On June 12, Ge Longhui Communications (603322.SH) issued an explanatory notice on media reports. It is concerned that some relevant media have mentioned that the company's suppliers are suspected to be related parties to the listed company. In order to facilitate investors' understanding, the relevant situation is now explained. In order to cope with changes in the market environment of the communication technology service industry, better achieve cost control and improve management efficiency, the company decided in 2020 to entrust temporary employment, vehicle rental, construction coordination, and some technical work in the communication technology service business to outsourcers, use fixed costs to control expenses, and give full play to the enthusiasm and active cost control advantages of outsourced enterprises. The company used this model to reverse the downward trend in the communication technology service business in a timely manner and achieved the goal of reducing costs and increasing efficiency. The use of outsourcing is a common situation in the communication technology service business industry.

The company switched from having its own employees to completing the business through outsourcing, and encouraged this group of employees to set up their own external suppliers to participate in the company's corresponding services. Choosing employees to leave the company to set up an outsourced supplier has potential advantages. When the service price is comparable, they have the advantage of being familiar with the workflow and environment. Compared with other outsourcing units, they can take on the corresponding work faster, thereby reducing the connection cycle and costs, and quickly adapting to customer requirements. Due to the characteristics of communication technology service business development, most of the employees of outsourced suppliers are located at project execution sites. Demand for fixed offices is not high, and attendance rates are generally low. The above business adjustments of the company are necessary measures taken to deal with operating risks and protect shareholders' rights and interests in actual operations. The selected outsourced suppliers operate independently from the time of establishment, bear their own profits and losses, and the suppliers themselves organize and carry out the undertakings. Outsourcing employees who intend to leave are subject to the same pricing rules as other outsourcing suppliers. The company has cooperated with 737 outside suppliers over the years. The pricing of this type of outside supplier combines the characteristics of each region and business, the service price is fair and reasonable, and there is no transfer of benefits (especially in the current highly competitive price situation, there is no room for profit transfer at all), which harms the interests of listed companies.

In 2020, when employees who plan to leave the company set up, the participating employees were all intended to leave the company, and there were no cases where directors and supervisors held shares or worked in the outside partner company. Beginning in 2021, the company rapidly developed IDC construction and computing power-related businesses, putting forward new requirements for technical and management personnel. In response to the company's requirements, relevant personnel completed the disconnection with the outsourcing unit, and no longer had equity or employment relationships with the outsourced unit. Currently, there is no cross-staffing between the company and the outside supplier, and there are no other related relationships. According to section 3 “Related Transactions” section 6.3.3 of the “Shanghai Stock Exchange Stock Listing Rules”, the rules relating to the determination of related persons of listed companies, there is no relationship between the company and the outside supplier.