On 19 April 2024, Haitong Securities Co., Ltd. received the Advance Notice of Administrative Penalty from the CSRC, the original text of which is as follows: "The CSRC has completed the investigation on Wang Zelong, Hong Haowei CITIC Securities Capital Management Co., Ltd. CITIC Securities Co., Ltd. Ltd, Haitong Securities and Han Yuchen in relation to their suspicion of transferring shares in violation of restrictive provision, and the CSRC intends to impose administrative penalties on in accordance with the law. The facts, reasons, and basis of the violation on which are based, as well as the relevant rights enjoy, are hereby informed. It was found that in July 2022, the application for non-public issuance of A-shares by CNNC Huayuan Titanium Dioxide Co., Ltd. was approved by the Issuance Examination Committee of the CSRC.

From July to August 2022, CITIC Securities Capital recommended a long-short plan to Wang Zelong, the actual controller of CNNC TD. According to the plan, "clients can achieve arbitrage through share issuance (long and short) directly via over-the-counter derivative trading platforms, settle profits in advance, and do not need to wait for the six-month lock-up period. Generally, funds and profits can be recouped in about one month".

In September 2022, Wang Zelong decided to implement private placement arbitrage, lend securities through CNNC TD employee share ownership plan, and engaged in over-the- counter derivatives trading with CITIC Securities Capital in the name of an investment development company. Han Yuchen specifically implemented the arbitrage scheme and was responsible for coordinating with CITIC Securities Capital and CITIC Securities. The Company humbly accepts the penalty and commits to a thorough reflection, learning valuable lessons, and diligently implementing all necessary rectification measures.

It will enhance compliance and internal control mechanisms, continuously elevate awareness and standards of regulatory operations, and diligently apply lessons learned across all areas. Upholding legality and prudence, the company pledge to advance business activities in strict compliance with laws and regulations. It will rigorously fulfill obligations for information disclosure as required by laws and regulations.

To date, the business of the Company is under normal operations.