Security Code: 603950 Security Abbreviation: Changyuan Donggu Announcement No.: 2021-016

Xiangyang Changyuan Donggu Industrial Co., Ltd.

Regarding the Increase in Company Shares by the Actual Controller and Chairman of the Company

Announcement of Progress

Important Note:

50. Key details of the share increase plan : Xiangyang Changyuan Donggu Industrial Co., Ltd. (hereinafter referred to as the “Company”) disclosed on September 29, 2020, the “Announcement Regarding the Actual Controller and Chairman’s Increase in Company Shares and Subsequent Increase Plan” (Announcement No.: 2020-018). On September 28, 2020, Mr. Li Zuoyuan, the Company’s Chairman, increased his holdings of the Company’s shares through centralized bidding transactions via the Shanghai Stock Exchange trading system, and plans to further increase his holdings opportunistically using his own funds through the same method within 12 months from the date this increase is implemented. Based on his confidence in the Company’s sustained healthy development and recognition of its long-term investment value, Chairman Li Zuoyuan intends to increase his holdings at a price not exceeding RMB 40.00 per share. The implementation period for the share increase plan is from September 28, 2020 (the initial increase) to September 27, 2021, with a total increase amount ranging from no less than RMB 60 million to no more than RMB 200 million (including the initial increase).
50. Progress on the implementation of the share increase plan As of the date of this announcement, more than half of the period for this share‑increase plan has elapsed. Chairman Li Zuoyuan has, through centralized bidding transactions on the Shanghai Stock Exchange, cumulatively increased his holdings by 1,421,083 shares, representing 0.6138% of the company’s total share capital, at a total cost of RMB 34.9975 million.
50. Related Risk Warning : There is a risk that this share‑increase plan may not be implemented if the company’s stock price remains consistently above the planned purchase price range. Additionally, changes in market conditions or delays in securing the necessary funds could result in the plan being postponed or failing to materialize.

On March 26, 2021, the company received from Chairman Mr. Li Zuoyuan the document “Progress and Implementation of Share Increase in Xiangyang Changyuan Donggu Industrial Co., Ltd. by Actual Controller Li Zuoyuan.” The specific details are hereby announced as follows:

I. Basic Information on the Increasing Holder

(1) The party increasing its holdings is Mr. Li Zuoyuan, the company’s actual controller and chairman.

(2) As of March 26, 2021, Mr. Li Zuoyuan and his concert parties held 144,812,188 shares of the company, representing approximately 62.55% of the company’s total share capital, of which Mr. Li Zuoyuan held 92,872,828 shares, representing approximately 40.11% of the company’s total share capital; Ms. Xu Nengchen holds 25,969,680 shares, representing approximately 11.22% of the company’s total share capital; Ms. Li Congrong holds 12,984,840 shares, representing approximately 5.61% of the company’s total share capital; and Mr. Li Xianfeng holds 12,984,840 shares, representing approximately 5.61% of the company’s total share capital.

II. Main Details of the Share Increase Plan

(1) The primary purpose of this share increase is, This is based on confidence in the company’s sustained, healthy development and recognition of its long-term investment value. 。

(2) The shares to be increased in this transaction are the Company’s A-shares with no sale restrictions and freely tradable.

(3) Shares to be acquired under this share increase plan The cumulative amount of additional purchases shall be no less than RMB 60 million and no more than RMB 200 million (including the portion acquired in this round). 。

(4) Proposed price for the additional share purchase: The proposed purchase price shall not exceed RMB 40.00 per share.

(5) Implementation period of this share increase plan: From September 28, 2020 (first increase in holdings) to September 27, 2021 。

(6) Funding arrangement for the proposed share increase: own funds.

(7) Method of increasing shareholding: The company’s shares will be increased opportunistically through the Shanghai Stock Exchange trading system.

III. Risk of Uncertainty in the Share Increase Plan

(1) The implementation of this share increase plan may be subject to The risk that the company’s stock price has consistently exceeded the purchase price range specified in the share‑increase plan, thereby preventing the plan from being implemented;

(2) The implementation of this share increase plan may be subject to risks that could delay or prevent its execution, due to changes in the securities market conditions or the failure of the funds for the increase to become available on time.

IV. Progress in Implementing the Share Increase Plan

Note: 1. The total share capital is the company’s share capital as of March 26, 2021;

2. Any discrepancies between the total percentage of shares increased and the sum of the individual component values, as well as minor differences in the final figures, are due to rounding.

From September 28, 2020, to March 26, 2021, Chairman Li Zuoyuan increased his holdings in the company’s shares by a cumulative total of 1,421,083 shares through centralized bidding transactions on the Shanghai Stock Exchange trading system, representing 0.6138% of the company’s total share capital, with a total investment amounting to RMB 34.9975 million. As of now, Chairman Li Zuoyuan directly holds 92,872,828 shares, accounting for 40.11% of the company’s total share capital; together with persons acting in concert with him, Chairman Li Zuoyuan holds a combined total of 144,812,188 shares, representing 62.55% of the company’s total share capital.

V. Other Notes

This increase in shareholding will not result in any change to the company’s controlling shareholder or actual controller. The company will continue to monitor developments regarding Mr. Li Zuoyuan and his concerted actors’ acquisition of the company’s shares, and, in accordance with the Shanghai Stock Exchange’s Rules for Listing Stocks and the Guidelines on the Format of Temporary Announcements—Specifically, Announcement No. 99 on Share Increase Plans/Progress/Results by Shareholders and Directors, Supervisors, and Senior Management of Listed Companies—the company will promptly fulfill its information disclosure obligations.

This is hereby announced.

Xiangyang Changyuan Donggu Industrial Co., Ltd.

Board of Directors

2021 March 29