1. What are the offering criteria for SZSE?

Under the Securities Law, a company applying for public offering of new shares shall meet the following requirements:

(1) It shall have a proper and well-operating organizational structure;

(2) It shall have sustainable profitability and sound financial position;

(3) In the past three years, there have been no falsehoods in its financial statements, and it has not committed any other serious illegal acts; and

(4) Other requirements prescribed by the securities regulatory authority approved by the State Council.

Apart from the above, enterprises seeking IPO should also meet other requirements prescribed by the CSRC. Those seeking IPO and listing on the Main Board (including the SME Board) should meet the relevant provisions of the Measures on the Administration of Initial Public Offerings and Listings of Shares issued by the CSRC on May 17, 2006, and those seeking IPO and listing on the ChiNext should meet the relevant provisions of the Interim Measures on the Administration of Initial Public Offerings and Listings of Shares on the ChiNext issued by the CSRC on March 31, 2009.

2. What are the listing criteria for SZSE?

(1) Listing on the Main Board and SME Board

Under the Measures on the Administration of Initial Public Offerings and Listings of Shares, a company seeking IPO and listing on the Main Board shall meet the following specific requirements:

(1)    It must have been profitable in the last three consecutive years with net profits  no less than RMB 30 million in aggregate; the net profits shall be calculated based on the amount before and after deducting non-recurring profits and losses, whichever is smaller;

(2)    The net cash flow from business operation in the last three years shall exceed RMB 50 million in aggregate; or the revenue in the last three financial years shall exceed RMB 300 million in aggregate;

(3)    The total share capital before the offer shall not be less than RMB 30 million;

(4)   The intangible assets as at the end of the last reporting period (after deducting land use rights, aquaculture rights, mining rights, etc.) shall not account for more than 20% of the net assets;

(5)    There shall be no uncovered losses as at the end of the last reporting period;

(6)    Its performance results shall not be heavily reliant on tax benefits;

(7)    It shall be free from any serious debt service risk;

(8)    It shall be free from the risk of significant contingent events; and

(9)    Requirement on sustainable profitability. The issuer may not fall under any of the following circumstances that would have a significant adverse impact on its sustainable profitability:

a. Its business model or its mix of products or services has undergone or will undergo a material change which has or would have a significant adverse impact on its sustainable profitability;

b. Its position in the industry or the business environment for its industry has undergone or will undergo a material change which has or would have a significant adverse impact on its sustainable profitability;

c.Its revenues or net profits in the most recent financial year are heavily reliant on a related party or any client susceptible to great uncertainty;

d.Its net profits in the most recent year have been primarily derived from investment returns off its consolidated financial statements;

e.There is a risk of material adverse change in respect of the availability or use of any important assets or technologies being used by the issuer, such as trademarks, patents, proprietary technology and franchise rights; or

f.Other circumstances that would have a significant adverse impact on its sustainable profitability.

(II) Listing on the ChiNext

Under the Interim Measures on the Administration of Initial Public Offerings and Listings of Shares on the ChiNext, a company seeking IPO and listing on the ChiNext shall meet the following specific requirements:

(1)    It must have been profitable in the most recent two consecutive years, with accumulated profits no less than RMB 10 million and in continued growth; or the issuer must have been profitable in the most recent year with net profits of no less than RMB 5 million and revenues of no less than RMB 50 million, and its revenue growth rate for either of the most recent two years must have been no less than 30%. Net profits shall be calculated based on the amount before or after deducting non-recurring profits and losses, whichever is smaller;

(2)    It must have net assets of no less than RMB 20 million at the end of the most recent reporting period with no uncovered losses;

(3)    It must have a total share capital of no less than RMB 30 million after the IPO;

(4)    The issuer shall have sustainable profitability. It may not fall under any of the circumstances that would have a significant adverse impact on its sustainable profitability. The specific requirements in this regard are similar to that for the Main Board listing candidates;

(5)    Its performance results shall not be heavily reliant on tax benefits;

(6)    It shall be free from any serious debt service risk; and

(7)    It shall be free from the risk of significant contingent events.