Core Viewpoint - The independent financial advisory report assesses the feasibility and implications of the employee stock ownership plan (ESOP) proposed by Hengsheng Electronics, ensuring compliance with relevant regulations and safeguarding shareholder interests [1][2][25]. Summary by Sections Employee Stock Ownership Plan Overview - The ESOP is designed to enhance the company's long-term development and align employee interests with those of shareholders, with a total of 1,267,500 shares available for purchase at a price of 18.99 yuan per share [6][9][8]. - The plan will involve a maximum of 99 participants, including directors, supervisors, senior management, and key employees, with specific limits on share ownership per individual [4][5][3]. Funding and Stock Acquisition - The funding for the ESOP will come from employees' legal salaries, self-raised funds, and other legally permitted sources, with no financial assistance provided by the company [6][25]. - The total amount raised for the ESOP is capped at 24,069,825 yuan, corresponding to the maximum share purchase [6][9]. Duration and Lock-up Period - The ESOP will have a duration of 60 months, starting from the approval date by the shareholders' meeting, with provisions for extension under certain conditions [9][10][25]. - Shares acquired through the ESOP will be unlocked in three phases over 36 months, with specific percentages released at each interval [10][11]. Performance Assessment - The ESOP includes performance assessment criteria at both company and individual levels, with annual targets set for net profit growth [12][13]. - If performance targets are not met, the corresponding shares will not be unlocked, and the management committee will have the authority to reclaim unvested shares [12][13]. Management Structure - The ESOP will be managed by a committee elected by the participants, ensuring transparency and accountability in the management of the plan [17][26]. - The management committee will oversee daily operations and represent the interests of the participants, adhering to legal and regulatory requirements [17][26]. Compliance and Regulatory Adherence - The report confirms that the ESOP complies with relevant laws and regulations, ensuring that it does not facilitate insider trading or market manipulation [25][26]. - The plan has been structured to protect the rights of all shareholders and maintain equitable treatment among participants [25][26].

Core Viewpoint - The company has proposed a 2025 employee stock ownership plan, which has been approved by the labor union committee, aiming to enhance employee motivation and align interests among shareholders, the company, and employees [1]. Group 1: Employee Stock Ownership Plan - The labor union committee meeting was held on August 21, 2025, to discuss the proposed employee stock ownership plan [1]. - The committee unanimously agreed that the plan does not harm the interests of the company or its shareholders and does not involve coercive participation from employees [1]. - The plan is expected to promote the establishment of an incentive mechanism that effectively aligns the interests of shareholders, the company, and individual employees, contributing to the company's long-term development [1].

Core Viewpoint - The company is implementing an employee stock ownership plan (ESOP) to enhance employee engagement, align interests between employees and shareholders, and promote long-term sustainable development [2][6][9]. Group 1: Purpose and Principles of the Employee Stock Ownership Plan - The ESOP aims to establish a profit-sharing mechanism between employees and shareholders, improve corporate governance, and enhance employee cohesion and competitiveness [6][7]. - Participation in the ESOP is voluntary, and the company will not force employees to join [6][7]. - Participants bear their own risks and have equal rights with other investors [6][7]. Group 2: Participants and Allocation Standards - The ESOP will include up to 99 employees, including 11 directors and senior management [3][6]. - The total number of shares allocated to the ESOP will not exceed 1.2675 million shares, representing 0.07% of the company's total share capital [10][11]. - Individual participation is capped at 1% of the total share capital for any single participant [3][6]. Group 3: Funding and Stock Sources - The total funding for the ESOP is capped at RMB 24,069,825, with shares priced at RMB 18.99 each [7][10]. - The shares will be acquired through non-trading transfers from the company's repurchased stock [7][10]. Group 4: Lock-up Period and Performance Assessment - The ESOP has a lock-up period with shares unlocking in three phases: 30% after 12 months, 30% after 24 months, and 40% after 36 months [11][14]. - Performance targets are set for net profit growth of at least 10% annually from 2025 to 2027, based on the previous year's net profit [11][14]. Group 5: Management and Governance - The ESOP will be managed by a management committee elected by the participants, ensuring the protection of their rights [16][19]. - The committee is responsible for daily management and must adhere to legal and regulatory requirements [19][25]. Group 6: Rights and Obligations of Participants - Participants have the right to dividends and must comply with the plan's terms, including the payment of taxes on any gains [25][26]. - Participants cannot transfer their shares during the lock-up period and must adhere to the plan's rules regarding participation and exit [25][26].

Core Viewpoint - The company has established a 2025 Employee Stock Ownership Plan (ESOP) aimed at enhancing employee engagement, improving corporate governance, and promoting long-term sustainable development [1][2]. Group 1: Purpose and Principles of the Employee Stock Ownership Plan - The ESOP aims to create a mechanism for sharing interests between employees and shareholders, thereby improving company governance and competitiveness [1][2]. - The plan adheres to principles of legality, voluntary participation, and risk-bearing by participants [2][3]. Group 2: Participants and Allocation - The ESOP includes up to 99 participants, consisting of directors (excluding independent directors), supervisors, senior management, and key employees [3][4]. - The total number of shares to be subscribed under the plan is capped at 1,267,500 shares, representing 0.07% of the company's total share capital [4][7]. Group 3: Funding and Stock Sources - The total funding for the ESOP is limited to 24.0698 million yuan, with a maximum subscription price of 18.99 yuan per share [5][7]. - The shares will be sourced from the company's repurchased stock, with the final number of shares depending on actual contributions from participants [5][6]. Group 4: Lock-up Period and Performance Assessment - The lock-up period for the shares is set at 12, 24, and 36 months, with specific unlocking conditions based on company performance [9][10]. - Performance targets are established for the years 2025 to 2027, requiring a minimum net profit growth rate of 10% each year [10][11]. Group 5: Management and Governance - The ESOP will be managed by a committee elected by the participants, ensuring oversight and representation of their interests [12][13]. - The management committee is responsible for daily operations, including share registration and distribution of benefits [15][18].

Core Viewpoint - The company has established a stock option incentive plan for 2025 to enhance its long-term incentive mechanism, ensuring alignment of interests among shareholders, the company, and key personnel [1][2]. Group 1: Assessment Objectives - The plan aims to attract and retain talent, motivating directors, senior management, and core employees to focus on the company's long-term development while improving work performance [1]. Group 2: Assessment Principles - The evaluation must adhere to principles of fairness, transparency, and objectivity, linking the stock option incentive plan closely with the performance and contributions of the incentivized individuals [2]. Group 3: Assessment Scope - The plan applies to all participants, including directors, senior management, and key personnel, excluding independent directors, supervisors, and major shareholders [3]. Group 4: Assessment Institutions and Execution - The Board's Compensation and Assessment Committee leads the assessment, while the Human Resources Department executes it, ensuring data accuracy and reliability [3][4]. Group 5: Assessment Indicators and Standards - The stock options' exercise conditions are based on annual net profit growth targets of at least 10% for the years 2025 to 2027, using the previous year's net profit as a baseline [4]. Group 6: Assessment Period and Frequency - The assessment period for the stock options is set for the fiscal years 2025 to 2027, with evaluations conducted annually [5]. Group 7: Assessment Procedures - The Human Resources Department is responsible for the assessment process, maintaining results and submitting reports to the Compensation and Assessment Committee [6]. Group 8: Assessment Results Management - Participants have the right to know their assessment results and can appeal within five working days if they disagree, with results archived confidentially [6]. Group 9: Supplementary Provisions - The plan is subject to approval by the shareholders' meeting and will be implemented following the effective date of the stock option incentive plan [7].

Group 1: ETF Performance - The Food and Beverage ETF (code: 515170) has seen a recent increase of 3.29% over the past five days, with a current PE ratio of 20.76 times and a total of 6.34 billion shares, reflecting an increase of 1.0 million shares, although there was a net outflow of 9.682 million yuan in principal funds [2] - The Gaming ETF (code: 159869) has experienced a rise of 2.51% in the last five days, with a PE ratio of 46.57 times and a total of 5.16 billion shares, which increased by 17 million shares, while there was a net outflow of 742.4 thousand yuan in principal funds [2] - The Sci-Tech Semiconductor ETF (code: 588170) has shown a significant increase of 11.21% over the past five days, with a total of 3.5 billion shares, which decreased by 6 million shares, but there was a net inflow of 22.738 million yuan in principal funds [2] Group 2: Cloud Computing ETF - The Cloud Computing 50 ETF (code: 516630) has reported a rise of 10.92% in the last five days, with a high PE ratio of 131.63 times and a total of 3.8 billion shares, which increased by 1 million shares, along with a net inflow of 8.761 million yuan in principal funds [3]

Core Viewpoint - The report outlines the 2025 stock option incentive plan of Hengsheng Electronics, detailing its structure, eligibility, and implications for shareholders and company performance. Group 1: Incentive Plan Overview - The 2025 stock option incentive plan involves granting stock options to 624 individuals, excluding independent directors and major shareholders, with a total of 15.159 million options, representing 0.80% of the company's total share capital [3][4]. - The stock options will have a validity period of up to 60 months from the grant date, with specific waiting and exercise periods defined [4][5]. Group 2: Stock Option Details - The exercise price for the stock options is set at 37.98 RMB per share, which is higher than the average trading price prior to the announcement [5][14]. - The plan includes performance-based conditions, requiring a minimum net profit growth of 10% year-over-year for the years 2025 to 2027 [8][17]. Group 3: Performance Assessment - The performance assessment will be based on the company's net profit, with individual performance evaluations determining the actual number of options exercisable by each participant [8][18]. - The assessment framework is designed to align the interests of management with those of shareholders, promoting long-term company growth [17][18]. Group 4: Compliance and Feasibility - The independent financial advisor confirms that the incentive plan complies with relevant laws and regulations, ensuring it does not harm the interests of the company or its shareholders [9][12][14]. - The plan's implementation is deemed feasible, with established procedures for granting and exercising options [12][14].

Group 1 - The Food and Beverage ETF (code: 515170) tracks the China Securities Food and Beverage Industry Theme Index, with a recent five-day change of 3.29% and a price-to-earnings ratio of 20.76 times. The latest share count is 6.34 billion, an increase of 100 million shares, with a net outflow of 9.682 million from main funds [2] - The Gaming ETF (code: 159869) follows the China Securities Animation and Gaming Index, showing a five-day change of 2.51% and a price-to-earnings ratio of 46.57 times. The latest share count is 5.16 billion, an increase of 17 million shares, with a net outflow of 742.4 thousand from main funds [2] - The Sci-Tech Semiconductor ETF (code: 588170) tracks the Shanghai Stock Exchange Sci-Tech Innovation Board Semiconductor Materials and Equipment Theme Index, with a five-day change of 11.21%. The latest share count is 350 million, a decrease of 6 million shares, with a net inflow of 22.738 million from main funds [2] Group 2 - The Cloud Computing 50 ETF (code: 516630) tracks the China Securities Cloud Computing and Big Data Theme Index, with a five-day change of 10.92% and a price-to-earnings ratio of 131.63 times. The latest share count is 3.8 billion, an increase of 1 million shares, with a net inflow of 8.761 million from main funds [3]

Group 1 - The Food and Beverage ETF (code: 515170) tracks the China Securities Food and Beverage Industry Theme Index, with a recent five-day change of 3.29% and a price-to-earnings ratio of 20.76 times. The latest share count is 6.34 billion, an increase of 100 million shares, with a net outflow of 9.682 million from main funds [2] - The Gaming ETF (code: 159869) follows the China Securities Animation and Gaming Index, showing a five-day change of 2.51% and a price-to-earnings ratio of 46.57 times. The latest share count is 5.16 billion, an increase of 17 million shares, with a net outflow of 742.4 thousand from main funds [2] - The Sci-Tech Semiconductor ETF (code: 588170) tracks the Shanghai Stock Exchange Sci-Tech Innovation Board Semiconductor Materials and Equipment Theme Index, with a five-day change of 11.21%. The latest share count is 350 million, a decrease of 6 million shares, with a net inflow of 22.738 million from main funds [2] Group 2 - The Cloud Computing 50 ETF (code: 516630) tracks the China Securities Cloud Computing and Big Data Theme Index, with a five-day change of 10.92% and a price-to-earnings ratio of 131.63 times. The latest share count is 38 million, an increase of 1 million shares, with a net inflow of 8.761 million from main funds [3]

Group 1: ETF Performance - The Food and Beverage ETF (code: 515170) has seen a recent increase of 3.29% over the past five days, with a current PE ratio of 20.76 times and a total of 6.34 billion shares, reflecting an increase of 1.0 million shares, although there was a net outflow of 9.682 million yuan in principal funds [2] - The Gaming ETF (code: 159869) has experienced a rise of 2.51% in the last five days, with a PE ratio of 46.57 times and a total of 5.16 billion shares, which increased by 17 million shares, while also showing a net outflow of 7.424 million yuan in principal funds [2] - The Sci-Tech Semiconductor ETF (code: 588170) has reported a significant increase of 11.21% over the past five days, with a total of 3.5 billion shares, which decreased by 6 million shares, but there was a net inflow of 22.738 million yuan in principal funds [2] Group 2: Cloud Computing ETF - The Cloud Computing 50 ETF (code: 516630) has shown a notable increase of 10.92% in the last five days, with a high PE ratio of 131.63 times and a total of 3.8 billion shares, which increased by 1 million shares, alongside a net inflow of 8.761 million yuan in principal funds [3]