China Merchants Securities Co., Ltd

Shenzhen Yilian Technology Co., Ltd

Initial public offering of shares

Special verification report for investors participating in strategic placement

Sponsor (lead underwriter).

(No. 111, Fuhua 1st Road, Futian Street, Futian District, Shenzhen).

The application documents for the initial public offering of shares (hereinafter referred to as the "Offering") and listing on the Growth Enterprise Market of Shenzhen Yilian Technology Co., Ltd. (hereinafter referred to as "Yilian Technology", "the Issuer" or the "Company") underwritten by China Merchants Securities Co., Ltd. (hereinafter referred to as "China Merchants Securities", "Sponsor (Lead Underwriter)" or "Lead Underwriter") have been reviewed and approved by the Listing Committee of the Growth Enterprise Market of the Shenzhen Stock Exchange (hereinafter referred to as the "Shenzhen Stock Exchange") on June 8, 2023. It has also been approved by the China Securities Regulatory Commission (hereinafter referred to as the "China Securities Regulatory Commission") for registration in the document [2024] No. 1107, which is issued on July 30, 2024.

The

investor participating in the strategic placement of this offering is China Merchants Securities Investment Co., Ltd. (alternatively, in accordance with the provisions of the "Shenzhen Stock Exchange Initial Public Offering of Securities Issuance and Underwriting Business Implementation Rules", the sponsor established an alternative investment subsidiary in accordance with the law or the securities company that actually controls the sponsor established in accordance with the law, hereinafter referred to as "China Merchants Investment"), Employees of China Merchants Asset Management Yilian Technology participate in the GEM strategic placement collective asset management plan (a special asset management plan established by the issuer's senior management and core employees participating in this strategic placement, hereinafter referred to as the "Yilian Technology Employee Matching Asset Management Plan"), large enterprises or their subsidiaries that have strategic cooperative relations or long-term cooperation visions with the issuer's business (Nanfang Industrial Asset Management Co., Ltd. (hereinafter referred to as "Nanfang Asset"), Ningde Dongqiao State-owned Assets Investment and Construction Co., Ltd. (hereinafter referred to as "Nanfang Asset Management Co., Ltd."). "Dongqiao Guotou")).

In accordance with the Administrative Measures for the Issuance and Underwriting of Securities (Decree [No. 208] of the CSRC) (hereinafter referred to as the "Administrative Measures"), the Administrative Measures for the Registration of Initial Public Offerings of Shares (Decree [No. 205] of the CSRC) (hereinafter referred to as the "Registration Measures"), the Implementation Rules for the Issuance and Underwriting of Initial Public Offerings of Securities of the Shenzhen Stock Exchange (SZSE Shang [2023] No. 100) (hereinafter referred to as the "Implementation Rules"), the Rules for the Underwriting of Initial Public Offerings of Securities (CSRC [2023] No. 100) (hereinafter referred to as the "Implementation Rules"), the Rules for the Underwriting of Initial Public Offerings of Securities (CSI Xiefa) ( 2023] No. 18) (hereinafter referred to as the "Underwriting Business Rules") and other relevant laws and regulations, regulatory provisions and self-discipline rules, China Merchants Securities will verify the qualifications of investors participating in this strategic placement and issue this verification report.

1. Approval and authorization for the issuance and listing on the GEM

(1) The approval of the board of directors of the issuer on the issuance and listing

The issuer held the 14th meeting of the 4th session of the board of directors on April 26, 2022 and the 6th meeting of the 5th session of the board of directors on April 24, 2024

Limited to the company's application for the initial public offering of RMB ordinary shares and listing on the GEM" and other proposals related to the issuance and listing.

(2) The approval and authorization of the general meeting of shareholders of the issuer on the issuance and listing

The issuer held the fifth extraordinary general meeting of shareholders in 2022 on May 12, 2022 and the first extraordinary general meeting of shareholders in 2024 on May 10, 2024, respectively, and deliberated and approved the "Proposal on Shenzhen Yilian Technology Co., Ltd.'s Application for Initial Public Offering of RMB Ordinary Shares and Listing on the Growth Enterprise Market" and other proposals related to the issuance and listing.

(3) The Shenzhen Stock Exchange and the China Securities Regulatory Commission on the review of the issuance and listing

On June 8, 2023, the Listing Committee of the Growth Enterprise Market of the Shenzhen Stock Exchange issued the "Announcement on the Results of the 40th Review Meeting of the Listing Review Committee of the Shenzhen Stock Exchange in 2023", according to the content of the announcement, the Listing Review Committee of the Shenzhen Stock Exchange held the 40th meeting of 2023 on June 8, 2023, and has deliberated and approved the issuance and listing (initial offering) of Shenzhen Yilian Technology Co., Ltd.

On July 30, 2024, the China Securities Regulatory Commission (CSRC) issued the "Reply on Agreeing to the Registration of the Initial Public Offering of Shares of Shenzhen Yilian Technology Co., Ltd.", agreeing to the registration application of the issuer for the initial public offering of shares.

(4) The issuer's approval of matters related to its participation in the strategic placement

On September 5, 2024, the issuer held the eighth meeting of the fifth board of directors, at which the meeting deliberated and passed the "Proposal on the Participation of Some Senior Managers and Core Employees in the Company's Initial Public Offering of Shares and the Strategic Placement of Listing on the Growth Enterprise Market", and agreed that the senior management and core employees of the issuer should set up a special asset management plan to participate in the strategic placement of the issuance and listing.

2. On the determination of the strategic placement object and the number of shares to be placed

(1) Determination of strategic placement targets

The strategic placement object of this issuance shall meet the following circumstances stipulated in Article 38 of the Implementation Rules:

"(1) Large enterprises or their subsidiaries that have a strategic cooperative relationship or long-term cooperation vision with the issuer's business;

(2) Large insurance companies or their subsidiaries with long-term investment intentions, and large state-level investment funds or their subsidiaries;

(3) Securities investment funds established by way of public offering, whose main investment strategy includes investment strategy placement of stocks, and which operate in a closed-end manner;

(4) If the co-investment is carried out in accordance with the provisions of these Rules, the relevant subsidiaries of the sponsor;

(5) the senior management and core employees of the issuer participate in the special asset management plan established by the strategic placement;

(6) Other strategic investors that comply with laws, regulations, and business rules. ”

The issuer and the lead underwriter shall determine the objects to participate in the strategic placement according to the number of shares in the initial public offering, the share restriction arrangement and the actual needs, and in accordance with the provisions of relevant laws and regulations:

Note:

1. The restriction period is calculated from the date of listing of the shares issued this time.

2. If the determined issuance price exceeds the median and weighted average of the quotations of offline investors after excluding the highest quotation and the securities investment fund (hereinafter referred to as the "public fund"), the national social security fund (hereinafter referred to as the "social security fund"), the basic pension insurance fund (hereinafter referred to as the "pension"), the enterprise annuity fund and the occupational pension fund (hereinafter referred to as the "annuity fund") established through public offering after excluding the highest quotation, in line with the "Administrative Measures for the Use of Insurance Funds" If the median and weighted average of the quotation of the insurance funds (hereinafter referred to as the "Insurance Funds") and the QFIIs (hereinafter referred to as the "Four Values") are lower, the relevant subsidiaries of the Sponsor (Lead Underwriter) China Merchants Investment will participate in the strategic placement of the Offering in accordance with the relevant regulations; If the issue price does not exceed the lower value of the "four values", China Merchants Investment will not participate in the strategic placement of this offering.

The compliance of the aforesaid strategic placement targets is detailed in Part III of this verification report.

(2) The amount and quantity of strategic placement subscriptions

The proposed public offering of 16.33 million shares, the proportion of the issued shares to the total number of shares of the company after the issuance of 25.01%, all of which are public new shares, the company's shareholders do not carry out public offering of shares. The total share capital after the public offering is 65,296,129 shares.

The initial number of shares invested by the sponsor's related subsidiaries is 5% of the number of shares in the public offering, that is, 816,500 shares. If the offering price exceeds the lower of the "four values", China Merchants Securities Investment Co., Ltd. (hereinafter referred to as "China Merchants Investment") will participate in the strategic placement of the offering in accordance with relevant regulations, and the number of co-investment will not exceed 5% of the number of shares in the public offering, that is, no more than 816,500 shares. If the issue price does not exceed the lower value of the "four values", China Merchants Investment will not participate in the strategic placement of this offering. The total number of shares to be subscribed for the asset management plan of Yilian Technology employees does not exceed 10% of the total size of the issuance, that is, 1,633,000 shares, and does not exceed 119.3 million yuan. Other investors participating in the strategic placement will subscribe for no more than $70 million.

The

difference between the final allotment amount and the initial allotment amount of investors participating in the strategic placement will be reversed to the offline issuance. The final strategic placement quantity will be determined on T-2 after the issuer and the sponsor (lead underwriter) determine the issue price based on the offline inquiry results.

In addition to the co-investment of the sponsor's relevant subsidiaries (if any), the issuer and the sponsor (lead underwriter) shall determine the number of shares in the initial public offering, the share restriction arrangement and the actual needs, and in accordance with the provisions of relevant laws and regulations, the objects to participate in the strategic placement and the subscription amount as follows

Note:

1. The restriction period is calculated from the date of listing of the shares issued this time.

2. The "upper limit of the amount to be subscribed" in the above table refers to the upper limit of the subscription amount agreed in the strategic placement agreement signed between the investors participating in the strategic placement and the issuer, and the investors participating in the strategic placement agree that the issuer will place the place at the final issue price.

If the offering price exceeds the median and weighted average of the quotations of offline investors after excluding the highest quotation, and the median and weighted average quotations of public funds, social security funds, pension funds, annuity funds, insurance funds and qualified foreign investors after excluding the highest quotation, whichever is lower, the relevant subsidiaries of the sponsor will follow the phase

The relevant provisions to participate in the strategic placement of the offering.

A total of 3 investors participated in the strategic placement (or 4 investors if the sponsor's related subsidiaries participated in the co-investment), and the initial number of shares issued was 3,266,000 shares (the maximum number of shares subscribed). In line with the requirements of the "Implementation Rules", no more than 10 investors should participate in the strategic placement of the issuance, and the total number of shares obtained by the investors participating in the strategic placement shall not exceed 20% of the number of shares in the public offering.

3. Compliance of investors participating in strategic placements

(1) Selection criteria for investors participating in strategic placements

The strategic placement investors are selected in accordance with the Detailed Implementation Rules and other relevant provisions, specifically: "large enterprises or their subsidiaries that have a strategic cooperative relationship or long-term cooperation vision with the issuer's business; The senior management and core employees of the issuer participated in the special asset management plan established by the strategic placement; the relevant subsidiaries of the sponsor that implement co-investment in accordance with the Implementation Rules".

(2) The entity qualifications of investors participating in the strategic placement

The

objects participating in the strategic placement of this issuance are China Merchants Investment (if any), Yilian Technology Employee War Matching Asset Management Plan, Southern Asset Management, and Dongqiao Guotou.

1. Investment promotion (if any).

(1) Basic information

Shareholder: China Merchants Securities Co., Ltd

After verification, China Merchants Investment is a limited liability company established in accordance with the law, and there is no circumstance that it must be terminated in accordance with relevant laws and regulations and the articles of association of the company, and its operating funds are all its own funds, and there is no situation where it is established by raising funds from investors in a non-public manner, and there is no situation where assets are managed by fund managers, and it has not acted as any private fund manager. Therefore, China Merchants Investment is not a private investment fund or private equity manager regulated by the Securities Investment Fund Law of the People's Republic of China, the Interim Measures for the Supervision and Administration of Private Investment Funds, and the Measures for the Registration of Private Investment Fund Managers and the Filing of Funds (for Trial Implementation), and is not required to perform the registration and filing procedures in accordance with the relevant regulations.

(2) Controlling shareholders and actual controllers

After verification, China Merchants Investment is a wholly-owned subsidiary established by China Merchants Securities, which holds 100% of the equity, and China Merchants Securities is the controlling shareholder and actual controller of China Merchants Investment. As of the date of issuance of this verification report, the shareholding structure of China Merchants Investment is as follows:

If the offering price exceeds the lower of the "four values", the relevant subsidiaries of the sponsor will participate in the strategic placement of the offering in accordance with the relevant regulations, and the sponsor's co-investment entity will be China Merchants Investment, an alternative investment subsidiary established by the sponsor in accordance with the law.

(3) The number of co-investments

If the above situation occurs, China Merchants Investment will subscribe for 2% to 5% of the number of shares of the issuer's public offering according to the stock issue price, and the specific proportion will be determined according to the scale of the issuer's public offering

(1) If the issuance size is less than RMB1 billion, the co-investment ratio shall be 5%, but not more than RMB40 million;

(2) If the issuance scale is more than 1 billion yuan but less than 2 billion yuan, the co-investment ratio is 4%, but not more than the people

$60 million;

(3) If the issuance scale is more than RMB 2 billion but less than RMB 5 billion, the co-investment ratio shall be 3%, but not more than RMB 100 million;

(4) If the issuance scale is more than 5 billion yuan, the co-investment ratio shall be 2%, but not more than 1 billion yuan.

The initial number of shares co-invested by the sponsor's relevant subsidiaries is 5% of the shares in the public offering, that is, 816,500 shares, and the difference between the final placement number and the initial placement number of investors participating in the strategic placement will be partially reversed to the offline issuance. The specific co-investment ratio and amount will be determined after the issue price is determined on T-2. Since the final co-investment of the relevant subsidiaries of the sponsor is related to the issue price, the actual subscription quantity and the final actual issuance size, the sponsor (lead underwriter) will adjust the final actual subscription quantity of the sponsor's relevant subsidiaries after the issuance price is determined.

(4) Qualifications for strategic placement

China Merchants Securities Investment Co., Ltd., as an alternative investment subsidiary established by the sponsor in accordance with the law, is qualified to participate in the strategic placement of this issuance, which is in accordance with the provisions of Article 38 (4) of the Implementation Rules.

(5) Affiliation

After verification, China Merchants Securities, as the sponsor (lead underwriter) of this offering, holds 100% of the shares of China Merchants Investment, which is its wholly-owned subsidiary. There is no affiliation between China Merchants Investment and the issuer.

(6) Sources of subscription funds to participate in the strategic placement

After verifying the 2023 audit report provided by China Merchants Investment, the liquidity of China Merchants Investment is sufficient to cover the subscription funds of the strategic placement agreement signed between China Merchants Investment and the issuer; At the same time, according to the letter of commitment issued by China Merchants Investment, the funds used by China Merchants Investment to pay for this strategic placement are its own funds. China Merchants Investment is the actual holder of the shares in this placement, and there is no situation in which it is entrusted by other investors or entrusts other investors to participate in this strategic placement.

(7) Restriction period

If the issuance price exceeds the median and weighted average of the quotations of offline investors after excluding the highest quotation, and the public funds, social security funds, pensions, enterprise annuity funds and insurance funds after excluding the highest quotations

The median price and the weighted average are lower, and the holding period of the shares that China Merchants Investment promises to obtain in this placement is 24 months from the date of the issuer's initial public offering and listing.

The

restriction period starts from the date of listing of the shares in this public offering on the Shenzhen Stock Exchange. After the expiration of the restriction period, the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange on the reduction of the allotted shares by investors participating in the strategic placement shall apply.

(8) Relevant commitments

If the relevant subsidiaries of the sponsor participate in the strategic placement of this issuance, the relevant subsidiaries of the sponsor will promise not to use the shareholder status obtained by the allotted shares to affect the normal production and operation of the issuer, and will not seek control of the issuer during the restriction period of the allotted shares.

2. Yilian Technology employees are equipped with asset management plans

(1) Basic information

The

senior management and core employees of the issuer participated in the strategic placement, and the special asset management plan established was the collective asset management plan for the employees of China Merchants Asset Management and Yilian Technology to participate in the strategic placement of the GEM. The total number of shares to be subscribed for the asset management plan of Yilian Technology's employees shall not exceed 10% of the total size of the issuance, that is, no more than 1,633,000 shares, and no more than 119.3 million yuan. The details are as follows:

Name, position, amount and proportion of the actual participant:

Note: 1. The difference between the total and the sum of the parts directly added in the mantissa is caused by rounding;

2. 100% of the funds raised by the asset management plan of Yilian Technology's employees will be used to participate in this strategic placement, that is, to pay the price of this strategic placement;

3. The full name of "Ningde Yilian" is "Ningde Yilian Electronics Co., Ltd.", and the full name of "Liyang Yilian" is "Liyang Yilian Electronics Co., Ltd.", both of which are wholly-owned subsidiaries of the issuer;

4. The participants of the employee matching asset management plan of Yilian Technology have signed labor contracts with the company or its subsidiaries, and the labor relationship is legally subsisting.

5. All the funds raised by the asset management plan of Yilian Technology employees can be used to participate in this strategic placement, and the final number of shares subscribed will be confirmed after the issue price is determined on (T-2 day).

(2) Filing situation

In accordance with the requirements of the Securities Investment Fund Law of the People's Republic of China and other laws and regulations, normative documents and self-discipline rules, Yilian Technology's employee war matching asset management plan has been filed with the Asset Management Association of China on September 25, 2024 (product code: SAPN67).

(3) The subject of actual domination

China Merchants Securities Asset Management Co., Ltd. (hereinafter referred to as "China Merchants Asset Management") is the actual controlling entity of the employee distribution asset management plan of Yilian Technology, and is not the senior management of the issuer.

(4) Qualifications for strategic placement

After verification, the personnel involved in the strategic placement of the issuance are the senior management and core employees of the issuer; has a significant impact on the production and operation of the issuer, and has signed labor contracts and established labor relations with the issuer or the issuer's holding subsidiaries; Relevant senior management and core employees set up a strategic placement plan for employees of Yilian Technology to participate in the strategic placement of the issuance, which has been deliberated and approved by the board of directors of the issuer; The participation of the employee of Yilian Technology in the strategic placement of this issuance is in line with the provisions of Article 38 (5) of the Implementation Rules.

(5) The source of subscription funds to participate in the strategic placement

According to the capital contribution vouchers, bank statements and interview records provided by the participants of the employee war matching asset management plan of Yilian Technology, as well as the letter of commitment issued by the managers and participants of the employee war matching asset management plan of Yilian Technology, the capital contribution funds of the participants of the employee war matching asset management plan of Yilian Technology to subscribe for the shares of the special asset management plan for employees and participate in this strategic placement come from their own funds, and their participation in this strategic placement is in line with the investment direction of the funds. The participants of the employee war matching asset management plan of Yilian Technology subscribed for the shares of the special asset management plan for employees and participated in this strategic placement, and there was no situation where they accepted the entrustment of other investors or entrusted other investors to participate in this strategic placement. There is no transfer of improper benefits between the employee of Yilian Technology and the asset management plan and the issuer, sponsor (lead underwriter) or other stakeholders.

(6) Resolution of the board of directors of the issuer on the strategic placement

On September 5, 2024, the issuer held the eighth meeting of the fifth board of directors, at which the meeting deliberated and approved the "Proposal on the Company's Employees Participating in the Company's Initial Public Offering of Shares and Listing on the Growth Enterprise Market Strategic Placement", and agreed on the specific details of the strategic placement of the company's senior management and core employees participating in the issuance and listing.

(7) Restriction period

The restriction period of the allotted shares of the asset management plan is 12 months, and the restriction period starts from the date of listing of the shares in this public offering on the Shenzhen Stock Exchange. After the expiration of the restriction period, the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange on the reduction of the allotted shares shall be applied to the reduction of the allotted shares by the employees of Yilian Technology.

3. Southern Assets

(1) Basic information

Company Name: Southern Industrial Asset Management Co., Ltd. Unified Social Code/911100007109287788

According to the business license, articles of association and other materials provided by China Southern Assets, China Southern Asset Management is not a private investment fund or private equity manager regulated by the Securities Investment Fund Law of the People's Republic of China, the Regulations on the Supervision and Administration of Private Investment Funds, the Interim Measures for the Supervision and Administration of Private Investment Funds, and the Measures for the Registration and Filing of Private Investment Funds, and is not required to perform registration and filing procedures in accordance with relevant regulations.

(2) Shareholding structure and controlling shareholders and actual controllers

China South Industries Group Co., Ltd. (hereinafter referred to as "Ordnance Group") holds 100% of the equity of Southern Asset Management and is the controlling shareholder of Southern Assets, and ultimately enjoys or bears the gains or losses of this strategic placement. The State-owned Assets Supervision and Administration Commission of the State Council holds 100% of the shares of China Ordnance Group.

Therefore, Ordnance Group is the controlling shareholder of Southern Assets, and the State-owned Assets Supervision and Administration Commission of the State Council is the actual controller of Southern Assets.

(3) Qualifications for strategic placement

Founded on June 29, 1999 with a registered capital of RMB 35.3 billion, the Ordnance Group is an important state-owned backbone enterprise directly managed by the central government, the core force of national defense science and technology industry, and a strategic enterprise for national defense construction and national economic construction. China Ordnance Group owns China Changan Automobile Group Co., Ltd. and China Optics Group

More than 40 industrial enterprises such as Tuan Co., Ltd., with 4 research institutes and 3 R&D centers, have established production bases or marketing agencies in more than 30 countries and regions around the world, and have formed the main business of automobiles, motorcycles, vehicle parts, optoelectronic products, etc., and the products are sold to more than 100 countries and regions in the world. As of December 31, 2023, the total assets of China Ordnance Group were 463.945 billion yuan and the net assets were 170.211 billion yuan. In 2023, the operating income will be 317.080 billion yuan and the net profit will be 12.599 billion yuan. In the first half of 2024, China Ordnance Group achieved an operating income of 152.3 billion yuan and a net profit of 4.333 billion yuan. Therefore, China Ordnance Group is a large state-owned enterprise.

Founded on August 28, 2001 with a registered capital of RMB 3.3 billion, Southern Asset Management is a wholly-owned subsidiary of China Ordnance Group. Therefore, Nanfang Asset Management is a subsidiary of a large state-owned enterprise. As the industrial investment platform of China Ordnance Group, Nanfang Asset Management Co., Ltd. makes strategic investments in line with the needs of the development strategy of China Ordnance Group. In recent years, focusing on the existing industrial transformation and upgrading of China Ordnance Group and the cultivation and incubation of emerging industries, Nanfang Asset has given full play to the important guiding role of state-owned holding investment companies in investment and structural adjustment, and has owned 41 holding companies in the fields of special equipment, auto parts, new materials, power transmission and transformation, optoelectronics, medicine, finance and other fields, and has achieved remarkable results in industrial layout. As of December 31, 2023, Southern Asset Management had total assets

16.881 billion yuan, net assets of 10.243 billion yuan. For the whole year of 2023, Southern Asset Management achieved an operating income of 212 million yuan and a net profit of 1.237 billion yuan.

Southern Asset Management participated in Guizhou Zhenhua New Materials Co., Ltd. (688707. SH), Zhuhai Guanyu Battery Co., Ltd. (688772. SH), Jiangsu Canqin Technology Co., Ltd. (688182. SH), Anhui JEE Technology Co., Ltd. (688162. SH), Zhuhai Gaoling Information Technology Co., Ltd. (688175. SH), Beijing Jingwei Hengrun Technology Co., Ltd. (688326. SH), Cloudwalk Technology Group Co., Ltd. (688327. SH), Nanjing Guobo Electronics Co., Ltd. (688375. SH), GRAN Semiconductor Silicon Materials Co., Ltd. (688432. SH), CSSC (Handan) Perry Special Gases Co., Ltd. (688146. SH), Beijing Institute of Aeronautical Materials Co., Ltd. (688563. SH), Guangdong Mingyang Electric Co., Ltd. (301291. SZ), Chengdu Huawei Electronic Technology Co., Ltd. (688709. SH), Guangdong Ole High-tech Materials Co., Ltd. (688530. SH), CAS Tiancheng Technology Co., Ltd. (301571. SZ) and other companies in the strategic placement of initial public offerings and listings on the Science and Technology Innovation Board/GEM.

According to the Memorandum of Understanding on Strategic Cooperation signed between the issuer and China Southern Asset Management, the specific cooperation contents are as follows:

Southern Asset Management will actively promote the cooperation between the automotive enterprises under China Ordnance Group and Yilian Technology in related fields to give full play to strategic synergies. Chongqing Changan Automobile Co., Ltd. (hereinafter referred to as "Changan Automobile"), a subsidiary of China Ordnance Group, is one of the four major automobile groups in China, with a history of 162 years and 40 years of car manufacturing accumulation, with 12 manufacturing bases and 22 factories around the world. As one of the typical representatives of Chinese auto brands, Changan Automobile includes Changan Qiyuan, Deep Blue, AVATAR, Changan Gravity, Changan Kaicheng, Changan Ford, Changan Mazda, Jiangling and other brands. For the whole year of 2023, Changan Automobile will sell 2,553,100 units, of which 2,097,800 will be sold by its own brand. From January to August 2024, Changan Automobile sold 1,691,800 units, of which 1,411,900 were sold by its own brand. Southern Asset Management directly holds a 4.6% stake in Changan Automobile. According to the IPO prospectus (registration draft) of Yilian Technology, Changan Automobile is a downstream customer of Yilian Technology.

Southern Asset Management will actively coordinate and promote the cooperation between Yilian Technology and the automotive industry chain enterprises of China Ordnance Group, including Changan Automobile, to carry out cooperation and discussion on the use of battery cell connection components, power transmission components, low-voltage signal transmission components and other products in new energy vehicles, as well as product research and development technology exchanges, to carry out research and development cooperation in improving the technical strength of new energy vehicles, reducing product costs, structural innovation and upgrading, and in-depth cooperation and exchanges in the industrialization and application of new technologies.

Founded in 2001, China Southern Asset Management has rich experience and comprehensive professional capabilities in equity investment, industrial funds, supply chain finance, mergers and acquisitions, asset securitization and other business fields. Southern Asset Management will fully mobilize its deep accumulation in the financial field, give full play to its professional advantages in the field of capital operation, and provide capital operation support for Yilian Technology. At the same time, Southern Asset Management will rely on its advantages as an industrial investment platform of China Ordnance Group to provide high-quality financial partner resources and automotive industry cooperation resources for Yilian Technology.

In summary, China Southern Asset Management is a subsidiary of a large enterprise that has a strategic cooperative relationship or long-term cooperation vision with the issuer's business, and is eligible to participate in the issuer's initial public offering strategic placement, which is in accordance with Article 38(1) of the Implementing Rules.

(4) Affiliation with the issuer and the sponsor (lead underwriter).

According to the questionnaire provided by China Southern Asset Management and after verification, there is no related relationship between China Southern Asset Management and the issuer and the lead underwriter.

(5) The source of subscription funds to participate in the strategic placement

Upon verification of the latest annual audit report and the latest financial statements of CSAMAM, CSAMAM's liquidity is sufficient to cover the subscription funds of the strategic placement agreement signed between CSAMAC and the issuer; At the same time, according to the commitment issued by Southern Asset, the funds used by Southern Asset Management to pay for this strategic placement are its own funds and are in line with the investment direction of the funds.

(6) Lock-up period and related commitments

China Southern Asset Management undertakes to hold the shares for a period of 12 months from the date of the issuer's initial public offering and listing. After the expiration of the restriction period, the reduction of the allotted shares by CSRC and the Shenzhen Stock Exchange shall be subject to the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange.

4. Dongqiao Guotou

(1) Basic information

According to the business license, articles of association and other materials provided by Dongqiao International Investment, Dongqiao International Investment is not a private investment fund or private equity manager regulated by the Securities Investment Fund Law of the People's Republic of China, the Regulations on the Supervision and Administration of Private Investment Funds, the Interim Measures for the Supervision and Administration of Private Investment Funds, and the Measures for the Registration and Filing of Private Investment Funds, and is not required to perform the registration and filing procedures in accordance with relevant regulations.

(2) Shareholding structure and controlling shareholders and actual controllers

The Finance Bureau of Dongqiao Economic and Technological Development Zone holds 100% of the equity of Dongqiao Guotou and is the controlling shareholder of Dongqiao Guotou, and ultimately enjoys or bears the gains or losses of this strategic placement.

Therefore, the Finance Bureau of Dongqiao Economic and Technological Development Zone is the controlling shareholder and actual controller of Dongqiao Guotou.

(3) Qualifications for strategic placement

Founded in May 2006 and fully funded by the Finance Bureau of Dongqiao Economic and Technological Development Zone, Dongqiao State Investment Co., Ltd. has a registered capital of 3 billion yuan, and its total assets have steadily expanded to 7.071 billion yuan, and its main business income in the last two years is 100.8808 million yuan and 98.2616 million yuan respectively. As a comprehensive state-owned enterprise in the region, Dongqiao International Investment is responsible for infrastructure construction, diversified investment layout, financing strategy implementation and investment attraction, with a wide and in-depth business scope, which has injected strong impetus into the comprehensive development of Dongqiao Development Zone.

As of the end of 2023, Dongqiao Guotou has 9 wholly-owned subsidiaries, 2 holding subsidiaries and 6 joint-stock companies, forming a good pattern of diversification and coordinated development. As an important promoter of urban construction and economic development in the Dongqiao Development Zone, Dongqiao SDIC has been deeply engaged in the field of infrastructure construction and continuously improved the level of regional infrastructure. In terms of the operation of state-owned assets, the company adheres to the principles of efficiency and transparency, and realizes the preservation and appreciation of state-owned assets; At the same time, the company also actively participates in diversified investment fields, seeks new growth points, and provides strong support for regional economic transformation and upgrading; In addition, Dongqiao International Investment also undertakes the important task of government financing, and provides a solid financial guarantee for the development of the development zone through innovative financing models.

According to the Memorandum of Strategic Cooperation signed between the issuer and Dongqiao Guotou, the specific cooperation contents are as follows:

(1) Plant leasing cooperation

The

issuer's new energy industry is a local pillar industry of CATL, and its CATL subsidiary is an important business operation and production base for the issuer to connect with CATL, a major customer. Relying on the local background and policy advantages, Dongqiao International Investment has played a strong synergistic role in the implementation and business docking of the issuer's Ningde base in the early stage, and the two parties have maintained a relatively stable cooperative relationship for a long time. In the future, Dongqiao SDIC will establish closer cooperation ties with the issuer, broaden the dimension of cooperation, and expand the investment promotion policy and plant leasing

and other aspects to provide strong support for the issuer's business development.

(2) Industrial chain synergy

Ningde Dongqiao Economic and Technological Development Zone is the headquarters of CATL, a global leader in the new energy industry, with a complete upstream and downstream industrial chain and rich industry resources. At the same time, copper, the main raw material of the issuer's main products such as battery cell connection components and power transmission components, is also one of the important leading industries in the local area. While providing industry resource support, TCICU provides a stable supply of relevant raw materials and equipment for the issuer by embedding itself in the supply chain and relying on its resource and capital advantages, alleviating the issuer's staged financial pressure and ensuring the company's stable operation.

(3) Coordination of capital operation

As the main government investment platform of Ningde Dongqiao Economic and Technological Development Zone, Dongqiao State Investment Co., Ltd. has strong financial strength and abundant industry resources, and its investment or quasi-financial entities such as Zhichuang Industrial Investment Fund, Xinhui Investment and Dongqiao Financial Leasing Company can rely on the advantages of regional industries and funds to strengthen the depth of cooperation at the capital level through project shareholding and joint investment in the upstream and downstream areas of the industrial chain. At the capital level, support is provided through financial leasing equipment financing and other means to help issuers optimize project production capacity, expand business scale, and develop sustainably, stably and healthily.

(4) Mutual benefit and win-win cooperation

Based on the fact that Yilian Technology is a key enterprise in Dongqiao Development Zone and its leading position in the field of new energy connectors, the two parties will promote the docking and implementation of the issuer and local projects and strengthen the cooperation between the two parties in the field of new energy based on the basic principles of mutual benefit and win-win cooperation, and on the premise of meeting the relevant requirements of national, local and industry policies. Dongqiao Guotou regards the issuer as an important partner; For the resources of the area led by the Dongqiao Development Zone, the issuer is actively encouraged to participate in the project cooperation as a partner. The issuer undertakes to give priority to ensuring the investment of resources such as production capacity, talent and management in Dongqiao Development Zone. The two sides will also pay close attention to industry dynamics and market changes, flexibly adjust the cooperation strategy and direction, and ensure that the cooperation will always remain at the forefront and leading position in the industry.

To sum up, TCIC is a large-scale enterprise with a strategic cooperative relationship or long-term cooperation vision with the issuer's business, and is eligible to participate in the issuer's initial public offering strategic placement, which is in accordance with Article 38(1) of the Implementing Rules.

(4) Affiliation with the issuer and the sponsor (lead underwriter).

According to the questionnaire provided by Dongqiao Guotou and after verification, there is no relationship between Dongqiao Guotou and the issuer and the lead underwriter

There is an affinity.

(5) The source of subscription funds to participate in the strategic placement

Upon verification of the latest annual audit report and the latest financial statements, the liquidity of the company is sufficient to cover the subscription funds of the strategic placement agreement signed between it and the issuer. At the same time, according to the commitment issued by Dongqiao Guotou, the funds used by Dongqiao Guotou to pay for this strategic placement are its own funds and are in line with the investment direction of the funds.

(6) Lock-up period and related commitments

The holding period of the shares in this placement is 12 months from the date of the issuer's initial public offering and listing. After the expiration of the lock-up period, the reduction of the allotted shares by OCBC will be subject to the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange on the reduction of shareholdings.

(3) Strategic placement agreement

The issuer entered into a strategic placement agreement with the above-mentioned allottees to participate in the strategic placement, which stipulated the subscription quantity, subscription price and subscription payment; Party A's rights and obligations; Party B's rights and obligations; confidentiality; liability for breach of contract; assignment and renunciation; Notices and deliveries. The content of the strategic placement agreement signed between the issuer and the issuer does not violate the provisions of laws, regulations and normative documents such as the Civil Code of the People's Republic of China, and the content is legal and valid.

(4) Compliance opinions

The asset management plan is a special asset management plan established by the senior management and core employees of the issuer to participate in the strategic placement of this issuance, which has been filed with the Asset Management Association of China (product code: SAPN67), and is the type of investor participating in the strategic placement as stipulated in Article 38 (5) of the Implementation Rules, and has the qualification for strategic placement. The number of shares to be subscribed does not exceed 10.00% of the number of shares to be issued, and has been deliberated and approved by the eighth meeting of the fifth board of directors of the issuer, in line with the provisions of Article 23 of the "Administrative Measures".

As large enterprises or their subsidiaries that have a strategic cooperative relationship or long-term cooperation vision with the issuer's business, China Southern Asset Management and Dongqiao Guotou are qualified to participate in the issuer's strategic placement

Article 38(1) of the Detailed Rules. China Merchants Investment is a relevant subsidiary of the sponsor and is a type of investor participating in the strategic placement as stipulated in Article 38(4) of the Implementing Rules, and is qualified for strategic placement.

According to the strategic placement agreement signed between the investors participating in the strategic placement and the issuer and the letters of commitment issued by the issuer and the investors participating in the strategic placement respectively, the issuer and the sponsor (lead underwriter) do not have any prohibitions as stipulated in Article 39 of the Detailed Implementation Rules for the placement of shares by China Merchants Investment (contingent), Yilian Technology Employee Allocation Asset Management Plan, Southern Asset Management and Dongqiao Guotou.

After verification, the lead underwriter believes that the selection criteria for investors participating in the strategic placement can reasonably determine the number and proportion of investors participating in the strategic placement according to the number of shares issued, the share restriction arrangement and the actual needs, so as to ensure the necessary liquidity after the listing of the shares, in line with the provisions of Article 35 of the "Implementation Rules" and Article 22 of the "Administrative Measures".

4. Investors participating in strategic placement are not subject to the verification of prohibited circumstances as stipulated in Article 39 of the Detailed Implementation Rules

Article 39 of the Detailed Implementing Rules stipulates that when an issuer or a lead underwriter places securities to investors participating in a strategic placement, the following circumstances shall not exist:

1. The issuer and the lead underwriter promise to the investors participating in the strategic placement that the stock price will rise after listing, or if the stock price does not rise, the issuer will repurchase the securities or give any form of economic compensation;

2. The lead underwriter introduces investors participating in the strategic placement on the condition of promising to share the underwriting fee and introducing other issuers to participate in the strategic placement;

3. After listing, the issuer subscribes to securities investment funds managed by investors participating in its strategic placement;

4. The issuer undertakes to appoint persons affiliated with the investor to serve as the directors, supervisors and senior management of the issuer during the restricted period of the securities allotted to the investor participating in the strategic placement, except where the senior management and core employees of the issuer set up a special asset management plan to participate in the strategic placement;

5. Except for the circumstances specified in Paragraph 3 of Article 38 of the Detailed Implementation Rules, investors participating in strategic placement use non-own funds to subscribe for the issuer's securities, or accept entrustment from other investors or entrust other investors

the participation of investors in the strategic placement;

6. Other acts of direct or indirect benefit transfer.

After verification, there is no prohibition as stipulated in Article 39 of the Detailed Rules for the Implementing Rules in the placement of shares between the issuer and the sponsor (lead underwriter) to the employees of Yilian Technology for the asset management plan and China Merchants Investment (if any).

5. Lawyers' verification opinions

After verification, Guangdong Huashang Law Firm, which was hired by the lead underwriter, believes that the asset management plan of Yilian Technology's employees and China Merchants Securities Investment (contingent) meet the selection criteria for investors participating in the strategic placement stipulated in the "Implementation Rules", and have the placement qualifications of investors participating in the strategic placement in this issuance; The specific circumstances of this participation in the strategic placement are in accordance with the provisions of the Implementation Rules and the Rules for the Underwriting of Initial Public Offerings of Securities; The investors participating in the strategic placement in this issuance do not have the prohibited circumstances stipulated in Article 39 of the Implementation Rules.

6. The lead underwriter's concluding comments

To sum up, the lead underwriter believes that the selection criteria and placement qualifications of investors participating in the strategic placement of this issuance comply with the "Implementation Rules" and other laws and regulations; China Merchants Investment (contingent), Yilian Technology Employee Matching Asset Management Plan, Southern Asset Management and Dongqiao International Investment meet the selection criteria of investors participating in the strategic placement in this issuance, and have the placement qualifications of investors participating in the strategic placement in this issuance; There is no prohibition as provided for in Article 39 of the Detailed Rules for the Implementing Rules for the placement of shares by the issuer and the lead underwriter to the issuer.

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(There is no text on this page, it is the stamped page of the "Special Verification Report of China Merchants Securities Co., Ltd. on Investors Participating in the Initial Public Offering of Shares of Shenzhen Yilian Technology Co., Ltd." to Participate in Strategic Placement).

Sponsor (lead underwriter): China Merchants Securities Co., Ltd

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Attachment: The original text of the announcement