be distributed.

− AGM-3 −