Securities Code: 603950 Securities Abbreviation: Changyuan Donggu Announcement No.: 2020-021

Xiangyang Changyuan Donggu Industrial Co., Ltd.

Announcement on Securities Investment Management

Important Content Tips:

• Xiangyang Changyuan Donggu Industrial Co., Ltd. (hereinafter referred to as the "Company") plans to manage its own idle funds for securities investment, with an initial amount not exceeding RMB 200 million. Within this amount, funds can be recycled.
• The scope of this securities investment management mainly includes new share subscription, subscription of publicly and privately issued stocks of listed companies, equity investment in companies to be listed, government bonds, corporate bonds (including convertible bonds), listed securities (including H shares), private equity fund investment, and other investment activities permitted by laws, regulations and the rules of the Shanghai Stock Exchange.

On October 30, 2020, the 16th meeting of the 3rd board of directors and the 13th meeting of the 3rd supervisory board of the company reviewed and approved the "Proposal on the Company's Securities Investment Management", and the relevant content is announced as follows:

I. Overview of Securities Investment Management

(1) Purpose of Securities Investment Management

Focusing on the company's development strategy, in order to broaden the company's investment channels, improve capital use efficiency, increase asset returns, and without affecting the normal operation of the company and its subsidiaries and effective risk control, the company plans to manage its own idle funds for securities investment.

(2) Investment Management Quota

The initial investment amount shall not exceed RMB 200 million, and the funds can be recycled within this quota.

(3) Investment Management Scope

The scope of this securities investment management mainly includes IPO (new share subscription), additional issuance and allotment of listed companies, and equity investment in companies to be listed, government bonds, corporate bonds (including convertible bonds), listed securities and their derivatives (including stocks, funds, bonds, etc.), futures, entrusted financial management (including bank wealth management products, trust product investment and reverse repurchase of government bonds), private equity fund investment, and other investable activities recognized by the Shanghai Stock Exchange.

(4) Investment Management Period

Within 12 months from the date of approval by the board of directors, the company's management is authorized to organize and implement it specifically.

(5) Source of Assets Used for Investment Management

The source of assets used for this securities investment management is the company's and its holding subsidiaries' own idle funds.

(6) Decision-Making Procedures

On October 30, 2020, the company held the 16th meeting of the third board of directors and the 13th meeting of the third supervisory board, and reviewed and approved the "Proposal on the Company's Securities Investment Management". The initial amount of this securities investment management does not exceed RMB 200 million, accounting for 9.28% of the company's net assets attributable to the parent company in the most recent audited period. According to the relevant provisions of the "Company Law", the "Shanghai Stock Exchange Stock Listing Rules" and the "Company Articles of Association", it is not necessary to submit it to the shareholders' meeting for deliberation.

II. Investment Risks and Risk Control

(1) Investment Risks

The company's securities investment may have the following risks: the securities market is greatly affected by macroeconomic conditions, fiscal and monetary policies, economic cycle fluctuations, interest rates, inflation, credit, etc., and this investment will be affected by market fluctuations; operational risks of relevant personnel, etc.

(2) Risk Control Measures

(1) Formulate the company's "Securities Investment Management System", clarify the decision-making, execution and control procedures for the company's securities investment, and effectively prevent and control investment risks.

(2) The company will strengthen the analysis and research of the securities market and adjust the investment strategy and scale in a timely manner according to market changes.

(3) Seriously implement relevant internal management systems and regularly report the company's securities investment management situation to the company's board of directors.

III. Impact on the Company

The company's management of its own idle funds for securities investment is carried out on the premise of ensuring the normal operation and controllable risks of the company's production and operation. It is expected to achieve the preservation and appreciation of assets. At the same time, there is also the risk of losses. The company will reasonably arrange and use the corresponding assets, improve the efficiency of fund use, prevent securities investment risks, and ensure that it does not affect the company's normal production and operation activities.

IV. Independent Director's Opinion

1 The company's current operation is normal, and its financial structure is sound. The initial investment management quota for the company's management of its own idle funds does not exceed 10% of the net asset value audited in the most recent period, which is conducive to the implementation of the company's development strategy and improves the efficiency of asset use. There is no situation that harms the interests of the company and all shareholders, especially small and medium-sized shareholders. At the same time, the source of assets used is the company's and its holding subsidiaries' own idle funds, which is legal and compliant and will not affect the normal operation of the company's business.

2 The decision-making procedure for this investment is legal and compliant, and conforms to the relevant laws, regulations and normative documents; the company has established a "Securities Investment Management System", which can strengthen investment risk management and control, and effectively protect asset safety. The independent directors unanimously agree to conduct securities investment business in accordance with the "Securities Investment Management System".

V. Supervisory Board's Opinion

The company's securities investment management based on its operating conditions and development strategy is conducive to improving the efficiency of asset use. The initial quota for securities investment management does not exceed 10% of the net assets audited in the most recent period. The investment scale is moderate and will not affect the normal operation of the company's business. The decision-making procedure is legal and compliant and conforms to the relevant laws, regulations and normative documents. There is no situation that harms the interests of the company and all shareholders, especially small and medium-sized shareholders. We agree with the company's securities investment management business this time.

This announcement.

Xiangyang Changyuan Donggu Industrial Co., Ltd.

Board of Directors

2020 October 31