According to the Zhitong Finance App, Huarui Co., Ltd. (300626.SZ) announced that Sun Ruiliang, a shareholder holding 5% or more of the company's shares, and Zhang Yijun, and related personnel, recently received the “Decision on Taking Corrective Measures against Sun Ruiliang and Zhang Yijun” (Administrative Supervision Measures Decision [2023] No. 35) issued by the Ningbo Regulatory Bureau of the China Securities Regulatory Commission. The relevant information is now announced as follows:

“Sun Ruiliang, Zhang Yijun: You signed a “Share Transfer Agreement” with Wuzhou Dongtai Asset Management Co., Ltd. (Wuzhou Dongtai) in September 2020, agreeing to transfer the controlling interest of Huarui Electric Co., Ltd. (Huarui shares for short) held by Wuzhou Dongtai to transfer the controlling interest of Huarui Electric Co., Ltd. (Huarui shares for short) held by Wuzhou Dongtai. At the same time, you promise that the net profit achieved by the company's current business at that time (existing business for short) in 2021, 2022, and 2023 is not less than RMB 25 million, RMB 30 million, and RMB 45 million, respectively, for a total of not less than 10,000 million yuan, and that the net cash flow generated from the audited operating activities of the year in the annual reports disclosed in 2021, 2022 and 2023 will not be less than the net profit of the current year. If Huarui Co., Ltd. loses money in 2020 or if the net profit of the existing business for any year during the performance commitment period does not meet the promised performance, you should pay cash compensation to the company.

According to the “Audit Report on the Implementation of Performance Promises” issued by Dahua Certified Public Accountants (Special General Partnership) (approved by Dahua [2023] No. 0011380), Huarui's current business in 2022 finally achieved net profit of 22,188,948.33 yuan, which failed to complete the promised performance in 2022. According to the “Share Transfer Agreement”, you are required to reimburse Huarui Shares in cash of 7,811,051.67 yuan. As of the date of issuance of this decision, you have not fulfilled the corresponding performance compensation commitments in accordance with the agreement. The above matters constitute a violation of commitments as described in section 15 of the “Listed Company Supervision Guidelines No. 4: Commitments of Listed Companies and Their Related Parties” of the Securities Regulatory Commission Notice [2022] No. 16). According to the provisions of Article 17 of the “Listed Companies Supervision Guidelines No. 4:11 Listed Companies and Their Related Parties Commitments” (Securities Regulatory Commission Notice [2022] No. 16), our bureau has decided to take administrative supervision measures to order corrections against you, and record the above relevant situation in the securities and futures market integrity file. You should strictly abide by relevant laws and administrative regulations and submit a rectification report to our bureau within one month. The rectification report should include a clear performance compensation plan and time.