AllBright Law Offices

About Hengxuan Technology (Shanghai) Co., Ltd

Differentiated Equity Distribution

Legal Opinions

Address: 9/11/12th Floor, Shanghai Tower, No. 501 Yincheng Middle Road, Pudong New Area, Shanghai

Tel: 021-20511000 Fax: 021-20511999

Zip code: 200120

AllBright Law Offices

About Hengxuan Technology (Shanghai) Co., Ltd

Differentiated Equity Distribution

Legal Opinions

To: Hengxuan Technology (Shanghai) Co., Ltd

AllBright Law Offices (hereinafter referred to as the "Firm") is entrusted by Hengxuan Technology (Shanghai) Co., Ltd. (hereinafter referred to as the "Company") to comply with the Company Law of the People's Republic of China (2023 Revision) (hereinafter referred to as the "Company Law"), the Securities Law of the People's Republic of China (hereinafter referred to as the "Securities Law"), the Rules for Share Repurchase of Listed Companies (hereinafter referred to as the "Repurchase Rules"), and the Listing Company of the Shanghai Stock Exchange

Self-Regulatory Guidelines No. 7 – Repurchase of Shares (Revised in December 2023) (hereinafter referred to as the "Repurchases

Guidelines") and other laws, regulations and other normative documents (hereinafter referred to as "laws and regulations") and the relevant provisions of the Articles of Association of Hengxuan Technology (Shanghai) Co., Ltd. (hereinafter referred to as the "Articles of Association"), this legal opinion is issued on matters related to the differentiated equity distribution involved in the company's profit distribution in the first three quarters of 2024 (hereinafter referred to as the "differentiated equity distribution").

In order to issue this legal opinion, the firm and its lawyers reviewed the relevant documents provided by the company for the distribution of differentiated rights, reviewed the company's announcement, and made necessary inquiries to the company on relevant matters. Our lawyers issue legal opinions based on the facts that have occurred or existed before the date of issuance of this legal opinion and based on their understanding of the current laws and regulations.

This legal opinion only expresses legal opinions on the legal issues involved in the distribution of differentiated equity, and does not express opinions on professional matters and reports related to accounting, auditing, capital verification, etc. The quotation (if any) of certain data and conclusions in the audit report and capital verification report in this legal opinion does not imply any express or implied guarantee to the authenticity and accuracy of such data and conclusions. The firm and its lawyers are not properly qualified to verify and evaluate the content of such data and reports.

Accordingly, in accordance with the requirements of laws and regulations, and in accordance with the generally recognized professional standards, ethics and diligence of the lawyer industry, the lawyers of this firm hereby issue the following legal opinions:

1. The reason for this differentiated equity distribution

According to the meeting materials announced by the company, on November 12, 2024, the company's first interim shares of 2024

The General Assembly deliberated and passed the "Proposal on the Profit Distribution Plan for the First Three Quarters of 2024" (hereinafter referred to as the "Proposal on the Profit Distribution Plan for the First Three Quarters of 2024"), and the company intends to distribute a cash dividend of 0.76 yuan (tax included) per share to all shareholders based on the total share capital on the record date of the implementation of equity distribution and deducting the shares in the company's special securities account for repurchase.

According to the company's description, as of the application date of this differentiated equity distribution, the number of the company's shares deposited in the company's special securities account for repurchase is 382,210 shares.

According to the provisions of the Company Law, the Securities Law, the Repurchase Rules and the Repurchase Guidelines, listed companies do not enjoy the right to vote at shareholders' meetings, profit distribution, conversion of provident fund into share capital, subscription of new shares and convertible corporate bonds. Based on the foregoing provisions, the shares in the company's repurchase special account will not participate in the company's profit distribution in the first three quarters of 2024, and the company's profit distribution in the first three quarters of 2024 will be subject to differentiated equity distribution.

2. The plan for the distribution of differentiated rights

According to the "Proposal on the Profit Distribution Plan for the First Three Quarters of 2024", the company intends to distribute a cash dividend of 0.76 yuan (tax included) per share to all shareholders based on the total share capital on the record date of the implementation of equity distribution and deducting the shares in the company's special securities account for repurchase, without giving bonus shares and not converting capital reserve into share capital.

3. The calculation basis of this differentiated equity distribution

According to the application documents provided by the company, the company applies to calculate the opening reference price of ex-rights and dividends according to the following formula:

Ex-rights (interest) reference price = (previous closing price - cash dividend) ÷ (1 + change ratio of outstanding shares).

Since the company's dividend is a differentiated dividend, the above-mentioned cash dividend refers to the actual distribution based on the total share capital

Diluted adjusted cash dividend per share. According to the profit distribution plan approved by the company's first extraordinary general meeting of shareholders in 2024, the company will only pay cash dividends this time, and there will be no capital reserve to increase share capital and dividends

Share. As a result, there will be no change in the outstanding shares of the company, and the percentage of outstanding shares will change at 0.

Cash dividend per share of fictitious distribution = (total amount of share capital participating in distribution × actual distribution of cash dividend per share) ÷ total share capital = 119,663,349×0.76÷120,045,559≈0.76 yuan per share (with two decimal places).

The company's closing price on November 13, 2024 is $244.62. Therefore, the company's equity distribution is excepted

Rights (interest) reference price = (previous closing price - cash dividend per share) ÷ (1 + change ratio of outstanding shares) = (244.62-0.76) ÷ (1 + 0) = 243.86 yuan / share.

4. The differentiated equity distribution meets the following conditions

(1) The shares that have been repurchased to the special account in this differentiated equity distribution will not participate in the distribution;

(2) Based on the closing price of the application date or the trading day before the application date, the absolute value of the impact of the differentiated equity distribution on the reference price of ex-rights and dividends is less than 1% (inclusive).

Ex-dividend reference price impact = |Ex-dividend reference price calculated based on actual distributions - Ex-rights and ex-dividend reference price calculated based on virtual distribution| /Ex-dividend reference price calculated based on actual distribution = |243.86-243.86 | /243.86≈0.00%＜1%

In summary, the absolute value of the impact of this differentiated equity distribution on the reference price of ex-rights and dividends is less than 1%, which has a small impact.

Concluding remarks

To sum up, our lawyers believe that the company's differentiated equity distribution complies with the provisions of laws and regulations such as the Company Law, the Securities Law, the Repurchase Rules and the Repurchase Guidelines, and does not harm the interests of the company and all its shareholders.

The original of this legal opinion shall be in duplicate and shall take effect after being signed by the lawyer of the firm and stamped with the official seal.

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