Notice on the Share Swap Absorption Merger of Hongyuan Securities Co., Ltd. by Shenwan Hongyuan Securities Co., Ltd.

Important Notice

1. With the approval of the China Securities Regulatory Commission (CSRC) under document [2014] No. 1279, Shenwan Hongyuan Securities Co., Ltd. (hereinafter referred to as "Shenwan Hongyuan") will issue shares to absorb and merge Hongyuan Securities Co., Ltd. (hereinafter referred to as "Hongyuan Securities" or "the Company").
2. To fully protect the legitimate interests of dissenting shareholders of Hongyuan Securities, Central Huijin Investment Co., Ltd. (hereinafter referred to as "Central Huijin") will provide a cash option to dissenting shareholders. The results of the cash option declaration can be found in the announcement published by the Company on December 19, 2014, titled "Announcement on the Results of Cash Option Declaration for the Share Swap Absorption Merger of Hongyuan Securities Co., Ltd. by Shenwan Hongyuan Securities Co., Ltd."
3. The Company's stock (stock code: 000562) has been continuously suspended from trading since December 10, 2014. Subsequently, Hongyuan Securities' stock will no longer be traded until it is converted into Shenwan Hongyuan stock and listed on the Shenzhen Stock Exchange.
4. Shenwan Hongyuan, as the absorbing party and the party implementing the share swap, will convert the shares held by investors in Hongyuan Securities through a securities conversion method. "Securities conversion" refers to the conversion of shares held by investors in Hongyuan Securities into the corresponding number of shares of Shenwan Hongyuan based on the share swap ratio determined by the merger plan. After completing the securities conversion, Shenwan Hongyuan will handle the initial registration for listing with the Shenzhen branch of China Securities Depository and Clearing Corporation Limited (hereinafter referred to as "China Clearing Shenzhen").
5. After the cash option plan is implemented, Hongyuan Securities will enter the delisting process, and the shares held by original Hongyuan Securities shareholders will be converted into shares of Shenwan Hongyuan according to the share swap ratio. On the share swap registration date (specific time to be announced separately), if investors have submitted the Company's stock as collateral for margin trading, the shares of Hongyuan Securities used as collateral will be converted into shares of Shenwan Hongyuan after the securities conversion.
6. Investors engaged in repurchase agreements with Hongyuan Securities should complete the early repurchase procedures before the close of trading on the share swap registration date. After the close of trading on the share swap registration date, if there are still outstanding repurchase agreements for Hongyuan Securities, the relevant securities companies must promptly contact China Clearing Shenzhen to handle related matters. Any losses incurred due to failure to contact China Clearing Shenzhen in a timely manner will be borne by the parties involved in the repurchase agreement, and China Clearing Shenzhen will not be liable.
7. For shares of Hongyuan Securities that have been pledged, subject to third-party rights, or judicially frozen, such shares will be converted into the shares issued by Shenwan Hongyuan in this issuance after the securities conversion. The status of pledges, other third-party rights, or judicial freezes on the original Hongyuan Securities shares will continue to be valid on the corresponding shares of Shenwan Hongyuan obtained through the conversion.
8. After the delisting of Hongyuan Securities, Shenwan Hongyuan will be responsible for distributing any cash dividends that original Hongyuan Securities investors have not yet received prior to delisting.
9. According to the notice issued by the Ministry of Finance, the State Administration of Taxation, and the CSRC regarding the implementation of differentiated personal income tax policies for dividends from listed companies (Cai Shui [2012] No. 85), individuals who acquire shares of listed companies from public offerings and transfer markets will have their dividend income fully included in taxable income if the holding period is within one month (including one month); for holding periods exceeding one month but within one year (including one year), 50% will be temporarily included in taxable income; for holding periods exceeding one year, 25% will be temporarily included in taxable income. The above income is uniformly subject to a 20% tax rate for personal income tax. The sha