Article 1 These Guidelines are enacted in accordance with relevant laws such as the Company Law and the Securities Law, applicable administrative regulations and rules, as well as the Rules Governing Listing of Stocks on Shenzhen Stock Exchange and the Special Provisions of Shenzhen Stock Exchange on Companies Listed on SME Board, for the purpose of earnestly protecting the legitimate rights and interests of investors, especially that of minority investors, improving standardized operations of listed companies, and promoting the healthy and steady development of the Small and Medium-sized Enterprise Board (hereinafter referred to as the SME Board).

Article 2 These Guidelines apply to the companies listed on the SME Board (hereinafter referred to as the listed companies) and their controlling shareholders and de facto controllers, the directors, supervisors and senior officers of listed companies, and the sponsors and sponsor representatives.

Article 3 Investors have lawful rights to access information, to participate in major decision making, to obtain profits from investment and to select managers. Listed companies and their controlling shareholders, de facto controllers, directors, supervisors and senior officers shall take necessary measures to ensure investors’ exercise of the foregoing rights.

Article 4 The controlling shareholder of a listed company shall exercise its rights as a capital contributor in accordance with law. The controlling shareholder and de facto controller shall not infringe the right held by the listed company as a legal person to its independent assets and shall not take advantage of their controlling status to impair the legitimate rights and interests of the listed company and minority investors.

The directors, supervisors and senior officers of a listed company shall faithfully perform their duties, safeguard the interests of the listed company and all investors and assume fiduciary duties to investors.

Article 5 In case that the controlling shareholder, de facto controller, any director, supervisor and senior officer of a listed company impairs the interests of the company and minority investors, the listed company shall make timely disclosure, be active in claiming compensation and, where necessary, institute legal proceedings with a people's court. If investors institute legal proceedings in accordance with law, the listed company shall render active cooperation and relevant conveniences.                                 

Chapter II  Emphasizing Sustained Development
and Protecting Investors’ Right to Obtain Dividends

Article 6 Listed companies shall highlight their principal businesses, enhance their capability in self-innovation, respond proactively to market changes, improve their core competitiveness and promote sustainable development.

Article 7 Listed companies shall improve their scientific decision-making and management capability. The decisions made shall be scientific, democratic and prudent and in strict accordance with laws and regulations and the articles of association. Feasibility study of the use of funds raised and of investment projects shall be strengthened, and earnest efforts be made to enhance the efficiency and profitability.

Article 8 Risk alert and treatment mechanism shall be set up by listed companies. They shall enhance their sense of risks, effectively avoid and dispel the risks that exist in the business, market, technology, financial affairs and investment, maintain the operation order and ensure that property of the company is safe and sound.

Article 9 Listed companies shall pay due regards to ensuring reasonable investment return to investors, especially minority investors, and formulate policies for continuous and steady profit distribution.

Article 10 The profits distributed by a listed company shall not exceed its total accumulated profits distributable and such distribution shall not impair the company’s capability for sustainable operations.

Article 11 Shenzhen Stock Exchange (hereinafter referred to as the Exchange) does not advocate high cash dividend payout by listed companies that have posted negative cash flows from their operating activities for two consecutive years.

Chapter III  Strengthening Information Disclosure
and Protecting Investors’ Right to Know

Article 12 Listed companies and relevant persons with disclosure obligation shall, in strict accordance with laws, administrative regulations and rules, as well as the rules of the Exchange, truthfully, accurately, completely and timely disclose the information that may significantly impact the price of stocks and derivatives or the decision-making of investors, and such information may not contain falsehoods, misleading statements or material omissions. The person with disclosure obligation shall, based on the principle of good faith, voluntarily disclose other information that is not required by laws, administrative regulations and rules, as well as the rules of the Exchange.

Listed companies shall ensure that investors have equal access to the information disclosed and shall not make selective disclosure. In case of inconsistency in the information disclosed, the person with disclosure obligation shall state the reason therefor and make disclosure in a timely manner. In severe cases, the person with disclosure obligation shall make a public apology to investors.

Article 13 When making voluntary disclosure of forward-looking financial information, listed companies shall follow the internal audit procedures, issue risk warning to investors stating the assumption basis for such forward-looking information and any uncertainty involved and, in accordance with actual conditions and in a timely manner, modify the information previously disclosed.

Article 14 If the controlling shareholder or de facto controller is in any of the following circumstances and such circumstance leads to unusual movement in the prices of stocks and derivatives of the listed company or gives rise to market rumors, or when required by the Exchange, such controlling shareholder or de facto controller shall, through the listed company, report to the Exchange and make relevant disclosure in a timely manner:
(1) significant asset restructuring of the listed company is being conducted;
(2) making such transactions with the listed company as provision of large-sum financial assistance, conclusion of major contracts or transfer of key technology;
(3) in process of negotiations with specific investors for alteration or transfer of the control power of the listed company;
(4) business conditions deteriorate; or
(5) other circumstances that may significantly impact the price of stocks and derivatives of the listed company.

Article 15 The former shareholders of non-tradable shares and the de facto controllers of listed companies (hereinafter referred to as the promisor) shall fulfill all the commitments they make to investors and the regulatory authority in their plans for non-tradable share reform. When preconditions for fulfilling such commitments are about to be met or already met, the promisor shall fulfill such commitments and disclose relevant information in a timely manner. Listed companies shall disclose in their periodic reports the particulars of fulfillment of such commitments.

The promisor shall keep an eye on the changes in such preconditions like bonus share distribution, transfer of surplus capital, increase of capital, pro rata issue or dividend payout, that lead to changes in shareholding or shareholder interests. When such circumstances arise, relevant data shall be