Huafa Group will increase its shareholding percentage to 44.11% in Huafa Group.

Huafa Group Announcement: Huafa Group intends to subscribe for A shares of Huafa Corporation to specific entities with cash. Prior to this acquisition, Huafa Group and its concerted action parties collectively held 29.64% of Huafa Corporation's shares; after the acquisition, Huafa Group and its concerted action parties collectively held 44.11% of Huafa Corporation's shares. If the total number of company shares held directly and indirectly by Huafa Group does not exceed 30% of the total share capital, they will not transfer the shares subscribed in this offering within 18 months from the end of the offering date. If it exceeds 30%, they will not transfer the shares subscribed in this offering within 36 months from the end of the offering date to meet the requirements for exemption from mandatory takeover bids.