PROVISIONAL REGULATIONS OF SHENZHEN MUNICIPALITY CONCERNING JOINT STOCK LIMITED COMPANIES

CHAPTER 1. GENERAL PROVISIONS CHAPTER 2. ESTABLISHMENT PROCEDURE CHAPTER 3. TYPES OF COMPANIES CHAPTER 4. RESTRUCTURING OF STATE-OWNED
ENTERPRISES AS JOINT STOCK LIMITED COMPANIES CHAPTER 5. CHINESE-FOREIGN JOINT STOCK LIMITED COMPANIES CHAPTER 6. SHARES CHAPTER 7.
COMPANY DEBTS CHAPTER 8. SHAREHOLDERS AND SHAREHOLDERS’ MEETINGS CHAPTER 9. BOARD OF DIRECTORS AND MANAGER CHAPTER 10. SUPERVISORY
BOARD CHAPTER 11. FINANCIAL AFFAIRS AND ACCOUNTING CHAPTER 12. MERGER AND DIVISION CHAPTER 13. AMENDMENTS TO ARTICLES OF ASSOCIATION
CHAPTER 14. TERMINATION AND LIQUIDATION CHAPTER 15. PENAL PROVISIONS CHAPTER 16. SUPPLEMENTARY PROVISIONS

CHAPTER 1. GENERAL PROVISIONS

   Article 1. These Regulations are formulated in order to establish the legal position of joint stock limited companies, to standardize their
code of conduct, to protect the lawful rights and interests of joint stock limited companies and their shareholders and creditors,
to ensure the leading position of the system of public ownership, to safeguard the socialist economic order and to promote economic
development.

   Article 2. These Regulations shall be applicable to joint stock limited companies established in Shenzhen Municipality. Joint stock limited
companies from outside Shenzhen Municipality that are listed on the Shenzhen Securities Exchange shall also comply with these Regulations.

   Article 3. The term “joint stock limited company” (a “Company”) refers to an enterprise with the status of a legal person that is established
in accordance with these Regulations, raises capital through the issue of shares and divides all of its registered capital into equal
shares, and whose shareholders are liable toward it to the extent of the shares subscribed for by them, and that is liable for its
debts to the extent of all of its assets.

   Article 4. Companies shall adhere to the principles of voluntary capital injection, equal share rights, joint enjoyment of gains and joint bearing
of risks.

   Article 5. The production and business activities of Companies must comply with the laws and regulations of the state and safeguard the interests
of the state and the public interest, and shall be subject to supervision by the relevant departments of the state.

   Article 6. The production and business activities and lawful rights and interests of Companies shall be protected by law and may not be infringed
upon or unlawfully interfered with by any organization or individual.

   Article 7. Companies may not become shareholders with unlimited liability of other profit-seeking organizations.

Where a Company other than an investment Company approved by the state is a shareholder with limited liability of another profit-seeking
organization, its shareholding in such other organization may not exceed 50 percent of the Company’s registered capital.

   Article 8. The names of Companies shall comply with the laws and regulations concerning administration of the registration of names of enterprises
with the status of a legal person, and shall contain the words “joint stock limited”. The names of Companies that have not been established
in accordance with these Regulations may not contain the words “joint stock limited” or “stock”.

   Article 9. A company’s domicile shall be the place where its main administrative establishment is located.

   Article 10. The scope of industries in which enterprises may restructure themselves as Companies or establish Companies is set forth below:

Ordinary industry, commerce, transportation, construction, tourism, services, cultivation, breeding, etc..

Production enterprises, high-technology enterprises, and enterprises generating foreign exchange through export, that comply with
the industrial policies of the state and Shenzhen Municipality and that let the market regulate the production, sale and pricing
of their main products may restructure themselves as Companies or establish Companies on a priority basis.

Enterprises that are run by the state on a monopoly basis and are extremely profitable, such as duty free companies, enterprises selling
liquor and tobacco on a monopoly basis, gold and jewelry processing enterprises, etc., as well as enterprises engaged in industries
in which the government has prohibited the establishment of Companies may not restructure themselves as Companies or establish Companies.

CHAPTER 2. ESTABLISHMENT PROCEDURE Article 11. Companies may be established by means of sponsorship or by means of share offer.

The term “establishment by means of sponsorship” refers to the form of establishment where all the issued shares of the Company are
subscribed for by five or more sponsors themselves, and where no shares are offered to the Company’s internal staff and workers or
to the public. The term “establishment by means of share offer” refers to the form of establishment where the sponsors shall subscribe
for more than 35 percent of the issued shares of the Company and where he balance is offered to the internal staff and workers of
the Company, to other legal persons or to the public.

   Article 12. The sponsors of a Company must be legal persons, or departments that have been authorized by the state to make investments.

   Article 13. A Company’s paid-up capital shall be its registered capital. The minimum registered capital of a Company shall be RMB 5 million yuan.

   Article 14. To establish a Company, its sponsors shall draft the following documents and submit the same to the Shenzhen Municipal Commission
on the Restructuring of the Economic System (the “Municipal Restructuring Commission”), which shall review them in conjunction with
the relevant departments and submit them to the Shenzhen Municipal People’s Government (the “Municipal Government”) for approval:

(1) an application for the establishment of a Company;

(2) a feasibility study;

(3) the articles of association of the Company;

(4) the share prospectus and share offer plan;

(5) the sponsors’ documents certifying that they have the status of a legal person (the documents approving their establishment and
the legal person business licenses), and their resident’s identification documents or passports;

(6) the sponsors’ certificates of creditworthiness; and

(7) the contract among the sponsors.

An existing enterprise that applies for permission to restructure itself as a Company shall also submit an asset valuation report
and an investment verification report issued by an accounting firm qualified to perform asset valuation or by an asset valuation
institution.

   Article 15. Where an existing enterprise wishes to restructure itself as a Company, the responsible persons of the enterprise and representatives
of the owners of the property rights in the enterprise shall jointly form a Committee for the Preparation of a Joint Stock Limited
Company, which shall be responsible for the following matters:

(1) to apply to the Municipal Government for approval to restructure the enterprise as a Company and to submit to the Municipal Government
the relevant documents specified in Article 14 hereof;

(2) to thoroughly examine the claims and debts of the enterprise, and to entrust an accounting firm qualified to perform asset valuation
or an asset valuation institution with performing asset valuation and verification, to determine what portion of shares will cover
the enterprise’s remaining net assets, to draw up a plan for the share rights and types of shares to be created, to work out the
number of shares to be issued, etc.; where the said activities involve state assets, matters shall be handled in accordance with
the relevant regulations of the state;

(3) to be in charge of the drafting of necessary documents such as the restructuring plan, the Company’s articles of association,
the prospectus, etc.;

(4) to offer the shares; and

(5) to convene the inaugural meeting of the Company.

   Article 16. The Preparation Committee shall be automatically dissolved on the date of establishment of the Company’s board of directors.

   Article 17. An application for approval to establish a Company shall specify the following:

(1) the names and domiciles of the sponsors (in the case of an existing enterprise intending to restructure itself as a Company, the
name and domicile of the existing enterprise shall be specified as well);

(2) the grounds for establishment of the Company;

(3) the name of the Company to be established;

(4) the share rights intended to be created; and

(5) the basic applications of the capital to be raised by the Company.

   Article 18. The feasibility study shall specify the following:

(1) the names and domiciles of the sponsors (in the case of an existing enterprise intending to restructure itself as a Company, the
name and domicile of the existing enterprise shall be specified as well);

(2) an outline of the production and business activities of the sponsors, their creditworthiness, their investment abilities, etc.;

(3) the state of affairs and distribution of the assets, liabilities, net assets and profit of the enterprise to be restructured during
the past three years;

(4) the scope and scale of business, including the names of the products, the domestic and foreign demand for the products, production
details, the scale of production, the regions where the products are sold, the sales channels and the ratio of domestic sales to
exports;

(5) the estimated investment, i.e. the sum of the fixed assets and the working capital to be invested in the project;

(6) the source of funds, i.e. the amount of shares that the sponsors intend to subscribe for (including the method of subscription)
and the amount of shares intended to be offered, the proportion of such shares to the total amount of shares of the Company, the
amount of funds to be borrowed, and the proportion of net assets to the total value of assets; and

(7) the profit forecast, profit rate on funds, profit rate on share capital and surplus per share.

   Article 19. The articles of association of a Company shall be drafted by its sponsors or by legal counsel instructed by its sponsors. After the
articles of association have been unanimously agreed upon by all sponsors, they shall be submitted to the Municipal Restructuring
Commission for approval and be made public by an appropriate method, in accordance with the type of Company. The articles of association
of a Company must specify the following:

(1) the name and domicile of the Company;

(2) the purpose and scope of business of the Company;

(3) the method of establishment and type of the Company;

(4) the names and domiciles of the sponsors and the names and positions of their legal representatives;

(5) the total amount of the Company’s registered capital, the types of shares to be issued, the rights attaching to and the total
amount of each type of share, and the amount of each share;

(6) the methods and amount of capital injection by each type of shareholder, and the proportion of each type of shareholder’s shareholding
to the total amount of shares;

(7) the method of transfer of shares in the Company;

(8) the types of convertible securities of the Company and the method of conversion;

(9) the establishment, official powers and rules of procedure of the Company’s shareholders’ meeting and board of directors, and the
appointment and official powers of the Company’s manager;

(10) the Company’s legal representative, the procedure for his appointment and his official powers;

(11) the financial and accounting systems of the Company;

(12) the distribution of the Company’s after tax profit;

(13) the termination and liquidation of the Company;

(14) the method by which the Company is to make public announcements;

(15) the procedure for amendment of the Company’s articles of association;

(16) the date of formulation of the articles of association and the signatures of the sponsors; and

(17) other matters that the sponsors deem necessary to be specified.

The contents of the articles of association of a Company may not be in conflict with these Regulations.

The articles of association of a Company shall be valid only when the Special Seal of Shenzhen Municipality for Approval of the Articles
of Association of Joint Stock Limited Companies is affixed thereto.

   Article 20. Within 30 days after the approval by the Municipal Government of an application for approval to establish a Company, the sponsors
shall apply to the Shenzhen Municipal Administration for Industry and Commerce (the “AIC”) for registration of preparation and construction.

   Article 21. Where a Company is established by means of issuing shares to its internal staff and workers and other legal persons or by means of
offering shares to the public, its sponsors shall submit a share offer application to the Shenzhen Special Economic Zone branch of
the People’s Bank of China (the “PBOC”). Shares may be issued only after such application has been approved in accordance with the
relevant regulations of the People’s Bank of China.

Where a Company is to be established by means of sponsorship, its sponsors shall apply to the PBOC for the handling of matters concerning
the issue of shares. The procedures for the printing of share certificates may be carried out only after such application has been
approved.

   Article 22. Sponsors shall publicly issue a prospectus by an appropriate method, in accordance with the type of Company. A prospectus shall specify
the following:

(1) the name and domicile of the Company;

(2) the scope of business;

(3) basic information on the sponsors;

(4) the grounds for the issue of shares;

(5) the total amount of shares to be issued, the class(es) and number of shares to be issued, and the face value, book value and selling
price of each share to be issued;

(6) the target (s) of the share issue;

(7) the opening and closing dates of the share issue;

(8) conditions attached to the issue of shares;

(9) relevant information on the Company’s business: the state of affairs of the main business operations, profit forecast and forecast
of dividends and bonuses;

(10) the number of shares subscribed for by the sponsors and the verification certificates for such subscriptions;

(11) the name(s) and domicile(s) of the securities distributors(s), the amount of shares to be distributed and the method of distribution;
and

(12) the method of share subscription.

In the case of a Company creating new shares to increase its capital or an existing enterprise being restructured as a Company, basic
information on the Company’s directors and manager shall be added under item (3) hereof, the book value of each existing share shall
be added under item (5) hereof, and information on the profitability and equity-debt situation shall be specified under item (9)
hereof.

In the case of an existing enterprise being restructured as a Company, an evaluation of and a verification report on the enterprise’s
remaining assets shall be included.

   Article 23. The sponsors of a Company shall prepare subscription forms to be filled out by subscribers. Such subscription forms shall set forth
the relevant items of the prospectus and the number and date of the PBOC’s approval document for the share offer.

   Article 24. Subscribers shall pay their subscription moneys in accordance with the amount of shares entered on the subscription form and the
time limit for payment. If a subscriber fails to pay his subscription moneys within the time limit therefor, he shall automatically
be deemed to have relinquished the shares subscribed for, which shall then be offered to others. If such failure to pay causes damage
to the Company, the subscriber shall be liable for compensation therefor.

   Article 25. A Company may not sell shares beyond the time limit for sale or beyond the maximum amount of shares to be issued.

   Article 26. The sponsors of a Company shall convene the inaugural meeting within 40 days after the subscription moneys have been paid in full.

An inaugural meeting shall be attended by more than two-thirds of the subscribers for the Company’s shares. Resolutions voted on at
such meeting shall be passed by a two-thirds majority of the affirmative votes of the subscribers present.

   Article 27. The following official powers may be exercised at an inaugural meeting:

(1) to hear the sponsors’ report concerning the preparation and construction of the Company;

(2) to adopt or amend the Company’s articles of association;

(3) to elect the members of the board of directors and of the supervisory board; and

(4) to decide other matters concerning the establishment of the Company.

   Article 28. Within 30 days after its establishment, a board of directors shall apply to the AIC for registration and submit to it the following
documents:

(1) an application for registration;

(2) the document from the Municipal Government approving the establishment of the Company;

(3) the document from the PBOC approving the share offer;

(4) the Company’s articles of association;

(5) the register of shareholders;

(6) the minutes of the inaugural meeting;

(7) the share capital verification certificates of the shareholders; and

(8) other documents required by the AIC.

A Company shall be established and obtain the status of a legal person upon verification and approval of registration and issue of
a Business License of an Enterprise with the Status of a Legal Person by the AIC.

   Article 29. The sponsors of a Company shall assume the following responsibilities:

(1) to be jointly and severally liable for subscription for any issued shares of the Company that are not taken up;

(2) if the Company cannot be established, to be jointly and severally liable for the expenses and debts arising from the establishment
activities; and

(3) if the Company publicly issued shares but cannot be established, to be jointly and severally liable for repayment of the subscription
moneys already paid up by the subscribers, together with the statutory interest thereon.

CHAPTER 3. TYPES OF COMPANIES

   Article 30. Companies can be divided into the following two major categories, depending on the scope and method of the share offer, subscription
and transfer:

(1) Internal Companies, being Companies whose shares are subscribed for by its sponsors alone or simultaneously issued to the Company’s
internal staff and workers and other legal persons. Internal Companies are divided into the following two kinds:

(a) Companies that are established by means of sponsorship and whose shares are subscribed for by their sponsors, are not issued to
any persons other than their sponsors and are transferred between legal persons;

(b) Companies that are established by means of share offer and (i) whose shares are subscribed for by their sponsors and internal
staff and workers or other legal persons, (ii) the shareholding of whose internal staff and workers may not exceed 30 percent of
their total amount of shares and (iii) whose shares are transferred between their internal staff and workers and legal persons and
are strictly forbidden to be issued and transferred to any persons other than their staff and workers.

The term “internal staff and workers of a Company” refers to a Company’s directors, manager, staff and workers, and such persons as
aforesaid of subsidiaries in which such Company owns more than 50 percent of the total shares.

(2) Public Companies, being Companies whose shares are publicly issued to the public. Public Companies are divided into the following
two kinds:

(a) Companies whose shares are issued to the public and, upon approval by the PBOC, are traded over the counters of securities dealers;

(b) Companies whose shares are issued to the public and, upon approval by the PBOC, are listed and traded on the Securities Exchange.

   Article 31. A Company that issues its shares to the public shall meet each of the following conditions:

(1) its business conforms to the industrial policies of the state and Shenzhen Municipality;

(2) the total amount of shares of a newly organized Company, or the net assets of an existing enterprise prior to being restructured
as a Company, are not less than RMB 10 million yuan;

(3) the proportion of its net tangible assets to its tangible assets for the year preceding its being restructured as a Company is
not lower than 25 percent;

(4) the sponsor’s share subscriptions are not less than 35 percent of the Company’s total amount of shares;

(5) the shares taken up by the public constitute not less than 25 percent of the Company’s total amount of shares;

(6) the portion of shares subscribed for by the Company’s staff and workers does not exceed 10 percent of the portion of shares issued
by the Company to the public or, in the case of an internal Company being changed to a public Company that exceeds this limit, no
shares are placed with its internal staff and workers;

(7) the number of shareholders is not less than 800;

(8) the financial affairs are public; and

(9) the political and professional quality of the main responsible persons of the enterprise is comparatively good, they observe discipline
and abide by the law, and they have no record of bad business operations.

   Article 32. In order for shares to be listed, the Company requesting their listing shall submit an application to the Securities Exchange, which
shall review the same and subsequently submit it to the PBOC for approval.

   Article 33. A listed Company shall meet each of the following conditions:

(1) the Company’s business conforms to the industrial policies of the state and Shenzhen Municipality;

(2) the Company has a record of profitability for more than three consecutive years and has provided financial information covering
the past three years;

(3) the proportion of its net tangible assets to its tangible asset is not lower than 38 percent; however, in the case of a public
company that has been in existence for more than one year, such requirement shall have been satisfied one year prior to the application
for listing;

(4) the Company’s profit rate for the past two years is higher than the average profit rate of the same industry;

(5) the Company’s net assets prior to listing and issue are not less than RMB 15 million yuan;

(6) it meets the other conditions for public Companies; and

(7) other conditions imposed by the Securities Exchange.

   Article 34. A Company established by means of sponsorship that requests approval for being changed to an internal Company whose shares are held
by its own staff and workers, and an internal Company that requests approval for being changed to a public Company, shall submit
an application to the Municipal Restructuring Commission, which shall review the same and subsequently submit it to the Municipal
Government for approval. Upon Approval by the Municipal Government of such application, an application for approval of share offer
and listed trading shall be submitted to the PBOC. The Company may be changed only after the PBOC has approved the application in
accordance with the relevant regulations of the People’s Bank of China.

CHAPTER 4. RESTRUCTURING OF STATE-OWNED ENTERPRISES AS JOINT STOCK LIMITED COMPANIES

   Article 35. The term “restructuring of a state-owned enterprise as a joint stock limited company” means the restructuring of an existing state-owned
enterprise as a Company by dividing the enterprise’s net assets (assets less liabilities) into state-owned shares and subsequently
(i) selling a portion of such shares to other legal persons and individuals or (ii) issuing a portion of new shares to departments
authorized by the state to make investments, other legal persons and individuals.

The rights, interests and debts of the original enterprise shall be vested in and borne by the Company formed through the restructuring.
Collective enterprises, and enterprises established jointly by investors from both inside and outside special zones, may be restructured
as Companies by reference to this Chapter.

   Article 36. The following shares may be created in the course of restructuring state-owned enterprises as joint stock limited companies:

(1) state-owned shares, being shares that are held directly, or that others have been authorized to hold, by government departments
for state asset administration;

(2) legal person shares, being shares formed by legal persons in the People’s Republic of China through investments in legally disposable
assets;

(3) individual shares, being (i) individual shares of staff and workers of the enterprise, that is, internally issued shares held
by the staff and workers of the issuing Company or (ii) public individual shares, that is, publicly issued shares of a Company that
are purchased by members of the public with their lawful individual property;

(4) foreign capital shares, being shares formed by foreign legal persons and individuals and by legal persons and individuals from
Hong Kong, Macao and Taiwan through foreign currency investments.

   Article 37. Proportion of state-owned shares:

(1) in Companies of key importance for the national economy and the people’s livelihood, the controlling interest of state-owned shares
shall be maintained;

(2) in other Companies, there shall be no limitations on the proportion of state-owned shares.

The assignment of state-owned shares in a Company of key importance for the national economy and the people’s livelihood by a Company
that has been authorized to hold such shares shall be examined by the department for state asset administration, which shall submit
the assignment to the Municipal Government for approval. The assignment of state-owned shares by an enterprise under the Municipal
Government that has been authorized to hold such shares shall be reported to the municipal department for state asset administration
for approval. The assignment of state-owned shares by a second-or third-tier enterprise that is subordinate to an enterprise under
the Municipal Government and that has been authorized to hold such shares shall be reported to the enterprise in charge of it for
approval.

   Article 38. Where a state-owned enterprise wishes to restructure it self as a Company, a preparation committee shall be formed by representatives
of all sides, such as the representative of the owner of the state assets, the department in charge of the enterprise, the responsible
persons of the enterprise, etc.. Such preparation committee shall be responsible for the restructuring of the enterprise as a Company,
etc..

The state asset representatives of group companies (head offices of companies) and of enterprises under the Municipal Government shall
be appointed by the government department for state asset administration. The state asset representatives of second-tier enterprises
shall be appointed by the enterprises in charge that have direct post_title to the assets.

   Article 39. The examination and approval procedure for the restructuring of enterprises as Companies shall be as set forth below:

(1) the restructuring of a group company, the head office of a company of an enterprise under the Municipal Government as a Company
shall be reported to the Municipal Government for approval;

(2) the restructuring of an enterprise subordinate to a group company, to a head office of a company or to an enterprise under the
Municipal Government as a Company shall be agreed to by the Company in charge and subsequently be reported to the Municipal Government
for approval;

(3) where an enterprise established by investors from both inside and outside special zones wishes to apply for approval to be restructured
as a Company, the investors in such enterprise shall adopt a resolution in favor of such restructuring and subsequently submit an
application to the Municipal Government for approval; Where a Chinese enterprise outside the People’s Republic of China wishes to
apply for approval to be restructured as a Company, such restructuring shall be agreed to by the unit in charge and subsequently
be reported to the Municipal Government for approval;

(4) the restructuring of an enterprise under a district or county as a Company shall be agreed to by the district or county government
and subsequently be reported to the Municipal Government for approval.

CHAPTER 5. CHINESE-FOREIGN JOINT STOCK LIMITED COMPANIES

   Article 40. The term “Chinese-foreign joint stock limited companies” means Companies established pursuant to these Regulations by Chinese and
foreign investors. With respect to Chinese-foreign joint stock limited companies, relevant laws and regulations concerning foreign
investment enterprises shall be referred to in addition to implementing these Regulations.

   Article 41. The establishment of Chinese-foreign joint stock limited companies shall comply with the state’s policies concerning industries invested
in by foreign business entities.

Newly organized Chinese-foreign joint stock limited companies shall generally be established by means of sponsorship.

The minimum registered capital of Chinese-foreign joint stock limited companies shall be RMB 30 million yuan.

To invest abroad or in Hong Kong, Macao or Taiwan, Chinese-foreign joint stock limited companies shall apply to the municipal examination
and approval authority for foreign investment in accordance with the examination and approval procedure, and may only carry out procedures
for the outward remittance of funds, etc. after approval by the municipal examination and approval authority for foreign investment
or the Ministry of Foreign Economic Relations and Trade.

   Article 42. To establish a Chinese-foreign joint stock limited company, an existing enterprise may be restructured as a Chinese-foreign joint
stock limited company, or a Chinese-foreign joint stock limited company may be newly organized.

Where a foreign investment enterprise wishes to apply for approval to restructure itself as a Chinese-foreign joint stock limited
company, the original investors shall adopt a resolution in favor of such restructuring and submit an application to the Municipal
Restructuring Commission, in conjunction with the municipal examination and approval authority for foreign investment, shall review
such application in accordance with the relevant regulations, making reference to the current procedure and limits of authority for
the examination and approval of Chinese-foreign equity joint ventures, and subsequently submit the same to the M

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