Announcement on Receiving Administrative Penalty Decision from China Securities Regulatory Commission

Securities Code: 002072 Securities Abbreviation: ST Kairui Announcement Number: 2020-L051 Kairuide Holdings Co., Ltd. Announcement on Receiving Administrative Penalty Decision from China Securities Regulatory Commission The Company and all members of the Board of Directors guarantee that the information disclosed is true, accurate, and complete, and contains no false records, misleading statements, or major omissions. Key Information Reminder: Kairuide Holdings Co., Ltd. (hereinafter referred to as the "Company" or "Kairuide") received the "Administrative Penalty Decision" (No. [2020] 26) issued by the China Securities Regulatory Commission (hereinafter referred to as the "CSRC") on June 17, 2020. According to the facts determined in the "Administrative Penalty Decision," the Company's violations do not fall under the circumstances of major violations leading to mandatory delisting as stipulated in Rule 13.2.1 (VII) to (IX) of the "Shenzhen Stock Exchange Stock Listing Rules" and Articles 2, 4, and 5 of the "Measures for the Implementation of Mandatory Delisting of Listed Companies for Major Violations." On October 31, 2016, the Company received a "Notice of Investigation" (No. LJZC-2016020) from the CSRC. Due to suspected violations of securities laws and regulations regarding information disclosure, the CSRC decided to initiate an investigation into the Company in accordance with relevant provisions of the "Securities Law of the People's Republic of China." During the investigation, the Company fully cooperated with the CSRC's investigation and strictly fulfilled its information disclosure obligations in accordance with relevant laws, regulations, and regulatory requirements. On November 1, 2016, the Company published the "Announcement on Receiving the Notice of Investigation from the China Securities Regulatory Commission" (Announcement No.: 2016-L101) and the "Announcement on the Risk of Stock Suspension of Listing" (Announcement No.: 2016-L102) on the designated information disclosure media. In August 2019, the Company received the "Notice of Prior Administrative Penalty and Market Prohibition" (Penalty No. [2019] 114) regarding the investigation matter (LJZC-2016020) from the CSRC, as detailed in the relevant announcement disclosed on the Juchao Information Network on August 19, 2019. On June 17, 2020, the Company received the "Administrative Penalty Decision" (No. [2020] 26) regarding the investigation matter (LJZC-2016020) from the CSRC. The specific contents are hereby announced as follows: I. Contents of the Administrative Penalty Decision Party Concerned: Kairuide Holdings Co., Ltd. (hereinafter referred to as Kairuide), with its registered address at No. 18 Shunhe West Road, Dezhou City, Shandong Province. Wu Lianmo, male, born in February 1972, was the actual controller and chairman of Kairuide at the time, with his residential address at: No. 302, Unit 3, Building 32, Caihong City, Binjiang District, Hangzhou City, Zhejiang Province. Liu Shuyan, female, born in October 1974, was a director and chief financial officer and deputy general manager of Kairuide at the time, with her residential address at: Unit 47, Building 1, Shunhe West Road, Dezhou City, Shandong Province. Zhang Bin, male, born in November 1972, was a director, secretary of the board, and deputy general manager of Kairuide at the time, with his residential address at: No. 129, Courtyard 18, Shunhe West Road, Dezhou City, Shandong Province. Liu Tao, male, born in August 1987, was an employee supervisor (and cashier) of Kairuide at the time, with his residential address at: No. 302, Unit 1, Building 33, Xiyang Road West Residential Area, Boshan District, Zibo City, Shandong Province. In accordance with the relevant provisions of the "Securities Law of the People's Republic of China" (hereinafter referred to as the "2005 Securities Law") revised in 2005, the CSRC initiated an investigation and hearing into Kairuide's illegal information disclosure activities and legally informed the parties concerned of the facts, reasons, basis for administrative penalties, and their legal rights. The party concerned, Kairuide, stated that it did not need to make statements, defend itself, or request a hearing, but submitted a written defense opinion. The parties concerned, Wu Lianmo, Liu Shuyan, Zhang Bin, and Liu Tao, stated that they needed to make statements and defend themselves and requested a hearing. Accordingly, the CSRC held a hearing on December 3