On September 18, 2013, our company was officially and successfully listed on the SME Equity Quoting System of the Shanghai Equity Exchange (www.china-seeq.com). The launch of this system is another important measure to further improve the service system of the Shanghai Equity Exchange, broaden the scope of service recipients, meet the diversified needs of SMEs, expand their financing channels, and promote the development of the real economy.

I. Background and Significance of the SME Equity Quoting System Construction China's economy is currently in a transitional development period of "structural adjustment and transformation of development mode". Numerous SMEs of different sizes, growth stages, and business forms will become the vital force for China's scientific innovation and economic development in the coming decades. However, for decades, financing difficulties have always been a major bottleneck hindering the development of these SMEs. Currently, compared with the booming real economy sector, the financial sector is relatively lagging. The bank-dominated indirect financing market occupies the dominant position in China's capital market, while the development of the direct financing market is seriously insufficient. The unbalanced development of the equity market and bond market cannot yet provide strong and effective support for the development of these vast SMEs.

The Shanghai Equity Exchange has always been committed to solving the financing difficulties of SMEs and striving to play a role in promoting the development of the real economy. After one and a half years of operation, the market has developed rapidly, operating smoothly and orderly, with its financing and trading functions fully utilized, establishing itself as an industry benchmark. However, due to the vast number of SMEs, a considerable portion of them, for various reasons, temporarily do not meet the listing conditions on the Share Transfer System of the Shanghai Equity Exchange, missing opportunities to connect with the capital market. To improve the Shanghai Equity Exchange's service system and further meet the diversified needs of SMEs, the Shanghai Equity Exchange, with innovative thinking and meticulous deliberation, under the specific guidance of the Municipal Financial Service Office, grandly launched the "SME Equity Quoting System" transparency

The "SME Equity Quoting System" is a brand-new equity quoting system built by the Shanghai Equity Exchange for domestic small, medium, and micro enterprises. After the new system is launched, the Shanghai Equity Exchange will form a new "one market, two boards" pattern: within one market—the Shanghai Equity Exchange—it will establish two boards, the Share Transfer System for Non-listed Public Companies ("Transfer System") and the SME Equity Quoting System ("Quoting System"), providing various types of enterprises with opportunities to connect with the capital market and suitable capital market services.

II. Service Connotation of the SME Equity Quoting System The SME Equity Quoting System is a new system that provides enterprises with multi-faceted services such as listing, private placement, information disclosure, publishing transfer and acceptance information, equity transfer registration, personnel training, professional guidance, corporate display, and brand promotion. Adhering to the business principle of "broad application, meticulous selection, and excellent service," the Quoting System primarily serves small and micro enterprises in their early stages. The listing threshold for enterprises on this platform is lower, with no restrictions on the form, ownership, or industry of listed enterprises. Specifically, listed enterprise types are not limited to joint-stock companies but also include limited liability companies, partnerships, and other various types of enterprises; ownership is also unrestricted, allowing state-owned, private, and joint-venture enterprises to be listed.

On this platform, the Shanghai Equity Exchange implements tiered management for listed companies, and the requirements for information disclosure also have a certain degree of flexibility. Furthermore, the SME Equity Quoting System of the Shanghai Equity Exchange provides a fair, transparent, and just quoting platform for enterprises with financing needs and investors willing to transfer equity. The Shanghai Equity Exchange will also provide comprehensive financial services to enterprises listed on this system by strengthening cooperation with regional banks, micro-loan companies, guarantee companies, and other financial service enterprises.

III. Features of the SME Equity Quoting System The SME Equity Quoting System restores the essence of the over-the-counter market, constructing and perfecting a multi-tiered capital market service system based on the principles of voluntariness, equality, compensation, and integrity. This ensures that enterprises of different types, sizes, and stages receive suitable services in the Shanghai Equity Exchange market; it also meets investors' diversified investment needs and provides multiple exit routes. Notably, the Quoting System innovatively designed a mechanism for tiered management based on enterprise information disclosure and standardization levels, guiding and incentivizing enterprises to establish modern corporate systems, improve corporate governance structures, and operate in a standardized manner. Investors can also quickly assess the degree of an enterprise's standardized development based on its classification.

In addition, the system also has the following features: providing investors with 7X24-hour equity transfer quotes; allowing enterprises to independently choose information disclosure content based on actual circumstances; providing professional services to enterprises point-to-point by quoting system recommended institutions, and offering continuous standardized training and guidance to enterprises; low listing costs and high efficiency for enterprises.