Dividend Policy

If the Company records a profit upon the annual closing of its accounts, it shall first pay taxes in accordance with applicable laws, offset accumulated losses, and then set aside 10% of the remaining profit as legal reserve, unless the legal reserve has reached the Company’s paid-in capital. After setting aside or reversing a special reserve in accordance with applicable laws or regulatory requirements, the balance, together with the accumulated undistributed earnings at the beginning of the period, shall constitute the accumulated earnings available for distribution to shareholders. The Board of Directors shall prepare a profit distribution proposal and submit it to the shareholders’ meeting for approval of the distribution of dividends and bonuses to shareholders.

The Company’s dividend policy is formulated in light of its current and future development plans and takes into account the investment environment, funding requirements, domestic and international competition, and the interests of its shareholders. Each year, out of the earnings available for distribution, the Company shall allocate an amount equal to no less than 10% of the current year’s earnings as dividends and bonuses to shareholders, of which cash dividends shall account for no less than 10% of the total dividends distributed for the year. However, if the Company has a major investment plan, it may elect not to distribute cash dividends, subject to a proposal prepared by the Board of Directors and approval by the shareholders’ meeting.

After the Company’s shares have been publicly issued, if dividends and bonuses, or all or any portion of the legal reserve or capital surplus, are distributed in cash, the Board of Directors is authorized to approve such distribution by a resolution adopted by a majority vote of the directors present at a meeting attended by at least two-thirds of all directors, and a report of such distribution shall be submitted to the shareholders’ meeting.