Stock code: 688608 Stock abbreviation: Hengxuan Technology Announcement No.: 2023-008

Hengxuan Technology (Shanghai) Co., Ltd.

Announcement on Using Idle Own Funds to Purchase Financial Products

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") on March 27, 2023

The fourth meeting of the second board of directors and the fourth meeting of the second board of supervisors were held to deliberate and pass the company's "Proposal on Using Idle Self-Owned Funds to Purchase Financial Products." Agree that the company in ensuring that the company's main business development

On the premise of meeting the company's daily operation, research and development and other capital needs and ensuring the safety of funds, temporarily idle self-owned funds of no more than 2.8 billion yuan (including 2.8 billion yuan) are used for cash management, which is used to purchase low-risk financial products with high security and good liquidity, including not limited to structured deposits and financial products.

Etc., within the above-mentioned quota, the funds can be used on a rolling basis, and the use period does not exceed 12 months from the date of approval by the board of directors. The board of directors authorizes the chairman to exercise the decision-making power and sign relevant legal documents, and the specific matters shall be organized and implemented by the Finance Department. The matter was approved by the board of directors, still need to be submitted to the general meeting of shareholders for consideration. The independent directors of the Company have issued an independent opinion expressly consented. The specific circumstances of the matter are hereby announced as follows:

Overview of 1. using temporarily idle own funds to purchase wealth management products

Purpose of (I) investment products

In order to improve the efficiency of the use of funds, the rational use of their own funds, without affecting the normal operation of the company, the use of temporarily idle own funds to invest in financial products, increase the company's income, for the company and for the company and shareholders to obtain more returns.

(II) investment product quota

The company intends to use temporarily idle self-owned funds not exceeding 2.8 billion yuan (including 2.8 billion yuan) for cash management.

management, used to purchase high security, good liquidity of low-risk financial products, including not limited to structured deposits, financial products, etc., the above amount can be recycled within the validity period.

(III) investment product variety

In order to control risks, the issuers of wealth management products are financial institutions such as banks, securities companies or trust companies that can provide capital preservation commitments, and the types of investments are low-risk wealth management products with high security and good liquidity, including but not limited to structured deposits and wealth management products.

(IV) Investment Act Authorization Period

Effective within 12 months from the date of deliberation and approval at the fourth meeting of the second board of directors of the company.

(V) Implementation Mode

Within the limit, the chairman is authorized to exercise the investment decision-making power and sign relevant contract documents, including but not limited to: selecting qualified professional financial institutions as trustees, specifying the amount and period of entrusted financial management, selecting the types of entrusted financial products, signing contracts and agreements and other legal documents. The company's specific investment activities are organized and implemented by the company's finance department.

(VI) information disclosure

The company will be in accordance with the relevant provisions of the Shanghai Stock Exchange, timely discharge of information disclosure obligations.

2. investment risk and risk control measures

(I) investment risk

Although we choose financial products with low-risk investment varieties, the financial market is greatly affected by macro-economy. The company will invest funds in a timely and appropriate amount according to the economic situation and changes in the financial market, but we do not rule out that the investment is affected by market fluctuations.

(II) risk control measures

1. The Company will handle the relevant cash management business in strict accordance with the relevant laws and regulations such as the Rules for the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange and the Articles of Association of the Company.

2. The Company's Internal Audit Department is responsible for auditing and supervising the use and custody of cash management, and regularly reviews the approval of cash management, actual operation, use of funds and profit and loss.

3, the company's finance department to arrange a timely analysis and tracking of cash management product investment, project progress, once found or judged to have adverse factors, must take appropriate security measures in a timely manner to control risks.

4. Independent directors and the board of supervisors have the right to supervise and inspect the use of funds, and may hire professional institutions to conduct audits when necessary.

5. The company will perform its information disclosure obligations in a timely manner in strict accordance with the relevant regulations of the China Securities Regulatory Commission and the Shanghai Stock Exchange.

The impact of 3. on the day-to-day operations of the company

The company's plan to use part of the temporarily idle self-owned funds to purchase wealth management products is carried out under the premise of ensuring the company's daily operations, and will not affect the company's daily capital normal turnover needs, nor will it affect the normal development of the company's main business.

At the same time, the timely investment and financial management business of temporarily idle own funds can obtain certain investment income, which is conducive to improving the efficiency of capital use, increasing income, further improving the overall performance level of the company, and seeking better investment returns for the company and shareholders.

4. review process

1. Opinions of the Board of Directors

On March 27, 2023, the fourth meeting of the second board of directors of the company deliberated and passed the "on the use of leisure"

On the premise of not affecting the development of the company's main business, meeting the company's daily operation, research and development and other capital needs, and ensuring the safety of funds, it is agreed that the company will use temporarily idle self-owned funds of no more than 2.8 billion yuan (including 2.8 billion yuan) for cash management to purchase low-risk financial products with high security and good liquidity, and the funds can be used on a rolling basis, the term of use shall be valid for 12 months from the date of approval by the board of directors of the company. At the same time, the chairman of the company is authorized to exercise the decision-making power and sign relevant contracts, agreements and other documents. The specific matters are organized and implemented by the company's finance department.

2. Opinions of independent directors

The independent directors of the company believe that the company's use of temporarily idle self-owned funds to purchase low-risk financial products with high security and good liquidity will not affect the normal development of the company's main business, and will help give full play to the efficiency of the use of idle funds and obtain good investment Returns are in line with the interests of the company and shareholders. The company's use of temporarily idle own funds to purchase low-risk wealth management products with high security and good liquidity does not violate the relevant laws, regulations and relevant regulations of the China Securities Regulatory Commission, the Shanghai Stock Exchange and other relevant departments. We unanimously agreed to the company's proposal to use its own funds to purchase wealth management products and agreed to submit it to the 2022 Annual General Meeting of Shareholders for consideration.

3. Opinions of the Supervisory Board

On March 27, 2023, the fourth meeting of the second board of supervisors of the company deliberated and passed the "on the use of idle

The motion on purchasing financial products with its own funds is as follows: the company's use of idle self owned funds to purchase low-risk financial products with high security and good liquidity will not affect the normal development of the company's main business. it is conducive to giving full play to the efficiency of the use of idle funds and obtaining a good return on investment, which is in line with the interests of the company and shareholders. The company uses its own funds that are temporarily idle to purchase low-risk financial products with high security and good liquidity,

It does not violate the relevant laws, regulations and relevant provisions of China Securities Regulatory Commission, Shanghai Stock Exchange and other relevant departments. We unanimously agreed to the company's proposal to use idle self-owned funds to purchase wealth management products and agreed to submit it to the 2022 Annual General Meeting of Shareholders for consideration.

4, this matter still needs to be submitted to the general meeting of shareholders for consideration.

It is hereby announced.

Hengxuan Technology (Shanghai) Co., Ltd.

Board of Directors

27 March 2023