Stock code: 688608 Stock abbreviation: Hengxuan Technology Announcement No.: 2024-030

Hengxuan Technology (Shanghai) Co., Ltd.

Announcement on Adjusting the Grant Price of the Company's 2023 Restricted Stock Incentive Plan

the company's board of directors and all directors to ensure that the contents of this announcement does not exist any false records, misleading statements or major omissions, and the authenticity, accuracy and completeness of the contents of the legal responsibility.

Hengxuan Technology (Shanghai) Co., Ltd. (hereinafter referred to as the "Company") was called on June 25, 2024.

The twelfth meeting of the second board of directors and the twelfth meeting of the second board of supervisors reviewed and approved the "Proposal on Adjusting the Grant Price of the Company's 2023 Restricted Stock Incentive Plan." The relevant matters are explained as follows:

Relevant approval procedures for 1. equity incentive plans

1. On August 1, 2023, the company held the sixth meeting of the second board of directors, deliberated and passed

Proposal on the Company's "2023 Restricted Stock Incentive Plan (Draft)" and its summary "," Proposal on the Company's "2023 Restricted Stock Incentive Plan Implementation Assessment Management Measures", "Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors to Handle the 2023 Restricted Stock Incentive Plan" and other related proposals. The independent directors of the company expressed their independent opinions on the motion related to the incentive plan.

On the same day, the company held the sixth meeting of the second board of supervisors, which deliberated and passed the proposal on the company's 2023 restricted stock incentive plan (Draft) and its summary, the proposal on the implementation assessment and management measures of the company's 2023 restricted stock incentive plan, and the proposal on verifying the list of incentive objects granted by the company's 2023 restricted stock incentive plan for the first time, the board of supervisors of the company verified the relevant matters of this incentive plan and issued relevant verification opinions.

2. On August 2, 2023, the Company disclosed on the website of the Shanghai Stock Exchange (www.sse.com.cn)

According to the "Announcement on the Public Solicitation of Entrusted Voting Rights by Independent Directors" (Announcement No. 2023-028), according to the entrustment of other independent directors of the Company, Independent Director Dai Jixiong, as the solicitor, solicited from all shareholders of the Company the relevant proposals of the Company's 2023 Restricted Stock Incentive Plan considered by the Company's First Extraordinary General Meeting of Shareholders in 2023.

Voting rights.

3. From August 2, 2023 to August 11, 2023, the Company's proposed incentive targets for this incentive plan

The name and position are publicized within the company. As of the expiration of the publicity period, the company's supervisory board has not received any employees.

Any objections to the proposed incentive. On August 12, 2023, the company was on the Shanghai Stock Exchange.

The website (www.sse.com.cn) disclosed the "Supervisory Board's Verification Opinions and Publicity Statement on the List of Incentive Objects of the Company's 2023 Restricted Stock Incentive Plan" (Announcement No. 2023-031).

4. On August 18, 2023, the company held the first extraordinary general meeting of shareholders in 2023, which was considered and approved.

The "Proposal on the Company's" 2023 Restricted Stock Incentive Plan (Draft) "and its Summary", "The Proposal on the Company's" 2023 Restricted Stock Incentive Plan Implementation Assessment Management Measures ", and" The Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors to Handle the 2023 Restricted Stock Incentive Plan Related Matters ".

5. On August 19, 2023, the Company disclosed on the website of the Shanghai Stock Exchange (www.sse.com.cn)

Self-Examination Report on the Trading of the Company's Shares by Insiders of the Company's 2023 Restricted Stock Incentive Plan (Announcement No. 2023-033).

6. On August 22, 2023, the company held the seventh meeting of the second board of directors and the second board of supervisors.

At the seventh meeting, the "Proposal on Adjusting Matters Related to the 2023 Restricted Stock Incentive Plan" and "The Proposal on Granting Restricted Stock to Incentive Objects for the First Time" were reviewed and approved. The independent directors of the Company expressed their independent opinions on the aforementioned motion, and the Supervisory Board verified and issued a verification opinion on the aforementioned matters.

7. On April 23, 2024, the company held the 11th meeting of the second board of directors and the second supervisor

At the eleventh meeting of the meeting, the "Proposal on Granting Reserved Partial Restricted Stocks to Incentive Objects of the 2023 Restricted Stock Incentive Plan" was considered and passed. The Supervisory Board verified the aforementioned matters and issued a verification opinion.

8. On June 25, 2024, the company held the 12th meeting of the second board of directors and the second supervisor

At the 12th meeting of the meeting, the motion on adjusting the grant price of the company's 2023 restricted stock incentive plan was considered and passed.

Reasons for 2. adjustment and adjustment results

1. Reasons for adjustment

According to the relevant provisions of the company's incentive plan, the announcement date of the incentive plan to the completion of the incentive object limit.

Prior to the registration of the vesting of the restricted shares, the Company shall adjust the grant price of the restricted shares accordingly in respect of the capitalization of the shares, the distribution of stock dividends, the splitting of shares, the allotment of shares, the reduction of shares or the distribution of dividends and other matters.

The Company held the 2023 Annual General Meeting of Shareholders on May 16, 2024 to consider and approve the "On 2023

The motion on the annual profit distribution plan "and disclosed on May 17, 2024" on the adjustment of the 2023 profit."

Announcement on the Total Amount of Cash Dividends for Run Distribution ", the profit distribution plan is: based on the total share capital of the implementation of the equity distribution equity registration date minus the shares in the company's special securities account for repurchase, a cash dividend of 1.6 yuan (tax included) will be distributed to all shareholders for every 10 shares, no bonus shares will be given, and no capital reserve will be converted into share capital.

2. Adjustment method

In accordance with the provisions of the Company's 2023 Restricted Stock Incentive Plan (Draft), the grant price is adjusted as follows:

P=P0-V

where P0 is the pre-adjusted grant price; V is the dividend per share; and P is the adjusted grant price. After dividend adjustment, P must still be greater than 1.

Based on the above formula, the adjusted grant price of the 2023 Restricted Stock Incentive Plan (including the grant of the reserved portion) = 65-0.16=$64.84 per share.

3. the impact of this adjustment on the Company

The company's adjustment to the grant price of the 2023 restricted stock incentive plan will not have a material impact on the company's financial position and operating results, will not affect the stability of the company's core team, and will not affect the continued implementation of the company's equity incentive plan.

Opinions of 4. Supervisory Board

The board of supervisors of the company believes that the adjustment of the grant price of the restricted stock incentive plan in 2023 is in line with the relevant provisions of the the People's Republic of China Company Law, the the People's Republic of China Securities Law, the measures for the Administration of Equity incentives of listed companies and other laws, regulations and normative documents on the adjustment of incentive plans, and has fulfilled the necessary procedures. This adjustment is within the scope of the authorization of the company's first extraordinary general meeting of shareholders in 2023. The adjustment procedures are legal and compliant, and there is no situation that harms the interests of the company and shareholders.

After this adjustment, the grant price of the 2023 Restricted Stock Incentive Plan was adjusted from $65 per share to 64.84

Yuan/share. The Supervisory Board agreed to the Company's adjustment to the grant price of the 2023 Restricted Stock Incentive Plan.

Concluding comments 5. counsel's legal opinion

The lawyer of Shanghai Jintiancheng Law Firm believes that: As of the date of issuance of this legal opinion, the adjustment of Hengxuan Technology's 2023 incentive plan has obtained the necessary approval and authorization, and the company has fulfilled the information disclosure obligations of the aforementioned related matters at this stage, And should continue to perform the corresponding information disclosure obligations in accordance with the requirements of relevant laws and regulations.

It is hereby announced.

Board of Directors of Hengxuan Technology (Shanghai) Co., Ltd.

26 June 2024