THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Phancy Group Co., Ltd., you should at once hand this circular, together with the accompanying proxy form, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

This circular is for reference only and does not constitute an invitation or recommendation to acquire, purchase or subscribe for any securities of the Company.

范式

PHANCY

Phancy Group Co., Ltd.

範式智能技術集團股份有限公司

(formerly known as "Beijing Fourth Paradigm Technology Co., Ltd.北京第四範式智能技術股份有限公司")

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock code: 6682)

(1) PROPOSED INITIAL PUBLIC OFFERING OF RENMINBI ORDINARY SHARES (A SHARES) AND LISTING ON THE CHINEXT MARKET OF THE SHENZHEN STOCK EXCHANGE AND RELATED MATTERS

(2) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND PROPOSED AMENDMENTS/FORMULATION OF INTERNAL GOVERNANCE POLICIES AND

(3) NOTICE OF THE 2026 SECOND EXTRAORDINARY GENERAL MEETING

The Company will convene the 2026 second extraordinary general meeting at Conference Room, Level 2, Block A, Hongyuan New Era, Shangdi West Road, Haidian District, Beijing, PRC on June 26, 2026 (Friday) at 2:00 p.m.. The notice of the 2026 second extraordinary general meeting of the Company is set out in this circular.

Whether or not you are able to attend the extraordinary general meeting, you are requested to complete and sign the accompanying proxy form for use at the extraordinary general meeting in accordance with the instructions printed thereon and return it to the Company's H share registrar, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong as soon as possible and in any event not less than 24 hours before the time appointed for holding the extraordinary general meeting or any adjournment thereof (as the case may be). Completion and return of the proxy form will not preclude a Shareholder from attending and voting in person at the extraordinary general meeting should he/she so wish.

Non-registered Shareholders whose H Shares are held through banks, brokers, custodians or HKSCC in CCASS may also attend and vote at the meeting. In this regard, they should consult directly with their banks, brokers or custodians (as the case may be) to make the necessary arrangements.

This circular, together with the proxy form, is also published on the website of the Hong Kong Stock Exchange (www.hkexnews.hk) and the website of the Company (www.4paradigm.com). Holders of Treasury Shares, if any, shall have no voting rights at general meetings of the Company.

June 10, 2026

	Pages
Definitions	1
Letter from the Board	4
APPENDIX I - UNDERTAKINGS AND RESTRICTIVE MEASURES IN RELATION TO THE INITIAL PUBLIC OFFERING OF A SHARES AND LISTING ON THE CHINEXT MARKET OF THE SHENZHEN STOCK EXCHANGE	I-1
APPENDIX II - PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION	II-1
APPENDIX III - PROPOSED AMENDMENTS TO THE RULES OF PROCEDURE FOR GENERAL MEETINGS OF PHANCY GROUP CO., LTD.	III-1
APPENDIX IV - PROPOSED AMENDMENTS TO THE RULES OF PROCEDURE FOR BOARD MEETINGS OF PHANCY GROUP CO., LTD.	IV-1
APPENDIX V - PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT NON-EXECUTIVE DIRECTORS OF PHANCY GROUP CO., LTD.	V-1
APPENDIX VI - PROPOSED AMENDMENTS TO THE ADMINISTRATIVE MEASURES FOR RELATED PARTY/CONNECTED TRANSACTIONS OF PHANCY GROUP CO., LTD.	VI-1
APPENDIX VII - PROPOSED ADOPTION OF THE MANAGEMENT SYSTEM FOR EXTERNAL GUARANTEES OF PHANCY GROUP CO., LTD.	VII-1
APPENDIX VIII - PROPOSED ADOPTION OF THE MANAGEMENT SYSTEM FOR EXTERNAL INVESTMENTS OF PHANCY GROUP CO., LTD.	VIII-1
APPENDIX IX - PROPOSED ADOPTION OF THE MANAGEMENT SYSTEM FOR PROCEEDS OF PHANCY GROUP CO., LTD.	IX-1
APPENDIX X - PROPOSED ADOPTION OF THE MANAGEMENT SYSTEM FOR PREVENTING OCCUPATION OF COMPANY FUNDS BY CONTROLLING SHAREHOLDERS, ACTUAL CONTROLLERS AND OTHER RELATED PARTIES OF PHANCY GROUP CO., LTD.	X-1
APPENDIX XI - PROPOSED ADOPTION OF THE MANAGEMENT SYSTEM FOR THE HOLDING OF SHARES IN THE COMPANY BY DIRECTORS AND SENIOR MANAGEMENT AND CHANGES THEREOF OF PHANCY GROUP CO., LTD.	XI-1
NOTICE OF THE 2026 SECOND EXTRAORDINARY GENERAL MEETING	EGM-1

DEFINITIONS

In this circular, unless otherwise defined or the context otherwise requires, the following expressions have the following meanings:

"A Share Offering", "Offering" or "Offering and Listing"
the proposed initial public offering of Renminbi ordinary shares (A Shares) by the Company and listing on the ChiNext Market of the Shenzhen Stock Exchange

"A Shares"
the Renminbi ordinary shares proposed to be initially offered by the Company and listed on the ChiNext Market of the Shenzhen Stock Exchange

"Articles of Association"
the articles of association of the Company

"Beijing Xinzhi"
Beijing Xinzhi Linghang Management Consulting Co., Ltd., and Dr. Dai Wenyuan holds 99% of its equity as at the Latest Practicable Date

"Board"
the board of directors of the Company

"CCASS"
the Central Clearing and Settlement System established and operated by HKSCC

"ChiNext Market"
the ChiNext Market of the Shenzhen Stock Exchange

"Company" or "Issuer"
Phancy Group Co., Ltd. (範式智能技術集團股份有限公司), whose H Shares are listed on the Main Board of the Stock Exchange (stock code: 6682)

"CSRC"
China Securities Regulatory Commission

"Director(s)"
the director(s) of the Company

"EGM"
the 2026 second extraordinary general meeting of the Company to be held at Conference Room, Level 2, Block A, Hongyuan New Era, Shangdi West Road, Haidian District, Beijing, PRC at 2:00 p.m. on June 26, 2026 (Friday), or any adjournment thereof, to consider and, if applicable, approve the resolutions set out in the notice of general meeting on pages EGM-1 to EGM-4 of this circular

"H Shares"
overseas listed foreign shares of RMB1.00 each in the share capital of the Company, which are subscribed for and traded in Hong Kong dollars and listed on the Stock Exchange

DEFINITIONS

"HK$"
Hong Kong dollars, the lawful currency of Hong Kong

"HKSCC"
Hong Kong Securities Clearing Company Limited

"Hong Kong"
the Hong Kong Special Administrative Region of the PRC

"Hong Kong Listing Rules" or "Listing Rules"
the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

"Latest Practicable Date"
June 10, 2026, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular

"Nanjing Phancy"
Nanjing Phancy Enterprise Management Consulting Partnership (Limited Partnership), an employee incentive platform of the Company, and Beijing Phancy Xinzhi Enterprise Management Co., Ltd. (Beijing Xinzhi's wholly owned subsidiary) is the general partner of Nanjing Phancy

"Phancy Investment"
Phancy (Tianjin) Management Consulting Partnership (Limited Partnership), an employee incentive platform of the Company, and Beijing Xinzhi is the sole general partner of Phancy Investment

"Phancy Yinyuan"
Tianjin Phancy Yinyuan Management Consulting Partnership (Limited Partnership), and Beijing Xinzhi is the sole general partner of Phancy Yinyuan

"PRC" or "China"
the People's Republic of China, and for the purpose of this circular only, excluding Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan Region

"RMB"
Renminbi, the lawful currency of the PRC

"Shareholders"
holders of the Shares

"Shares"
ordinary shares of RMB1.00 each in the share capital of the Company

"Stock Exchange" or "Hong Kong Stock Exchange"
The Stock Exchange of Hong Kong Limited

DEFINITIONS

"subsidiaries"	has the meaning ascribed to it under the Hong Kong Listing Rules
"SZSE" or "Shenzhen Stock Exchange"	Shenzhen Stock Exchange
the "Group" or "we"	the Company and our subsidiaries
"Treasury Shares"	has the meaning ascribed to it under the Hong Kong Listing Rules (as amended from time to time)
"Unlisted Shares" or "Domestic Shares"	ordinary shares of RMB1.00 each issued by the Company, which are not listed on any stock exchange as at the Latest Practicable Date
"%"	per cent

LETTER FROM THE BOARD

范式

PHANCY

Phancy Group Co., Ltd.

範式智能技術集團股份有限公司

(formerly known as "Beijing Fourth Paradigm Technology Co., Ltd.北京第四範式智能技術股份有限公司")

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock code: 6682)

Executive Directors:

Dr. Dai Wenyuan (Chairman)

Mr. Chen Yuqiang

Non-executive Directors:

Dr. Yang Qiang

Mr. Dou Shuai

Mr. Zhang Jing

Independent non-executive Directors:

Mr. Li Jianbin

Mr. Liu Chijin

Ms. Ke Yele

Mr. Pan Jialin

Employee Representative Director:

Mr. Chai Yifei

Registered Address:

Room 303, 3/F, Block A

Heying Center, Building 1

No. 10 Xiaoying West Road

Haidian District, Beijing

the PRC

Headquarters and Principal Place of Business in PRC:

Block A, Hongyuan New Era

Shangdi West Road

Haidian District, Beijing

the PRC

Principal Place of Business in

Hong Kong:

Room 1910, 19/F, Lee Garden One

33 Hysan Avenue, Causeway Bay

Hong Kong

June 10, 2026

To the Shareholders

Dear Sir/Madam,

(1) PROPOSED INITIAL PUBLIC OFFERING OF RENMINBI

ORDINARY SHARES (A SHARES) AND LISTING ON

THE CHINEXT MARKET OF THE SHENZHEN STOCK EXCHANGE

AND RELATED MATTERS

(2) PROPOSED AMENDMENTS TO THE ARTICLES OF

ASSOCIATION AND PROPOSED AMENDMENTS/FORMULATION

OF INTERNAL GOVERNANCE POLICIES

I. INTRODUCTION

The extraordinary general meeting will be held at Conference Room, Level 2, Block A, Hongyuan New Era, Shangdi West Road, Haidian District, Beijing, PRC at 2:00 p.m. on June 26, 2026 (Friday), and the notice of the meeting is set out on pages EGM-1 to EGM-4 of this circular.

LETTER FROM THE BOARD

The purpose of this circular is, among other things, to provide you with the notice of the extraordinary general meeting and relevant information on certain resolutions to be considered at the above meeting, so as to enable you to make an informed decision on whether to vote for or against such resolutions at the above meeting.

II. MATTERS TO BE RESOLVED AT THE GENERAL MEETING

1. Application by the Company for the initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange

Reference is made to the announcement of the Company dated June 9, 2026 in relation to the proposed A Share Offering.

The Company plans to apply for the initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange. The type of shares to be issued under this issuance is Renminbi ordinary shares (A Shares), with a par value of RMB1.00 each, and the place of listing is the ChiNext Market of the Shenzhen Stock Exchange. Subject to applicable laws, regulations, the securities regulatory rules of the places where the Company's shares are listed and the Articles, the A Shares and H Shares are both ordinary shares in the share capital of the Company and rank pari passu with each other as to the rights attached thereto. The basic issuance plan is as follows:

1) Type of shares: Renminbi ordinary shares (A Shares);
2) Par value per share: RMB1.00;
3) Number of shares to be issued:

The total number of Renminbi ordinary shares proposed to be publicly issued under this issuance shall be not less than 62.032515 million shares and not more than 186.097544 million shares (excluding the additional Shares to be issued upon the exercise of the over-allotment option), representing not less than 10% and not more than 25% of the total share capital after the issuance (including Treasury Shares). The issuance by the Company will consist entirely of new shares, and the existing Shareholders will not publicly offer any shares for sale. The Company and the sponsor (lead underwriter) may exercise the over-allotment option, and the number of A Shares issued upon exercise of the over-allotment option shall not exceed 15% of the number of shares under the proposed A Share Offering (before exercise of the over-allotment option).

The final number of shares to be issued shall be determined by the Board or its authorised persons as authorised by the general meeting, in consultation with the sponsor (lead underwriter), having regard to the number approved and registered by the competent authorities, the Company's capital requirements and market conditions;

The proposed number of A Shares to be issued under the A Share Offering shall be not less than 62.032515 million Shares and not more than 186.097544 million Shares (excluding the additional Shares to be issued upon the exercise of the over-allotment option), representing approximately 11.11% and 33.33% of the total share capital of the Company as at the Latest Practicable Date, respectively. Assuming that the maximum number of A Shares is issued under the A Share Offering and the over-allotment option is exercised in full, the maximum number of additional A Shares to be issued upon exercise of the over-allotment option shall be 27.914631 million Shares, representing approximately 5.00% of the total share capital of the Company as at the Latest Practicable Date and approximately 3.61% of the total share capital of the Company immediately upon completion of the A Share Offering and subscription of such over-allotment Shares. For the purpose of the above percentages and, unless otherwise specified, all references to total share capital in this circular include Treasury Shares.

4) Pricing method:

The pricing method for this issuance shall be determined by the Company and the sponsor (lead underwriter) through consultation based on the preliminary price inquiry results from offline investors, or by such other methods as recognised by the China Securities Regulatory Commission (the "CSRC") or the Shenzhen Stock Exchange;

According to Article 5 of the Administrative Measures for Securities Issuance and Underwriting (2025 Revision) issued by the China Securities Regulatory Commission on March 28, 2025 (CSRC Order No. 228): "For an initial public offering of securities, the issue price may be determined by way of book-building, or by other lawful and feasible methods such as direct pricing through independent negotiation between the issuer and the lead underwriter. The issuer and the lead underwriter shall disclose the pricing method for the securities offering in the preliminary prospectus (or the prospectus, as applicable; same below) and the offering announcement. Where the issue price for an initial public offering of securities is determined by way of book-building, the issue price may be determined after preliminary book-building, or may be determined through cumulative bidding inquiry after an issue price range has been determined through preliminary book-building."

To ensure that the issue price of the A Share Offering is in the overall interests of the Company and its Shareholders, the Board and the sponsor (lead underwriter), when determining the final issue price, will comply with the above requirements and take into account factors including: (i) the Company's financial condition and profitability; (ii) prevailing market conditions and the performance of the industry in which the Company operates; and (iii) applicable laws and regulations.

5) Issuance method:

The issuance shall be conducted by a combination of targeted placing to strategic investors, inquiry-based placing to offline investors and online fixed-price issuance to investors, or by such other methods as recognised by the CSRC or the Shenzhen Stock Exchange; the final issuance method shall be determined by the Board in accordance with the authorisation of the general meeting and the relevant requirements of the CSRC;

6) Target subscribers:

Eligible strategic investors, offline investors and qualified domestic natural persons, legal persons and other investors who have opened accounts with the Shenzhen Stock Exchange (excluding persons prohibited from purchasing under national laws, regulations and normative documents), or such other target subscribers as prescribed by the CSRC or the Shenzhen Stock Exchange;

The target subscribers of the A Share Offering are expected to be independent third parties. If any target subscriber of the A Share Offering is or will become a connected person of the Company, the Company shall, where appropriate, take reasonable measures to comply with the relevant announcement and shareholders' approval requirements under applicable PRC laws and regulations and the Listing Rules.

7) Underwriting method: standby underwriting;

8) Place of listing of the shares: the ChiNext Market of the Shenzhen Stock Exchange;

9) Timing of issuance:

The Company will proceed with the issuance after review and approval by the Shenzhen Stock Exchange and registration with the CSRC, and the specific issuance date shall be determined by the Board or its authorised persons as authorised by the general meeting after review and approval by the Shenzhen Stock Exchange and registration with the CSRC;

The Company may, at its sole discretion, determine the timing of the A Share Offering within 12 months from the date on which it obtains the registration document for the A Share Offering from the CSRC. For the purpose of obtaining the registration document from the CSRC, if the Company fails to complete the offering within the validity period of this resolution (i.e., 12 months from the date of approval by the extraordinary general meeting), the Company will reconvene a general meeting to extend the validity period of this resolution.

10) Use of proceeds:

After deducting the issuance expenses, the proceeds from the Offering and Listing by the Company will be invested in the following projects:

No.	Project name	Total investment amount of the project (RMB million)	Amount of proceeds to be invested (RMB million)
1	R&D upgrade and industrialisation project for full-stack intelligent solutions and services based on an enterprise-grade AI platform	2,591.5145	2,550.0000
2	Domestic AI information technology application innovation R&D project	510.5571	500.0000
3	Replenishment of working capital	750.0000	750.0000
	Total	3,852.0716	3,800.0000

11) Domestic shares of the Company:

After the Offering and Listing, the unlisted domestic shares of the Company will become A Shares and be deposited with China Securities Depository and Clearing Corporation Limited, and shall be subject to lock-up restrictions under the relevant PRC laws and regulations.

12) Validity period of the resolution: The resolution is valid for 12 months from the date on which it is considered and approved at the general meeting.

The A Shares will be issued under specific mandate granted by the Shareholders at the EGM for the allotment and issuance of A Shares pursuant to the A Share Offering. The Company will ensure that the theoretical dilution effect of the A Share Offering will be in compliance with Rule 7.27B of the Listing Rules.

These resolutions were considered and approved by the Board on June 9, 2026 and are now proposed at the extraordinary general meeting as special resolutions for consideration and approval.

Investment projects to be funded by proceeds from the Company's initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange and the feasibility thereof

After deducting the issuance expenses, the proceeds from the Offering and Listing by the Company will be invested in the following projects:

No.	Project name	Total investment amount of the project (RMB million)	Amount of proceeds to be invested (RMB million)
1	R&D upgrade and industrialisation project for full-stack intelligent solutions and services based on an enterprise-grade AI platform	2,591.5145	2,550.0000
2	Domestic AI information technology application innovation R&D project	510.5571	500.0000
3	Replenishment of working capital	750.0000	750.0000
	Total	3,852.0716	3,800.0000

The total amount of proceeds to be invested will be RMB3.8 billion. Before completion of the Offering and Listing, the Company will make preliminary investments in the above projects with self-raised funds according to its actual production and operation needs, and after the proceeds are in place, the proceeds will be used to replace such portion of self-raised funds. If the net proceeds after deducting the issuance expenses are insufficient to meet the funding requirements of the above projects, the Company will make up the shortfall with self-raised funds; if the net proceeds exceed the funding required for the projects, the remaining funds will be used as working capital for other purposes related to the principal business. It is expected that the proceeds will be fully utilised by the end of 2029.

This resolution was considered and approved by the Board on June 9, 2026 and is now proposed at the extraordinary general meeting as a special resolution for consideration and approval.

Plan for assuming the accumulated unrecovered losses before the Company's initial public offering of Renminbi ordinary shares (A Shares)

If the Company's application for the Offering and Listing is reviewed and approved by the Shenzhen Stock Exchange and registered with the CSRC, the accumulated unrecovered losses of the Company before completion of the Offering and Listing shall be shared by the new and existing Shareholders registered after the Offering and Listing in proportion to their respective shareholdings.

This resolution was considered and approved by the Board on June 9, 2026 and is now proposed at the extraordinary general meeting as a special resolution for consideration and approval.

Shareholder dividend return plan for the three years after the Company's initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange

For the purpose of the Offering and Listing by the Company, and to further improve the Company's profit distribution policy, establish a sound, scientific, sustainable and stable dividend mechanism, and safeguard the lawful rights and interests of investors, the Company has formulated the Shareholder Dividend Return Plan of Phancy Group Co., Ltd. for the Three Years after the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market of the Shenzhen Stock Exchange, details of which are set out below in the Shareholder Dividend Return Plan of Phancy Group Co., Ltd. for the Three Years after the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market of the Shenzhen Stock Exchange.

10 -

Phancy Group Co., Ltd. Shareholder Dividend Return Plan for the Three Years after the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market of the Shenzhen Stock Exchange

Factors Considered in the Company's Dividend Return Plan

After the Company's Offering and Listing, the Company will focus on long-term and sustainable development, take maximising Shareholders' interests as the Company's value objective, continue to adopt an active cash and stock dividend distribution policy, attach importance to returns to investors, effectively fulfil its social responsibilities as a listed company, and establish a sustainable, stable and scientific return mechanism for investors in strict accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Guidelines for the Supervision of Listed Companies No. 3 - Cash Dividends of Listed Companies and other relevant requirements of the China Securities Regulatory Commission and the Shenzhen Stock Exchange.

Principles for Formulating the Company's Dividend Return Plan

The Company's profit distribution policy shall be based on attaching importance to reasonable investment returns to investors. Subject to relevant laws and regulations, the Company shall maintain the continuity and stability of its profit distribution policy, while taking into account its actual operating conditions and long-term strategic development objectives. Profit distribution shall not exceed the accumulated distributable profits and shall not impair the Company's ability to continue as a going concern. In the decision-making and demonstration process for the profit distribution policy by the Board, the Audit Committee and the general meeting of the Company, the opinions of independent non-executive Directors and public investors shall be fully considered.

Order of Profit Distribution of the Company

When distributing after-tax profits for the year, the Company shall allocate 10% of its profits to the Company's statutory reserve fund. Where the accumulated amount of the Company's statutory reserve fund reaches 50% or more of the Company's registered capital, no further allocation may be made. Where the Company's statutory reserve fund is insufficient to make up losses from previous years, the Company shall first use the profits for the year to make up such losses before making allocations to the statutory reserve fund in accordance with the preceding paragraph.

11 -

Specific Policy for Future Dividend Returns of the Company

Form of profit distribution:

The Company may distribute dividends in cash, in shares or by a combination of cash and shares, and shall give priority to cash dividends for profit distribution. Where conditions permit, the Company may make interim profit distributions.

The objective of the cash dividend policy is to distribute dividends in accordance with the cash dividend conditions and requirements prescribed in the Articles of Association.

The Company may refrain from profit distribution under any of the following circumstances: (1) the Company is not profitable for the year, or the Company's distributable profit for the year is negative; (2) the audit report for the most recent year is a non-unqualified opinion or an unqualified opinion with a paragraph on material uncertainty related to going concern; (3) the asset-liability ratio is higher than 70%; (4) the net operating cash flow for the year is negative; (5) other circumstances affecting the Company's ability to continue as a going concern; and (6) other circumstances prescribed by laws, regulations and the Articles of Association.

Specific conditions and ratio for the Company's distribution of dividends in cash:

The Company shall distribute cash dividends when all of the following conditions are satisfied:

(1) the Company is profitable for the year and its distributable profit is positive;

(2) the Company's audited net cash flow from operating activities for the year is positive, and the implementation of cash dividends will not affect its subsequent continuing operations;

(3) the Company has no major investment plan or major cash expenditure within the next 12 months (excluding proceeds-funded projects);

(4) the Company's audited asset-liability ratio at the end of the year does not exceed 70%.

12 -

The "major investment plan or major cash expenditure" referred to in the preceding paragraph means that the Company's accumulated expenditure proposed for external investment, asset acquisition or purchase of equipment reaches or exceeds 30% of the Company's latest audited net assets.

The Company shall comprehensively consider factors such as the characteristics of the industry in which it operates, stage of development, its own business model, profitability, debt repayment ability, whether there are major capital expenditure arrangements and investor returns, and the Board shall propose differentiated cash dividend plans based on the following circumstances and submit them to the general meeting for approval:

(1) where the Company is at a mature stage of development and has no major capital expenditure arrangements, the proportion of cash dividends in the profit distribution shall be at least 80%;

(2) where the Company is at a mature stage of development and has major capital expenditure arrangements, the proportion of cash dividends in the profit distribution shall be at least 40%;

(3) where the Company is at a growth stage and has major capital expenditure arrangements, the proportion of cash dividends in the profit distribution shall be at least 20%;

Where the Company's stage of development is difficult to distinguish but it has major capital expenditure arrangements, the matter may be handled in accordance with item (3).

The proportion of cash dividends in the profit distribution refers to cash dividends divided by the sum of cash dividends and stock dividends.

Specific conditions for the Company's distribution of stock dividends:

On the premise of ensuring that the Company's share capital size and equity structure are reasonable, and taking into account returns to investors and sharing of the Company's value, based on genuine factors such as the Company's growth and the dilution of net assets per share, where the valuation of the Company's shares is within a reasonable range, the Company may distribute stock dividends if the above conditions for cash dividend distribution are satisfied.

13 -

Decision-making and Implementation of Future Dividend Returns of the Company

The Company's profit distribution plan shall be prepared by the Company's management and submitted to the Board and the Audit Committee of the Company for consideration. When considering a profit distribution plan, the Board shall carefully study and demonstrate matters such as the timing, conditions and minimum ratio of the Company's cash dividends, the conditions for adjustment and the requirements for the decision-making procedures, and fully discuss the reasonableness of the profit distribution plan. A profit distribution plan shall be approved by more than half of all Directors. If independent non-executive Directors consider that the specific cash dividend plan may prejudice the interests of the listed company or minority Shareholders, they shall have the right to express independent opinions. Where the Board does not adopt or does not fully adopt the opinions of the independent non-executive Directors, the opinions of the independent non-executive Directors and the specific reasons for non-adoption shall be recorded in the Board resolution and disclosed. The Audit Committee shall review and express review opinions on the profit distribution plan formulated by the Board.

After the Board has considered and approved a profit distribution plan, it shall be submitted to the general meeting for consideration and approval. When the Company announces the Board resolution, it shall also disclose the review opinions of the independent non-executive Directors and the Audit Committee before submitting the matter to the general meeting of the Company for consideration. When the general meeting considers a profit distribution plan, the Company shall effectively protect the rights of public Shareholders to participate in the general meeting by providing online voting and other means.

Before the general meeting considers a specific cash dividend plan, the Company shall proactively communicate and exchange views with Shareholders, especially minority Shareholders, through various channels such as answering investors' telephone calls, the Company's public email address, online platforms and investor meetings, fully listen to the opinions and demands of minority Shareholders, and promptly respond to issues of concern to minority Shareholders.

When the Company convenes an annual general meeting to consider the annual profit distribution plan, it may consider and approve the conditions, upper limit of ratio and upper limit of amount for interim cash dividends for the following year. The upper limit of interim dividends for the following year

14 -

considered by the annual general meeting shall not exceed the net profit attributable to Shareholders of the listed company for the relevant period. The Board shall formulate a specific interim dividend plan in accordance with the resolution of the general meeting and subject to the conditions for profit distribution.

A cash profit distribution plan shall be approved by more than one-half of the voting rights held by Shareholders attending the general meeting, and a stock dividend distribution plan shall be approved by two-thirds or more of the voting rights held by Shareholders attending the general meeting.

Where the Company does not distribute cash dividends as required due to the special circumstances specified in Article 4, the Board shall provide a special explanation on the specific reasons, the exact use of the Company's retained earnings, expected investment returns and the measures proposed to enhance the level of investor returns, submit the matter to the general meeting for consideration after independent non-executive Directors have expressed clear opinions, and disclose the same in the media designated by the Company.
Within two months after the general meeting considers and approves the profit distribution resolution or the Board of the Company formulates a specific plan based on the conditions and upper limit for interim dividends for the following year approved by the annual general meeting, the Board must complete the dividend distribution.

Change to the Future Shareholder Dividend Return Plan

The Company shall revise the Shareholder Dividend Return Plan of Phancy Group Co., Ltd. for the Three Years after the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market of the Shenzhen Stock Exchange on a three-year cycle based on the Articles of Association of Phancy Group Co., Ltd.
The Company may adjust its profit distribution policy according to its production and operation conditions, investment plans and long-term development needs, or upon the occurrence of force majeure events such as war or natural disasters that have a material impact on the Company's production and operation, or where there is a material change in the Company's own operating conditions.
15 -

Any adjustment by the Company to its profit distribution plan shall satisfy the conditions prescribed in the Articles of Association, and must be considered by the Board and submitted to the general meeting for approval by two-thirds or more of the voting rights held by Shareholders attending the general meeting.

When the general meeting considers a change to the profit distribution policy, online voting must be provided.

Plan for stabilising the share price within three years after the Company's initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange

In order to fully protect the interests of public investors, the Company has formulated the Plan of Phancy Group Co., Ltd. for Stabilising the Share Price within Three Years after the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market of the Shenzhen Stock Exchange, and has formulated corresponding documents in the nature of undertakings in respect of the due performance of such plan, details of which are set out below in the Plan of Phancy Group Co., Ltd. for Stabilising the Share Price within Three Years after the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market of the Shenzhen Stock Exchange.

Phancy Group Co., Ltd. Plan for Stabilising the Share Price within Three Years after the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market of the Shenzhen Stock Exchange

Validity Period of the Plan

This plan shall be valid for three years from the Offering and Listing.

Specific Conditions and Procedures for Commencement and Termination of Share Price Stabilisation Measures

Commencement conditions and procedures: within three years after the Offering and Listing, where the closing price of the
16 -

Company's A Shares for 20 consecutive trading days is lower than the Company's latest audited net assets per share (if the Company undergoes profit distribution, capitalisation of capital reserves, additional issue, rights issue or other events, the closing price shall be adjusted accordingly; the same below), and the Company's circumstances also satisfy the relevant requirements of the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the CSRC and the stock exchange regarding share repurchases and other changes in share capital or increases in shareholdings, the Company shall convene a Board meeting within 10 days, convene a general meeting within 30 days from the date of announcement of the Board resolution, consider the specific plan for stabilising the share price, specify the implementation period of such specific plan, and commence implementation of the specific plan for stabilising the share price within 10 trading days after such plan is considered and approved by the general meeting. The Company and relevant parties shall commence the share price stabilisation measures.

From the date of announcement of the Company's share price stabilisation plan, if any of the following circumstances occurs, the implementation of the share price stabilisation measures and the performance of the undertakings shall be deemed completed, and the announced share price stabilisation plan shall be terminated: (1) the closing price of the Company's A Shares for five consecutive trading days is higher than the Company's latest audited net assets per share; (2) the Company's continued repurchase of shares or the increase in holdings of the Company's A Shares by the controlling shareholders, actual controllers, Directors or senior management will result in the Company's shareholding distribution failing to satisfy the listing conditions; (3) continued increase in shareholdings will result in the controlling shareholders and/or actual controllers and/or Directors and/or senior management being required to perform a mandatory offer obligation and they do not plan to make such offer; or (4) the number of shares purchased or the amount used to purchase shares by each relevant party within 12 consecutive months has reached the upper limit.

Specific Measures and Plan

The Company, the Company's controlling shareholders, actual controllers, Directors (excluding independent non-executive Directors) and senior management who receive remuneration and/or allowances from the Company are the parties obliged to stabilise the Company's share price. Unless a party with a subsequent order of obligation voluntarily assumes the obligation to stabilise the share price before or simultaneously with a party

17 -

with a prior order of obligation, the share price stabilisation measures shall be implemented in the following order: (1) repurchase of shares by the Company; (2) increase in holdings of the Company's shares by the controlling shareholders and actual controllers; and (3) increase in holdings of the Company's shares by Directors (excluding independent non-executive Directors) and senior management who receive remuneration and/or allowances from the Company.

Subject to not affecting the Company's listing conditions, the following specific measures and plans may be adopted:

Specific measures for stabilising the share price by the Company

(1) When the commencement conditions for the aforesaid share price stabilisation measures are triggered, the Company shall formulate a share repurchase plan in accordance with laws, regulations, normative documents, the Articles of Association and the Company's internal governance systems, repurchase part of the Company's shares from public Shareholders, and ensure that after the implementation of the share price stabilisation measures, the Company's shareholding distribution will still satisfy the listing conditions.

(2) The Company shall repurchase its public shares by way of centralised bidding transactions, tender offer or other methods recognised by securities regulatory authorities. The aggregate amount of funds used by the Company for the repurchase shall be ultimately determined by the general meeting based on, among others, the Company's Share price and financial conditions at that time, and the aggregate amount of funds used by the Company to repurchase shares shall not exceed the total amount of proceeds raised from the Offering and Listing. If the Company's shares no longer satisfy the conditions for commencing the measures to stabilise the Company's share price, the Company may cease to implement the repurchase of shares from public Shareholders.

Specific measures for stabilising the share price by the controlling shareholders and actual controllers

The following matters will trigger the obligation of the Company's controlling shareholders and actual controllers to stabilise the share price (i.e. to increase their holdings of the Company's shares): 1) where the Issuer is required to take share price stabilisation measures, but the repurchase of shares will cause the Issuer to fail to satisfy the statutory listing conditions or

18 -

the resolution on share repurchase is not approved by the general meeting, resulting in the inability to implement the share repurchase, and the increase in shareholdings by the controlling shareholders and actual controllers will not cause the Issuer to fail to satisfy the statutory listing conditions; 2) after the Company implements the share repurchase plan, the closing price of the Company's shares still cannot be stabilised above the Company's latest audited net assets per share for more than five consecutive trading days; or 3) the controlling shareholders and actual controllers voluntarily assume the obligation to stabilise the share price before or simultaneously with the party with a prior order of obligation.

The controlling shareholders and actual controllers shall actively take the following measures within 10 trading days after the aforesaid commencement conditions are triggered to stabilise the Company's share price, and ensure that after the implementation of the share price stabilisation measures, the Company's shareholding distribution will still satisfy the listing conditions:

(1) notify the Company of the specific plan for the proposed increase in shareholdings (including but not limited to the range of the number of shares to be increased, the proposed upper limit of the increase price, and the completion timeline);

(2) increase their holdings of the Company's A Shares through centralised bidding transactions on the secondary market or other lawful methods.

The shares of the Company increased by the controlling shareholders and actual controllers within 12 months shall not exceed 2% of the Company's issued shares. The total amount of funds used by the controlling shareholders and actual controllers for a single increase in shareholdings or cumulatively within 12 months shall not exceed 20% of the after-tax cash dividends received by them from the Company in the preceding year.

The increase price shall in principle not exceed the Company's latest audited net assets per share.

Specific measures for stabilising the share price by Directors (excluding independent non-executive Directors) and senior management who receive remuneration and/or allowances from the Company

The following matters will trigger the obligation of Directors (excluding independent non-executive Directors) and senior management who receive remuneration and/or allowances from the Company to increase their holdings of the Company's shares:

19 -

1) where the Issuer is required to take share price stabilisation measures, but the Company's repurchase of shares and the increase in holdings of the Company's shares by the controlling shareholders and actual controllers will cause the Issuer to fail to satisfy the statutory listing conditions, or circumstances arise where both the Company's repurchase of shares and the increase in holdings of the Company's shares by the controlling shareholders and actual controllers cannot be implemented; 2) both the Company and the Company's controlling shareholders and actual controllers have taken share price stabilisation measures, but the closing price of the Company's shares still cannot be stabilised above the Company's latest audited net assets per share for more than five consecutive trading days; or 3) Directors (excluding independent non-executive Directors) and senior management who receive remuneration and/or allowances from the Company voluntarily assume the obligation to stabilise the share price before or simultaneously with the party with a prior order of obligation.

Directors (excluding independent non-executive Directors) and senior management who receive remuneration and/or allowances from the Company shall actively take the following measures within 10 trading days after the aforesaid commencement conditions are triggered to stabilise the Company's share price, and ensure that after the implementation of the share price stabilisation measures, the Company's shareholding distribution will still satisfy the listing conditions:

(2) increase their holdings of the Company's A Shares through centralised bidding transactions on the secondary market or other lawful methods.

The total amount of funds used by Directors (excluding independent non-executive Directors) and senior management who receive remuneration and/or allowances from the Company for a single increase in shareholdings or cumulatively within 12 months shall not exceed 20% of the aggregate amount of after-tax cash dividends (if any), remuneration (if any) and allowances (if any) received by such Directors and senior management from the Company in the preceding accounting year.

The increase price shall in principle not exceed the Company's latest audited net assets per share.

20 -

Authority to Amend the Plan

Any amendment to this plan shall be considered and approved by the general meeting of the Company.

Implementation of the Plan

When the Company, the Company’s controlling shareholders, actual controllers, Directors (excluding independent non-executive Directors) and senior management who receive remuneration and/or allowances from the Company perform the above repurchase or increase obligations, they shall perform corresponding information disclosure obligations in accordance with the Articles of Association and relevant regulatory rules on share repurchases by listed companies, increases in shareholdings by controlling shareholders and actual controllers of listed companies, and increases in shareholdings by directors and senior management of listed companies.
This plan applies to Directors and senior management elected or appointed within three years after the Company’s listing. When the Company elects or appoints Directors or senior management, it shall require them to provide written undertakings in this regard and require them to propose binding measures for failure to perform undertakings in accordance with the undertakings of the Directors and senior management at the time of the Company’s initial public offering and listing.

Binding Measures under the Plan

When the conditions for commencing the share price stabilisation measures are satisfied, if the Company, controlling shareholders, actual controllers, Directors or senior management fail to take the above specific measures to stabilise the share price, such entities and persons undertake to accept the following binding measures:

They will publicly explain the specific reasons for failing to take the above share price stabilisation measures at the general meeting of the Company and in newspapers designated by the CSRC, and apologise to the Company’s Shareholders and public investors.
They will propose supplemental undertakings or alternative undertakings to investors to protect the rights and interests of investors as far as possible.
If they fail to perform the above undertakings, thereby causing investors to suffer losses in securities transactions, they will compensate investors for such losses in accordance with law.
21 -

Phancy Group Co., Ltd. Letter of Undertaking in relation to the Plan for Stabilising the Share Price within Three Years after the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market of the Shenzhen Stock Exchange

Phancy Group Co., Ltd. (the "Company") plans to apply for the initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange (the "Offering and Listing"). In order to stabilise the Company's share price and protect the interests of minority Shareholders and investors, the Company makes the following undertakings:

When the commencement conditions for share price stabilisation measures stipulated in the Plan of Phancy Group Co., Ltd. for Stabilising the Share Price within Three Years after the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market of the Shenzhen Stock Exchange are triggered, the Company shall take the following measures:

In accordance with laws, regulations, normative documents, the Articles of Association and the Company's internal governance systems, formulate a share repurchase plan to repurchase part of the Company's shares from public Shareholders, and ensure that after the implementation of the share price stabilisation measures, the Company's shareholding distribution will still satisfy the listing conditions.
Repurchase the Company's public shares by way of centralised bidding transactions, tender offer or other methods recognised by securities regulatory authorities. The repurchase price shall not exceed the Company's latest audited net assets per share. The aggregate repurchase funds used by the Company to stabilise the share price in a single accounting year shall not exceed 50% of the audited net profit attributable to shareholders of the parent company for the preceding accounting year, and the aggregate amount of funds used by the Company to repurchase shares shall not exceed the total amount of proceeds raised from the Offering and Listing. If the Company's shares no longer satisfy the conditions for commencing the measures to stabilise the Company's share price, the Company may cease to implement the repurchase of shares from public Shareholders.
22 -

If the Company fails to perform the above undertakings, the Company agrees to accept the following binding measures in respect of the above share price stabilisation measures:

It will publicly explain the specific reasons for failing to take the above share price stabilisation measures at the general meeting of the Company and in newspapers designated by the CSRC, and apologise to the Company’s Shareholders and public investors;
It will propose supplemental undertakings or alternative undertakings to investors to protect the rights and interests of investors as far as possible;
If it fails to perform the above undertakings, thereby causing investors to suffer losses in securities transactions, it will compensate investors for such losses in accordance with law.

This undertaking is hereby made.

Undertakings and binding measures relating to the Company’s initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange

Pursuant to the requirements of relevant laws and regulations including the Guidelines for the Application of Regulatory Rules - Issuance No. 4 and the Rules Governing the Listing of Shares on the ChiNext Market of the Shenzhen Stock Exchange, the Company is required to issue relevant letters of undertaking in connection with its application for the Offering and Listing, and to propose binding measures in respect of any failure to perform public undertakings. Details of the undertakings and binding measures are set out in Appendix I.

Measures to make up for the diluted immediate returns in relation to the Company’s initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange

In order to reduce the impact of dilution of immediate returns arising from the Company’s public offering of shares and protect the interests of investors, pursuant to the requirements of relevant laws and regulations including the Guiding Opinions of the CSRC on Matters Relating to the Dilution of Immediate Returns in Initial Public Offerings and Refinancing and Major Asset Restructurings, the

23 -

Company has formulated corresponding documents in the nature of undertakings in respect of the remedial measures to be adopted and the due performance of such measures in connection with the dilution of immediate returns arising from the initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange. Details are set out below in the Measures of Phancy Group Co., Ltd. for Compensating for Diluted Immediate Returns in connection with the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market of the Shenzhen Stock Exchange and the Letter of Undertaking in respect of the Measures of Phancy Group Co., Ltd. for Compensating for Diluted Immediate Returns in connection with the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market of the Shenzhen Stock Exchange.

Phancy Group Co., Ltd. Measures for Compensating for Diluted Immediate Returns in connection with the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market of the Shenzhen Stock Exchange

Phancy Group Co., Ltd. (the "Issuer" or the "Company") plans to apply for the initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange (the "Offering" or the "Offering and Listing"). In accordance with the requirements of the Opinions of the General Office of the State Council on Further Strengthening the Protection of the Lawful Rights and Interests of Minority Investors in the Capital Markets (Guo Ban Fa [2013] No. 110) and the Guiding Opinions on Matters Relating to Dilution of Immediate Returns in Initial Public Offerings, Refinancing and Major Asset Restructurings (CSRC Announcement [2015] No. 31), where an initial public offering of shares, refinancing by a listed company, or merger and reorganisation dilutes immediate returns, in order to protect the interests of minority investors, the Company has carefully analysed the impact of the Offering and Listing on earnings per share, and the specific measures proposed to be taken in respect of the dilution of immediate returns by the Offering are as follows:

I. Actively Implement Proceeds-funded Investment Projects

The Company will actively implement the construction of proceeds-funded investment projects and strive for such projects to realise expected returns as soon as possible. The proceeds-funded investment projects are intended to enhance production capacity, strengthen production capability, respond to market demand and improve research and development efficiency. The proceeds-funded investment projects will significantly improve the Company's research and development capabilities, thereby enhancing and consolidating the Company's market position, achieving long-term sustainable development and reducing the risk of dilution of immediate returns after listing.

24 -

II. Intensify Market Development Efforts

Through close collaboration among its sales, research and development and technical support departments, the Company will gain in-depth understanding of customer needs, compare itself with competitors, identify customer pain points, continue to improve customer service standards on the basis of consolidating its current market competitive position, intensify domestic and overseas market development efforts, attract quality customers, improve its ability to withstand risks arising from regional market fluctuations, and reduce the risk of dilution of immediate returns after listing.

III. Strengthen Operation Management and Internal Control

The Company will, in light of its operating and development needs, comprehensively strengthen its operation management and internal control, further improve its business management system, financial system and internal control system, strengthen supervision over operational processes, strengthen control over operating costs and various expenses, enhance operating efficiency, improve risk prevention capability and reduce the risk of dilution of immediate returns after listing.

IV. Optimise the Investment Return Mechanism

In accordance with relevant laws and regulations, the Company has formulated the Shareholder Dividend Return Plan of Phancy Group Co., Ltd. for the Three Years after the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market of the Shenzhen Stock Exchange, which specifies the formulation principles and specific contents of the dividend return plan for the three years after the Company's listing. The Company will strictly implement the dividend policy, actively promote profit distribution to Shareholders and strive to enhance returns to Shareholders.

Phancy Group Co., Ltd. Letter of Undertaking in relation to Measures for Compensating for Diluted Immediate Returns in connection with the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market of the Shenzhen Stock Exchange

Rapidly enhance the overall strength of the Company and improve the Company's core competitiveness.
Strengthen internal control, improve operating efficiency and reduce operating costs, thereby further enhancing the Company's profitability.
Strengthen the management of proceeds. After the proceeds are in place, the Company will strictly use and manage the proceeds in accordance with the Company's system for the use and management of proceeds. At the same time, the Company will reasonably arrange the timing of the investment of proceeds, use temporarily idle funds to supplement working capital, improve the efficiency of use of such funds and save finance costs, thereby further enhancing the Company's profitability.
Accelerate the progress of proceeds-funded projects and strive to realise the expected benefits of proceeds-funded investment projects as soon as possible, so that Shareholders' dividend returns can be increased after the projects reach designed capacity in the future.
Attach importance to returns to Shareholders and protect the lawful rights and interests of Shareholders. The Company has set out detailed provisions on the profit distribution policy in the Articles of Association applicable after the Offering. The Company will conduct profit distribution strictly in accordance with the Articles of Association applicable after the Offering and give priority to cash dividends for profit distribution.
If the Company violates or refuses to perform the above undertakings, the Company will publicly explain and apologise at the general meeting and in newspapers designated by the CSRC, and accept relevant penalties or regulatory measures imposed by the CSRC and the stock exchange on the Company.
From the date of issuance of this letter of undertaking to the date of the Offering and Listing, if the CSRC or the Shenzhen Stock Exchange issues any new regulatory requirements on measures for compensating returns and related undertakings, and the undertakings made by the Company cannot satisfy such requirements, the Company will issue supplemental undertakings in accordance with the relevant requirements at that time.

This undertaking is hereby made.

26 -
Proposed authorisation to the Board by the general meeting to handle matters relating to the initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange

In order to ensure the smooth implementation of matters relating to the Offering and Listing by the Company, it is proposed that the general meeting authorise the Board to handle matters relating to the Offering and Listing within the framework and principles considered and approved at the general meeting, including but not limited to:

(1) submitting the application materials for the Offering and Listing to the Shenzhen Stock Exchange, and signing all documents required to be signed by the Company during the process of the Offering and Listing;

(2) responding to feedback from regulatory authorities and departments such as the Shenzhen Stock Exchange and the CSRC on matters relating to the Offering and Listing by the Company;

(3) specifically determining the number of shares to be issued, target subscribers, pricing method, issue price, issuance method, timing of issuance and other matters within the scope of the resolutions of the general meeting according to the requirements of the relevant competent authorities and the actual conditions of the securities market, and making necessary adjustments to the specific contents of the relevant plan based on the implementation of the Offering and Listing plan, market conditions and opinions of regulatory authorities;

(4) determining the commencement and closing dates of this share issuance according to the review and approval by the Shenzhen Stock Exchange and the consent to registration by the CSRC;

(5) handling matters relating to the implementation of investment projects using proceeds (including but not limited to: adjusting and revising the plan for the use of proceeds from this issuance by the Company according to the requirements of the Shenzhen Stock Exchange; before the proceeds from the Offering and Listing are in place, organising and implementing the construction of the projects with self-raised funds according to the actual progress of the projects; determining the special account for deposit of proceeds; specifically implementing the investment of proceeds after completion of the Offering and Listing; if the proceeds are insufficient, arranging for the Company to make up the shortfall with self-raised funds; and signing material contracts involved in the implementation of the investment projects using proceeds);

(6) signing contracts, agreements and relevant legal documents involved in the process of the Offering and Listing;

27 -

(7) handling procedures relating to the Offering and Listing;
(8) supplementing and amending the relevant provisions of the Articles of Association and other rules and policies (if necessary) according to the results of the share issuance, and handling the relevant approval of changes and registration matters with the competent administration for industry and commerce;
(9) if there is any change in the policy for initial public offerings of new shares during the validity period of the issuance resolution, continuing to handle matters relating to the Offering and Listing in accordance with the new policy;
(10) engaging intermediaries for the Offering and Listing by the Company, including the sponsor/lead underwriter, accounting firm and special legal counsel;
(11) handling other necessary, proper or appropriate matters relating to the Offering and Listing to the extent permitted by relevant laws and regulations;
(12) where the Board has obtained the above authorisations, unless otherwise provided by relevant laws and regulations, delegating the above authorisations to the chairman of the Company or relevant persons of the Company designated by the chairman of the Company to handle the relevant authorised matters;

The above authorisations shall be valid for twelve months from the date on which they are approved at the general meeting of the Company.

9. Proposed engagement of intermediaries

Based on the needs of the Company for the Offering and Listing, the Company proposes to engage Huatai United Securities Co., Ltd. as the sponsor (lead underwriter) for the Offering and Listing by the Company; JunHe LLP as the law firm for the Offering and Listing by the Company; and RSM China CPA LLP as the accounting firm for the Offering and Listing by the Company.

28 -
Amendments to Articles of Association of Phancy Group Co., Ltd. applicable after the Company's initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange

Based on the needs of the Company for the Offering and Listing, and in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Guidelines for the Articles of Association of Listed Companies and other relevant laws, regulations and normative documents, and taking into account the actual circumstances and needs of the Company, the Company has amended the existing Articles of Association of Phancy Group Co., Ltd. to formulate the Articles of Association of Phancy Group Co., Ltd. applicable after the Offering and Listing (the "Articles of Association").

After this resolution is submitted to and approved by the general meeting, the amended Articles of Association will become effective on the date of the Offering and Listing; before that, the existing Articles of Association of Phancy Group Co., Ltd. shall remain effective until the Articles of Association become effective. Details of the amendments to the Articles of Association are set out in Appendix II to this circular.

The Articles of Association are prepared in Chinese, and the English version is for reference only. In the event of any discrepancy between the Chinese and English versions, the Chinese version shall prevail.

Internal governance policies applicable after the Company's initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange

Based on the needs of the Company for the Offering and Listing, and pursuant to the requirements of the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Code of Corporate Governance for Listed Companies, the Rules Governing the Listing of Shares on the ChiNext Market of the Shenzhen Stock Exchange, the Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 2 – Standardised Operation of Companies Listed on the ChiNext Market and other relevant laws, regulations and normative documents, as well as the Articles of Association of Phancy Group Co., Ltd., in order to better regulate corporate governance, safeguard the interests of the Company and promote the long-term development of the Company, the Company proposes to amend the Rules of Procedure for General Meetings of Phancy Group Co., Ltd., the Rules of Procedure for Board Meetings of Phancy Group Co., Ltd., the Working System for Independent Non-executive Directors of Phancy Group Co., Ltd., the Administrative Measures for Related Party/Connected Transactions of Phancy Group Co., Ltd., and to formulate the Management System for External Guarantees of Phancy Group Co., Ltd., the Management System for External Investments of Phancy Group Co., Ltd., the Management System for Proceeds of Phancy Group Co., Ltd., the Management System for Preventing Occupation of

29 -

Company Funds by Controlling Shareholders, Actual Controllers and Other Related Parties of Phancy Group Co., Ltd., and the Management System for the Holding of Shares in the Company by Directors and Senior Management and Changes Thereof of Phancy Group Co., Ltd. Details of the above policies are set out in Appendices III to XI to this circular.

Among the proposed amendments/formulation of the above internal governance policies, save for the Management System for Proceeds of Phancy Group Co., Ltd. and the Management System for the Holding of Shares in the Company by Directors and Senior Management and Changes Thereof of Phancy Group Co., Ltd., which shall become effective from the date of the Offering and Listing upon the approval by the general meeting, the proposed amendments/formulation of the remaining internal governance policies shall become effective upon approval by the general meeting.

These resolutions were considered and approved by the Board on June 9, 2026. Among them, the resolutions to amend the Rules of Procedure for General Meetings of Phancy Group Co., Ltd. and the Rules of Procedure for Board Meetings of Phancy Group Co., Ltd. are now proposed at the extraordinary general meeting as special resolutions, and the remaining resolutions are proposed as ordinary resolutions, for consideration and approval.

III. REASONS FOR AND PURPOSES OF THE OFFERING AND LISTING

The Company advances the Offering and Listing of A Shares to leverage the synergistic advantages of the Hong Kong and A Share capital markets, establish a dual capital operation platform, and fully utilise the notable strengths of the A Share market, including ample liquidity, strong recognition from domestic industries and diversified financing channels, while also capitalising on the Hong Kong stock market's access to international markets and global resources, thereby enabling mutual reinforcement between capital value and business development.

The proposed A Share Offering will, on the one hand, enable the Company to raise sufficient funds for key investments in computing power infrastructure, core AI technology research and development, market channel expansion and industrial ecosystem integration, so as to continuously strengthen its technological barriers and computing power supply capabilities and support the scaled commercialisation of its core businesses such as its AI platform and APIs. On the other hand, it will help further enhance the Company's brand influence and customer trust, deepen its presence in domestic industry markets, and improve its corporate governance structure and information disclosure standards. Through an H+A dual listing structure, the Company will be able to effectively broaden its financing channels, enhance its overall competitiveness, seize opportunities arising from the development of China's artificial intelligence industry, consolidate its leading industry position and achieve long-term and steady development.

Therefore, the Directors consider that the A Share Offering is in the interest of the Company and the Shareholders as a whole.

30 -

IV. EFFECT OF THE OFFERING AND LISTING ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

For reference and illustration only, assuming that (i) an aggregate of 186,097,544 A Shares under the Offering and Listing are approved for issuance (before exercise of the over-allotment option), (ii) the H share full circulation involving the conversion of 53,157,667 Unlisted Shares into H Shares (the "H Share Full Circulation") is completed before completion of the Offering and Listing, (iii) save for the conversion of Unlisted Shares into H Shares under the H Share Full Circulation and the issue of A Shares under the Offering and Listing, the issued share capital of the Company remains unchanged, and (iv) the over-allotment option is exercised in full and 27,914,631 additional A Shares are issued, the shareholding structure of the Company as at the Latest Practicable Date, immediately after completion of the H Share Full Circulation, immediately after completion of both the H Share Full Circulation and the Offering and Listing, and immediately after full exercise of the over-allotment option is as follows:

Type	As at the Latest Practicable Date		Immediately after completion of the H Share Full Circulation(4)		Immediately after completion of the H Share Full Circulation and the Offering and Listing(4)		Immediately after full exercise of the over-allotment option
	Number of Shares	Approximate percentage of the issued Shares of the Company (%)	Number of Shares	Approximate percentage of the issued Shares of the Company (%)	Number of Shares	Approximate percentage of the issued Shares of the Company (%)	Number of Shares	Approximate percentage of the issued Shares of the Company (%)
Unlisted Shares(1)
Dr. Dai Wenyuan ("Dr. Dai")(2)(4)	147,177,986	26.36%	94,095,724	16.85%	94,095,724	12.64%	94,095,724	12.18%
Unlisted Shares/A Shares held by non-core connected persons(5)	51,691,251	9.26%	51,615,846	9.25%	51,615,846	6.93%	51,615,846	6.68%
Newly issued A Shares under the Offering and Listing	-	-	-	-	186,097,544	25.00%	214,012,175	27.71%
Subtotal of Unlisted Shares	198,869,237	35.62%	145,711,570	26.10%	331,809,114	44.57%	359,723,745	46.58%
H Shares
Dr. Dai(3)(4)	30,029,564	5.38%	83,111,826	14.89%	83,111,826	11.17%	83,111,826	10.76%
Ungranted shares held by the Trustee	93	0.00%	93	0.00%	93	0.00%	93	0.00%
H Shares held by public holders(5)	328,138,539	58.78%	328,213,944	58.79%	328,213,944	44.09%	328,213,944	42.50%
Treasury Shares	1,255,200	0.22%	1,255,200	0.22%	1,255,200	0.17%	1,255,200	0.16%
Subtotal of H Shares	359,423,396	64.38%	412,581,063	73.90%	412,581,063	55.43%	412,581,063	53.42%
Total	558,292,633	100.00%	558,292,633	100.00%	744,390,177	100.00%	772,304,808	100.00%

Notes:

(1) Immediately after completion of the Offering and Listing, the issued Domestic Shares will be converted into A Shares.

(2) As at the Latest Practicable Date, Dr. Dai beneficially owned 106,164,523 Unlisted Shares and was deemed to be interested in 31,981,367, 5,052,824 and 3,979,272 Unlisted Shares held by Phancy Investment, Phancy Yinyuan and Nanjing Phancy, respectively. Pursuant to the Securities and Futures Ordinance, the spouse of Dr. Dai is also deemed to be interested in the Shares in which Dr. Dai is interested.

(3) As at the Latest Practicable Date, Dr. Dai was deemed to be interested in 22,936,567, 3,484,725 and 3,608,272 H Shares held by Phancy Investment, Phancy Yinyuan and Nanjing Phancy, respectively.

(4) For the purpose of the illustration in the above table, the H Share Full Circulation assumes the conversion of 53,082,262 Unlisted Shares personally held by Dr. Dai into H Shares. Accordingly, immediately after completion of the H Share Full Circulation, the number of Unlisted Shares/A Shares attributable to Dr. Dai decreases from 147,177,986 Shares to 94,095,724 Shares, and the number of H Shares attributable to Dr. Dai increases from 30,029,564 Shares to 83,111,826 Shares.

For the purpose of the same illustration, 75,405 Unlisted Shares held by Beijing Zhonghujin No. 1 Artificial Intelligence Technology Industrial Fund Management Center (Limited Partnership) are assumed to be converted into H Shares under the H Share Full Circulation. Such conversion accounts for the corresponding decrease in the number of Unlisted Shares/A Shares held by non-core connected persons and the corresponding increase in the number of H Shares held by public holders, and does not change the total issued share capital of the Company.

(5) As at the Latest Practicable Date, the trustee (the "Trustee") of the H share restricted share unit scheme adopted on September 19, 2024 held 93 ungranted H Shares. Such ungranted H Shares are not counted as H Shares held by public holders pursuant to Rule 8.24 of the Listing Rules. For the avoidance of doubt, the H Shares granted to employees and held by the Trustee are included in H Shares held by public holders.

(6) The shareholding percentages may not add up to the total due to rounding.

Assuming that an aggregate of 186,097,544 A Shares are issued under the A Share Offering (before the exercise of the over-allotment option) upon approval, and that there is no change in the issued share capital of the Company prior to completion of the A Share Offering, the A Shares newly issued under the A Share Offering before exercise of the over-allotment option will represent (a) approximately $33.33\%$ of the existing issued share capital of the Company as at the Latest Practicable Date and (b) approximately $25.00\%$ of the total issued share capital of the Company immediately upon completion of the A Share Offering. Assuming the over-allotment option is exercised in full and 27,914,631 additional A Shares are issued, the A Shares newly issued under the A Share Offering will represent approximately $38.33\%$ of the existing issued share capital of the Company as at the Latest Practicable Date and approximately $27.71\%$ of the total issued share capital of the Company immediately after completion of the A Share Offering and full exercise of the over-allotment option.

As at the Latest Practicable Date, the Company had not entered into, nor proposed to enter into, any agreement with any connected person of the Company in respect of the subscription for A Shares, and no connected person of the Company had indicated to the Company any intention to participate in the subscription for A Shares. The Company will comply with the relevant requirements under Chapter 14A of the Listing Rules if any connected person indicates its intention to participate in the proposed A Share Offering or if the Company intends to enter into any agreement with any of its connected persons in respect of the subscription for A Shares. If the proposed A Share Offering eventually involves any connected person of the Company, the Company will proceed with the proposed A Share Offering only after obtaining the approval of the independent Shareholders in respect of the connected transaction.

32 -

V. EQUITY FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

On April 22, 2026, the Company and the placing agents entered into a placing agreement, pursuant to which the placing agents have conditionally and severally agreed, as the placing agents of the Company, to procure, on a best effort basis, no less than six places to subscribe for up to 38,800,000 new H Shares at the placing price of HK$40.36 per H Share (the “2026 Placing”). Completion of the 2026 Placing took place on April 29, 2026 and a total of 38,800,000 new H Shares have been successfully placed by the placing agents to no less than six places. The gross proceeds and net proceeds from the 2026 Placing were approximately HK$1,565.97 million and HK$1,555.63 million, respectively. For details, please refer to the announcements of the Company dated April 22, 2026 and April 29, 2026.

On July 17, 2025, the Company entered into a subscription agreement with the subscriber and a placing agreement with the placing agent in respect of the subscription, pursuant to which the subscriber conditionally agreed to subscribe for, and the Company conditionally agreed to allot and issue, a total of 25,900,000 H Shares at the subscription price of HK$50.50 per H Share (the “2025 Subscription and Placing”). The subscription shares under the 2025 Subscription and Placing were allotted and issued on August 14, 2025. The gross proceeds and net proceeds from the 2025 Subscription and Placing were approximately HK$1,307.95 million and HK$1,306.18 million, respectively. For details, please refer to the announcements of the Company dated July 17, 2025 and August 14, 2025.

2026 Placing

The use of the net proceeds from the 2026 Placing is set out below:

Intended use of net proceeds		Allocation of net proceeds (HK$ million)	Approximate amount of utilised net proceeds as at the Latest Practicable Date (HK$ million)	Approximate amount of unutilised net proceeds as at the Latest Practicable Date (HK$ million)	Expected timetable for the full utilisation of the unutilised net proceeds
(1)	80% for advancing heterogeneous AI computing equipment based on heterogeneous GPUs, providing infrastructure for the Group’s API business	1,244.50	459.74	784.76	By the end of 2028
(2)	20% for global business expansion and potential acquisitions of technology service providers that support the emerging businesses, including embodied intelligence and smart devices	311.13	–	311.13	By the end of 2028
Total		1,555.63	459.74	1,095.89

2025 Subscription and Placing

The use of proceeds of the 2025 Subscription and Placing is set out in the table below:

Intended use of net proceeds		Allocation of net proceeds (HK$ million)	Approximate amount of utilised net proceeds as at the Latest Practicable Date (HK$ million)	Approximate amount of unutilised net proceeds as at the Latest Practicable Date (HK$ million)	Expected timetable for the full utilisation of the unutilised net proceeds
(1)	50% for investment in research and development regarding artificial intelligence (AI) products and solutions	653.09	270.28	382.81	By the end of 2027
(2)	40% for global business expansion and potential acquisitions of technology service providers that support the aforementioned emerging businesses	522.47	-	522.47	By the end of 2027
(3)	10% for general corporate purpose	130.62	-	130.62	By the end of 2027
Total		1,306.18	270.28	1,035.90

It is expected that the unutilised net proceeds raised from the 2026 Placing and the 2025 Subscription and Placing will be deployed in accordance with the above intended usage.

As at the Latest Practicable Date, save as disclosed above, the Company has not conducted any fund raising activities in relation to the issue of equity securities of the Company in the past twelve months immediately preceding the Latest Practicable Date.

The use of proceeds from the 2025 Subscription and Placing was focused on applications of AI products (e.g. expanding embodied intelligence business), whereas the use of proceeds from the A Share Offering and the 2026 Placing is concentrated on the construction of large-scale computing power platform infrastructure and the expansion of computing power resource reserves. Specifically, most of the proceeds from the 2026 Placing are used for the construction of computing hardware infrastructure, in order to meet the demand for underlying computing power supply driven by the rapid growth of the API business. Among the projects funded by the A Share Offering: (1) the "R&D Upgrade and Industrialization Project for Full-stack Intelligent Solutions and Services Based on an Enterprise-grade AI Platform" will primarily be used to expand computing power reserves, enhance the overall service capabilities and intelligence level of the Company's AI platform, and build a full-stack computing power service system covering

supply, virtualization, scheduling, governance and optimization of basic computing power. It will support the external sales of the Company's AI platform and API services to comprehensively expand business scale and boost revenue; and (2) The "Domestic AI information technology application innovation R&D project" will focus on two major areas: the development of a domestic AI ecosystem and the construction of GPU resource pooling capabilities through vGPU. It aims to address industry pain points such as insufficient adaptation between models and domestic chips, and the fragmentation between computing power and models, thereby improving the efficiency and utilization rate of computing power.

Due to factors such as increasing computing power demand driven by model iteration, explosive growth in Token volume driven by the API business, accelerated adaptation of domestic IT innovation products, and short hardware iteration cycles, the Company needs to dynamically expand capacity to support business growth, and therefore needs to continue investing substantial capital in construction.

VI. CLOSURE OF REGISTER OF MEMBERS

For the purpose of determining the list of Shareholders who are entitled to attend the extraordinary general meeting, the register of members of H Shares of the Company will be closed from June 23, 2026 (Tuesday) to June 26, 2026 (Friday), both days inclusive, during which period no transfer of Shares will be registered. In order to qualify for attending and voting at the extraordinary general meeting, holders of H Shares of the Company shall lodge all completed transfer documents together with the relevant share certificates with the Company's H Share registrar, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong, by no later than 4:30 p.m. on June 22, 2026 (Monday). Shareholders whose names appear on the register of members of the Company on June 26, 2026 (Friday) shall be entitled to attend and vote at the extraordinary general meeting.

VII. EXTRAORDINARY GENERAL MEETING AND PROXY ARRANGEMENT

The Company will convene the extraordinary general meeting at Conference Room, Level 2, Block A, Hongyuan New Era, Shangdi West Road, Haidian District, Beijing, PRC at 2:00 p.m. on June 26, 2026 (Friday). The notice of the extraordinary general meeting is set out on pages EGM-1 to EGM-4 of this circular. The proxy form for use at the extraordinary general meeting is enclosed with this circular and is also available on the website of the Hong Kong Stock Exchange (www.hkexnews.hk) and the website of the Company (www.4paradigm.com). Shareholders who intend to appoint a proxy to attend the extraordinary general meeting shall complete the proxy form and return it to the Company's H Share registrar, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong, not less than 24 hours before the scheduled time of the extraordinary general meeting (i.e. by no later than 2:00 p.m. on June 25, 2026 (Thursday) (Hong Kong time)) or any adjournment thereof, as the case may be. Completion and return of the proxy form will not preclude Shareholders from attending and voting in person at the extraordinary general meeting or any adjournment thereof should they so wish.

VIII. RECOMMENDATION

The Board considers that the resolutions set out in the notice of general meeting are in the interests of the Company and its Shareholders as a whole. Accordingly, the Board recommends all Shareholders to vote in favour of the relevant resolutions to be proposed at the general meeting.

Yours faithfully

By order of the Board

Phancy Group Co., Ltd.

範式智能技術集團股份有限公司

Dr. Dai Wenyuan

Chairman and Executive Director

36 -

APPENDIX I

UNDERTAKINGS AND RESTRICTIVE MEASURES IN RELATION TO THE INITIAL PUBLIC OFFERING OF A SHARES AND LISTING ON THE CHINEXT MARKET OF THE SHENZHEN STOCK EXCHANGE

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

In accordance with laws, regulations, normative documents, the Articles of Association and the Company's internal governance systems, formulate a share repurchase plan to repurchase part of the Company's shares from public Shareholders, and ensure that after the implementation of the share price stabilisation measures, the Company's shareholding distribution will still satisfy the listing conditions.
Repurchase the Company's public shares by way of centralised bidding transactions, tender offer or other methods recognised by securities regulatory authorities. The repurchase price shall not exceed the Company's latest audited net assets per share. The aggregate repurchase funds used by the Company to stabilise the share price in a single accounting year shall not exceed 50% of the audited net profit attributable to shareholders of the parent company for the preceding accounting year, and the aggregate amount of funds used by the Company to repurchase shares shall not exceed the total amount of proceeds raised from the Offering and Listing. If the Company's shares no longer satisfy the conditions for commencing the measures to stabilise the Company's share price, the Company may cease to implement the repurchase of shares from public Shareholders.

If the Company fails to perform the above undertakings, the Company agrees to accept the following binding measures in respect of the above share price stabilisation measures:

It will publicly explain the specific reasons for failing to take the above share price stabilisation measures at the general meeting of the Company and in newspapers designated by the CSRC, and apologise to the Company's Shareholders and public investors;
I-1 -

APPENDIX I

UNDERTAKINGS AND RESTRICTIVE MEASURES IN RELATION TO THE INITIAL PUBLIC OFFERING OF A SHARES AND LISTING ON THE CHINEXT MARKET OF THE SHENZHEN STOCK EXCHANGE

It will propose supplemental undertakings or alternative undertakings to investors to protect the rights and interests of investors as far as possible;
If it fails to perform the above undertakings, thereby causing investors to suffer losses in securities transactions, it will compensate investors for such losses in accordance with law.

Rapidly enhance the overall strength of the Company and improve the Company's core competitiveness.
Strengthen internal control, improve operating efficiency and reduce operating costs, thereby further enhancing the Company's profitability.
Strengthen the management of proceeds. After the proceeds are in place, the Company will strictly use and manage the proceeds in accordance with the Company's system for the use and management of proceeds. At the same time, the Company will reasonably arrange the timing of the investment of proceeds, use temporarily idle funds to supplement working capital, improve the efficiency of use of such funds and save finance costs, thereby further enhancing the Company's profitability.
Accelerate the progress of proceeds-funded projects and strive to realise the expected benefits of proceeds-funded investment projects as soon as possible, so that Shareholders' dividend returns can be increased after the projects reach designed capacity in the future.
Attach importance to returns to Shareholders and protect the lawful rights and interests of Shareholders. The Company has set out detailed provisions on the profit distribution policy in the Articles of Association applicable after the Offering. The Company will conduct profit distribution strictly in accordance

– I-2 –

with the Articles of Association applicable after the Offering and give priority to cash dividends for profit distribution.

If the Company violates or refuses to perform the above undertakings, the Company will publicly explain and apologise at the general meeting and in newspapers designated by the CSRC, and accept relevant penalties or regulatory measures imposed by the CSRC and the stock exchange on the Company.
From the date of issuance of this letter of undertaking to the date of the Offering and Listing, if the CSRC or the Shenzhen Stock Exchange issues any new regulatory requirements on measures for compensating returns and related undertakings, and the undertakings made by the Company cannot satisfy such requirements, the Company will issue supplemental undertakings in accordance with the relevant requirements at that time.

Letter of Undertaking on Assuming Compensation or Indemnification Liability in Accordance with Law

In view of the fact that Phancy Group Co., Ltd. (the "Company") proposes to submit application documents for Offering and Listing to the China Securities Regulatory Commission (the "CSRC") and the Shenzhen Stock Exchange, the Company hereby makes the following undertakings:

The Company undertakes that the prospectus, issuance application documents and other information disclosure materials for the Offering and Listing contain no false records, misleading statements or material omissions, and that it shall assume individual and joint and several legal liability for their truthfulness, accuracy and completeness.

If the prospectus and issuance application documents contain false records, misleading statements or material omissions, causing investors to suffer losses in securities transactions involving the trading of the Company's shares, the Company will compensate investors for their losses in accordance with law. The specific measures are as follows: after the CSRC or the Shenzhen Stock Exchange issues a formal administrative penalty decision against the Company and determines that the Company has committed the above illegal acts, the Company will arrange for registration of public investors who submit claims and, after verifying their eligibility and the amount of losses, promptly pay compensation.

Letter of Undertaking on Binding Measures for Failure to Perform Undertakings

In view of the fact that Phancy Group Co., Ltd. (the "Company") plans to apply for the initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange (the "Offering and Listing"), in order to safeguard the interests of public investors, the Company makes the following undertakings in respect of the performance of various undertakings made by the Company in the course of the Offering and Listing:

The Company will strictly perform all obligations and responsibilities under all public undertakings made in the course of the Offering and Listing (the "Undertakings").
If the Company fails to perform any obligations or responsibilities under the Undertakings for reasons other than force majeure, the Company will publicly explain and apologise to Shareholders and public investors at the general meeting and in newspapers designated by the CSRC, disclose the reasons for failure to perform the Undertakings, propose remedial plans such as supplemental undertakings or alternative undertakings, assume relevant legal liability in accordance with law, and pay the corresponding amount of compensation. Before the Company has completely eliminated all adverse effects arising from its failure to perform the relevant Undertakings, the Company shall not increase salaries or allowances for Directors and senior management or distribute dividends or issue bonus shares (if any) in any form.
If the Company fails to perform any obligations or responsibilities under the Undertakings due to force majeure, the Company will publicly explain and apologise to Shareholders and public investors at the general meeting and in newspapers designated by the CSRC, disclose the reasons for failure to perform the Undertakings, and will study as soon as possible a remedial plan to minimise losses to investors' interests and protect investors' interests as far as possible.

Measures and Undertakings on Share Repurchase and Share Buy-back

In view of the fact that Phancy Group Co., Ltd. (the "Issuer") proposes to apply for the initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange (the "Offering and Listing"), the Issuer makes the following undertakings:

The prospectus for the Issuer's Offering and Listing contains no false records, misleading statements or material omissions.
If the prospectus for the Issuer's Offering and Listing contains false records, misleading statements or material omissions that have a material and substantive impact on the determination of whether the Issuer satisfies the issuance conditions prescribed by law, the Issuer will, when the securities regulatory authority makes such determination, promptly propose a share repurchase plan and submit it to the Board and the general meeting for discussion, and repurchase in accordance with law the new shares issued under the offering (excluding shares publicly offered by existing Shareholders). The repurchase price shall be determined based on the issue price under the Offering and Listing (if the Company's shares are subject to ex-rights or ex-dividend events such as dividend distribution, bonus issue or capitalisation of capital reserves during such period, the issue price shall be adjusted accordingly) plus bank deposit interest for the same period, and shall be implemented in accordance with the procedures prescribed by relevant laws and regulations. If laws, regulations, the Articles of Association or other requirements provide otherwise when the above share repurchase is implemented, such requirements shall prevail.

Letter of Undertaking on the Profit Distribution Policy

Phancy Group Co., Ltd. (the "Issuer") plans to apply for the initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange (the "Offering and Listing"). The Issuer undertakes to strictly implement the provisions on profit distribution policy set out in the Articles of Association of Phancy Group Co., Ltd. (Draft) prepared for the Offering and Listing, the Shareholder Dividend Return Plan of Phancy Group Co., Ltd. for the Three Years after the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market of the Shenzhen Stock Exchange approved by the general meeting, and other documents, actively implement the profit distribution policy, attach importance to reasonable returns to Shareholders while taking into account the sustainable development of the Issuer, and maintain the continuity and stability of the Issuer's profit distribution policy.

Phancy Group Co., Ltd. Letter of Undertaking on Ensuring Not to Affect or Interfere with the Review

(1) Comply with relevant requirements on communication, reception and contact, and recusal in connection with the review of Offering and Listing, and not privately contact review personnel, regulatory personnel, members of the Listing Review Committee of the Shenzhen Stock Exchange (the "Listing Committee"), members of the Merger and Reorganisation Review Committee (the "Reorganisation Committee"), experts in the industry consulting expert database or others in a manner that may affect the impartial performance of official duties. Where the Company considers that there may be a relationship or circumstance involving a conflict of interest, it shall submit an application for recusal in a timely manner in accordance with relevant requirements and procedures.

(2) Not organise, instruct or participate in the provision of improper benefits to review personnel, regulatory personnel, members of the Listing Committee of the Shenzhen Stock Exchange, members of the Reorganisation Committee, experts in the industry consulting expert database or other interested parties by any of the following means:

giving or providing, under various names, money, gifts, real estate, cars, negotiable securities, equity interests or other property, or providing conveniences such as holding on behalf of others for the above acts;
providing benefits such as travel, banquets, entertainment, fitness or work arrangements, or conveniences such as employment, medical treatment, school admission or bearing travel expenses;
arranging transactions in structured, high-yield, principal-protected wealth management products or similar products that deviate significantly from fair prices;

– I-6 –

directly or indirectly providing inside information, non-public information, commercial secrets and customer information, or expressly or impliedly indicating engaging in relevant trading activities;
other circumstances involving the provision of improper benefits.

(3) Not organise, instruct or participate in probing for undisclosed review information, seeking favours or lobbying, or interfering with the review work.

(4) Comply with the requirements on confidentiality under laws and regulations, the CSRC and the Shenzhen Stock Exchange, not disclose inside information, non-public information, commercial secrets and state secrets learned during the review process, and not use such information directly or indirectly to seek improper benefits for itself or others.

If the Company violates the above undertakings, the undertaking party voluntarily accepts measures taken by the Shenzhen Stock Exchange in accordance with its business rules, including termination of review, refusal to accept application documents for a specified period, and public determination that the relevant person is unsuitable to hold relevant positions. If the relevant acts of the undertaking party violate laws and regulations, it shall assume corresponding legal liability.

Statement of Phancy Group Co., Ltd. on Relationship with Intermediaries

In view of the fact that Phancy Group Co., Ltd. (the "Company") plans to apply for the initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange (the "Offering and Listing"), the Company hereby explains its relationship with the intermediaries relating to the Offering and Listing as follows:

The intermediaries relating to the Offering and Listing and their responsible persons, partners, senior management and handling personnel do not directly or indirectly hold any domestic Shares or other equity interests of the Company.

I-7 -

Phancy Group Co., Ltd. Letter of Undertaking on Consistency between Application Electronic Files and Reserved Originals

The Company strictly complies with relevant laws and regulations in performing document submission procedures, and ensures that all electronic files relating to the Offering and Listing submitted by the Company through the Offering and Listing review business system of the Shenzhen Stock Exchange are consistent with the reserved originals.
If the Company violates the above undertaking, it shall assume all legal liabilities arising therefrom.

Phancy Group Co., Ltd. Special Undertaking on Shareholder Information Disclosure in connection with the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market

(1) The Company has truthfully, accurately and completely disclosed domestic shareholder information in the prospectus, including but not limited to information required to be disclosed under the Guidelines for the Application of Regulatory Rules - Shareholder Information Disclosure by Enterprises Applying for Initial Public Offering and Listing and other laws and regulations, and the requirements of the CSRC and the Shenzhen Stock Exchange;
(2) Among the Company's domestic shareholders, there is no circumstance where any entity prohibited from holding shares under laws and regulations directly or indirectly holds domestic shares of the Issuer;
(3) The intermediaries relating to the Offering and Listing and their responsible persons, partners, senior management and handling personnel do not directly or indirectly hold any domestic Shares or other equity interests of the Company;

I-8 -

(4) There is no circumstance where the Company or its domestic shareholders conduct improper transfer of benefits through the equity interests of the Company;

(5) The Company has timely provided true, accurate and complete information to the intermediaries for the Offering and Listing, actively and comprehensively cooperated with the intermediaries for the Offering and Listing in conducting due diligence, and truthfully, accurately and completely performed information disclosure obligations in the application documents for the Offering and Listing in accordance with law;

(6) If the Company violates the above undertakings, it shall assume all legal consequences arising therefrom.

Undertaking on Share Buy-back in the Event of Fraudulent Offering and Listing

In view of the fact that Phancy Group Co., Ltd. (the "Issuer") plans to apply for the initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange (the "Offering" or the "Offering and Listing"), the Issuer makes the following undertakings:

The Issuer guarantees that there is no circumstance of fraudulent issuance in connection with the Offering and Listing.
If the Issuer does not satisfy the Offering and Listing conditions and obtains issuance registration by fraudulent means and has completed the Offering and Listing, the Issuer will commence the share buy-back procedures within five business days after confirmation by the CSRC and other competent authorities, and buy back all new shares issued by the Issuer under the Offering.
I-9 -

APPENDIX II PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

Comparison Table of Amendments to the Articles of Association

Existing Articles of Association (May 2026)	Revised Articles (Note: Where no revision marks appear, no revision is proposed)
CHAPTER 1 GENERAL PROVISIONS	CHAPTER 1 GENERAL PROVISIONS
Article 1 In order to regulate the organization and activities of Phancy Group Co., Ltd. (範式智能技術集團股份有限公司) (the “Company”) and to safeguard the legal rights and interests of the Company, its shareholders, employees and creditors, these Articles of Association are prepared in accordance with Company Law of the People’s Republic of China (“Company Law”), the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”), the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Hong Kong Listing Rules”) and other relevant laws and regulations.	Article 1 In order to regulate the organization and activities of Phancy Group Co., Ltd. (範式智能技術集團股份有限公司) (the “Company”) and to safeguard the legal rights and interests of the Company, its shareholders, employees and creditors, these Articles of Association are prepared in accordance with Company Law of the People’s Republic of China (“Company Law”), the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”), the Guidelines for Articles of Association of Listed Companies, the Rules Governing the Listing of Shares on the ChiNext Market of the Shenzhen Stock Exchange (the “ChiNext Listing Rules”), the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Hong Kong Listing Rules”) and other relevant laws and regulations.

Existing Articles of Association (May 2026)

Revised Articles (Note: Where no revision marks appear, no revision is proposed)

CHAPTER 1 GENERAL PROVISIONS

Article 1 In order to regulate the organization and activities of Phancy Group Co., Ltd. (範式智能技術集團股份有限公司) (the “Company”) and to safeguard the legal rights and interests of the Company, its shareholders, employees and creditors, these Articles of Association are prepared in accordance with Company Law of the People’s Republic of China (“Company Law”), the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”), the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Hong Kong Listing Rules”) and other relevant laws and regulations.

Article 1 In order to regulate the organization and activities of Phancy Group Co., Ltd. (範式智能技術集團股份有限公司) (the “Company”) and to safeguard the legal rights and interests of the Company, its shareholders, employees and creditors, these Articles of Association are prepared in accordance with Company Law of the People’s Republic of China (“Company Law”), the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”), the Guidelines for Articles of Association of Listed Companies, the Rules Governing the Listing of Shares on the ChiNext Market of the Shenzhen Stock Exchange (the “ChiNext Listing Rules”), the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Hong Kong Listing Rules”) and other relevant laws and regulations.

II-1 -

APPENDIX II PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Existing Articles of Association (May 2026)	Revised Articles (Note: Where no revision marks appear, no revision is proposed)
CHAPTER 4 SHAREHOLDERS AND GENERAL MEETINGS	CHAPTER 4 SHAREHOLDERS AND GENERAL MEETINGS
Article 35 Holders of shares of the Company shall have the following rights:

(I) The right to receive dividends and other distributions in proportion to the number of shares held;

(II) The right to request, convene, hold, chair, attend and vote in person or appoint a proxy to attend, speak and vote on their behalf at shareholders’ general meetings in proportion to the number of shares held in accordance with the laws;

(III) right to supervise the Company’s business operations, and to put forward proposals and raise enquiries;

(IV) right to transfer, give as a gift or pledge the shares held in accordance with the laws, administrative regulations and the Articles of Association;

(V) the right to inspect and copy these Articles of Association, the register of shareholders, the minutes of general meetings, the resolutions of the board of directors’ meeting, and the financial and accounting reports. Eligible shareholders may inspect the Company’s accounting books and vouchers;

(VI) in the event of the termination or liquidation of the Company, the right to participate in the distribution of the remaining assets of the Company in proportion to the number of shares held; | Article 35 Holders of shares of the Company shall have the following rights:

(I) The right to receive dividends and other distributions in proportion to the number of shares held;

(III) right to supervise the Company’s business operations, and to put forward proposals and raise enquiries;

(IV) right to transfer, give as a gift or pledge the shares held in accordance with the laws, administrative regulations and the Articles of Association;

(VI) in the event of the termination or liquidation of the Company, the right to participate in the distribution of the remaining assets of the Company in proportion to the number of shares held; |

II-2 -
II-3 -
II-4 -
II-5 -
II-6 -

| Existing Articles of Association (May 2026) | Revised Articles
(Note: Where no revision marks appear, no revision is proposed) |
| --- | --- |
| Article 48 The general meeting of the Company comprises all shareholders. The shareholders' general meeting is the power of authority of the Company and shall exercise its following functions and powers in accordance with the laws:

(I) To elect and replace directors and to determine matters relating to the remuneration of the directors;

(II) To consider and approve the reports of the board of directors;

(III) To consider and approve the Company's profit distribution plan and plan for recovery of losses;

(IV) To make resolutions on increase or reduction of the Company's registered capital;

(V) To make resolutions on the issue of debentures by the Company;

(VI) To make resolutions on the merger, demerger, dissolution, liquidation or change of corporate form of the Company;

(VII) To amend the Articles of Association;

(VIII) To decide the appointment, re-appointment or dismissal of the accounting firm of the Company that undertakes the Company's audit works; | Article 48 The general meeting of the Company comprises all shareholders. The shareholders' general meeting is the power of authority of the Company and shall exercise its following functions and powers in accordance with the laws:

(I) To elect and replace directors and to determine matters relating to the remuneration of the directors;

(II) To consider and approve the reports of the board of directors;

(III) To consider and approve the Company's profit distribution plan and plan for recovery of losses;

(IV) To make resolutions on increase or reduction of the Company's registered capital;

(V) To make resolutions on the issue of debentures by the Company;

(VI) To make resolutions on the merger, demerger, dissolution, liquidation or change of corporate form of the Company; |

II-7 -

| Existing Articles of Association (May 2026) | Revised Articles
(Note: Where no revision marks appear, no revision is proposed) |
| --- | --- |
| (IX) To consider and approve the transactions and guarantees required by the Articles of Association and the rules of procedure of the general meeting to be decided by a general meeting; | (IX) To consider and approve the transactions and guarantees required by the Articles of Association and the rules of procedure of the general meeting to be decided by a general meeting; |
| (X) To consider the purchase or disposal of material assets of the Company with a value exceeding 30% of the Company’s latest audited total assets within a period of 12 consecutive months; | (X) To consider the purchase or disposal of material assets of the Company with a value exceeding 30% of the Company’s latest audited total assets within a period of 12 consecutive months; |
| (XI) To consider and approve changes in the use of proceeds raised; | (XI) To consider and approve changes in the use of proceeds raised; |
| (XII) To consider the share incentive plan and employee stock ownership plans; | (XII) To consider the share incentive plan and employee stock ownership plans; |
| (XIII) To consider the repurchase of the Company’s shares in accordance with the circumstances set out in (I) and (II) of Article 25 of the Articles of Association; | (XIII) To consider the repurchase of the Company’s shares in accordance with the circumstances set out in (I) and (II) of Article 25 of the Articles of Association; |
| (XIV) To consider other matters required by law, administrative regulations, departmental rules and regulations, the Hong Kong Listing Rules or the Articles of Association or the rules of procedure of the general meeting that should be resolved by the general meeting. | (XIV) To consider other matters required by law, administrative regulations, departmental rules and regulations, the Hong Kong Listing Rules or the Articles of Association or the rules of procedure of the general meeting that should be resolved by the general meeting. |

II-8 -
II-9 -
II-10 -
II-11 -

(III) the net profit related to the transaction target (such as equity interests) for the latest accounting year accounts for 50% or more of the Company’s audited net profit for the latest accounting year, and the absolute amount exceeds RMB5 million;

(IV) the transaction amount (including debts and expenses assumed) accounts for 50% or more of the Company’s latest audited net assets, and the absolute amount exceeds RMB50 million;

(V) the profit generated from the transaction accounts for 50% or more of the Company’s audited net profit for the latest accounting year, and the absolute amount exceeds RMB5 million.

Where any data involved in the calculation of the above indicators are negative, their absolute values shall be used for calculation. |

II-12 -

(I) when the number of directors is less than the number stipulated in Company Law or two-thirds of the number specified in the Articles of Association;

(II) when the unrecovered losses of the Company amount to one-third of the total amount of its share capital;

(III) when any shareholder individually or jointly holding 10% or more of the Company’s shares (including preferred shares with voting rights reinstatement) requests;

(IV) when deemed necessary by the board of directors;

(V) when proposed by the audit committee;

(VI) other circumstances stipulated by laws, administrative regulations, departmental rules or the Articles of Association. | Article 51 An extraordinary general meeting shall be convened within 2 months from the occurrence of any of the following circumstances:

(I) when the number of directors is less than the number stipulated in Company Law or two-thirds of the number specified in the Articles of Association;

(II) when the unrecovered losses of the Company amount to one-third of the total amount of its share capital;

(III) when any shareholder individually or jointly holding 10% or more of the Company’s shares (including preferred shares with voting rights reinstatement) requests;

(IV) when deemed necessary by the board of directors;

(V) when proposed by the audit committee;

(VI) other circumstances stipulated by laws, administrative regulations, departmental rules, the securities regulatory rules of the places where the Company’s shares are listed or the Articles of Association. |

II-13 -

Where the securities regulatory authority of the place where the Company's shares are listed otherwise provides, such provisions shall apply. |
| Article 61 The substance of the motion proposed shall fall within the terms of reference of the shareholders' general meeting, with clear subjects for discussion and specific issues for resolution and in compliance with the relevant provisions of laws, administrative regulations and the Articles of Association. | Article 61 The substance of the motion proposed shall fall within the terms of reference of the shareholders' general meeting, with clear subjects for discussion and specific issues for resolution and in compliance with the relevant provisions of laws, administrative regulations, the securities regulatory rules of the places where the Company's shares are listed and the Articles of Association. |

II-14 -

Shareholder(s) alone or in aggregate holding 1% or more of the total number of the Company’s shares (including preferred shares with voting rights reinstatement) shall have the right to submit an interim motion in writing to the convener 10 days prior to the general meeting. The convener shall issue a supplemental notice of the general meeting within two days after receiving the proposed motion announcing the contents of the interim motion, and submit such interim motion to the general meeting for deliberation, unless the motion violates laws, administrative regulations, or the Articles of Association, or falls outside the scope of the general meeting’s authority.

Save as provided above, the convener shall not amend motions stated in or add new motions to the notice of the general meeting after the same has been issued and announced.

No voting or resolution shall be executed or adopted at the general meeting for motions that have not been stated in the notice of the general meeting or that do not comply with the Articles of Association. | Article 62 Whenever the Company convenes a shareholders’ general meeting, the board of directors, the audit committee and shareholder(s) alone or in aggregate holding 1% or more of the total number of the Company’s shares (including preferred shares with voting rights reinstatement) shall have the right to propose motions to the Company.

Save as provided above, the convener shall not amend motions stated in or add new motions to the notice of the general meeting after the same has been issued and announced.

No voting or resolution shall be executed or adopted at the general meeting for motions that have not been stated in the notice of the general meeting or that do not comply with the Articles of Association. |
| | Article 65 Where a shareholders’ general meeting adopts other means of voting, the notice shall also specify the voting time and matters to be voted on by such other means. |

II-15 -
II-16 -
II-17 -
II-18 -

(I) increase or reduction of the registered capital of the Company;

(II) separation, division, merger, dissolution and liquidation (including voluntary winding up) of the Company;

(III) amendment to the Articles of Association;

(IV) purchase or disposal of material assets or provision of a guarantee to other parties by the Company within a period of 12 consecutive months of a value exceeding 30% of the Company’s latest audited total assets;

(V) employee share ownership plans or equity incentive plans to be considered and approved;

(VI) other matters prescribed by law, administrative regulations or the Articles of Association or the Rules of Procedure of the Shareholders’ general meeting, and any other matters that, if resolved by way of an ordinary resolution of the general meeting, may have a material impact on the Company and shall be adopted by a special resolution.

Changes in the rights attached to classes of shares shall be approved by at least two-thirds of the shareholders of the Company holding the class of shares to which the rights attach. | Article 857 The following matters shall be resolved by way of special resolutions at a shareholders’ general meeting:

(I) increase or reduction of the registered capital of the Company;

(II) separation, division, merger, dissolution and liquidation (including voluntary winding up) of the Company;

(III) amendment to the Articles of Association;

(V) employee share ownership plans or equity incentive plans to be considered and approved;

(VI) other matters prescribed by law, administrative regulations, the securities regulatory rules of the places where the Company’s shares are listed or the Articles of Association or the Rules of Procedure of the Shareholders’ general meeting, and any other matters that, if resolved by way of an ordinary resolution of the general meeting, may have a material impact on the Company and shall be adopted by a special resolution.

Changes in the rights attached to classes of shares shall be approved by at least two-thirds of the shareholders of the Company holding the class of shares to which the rights attach. |

– II-19 –

Connected shareholders shall voluntarily disqualify themselves and abstain from voting at the general meeting. The chairperson of the meeting shall request the connected shareholders to abstain from voting. Any shareholder who is not required to abstain from voting has the right to request the connected shareholder to abstain from voting.

Such connected transaction shall be voted by the non-connected shareholders present at the meeting and be passed with a majority of the valid votes cast in favour of such connected transaction; if such transaction falls within the scope of a special resolution, it shall be passed by more than two-thirds of the valid voting rights. | Article 8890 In the course of considering matters relating to connected transactions related party/connected transactions at a shareholders’ general meeting, the connected shareholders related (connected) shareholders shall abstain from voting and shall not exercise voting rights on behalf of other shareholders. The voting rights represented by the number of shares held by such shareholders shall be excluded from the total number of valid votes. The voting result of the non-connected shareholders related (connected) shareholders shall be fully disclosed in the announcement of the resolution of the general meeting.

Where a shareholders’ general meeting considers significant matters affecting the interests of minority investors, the votes of minority investors shall be counted separately. The results of the separate count shall be publicly disclosed in a timely manner. |

II-20 -

Such connected transaction related party/connected transactions shall be voted by the non-connected shareholders related (connected) shareholders present at the meeting and be passed with a majority of the valid votes cast in favour of such connected transaction related party/connected transactions; if such transaction falls within the scope of a special resolution, it shall be passed by more than two-thirds of the valid voting rights.

Shareholders or shareholders who are under the control of the de facto controllers of the Company shall abstain from voting on resolutions of a general meeting in respect of guarantees to be provided in favour of shareholders, de facto controllers of the Company and their connected persons related parties/connected persons, and such resolutions shall be passed by a majority of the voting rights represented by other shareholders attending the meeting. |

II-21 -

The candidates for directors for the first term of the board of directors have been nominated by the promoters. The manner and procedure for the nomination of directors for each subsequent term shall be as follows:

(I) The current board of directors, or the shareholder(s) individually or jointly holding at least 3% shares of the Company may nominate candidates for election as directors for the next term or additional director(s) for the current term of the board of directors in accordance with the number of persons to be elected;

(II) The board of directors shall review the qualifications of the candidates nominated by them for appointment as directors. Shareholders shall submit to the current board of directors the biographical details and general information of the candidates nominated by them for appointment as directors, while the current board of directors will review the qualifications, and if the candidates meet the qualifications for appointment as directors, the board of directors shall submit the list to the general meeting for voting; | Article 9092 The list of candidates for directors shall be proposed in form of a motion to the shareholders’ general meeting for resolution.

(I) The current board of directors, or the shareholder(s) individually or jointly holding at least 31% shares of the Company may nominate candidates for election as directors for the next term or additional director(s) for the current term of the board of directors in accordance with the number of persons to be elected;

II-22 -
II-23 -

When voting on a resolution at a shareholders’ general meeting, a lawyer and, a representative of shareholders shall be responsible for counting the votes as well as supervising the counting process and announcing the voting results at the meeting. The voting results in connection with the resolution shall be recorded in the minutes. | Article 979 Before voting on a resolution at a shareholders’ general meeting, two representatives of the shareholders shall be nominated to participate in counting the votes as well as supervising the counting process. If there is connected relationship related (connected) relationship between the matters under consideration and the shareholders, the relevant shareholder and his proxies shall not participate in counting the votes or supervising the counting process.

II-24 -

Article 107 The directors shall comply with the provisions of the laws, administrative regulations and these Articles and shall faithfully perform their obligations to the Company. They shall take measures to avoid conflicts of interest between their personal interests and those of the Company, and must not exploit their positions to seek improper gains.

Directors owe the following fiduciary duties to the Company:

(I) shall not misappropriate the Company’s property or embezzle the Company’s funds;

(II) shall not deposit Company funds into accounts opened in his/her own name or in the name of any other individual;

(III) shall not use his/her position to solicit or accept bribes or other unlawful income;

(IV) shall not, directly or indirectly, enter into contracts or conduct transactions with the Company, unless such matter has been reported to the Board of Directors or the shareholders’ general meeting and approved by a resolution of the Board of Directors or the shareholders’ general meeting in accordance with the provisions of these Articles of Association; | CHAPTER 5 THE BOARD OF DIRECTORS

Article 1079 The directors shall comply with the provisions of the laws, administrative regulations and these Articles and shall faithfully perform their obligations to the Company. They shall take measures to avoid conflicts of interest between their personal interests and those of the Company, and must not exploit their positions to seek improper gains.

Directors owe the following fiduciary duties to the Company:

(I) shall not misappropriate the Company’s property or embezzle the Company’s funds;

(II) shall not deposit Company funds into accounts opened in his/her own name or in the name of any other individual;

(III) shall not use his/her position to solicit or accept bribes or other unlawful income;

– II-25 –

II-26 -

The provisions of item (IV) of the second paragraph of this Article shall apply to contracts or transactions entered into with the Company by close relatives of Directors or senior management, by businesses directly or indirectly controlled by Directors, senior management or their close relatives, and by other related parties who have other related party relationships with Directors or senior management. | Income received by any directors in violation of this article shall be forfeited by the Company. Any directors who act in violation of this article shall be liable for compensation for any losses caused to the Company.

The provisions of item (IV) of the second paragraph of this Article shall apply to contracts or transactions entered into with the Company by close relatives of Directors or senior management, by businesses directly or indirectly controlled by Directors, senior management or their close relatives, and by other related parties who have other related party relationships-related (connected) relationships with Directors or senior management. |

II-27 -

(I) to exercise prudently, conscientiously and diligently the rights granted by the Company to ensure that the Company’s commercial activities are in compliance with the national laws, administrative regulations and the requirements of economic policies of China and that its commercial activities are within the scope stipulated in the business licence;

(II) to treat all shareholders equally and fairly;

(III) to understand the operation and management of the Company in a timely manner;

(IV) to sign written confirmation opinion on the Company’s periodic reports and to ensure the integrity, accuracy and completeness of the information disclosed by the Company;

(V) to provide all relevant information required by the audit committee and shall not intervene the performance of its duties;

(VI) to perform other due diligence obligations stipulated by laws, administrative regulations, departmental rules and these Articles. | Article 10810 The directors shall diligently perform their obligations to the Company in compliance with the provisions of laws, regulations and these Articles. When performing their duties, Directors shall act in the best interests of the Company and exercise the reasonable care that would ordinarily be expected of a manager.

(II) to treat all shareholders equally and fairly;

(III) to understand the operation and management of the Company in a timely manner;

(IV) to sign written confirmation opinion on the Company’s periodic reports and to ensure the integrity, accuracy and completeness of the information disclosed by the Company;

(V) to provide all relevant information required by the audit committee and shall not intervene the performance of its duties;

(VI) to perform other due diligence obligations stipulated by laws, administrative regulations, departmental rules, the securities regulatory rules of the place where the Company’s shares are listed and these Articles. |

– II-28 –

II-29 -
II-30 -
II-31 -
II-32 -

The Board shall establish an audit committee, a remuneration committee and a nomination committee and other special committees (collectively as the “Special Committees”) if necessary to provide advice and opinions for its significant decisions. The membership and the rules of procedure are agreed by the Board. Being accountable to the Board, the Special Committees shall perform duties and responsibilities as authorized by these Articles of Association and the Board with proposals of the Special Committees submitted to the Board for consideration and approval. The Special Committees shall not resolve on a proposal in the name of the Board; however, in compliance with these Articles of Association, the mandatory provisions under PRC’s relevant laws, regulations, regulatory documents and the listing rules of the stock exchange where the Company’s shares are listed, they shall exercise the right of decision on the authorized matters under the special authorization of the Board.

Matters beyond the scope authorized by the general meeting shall be submitted to the general meeting for consideration and decision. | (XVI) exercising other duties and powers granted by laws, administrative regulations, departmental rules, Hong Kong Listing Rules, the securities regulatory rules of the place where the Company’s shares are listed, these Articles of Association or the general meeting.

The Board shall establish an audit committee, a remuneration and appraisal committee, a strategy committee and a nomination committee and other special committees (collectively as the “Special Committees”) if necessary to provide advice and opinions for its significant decisions. The membership and the rules of procedure are agreed by the Board. Being accountable to the Board, the Special Committees shall perform duties and responsibilities as authorized by these Articles of Association and the Board with proposals of the Special Committees submitted to the Board for consideration and approval. The Special Committees shall not resolve on a proposal in the name of the Board; however, in compliance with these Articles of Association, the mandatory provisions under PRC’s relevant laws, regulations, regulatory documents and the listing rules of the stock exchange where the Company’s shares are listed, they shall exercise the right of decision on the authorized matters under the special authorization of the Board.

Matters beyond the scope authorized by the general meeting shall be submitted to the general meeting for consideration and decision. |

II-33 -
II-34 -

For the purposes of this Article, the meaning of “related (connected) relationship” is the same as defined in the ChiNext Listing Rules or the Hong Kong Listing Rules. If the listing rules of any other stock exchange on which the Company’s shares are listed and traded impose more stringent requirements on the recusal of directors, such more stringent requirements shall be complied with. |

II-35 -

(I) The principle of profit distribution of the Company: the Company shall implement a dividend distribution policy of equal dividend for equal shares, and Shareholders shall receive dividends and other forms of distribution of benefits according to the number of shares they hold. The Company shall implement an active profit distribution policy, attach importance to reasonable investment returns to investors, and maintain continuity and stability. The Company may distribute profits in cash, shares or other means, and profit distribution shall not exceed the scope of accumulated distributable profits or impair the Company’s ability to continue as a going concern. The Board, the Audit Committee and the general meeting of the Company shall fully consider the opinions of independent non-executive Directors and public investors in the decision-making and demonstration process for the profit distribution policy. | Article 157161 The Company may distribute dividends in cash or in shares as follows:

II-36 -

Where all of the following conditions are satisfied, the Company shall distribute cash dividends:
1. the Company is profitable for the year and has positive distributable profits;
2. the Company’s audited net cash flow from operating activities for the year is positive, and the implementation of cash dividends will not affect its subsequent continuing operations;
3. there is no material investment plan or material cash expenditure of the Company in the coming twelve months (other than proceeds-funded projects); |

II-37 -

The foregoing “material investment plan or material cash expenditure” means that the cumulative expenditure proposed by the Company for external investment, acquisition of assets or purchase of equipment reaches or exceeds 30% of the Company’s latest audited net assets.

The Company shall comprehensively consider factors such as the characteristics of the industry in which it operates, stage of development, its own business model, profitability, debt repayment ability, whether there are major capital expenditure arrangements and investor returns, and the Board shall propose differentiated cash dividend plans based on the following circumstances and submit them to the general meeting for approval:

where the Company is at a mature stage of development and has no major capital expenditure arrangements, the proportion of cash dividends in the profit distribution shall be at least 80%;
where the Company is at a mature stage of development and has major capital expenditure arrangements, the proportion of cash dividends in the profit distribution shall be at least 40%;
where the Company is at a growth stage and has major capital expenditure arrangements, the proportion of cash dividends in the profit distribution shall be at least 20%; |
II-38 -

The proportion of cash dividends in the profit distribution refers to cash dividends divided by the sum of cash dividends and stock dividends.

(IV) Specific conditions for the Company’s distribution of stock dividends: on the premise of ensuring that the Company’s share capital size and equity structure are reasonable, and taking into account returns to investors and sharing of the Company’s value, based on genuine factors such as the Company’s growth and the dilution of net assets per share, where the valuation of the Company’s shares is within a reasonable range, the Company may distribute stock dividends if the above conditions for cash dividend distribution are satisfied. |

II-39 -
Decision-making and implementation of the Company's profit distribution policy

(1) The Company's profit distribution plan shall be prepared by the Company's management and submitted to the Board and the Audit Committee for consideration. When considering a profit distribution plan, the Board shall carefully study and demonstrate matters such as the timing, conditions and minimum ratio of the Company's cash dividends, the conditions for adjustment and the requirements for the decision-making procedures, and fully discuss the reasonableness of the profit distribution plan. A profit distribution plan shall be approved by more than half of all Directors. If independent non-executive Directors consider that the specific cash dividend plan may prejudice the interests of the listed company or minority Shareholders, they shall have the right to express independent opinions. Where the Board does not adopt or does not fully adopt the opinions of independent non-executive Directors, the opinions of independent non-executive Directors and the specific reasons for not adopting them shall be recorded in the Board resolution and disclosed. The Audit Committee shall review the profit distribution plan formulated by the Board and issue review opinions. |

II-40 -

Before the general meeting considers a specific cash dividend plan, the Company shall proactively communicate and exchange views with Shareholders, especially minority Shareholders, through various channels such as answering investors’ telephone calls, the Company’s public email address, online platforms and investor meetings, fully listen to the opinions and demands of minority Shareholders, and promptly respond to issues of concern to minority Shareholders. |

II-41 -

II-42 -

(3) Within 2 months after the general meeting has approved a profit distribution resolution, or after the Board has formulated a specific plan pursuant to the interim dividend conditions and caps for the following year approved at the annual general meeting, the Board must complete the dividend distribution. |

II-43 -

The Company may adjust its profit distribution policy based on its production and operation conditions, investment plans and long-term development needs, or when war, natural disasters or other force majeure events have a material impact on the Company's production and operation, or when the Company's own operating conditions undergo material changes.

Any adjustment by the Company to its profit distribution plan shall satisfy the conditions prescribed in these Articles of Association, and must be considered by the Board and submitted to the general meeting for approval by two-thirds or more of the voting rights held by Shareholders attending the general meeting.

When the general meeting considers a proposal to adjust the profit distribution policy, the Company shall provide online or other means to facilitate public investors' participation in the general meeting in accordance with the relevant rules of the stock exchange of the place where the Company's shares are listed. |

II-44 -
II-45 -

Where the Company proceeds with a merger in accordance with the preceding paragraph without a resolution of the general meeting, such merger shall be subject to a resolution of the Board of Directors. | Article 1816 Subject to compliance with the securities regulatory rules of the place where the Company’s shares are listed, where the consideration paid by the Company for a merger does not exceed 10% of the Company’s net assets, such merger may not require a resolution of the general meeting, unless otherwise stipulated in these Articles of Association and the Hong Kong Listing Rules.

II-46 -
II-47 -

The amendment to the Articles of Association or a resolution of the general meeting made pursuant to the preceding paragraph shall be passed by shareholders who hold two-thirds or more of the voting rights present at the shareholders’ general meeting. |
| Article 193 Where the Company is dissolved pursuant to sub-paragraphs (I), (II), (IV) and (V) of Article 191 of the Articles of Association, a liquidation shall be conducted. In the event that Directors are the liquidation obligors of the Company, a liquidation committee shall be formed within 15 days from the date of occurrence of such grounds for dissolution, to start the liquidation process. The composition of the liquidation committee shall consist of the directors or other individuals as otherwise required by the Articles of Association or decided by the general meeting. If the liquidation obligors fail to perform their liquidation duties in a timely manner, thereby causing losses to the Company or its creditors, they shall be liable for compensation. | Article 1938 Where the Company is dissolved pursuant to sub-paragraphs (I), (II), (IV) and (V) of Article 1916 of the Articles of Association, a liquidation shall be conducted. In the event that Directors are the liquidation obligors of the Company, a liquidation committee shall be formed within 15 days from the date of occurrence of such grounds for dissolution, to start the liquidation process. The composition of the liquidation committee shall consist of the directors or other individuals as otherwise required by the Articles of Association or decided by the general meeting. If the liquidation obligors fail to perform their liquidation duties in a timely manner, thereby causing losses to the Company or its creditors, they shall be liable for compensation. |

II-48 -

(I) Controlling shareholder refers to the shareholders whose shares account for more than 50% of a joint stock company’s total share capital, or the shareholders whose proportion of shares is less than or equal to 50%, while their entitlement to voting rights is sufficient to have a significant impact on the resolution of the shareholders’ general meeting, or has the meaning stipulated in the “Hong Kong Listing Rules”.

(II) De facto controller refers to the natural person, legal persons or other entities who are able to actually control the acts of the Company through an investment, agreement or other arrangement.

(III) Connected relationship refers to that as defined in the Hong Kong Listing Rules.

(IV) Connected person refers to that as defined in the Hong Kong Listing Rules. | Article 2049 Definitions

(II) De facto controller refers to the natural person, legal persons or other entities who are able to actually control the acts of the Company through an investment, agreement or other arrangement.

(III) Connected relationship refers to that as defined in the Hong Kong Listing Rules; related party relationship refers to that as defined in the ChiNext Listing Rules.

(IV) Connected person party refers to that as defined in the Hong Kong Listing Rules; related party refers to that as defined in the ChiNext Listing Rules. |

Apart from the above table, if changes in the numbering of certain provisions are caused by the addition, deletion or re-arrangement of certain provisions, the numbering of the provisions of the revised Articles of Association shall be adjusted accordingly in sequence, and the numbering of provisions involved in cross-references shall also be adjusted accordingly.

II-49 -

APPENDIX III

PROPOSED AMENDMENTS TO THE RULES OF PROCEDURE FOR GENERAL MEETINGS OF PHANCY GROUP CO., LTD.

Beijing Fourth Paradigm Technology Co., Ltd. Phancy Group Co., Ltd.

Rules of Procedure for General Meetings

Chapter 1 General Provisions

Article 1 For the purposes of further regulating the procedures for discussion and decision-making of general meetings of Beijing Fourth Paradigm Technology Co., Ltd. Phancy Group Co., Ltd. (hereinafter referred to as the "Company"), ensuring that the general meeting of the Company may exercise its functions and powers in accordance with law, these Rules of Procedure are formulated in accordance with the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), the Securities Law of the People's Republic of China (hereinafter referred to as the "Securities Law") and the Trial Administrative Measures for Overseas Securities Offering and Listing by Domestic Enterprises (hereinafter referred to as the "Trial Administrative Measures"), the Guidelines for Articles of Association of Listed Companies, the Rules for General Meetings of Listed Companies, the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (hereinafter referred to as the "Hong Kong Listing Rules") and other relevant laws and regulations, as well as the Articles of Association of Beijing Fourth Paradigm Technology Co., Ltd. Phancy Group Co., Ltd. (hereinafter referred to as the "Articles of Association").

Article 2 These Rules of Procedure shall apply when the Company convenes a general meeting. The Company shall convene general meetings in strict accordance with the relevant provisions of laws, administrative regulations, the Articles of Association and these Rules of Procedure, so as to ensure that Shareholders may exercise their rights in accordance with law.

The Board of the Company shall duly perform its duties and carefully convene and organise general meetings on time. All Directors of the Company shall act diligently and responsibly to ensure that general meetings are duly convened and exercise their functions and powers in accordance with law.

Chapter 2 Functions and Powers of General Meetings

Article 3 A general meeting shall comprise all Shareholders of the Company and shall be the organ of authority of the Company.

A general meeting shall exercise its functions and powers within the scope prescribed by the Company Law and the Articles of Association.

Article 4 A general meeting shall exercise the following functions and powers in accordance with law:

(1) to elect and replace Directors and determine matters relating to the remuneration of Directors;

APPENDIX III

PROPOSED AMENDMENTS TO THE RULES OF PROCEDURE FOR GENERAL MEETINGS OF PHANCY GROUP CO., LTD.

(2) to consider and approve reports of the Board;

(3) to consider and approve the Company's profit distribution plans and plans for making up losses;

(4) to pass resolutions on any increase or reduction of the registered capital of the Company;

(5) to pass resolutions on the issue of corporate bonds;

(6) to pass resolutions on the merger, division, dissolution, liquidation or change of corporate form of the Company;

(7) to amend the Articles of Association;

(8) to pass resolutions on the appointment or dismissal of the accounting firm engaged to undertake the audit work of the Company;

(9) to consider and approve transactions, guarantees and other matters which are required under the Articles of Association to be considered by the general meeting;

(10) to consider matters relating to the Company's purchase or sale of material assets or provision of guarantees to others within a consecutive twelve-month period where the amount exceeds 30% of the Company's latest audited total assets;

(11) to consider and approve matters relating to any change in the use of proceeds;

(12) to consider employee share ownership schemes or equity incentive schemes;

(13) to consider repurchases of the Company's shares under the circumstances set out in items (1) and (2) of the first paragraph of Article 25 of the Articles of Association;

(14) to consider other matters which are required by laws, administrative regulations, departmental rules, the securities regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules or the Articles of Association to be determined by the general meeting.

The general meeting may authorise the Board to pass resolutions on the issue of corporate bonds.

Article 5 General meetings shall be classified into annual general meetings and extraordinary general meetings.

Article 6 An annual general meeting shall be convened once every year and shall be held within 6 months after the end of the preceding accounting year. Extraordinary

III-2 -

general meetings shall be convened from time to time and, where any circumstance under these Rules of Procedure requiring the convening of an extraordinary general meeting occurs, the extraordinary general meeting shall be convened within 2 months.

Article 7 Where any of the following circumstances occurs, the Company shall convene an extraordinary general meeting within 2 months from the date on which the relevant fact occurs:

(1) where the number of Directors is less than the statutory minimum prescribed by the Company Law or less than two-thirds of the number prescribed in the Articles of Association;

(2) where the Company's unrecovered losses amount to one-third of its total share capital;

(3) where requested by Shareholders individually or collectively holding 10% or more of the total number of shares of the Company (including preference shares with restored voting rights, etc.);

(4) where the Board considers it necessary;

(5) where the Audit Committee proposes that one be convened; and

(6) other circumstances prescribed by laws, administrative regulations, departmental rules, the securities regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules or the Articles of Association.

Article 8 General meetings of the Company shall be held at the domicile of the Company or at the place specified in the notice of meeting. A venue shall be provided for a general meeting, which shall be held as a physical meeting. The Company may provide other forms and channels for participation in general meetings (including but not limited to online means, telephone conferences, video or other electronic facilities), online voting and/or other methods permitted by the Hong Kong Listing Rules to facilitate Shareholders' participation in general meetings and voting by electronic means.

Chapter 3 Authorisation by General Meetings

Article 9 Matters which are required by relevant laws, regulations, the Hong Kong Listing Rules or the Articles of Association to be determined by the general meeting must be considered by the general meeting, so as to safeguard the decision-making rights of the Shareholders of the Company in respect of such matters.

Article 10 Where necessary, reasonable and in compliance with relevant legal requirements, the general meeting may authorise the Board to decide, within the scope of authorisation granted by the general meeting, specific matters relating to the resolved matters which are not required to be determined at that general meeting.

III-3 -

Chapter 4 Convening of General Meetings

Article 11 The Board shall convene general meetings within the periods prescribed in Articles 12, 13 and 14 of these Rules of Procedure. Where the Board is unable or fails to perform its duty to convene a general meeting, the Audit Committee shall promptly convene and preside over the meeting; if the Audit Committee does not convene and preside over the meeting, Shareholders individually or collectively holding 10% or more of the Company's shares for 90 consecutive days or more may convene and preside over the meeting on their own.

Article 12 With the consent of more than half of all independent non-executive Directors, the independent non-executive Directors shall have the right to propose to the Board the convening of an extraordinary general meeting. In respect of a proposal by the independent non-executive Directors requesting the convening of an extraordinary general meeting, the Board shall, in accordance with laws, administrative regulations and the Articles of Association, provide written feedback on whether it agrees or disagrees to convene the extraordinary general meeting within 10 days after receiving the proposal.

Where the Board agrees to convene an extraordinary general meeting, it shall issue a notice of the general meeting within 5 days after the Board resolution is passed; where the Board disagrees to convene an extraordinary general meeting, it shall state the reasons.

Where the securities regulatory authority of the place where the Company's shares are listed otherwise provides, such provisions shall prevail.

Article 13 The Audit Committee shall have the right to propose to the Board the convening of an extraordinary general meeting, and shall make such proposal to the Board in writing. The Board shall, in accordance with laws, administrative regulations and the Articles of Association, provide written feedback on whether it agrees or disagrees to convene the extraordinary general meeting within 10 days after receiving the proposal.

Where the Board agrees to convene an extraordinary general meeting, it shall issue a notice of the general meeting within 5 days after the Board resolution is passed. Any change in the notice to the original proposal shall be subject to the consent of the Audit Committee.

Where the Board disagrees to convene an extraordinary general meeting, or fails to provide feedback within 10 days after receiving the proposal, the Board shall be deemed unable or to have failed to perform its duty to convene a general meeting, and the Audit Committee may convene and preside over the meeting on its own.

Article 14 Where Shareholders individually or collectively holding 10% or more of the Company's shares (including preference shares with restored voting rights, etc.) request the Board to convene an extraordinary general meeting, such request shall be made to the Board in writing. The Board shall, in accordance with laws, administrative regulations and the Articles of Association, provide written feedback on whether it agrees or disagrees to convene the extraordinary general meeting within 10 days after receiving the request.

Where the Board disagrees to convene an extraordinary general meeting, or fails to provide feedback within 10 days after receiving the request, Shareholders individually or collectively holding 10% or more of the Company's shares (including preference shares with restored voting rights, etc.) who propose to the Audit Committee the convening of an extraordinary general meeting shall make such request to the Audit Committee in writing.

Where the Audit Committee agrees to convene an extraordinary general meeting, it shall issue a notice of the general meeting within 5 days after receiving the request. Any change in the notice to the original request shall be subject to the consent of the relevant Shareholders.

Where the Audit Committee fails to issue a notice of general meeting within the prescribed period, the Audit Committee shall be deemed not to convene and preside over the general meeting, and Shareholders individually or collectively holding 10% or more of the Company's shares (including preference shares with restored voting rights, etc.) for 90 consecutive days or more may convene and preside over the meeting on their own.

Article 15 Where the Audit Committee or Shareholders decide to convene a general meeting on their own, they shall notify the Board in writing and, at the same time, file with the stock exchange in accordance with relevant laws and regulations and the requirements of the Hong Kong Listing Rules (if required). Before a resolution is passed at the general meeting, the shareholding percentage of the convening Shareholders (including preference shares with restored voting rights, etc.) shall not be less than 10%.

Article 16 In respect of a general meeting convened by the Audit Committee or Shareholders on their own, the Board and the secretary to the Board shall provide cooperation. The Board shall provide the register of Shareholders as at the record date.

Article 17 Necessary expenses for a general meeting convened by the Audit Committee or Shareholders on their own shall be borne by the Company.

Chapter 5 Proposals and Notices of General Meetings

Article 18 The contents of a proposal shall fall within the scope of functions and powers of the general meeting, have a clear subject and specific matters for resolution, and comply with the relevant provisions of laws, administrative regulations, the securities regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules and the Articles of Association.

Article 19 When the Company convenes a general meeting, the Board, the Audit Committee and Shareholders individually or collectively holding 1% or more of the Company's shares (including preference shares with restored voting rights, etc.) shall have the right to submit proposals to the Company.

Shareholders individually or collectively holding 1% or more of the Company's shares (including preference shares with restored voting rights, etc.) may, not less than 10 days before the general meeting is convened, submit an interim proposal in writing to the convener. The convener shall, within 2 days after receiving the proposal, issue a supplemental notice of general meeting announcing the contents of the interim proposal, and submit such interim proposal to the general meeting for consideration, except where

III-5 -

the interim proposal violates laws, administrative regulations or the Articles of Association, or does not fall within the scope of functions and powers of the general meeting. The Company shall not increase the shareholding ratio of the Shareholders who put forward the interim motion.

Except for the circumstances provided in the preceding paragraph, after issuing the announcement of notice of general meeting, the convener shall not amend proposals already specified in the notice of general meeting or add new proposals.

The general meeting shall not vote on or pass resolutions in respect of proposals which are not specified in the notice of general meeting or do not comply with the Articles of Association.

Article 20 The convener shall, by way of announcement, notify all Shareholders not less than 20 days before the annual general meeting is convened, and shall, by way of announcement, notify all Shareholders not less than 15 days before an extraordinary general meeting is convened. In calculating the advance notice period, the Company shall not include the date on which the meeting is convened, but may include the date on which the notice of meeting is issued.

Article 21 The notice of general meeting and supplemental notice shall fully and completely disclose the specific contents of all proposals, as well as all information or explanations necessary to enable Shareholders to make a reasonable judgment on the matters proposed to be discussed.

Article 22 The notice of general meeting shall include the following:

(1) the time, place and duration of the meeting;
(2) the matters and proposals to be submitted to the meeting for consideration;
(3) a conspicuous statement that all ordinary Shareholders (including holders of preference shares with restored voting rights), Shareholders holding shares with weighted voting rights and other Shareholders are entitled to attend the general meeting, and may appoint a proxy in writing to attend and vote at the meeting, and that such proxy need not be a Shareholder of the Company;
(4) the record date for determining Shareholders entitled to attend the general meeting;
(5) the name and telephone number of the standing contact person for meeting affairs;
(6) the voting time and voting procedures by online or other means; and
(7) other contents which are required to be included in a notice of general meeting under the Hong Kong Listing Rules and other applicable laws and regulations.

Article 23 Where a Shareholders' general meeting adopts other means of voting, the notice shall also specify the voting time and matters to be voted on by such other

III-6 -

means The notice of general meeting and supplemental notice shall fully and completely disclose the specific contents of all proposals.

Article 24 Where a general meeting proposes to discuss the election of Directors, the notice of general meeting shall fully disclose detailed information on the Director candidates, including at least the following:

(1) personal particulars such as educational background, work experience and concurrent positions;

(2) whether there is any related party/connected connected relationship with the Company or the Company's controlling Shareholder and actual controller;

(3) the number of shares of the Company held;

(4) whether the candidate has been subject to penalties imposed by the China Securities Regulatory Commission or other relevant authorities, or disciplinary sanctions imposed by any stock exchange; and

(5) other information required by applicable laws, administrative regulations and the securities regulatory rules of the place where the Company's shares are listed other contents required to be disclosed under the Hong Kong Listing Rules and other laws and regulations.

Except where Directors are elected by cumulative voting, each Director candidate shall be proposed as a separate proposal.

Article 25 The notice of general meeting shall specify the time and place of the meeting and determine the record date. The interval between the record date and the date of the meeting shall not exceed seven business days. Once the record date is confirmed, it shall not be changed. Where the securities regulatory rules of the place where the Company's shares are listed provide otherwise in respect of the record date, such provisions shall prevail.

Article 26 After the notice of general meeting is issued, the general meeting shall not be postponed or cancelled without justifiable reasons, and proposals specified in the notice of general meeting shall not be cancelled. In the event of any postponement or cancellation, the convener shall state the reasons at least 2 business days before the originally scheduled date of the meeting. Where the securities regulatory rules of the place where the Company's shares are listed provide otherwise in respect of the record date, such provisions shall prevail.

Chapter 6 Holding of General Meetings

Article 27 The Company shall hold general meetings at the domicile of the Company or at the place specified in the notice of meeting.

A venue shall be provided for a general meeting, which shall be held as a physical meeting. The Company may provide other forms and channels for participation in general meetings (including but not limited to online means, telephone conferences, video or

other electronic facilities), online voting and/or other methods permitted by the Hong Kong Listing Rules to facilitate Shareholders' participation in general meetings and voting by electronic means.

A Shareholder may attend a general meeting in person, or may appoint a proxy (who need not be a Shareholder) to attend and vote on his/her/its behalf.

Article 28 The Board of the Company and other conveners shall take necessary measures to ensure the normal order of general meetings. Measures shall be taken to stop any conduct that disrupts the order of a general meeting, causes disturbances or infringes upon the lawful rights and interests of other Shareholders, and such conduct shall be promptly reported to the relevant authorities for handling.

Article 29 Where an individual Shareholder or proxy attends the meeting in person, he/she shall present his/her identity card or other valid certificate or proof capable of evidencing his/her identity; where attending the meeting on behalf of another person, the proxy shall present his/her valid identity document and the Shareholder's proxy form.

A corporate Shareholder shall attend the meeting through its legal representative or a proxy appointed by its legal representative. Where the legal representative attends the meeting, he/she shall present his/her identity card and valid proof evidencing his/her qualification as legal representative; where a proxy attends the meeting, the proxy shall present his/her identity card and the written proxy form lawfully issued by the legal representative of the corporate Shareholder.

If such Shareholder is a recognised clearing house (or its nominee) as defined in the relevant ordinances from time to time in Hong Kong, such Shareholder may authorise one or more persons as it thinks fit to act as its representative(s) at any general meeting or any class meeting or creditors' meeting; provided that, if more than one person is so authorised, the authorisation shall specify the number and class of shares in respect of which each such person is so authorised, and the authorisation shall be signed by an authorised officer of the recognised clearing house. A person so authorised may attend the meeting on behalf of the recognised clearing house (or its nominee) (without producing a shareholding certificate, notarised authorisation and/or further evidence confirming that he/she has been duly authorised) and exercise rights as if such person were an individual Shareholder of the Company, and shall enjoy the same statutory rights as other Shareholders, including the right to speak and vote.

Article 30 A proxy form issued by a Shareholder appointing another person to attend a general meeting shall specify the following:

(1) the name or designation of the appointor, and the class and number of shares of the Company held;

(2) the name or designation of the proxy;

(3) the specific instructions of the Shareholder, including instructions to vote for, against or abstain from voting on each matter to be considered on the agenda of the general meeting;

III-8 -

(4) the date of issue and validity period of the proxy form; and
(5) the signature (or seal) of the appointor. Where the appointor is a corporate Shareholder, the seal of the legal person shall be affixed.

Article 31 Where a proxy form for voting is signed by another person authorised by the appointor, the power of attorney or other authorisation document authorising the signature shall be notarised. The proxy form for voting, the notarised power of attorney or other authorisation document shall be kept at the domicile of the Company or at such other place as specified in the notice convening the meeting.

Article 32 The register of attendees at the meeting shall be prepared by the Company. The register of attendees shall specify matters including the names (or entity names), identity card numbers, number of voting shares held or represented, and names (or entity names) of the appointors of the attendees.

The convener shall verify the legality of Shareholders' qualifications, and register the names (or designations) of Shareholders and the number of voting shares held by them. Registration for the meeting shall cease before the chairman of the meeting announces the number of Shareholders and proxies attending the meeting in person and the total number of voting shares held by them.

Article 33 Where a general meeting requires Directors and senior management to attend the meeting, the Directors and senior management shall attend and respond to Shareholders' enquiries.

Article 34 A general meeting convened by the Board shall be presided over by the chairman of the Board. Where the chairman of the Board is unable or fails to perform his/her duties, a Director jointly elected by more than half of the Directors shall preside over the meeting.

A general meeting convened by the Audit Committee on its own shall be presided over by the convener of the Audit Committee. Where the convener of the Audit Committee is unable or fails to perform his/her duties, one Audit Committee member jointly elected by more than half of the Audit Committee members shall preside over the meeting.

A general meeting convened by Shareholders on their own shall be presided over by the convener or a representative elected by the convener.

When a general meeting is convened, if the chairman of the meeting violates the rules of procedure such that the general meeting cannot continue, with the consent of Shareholders holding more than half of the voting rights present at the general meeting, the general meeting may elect one person to act as chairman of the meeting and continue the meeting.

Article 35 At an annual general meeting, the Board and the Audit Committee shall report to the general meeting on their work during the preceding year. Each independent non-executive Director shall also submit a work report.

III-9 -

Article 36 Directors and senior management shall provide explanations and clarifications at general meetings in response to Shareholders' enquiries and suggestions.

Article 37 The chairman of the meeting shall announce, before voting, the number of Shareholders and proxies attending the meeting in person and the total number of voting shares held by them. The number of Shareholders and proxies attending the meeting in person and the total number of voting shares held by them shall be based on the meeting registration.

Article 38 Minutes shall be kept for general meetings and shall be the responsibility of the secretary to the Board. The minutes shall record the following:

(1) the time, place and agenda of the meeting, and the name or designation of the convener;

(2) the name of the chairman of the meeting and the names of Directors and senior management attending the meeting as non-voting attendees;

(3) the number of Shareholders and proxies attending the meeting, the total number of voting shares held by them and the percentage of the total number of shares of the Company represented thereby;

(4) the course of consideration, key points of speeches and voting results for each proposal;

(5) Shareholders' enquiries, opinions or suggestions and the corresponding replies or explanations;

(6) the names of the lawyer, vote counters and scrutineers; and

(7) other contents required by the Articles of Association to be included in the minutes.

Article 39 The convener shall ensure that the contents of the minutes are true, accurate and complete. Directors, the secretary to the Board, the convener or his/her/its representative, and the chairman of the meeting who attend or are present at the meeting shall sign the minutes. The minutes shall be kept together with the signature book of Shareholders attending in person, forms of proxy for attendance by proxy and valid materials on voting by other means for a period of not less than 10 years.

Article 40 The convener shall ensure that the general meeting continues until a final resolution is passed. Where a general meeting is suspended or is unable to pass a resolution due to force majeure or other special reasons, necessary measures shall be taken to resume the general meeting as soon as possible or directly terminate the general meeting, and an announcement shall be made in a timely manner. In addition, the convener shall report to the dispatched office of the CSRC at the Company's domicile and the stock exchange.

Chapter 7 Voting and Resolutions at General Meetings

Article 41 Where a Shareholder requests to speak at a general meeting, he/she shall first raise his/her hand and may speak after permission is granted by the chairman

III-10 -

of the general meeting. Where more than one Shareholder raises his/her hand to speak, the chairman shall designate the speaker.

The chairman shall, depending on the specific circumstances, prescribe the speaking time and number of speeches for each person. A Shareholder shall not be interrupted during the prescribed speaking period, so that the Shareholder may fully enjoy the right to speak. A Shareholder speaking shall report his/her name and number of shares held to the general meeting, and the content of his/her speech shall focus on the principal issues of that general meeting.

Where a Shareholder’s speech violates the foregoing provisions, the chairman of the general meeting may refuse or stop such speech.

Article 42 Resolutions of general meetings shall be classified into ordinary resolutions and special resolutions.

An ordinary resolution of a general meeting shall be passed by more than half of the voting rights held by Shareholders attending the general meeting.

A special resolution of a general meeting shall be passed by not less than two-thirds of the voting rights held by Shareholders attending the general meeting.

For the purposes of this Article, Shareholders include Shareholders who appoint proxies to attend general meetings.

Article 43 The following matters shall be passed by ordinary resolution at a general meeting:

(1) work reports of the Board;

(2) profit distribution plans and plans for making up losses formulated by the Board;

(3) the appointment and removal of members of the Board and their remuneration and method of payment; and

(4) other matters except those which are required by laws, administrative regulations, the securities regulatory rules of the place where the Company’s shares are listed the Hong Kong Listing Rules or the Articles of Association to be passed by special resolution.

Article 44 The following matters shall be passed by special resolution at a general meeting:

(1) any increase or reduction of the registered capital of the Company;

(2) the division, merger, dissolution, liquidation or change of corporate form of the Company;

(3) amendments to the Articles of Association;

III-11 -

(4) the Company's purchase or sale of material assets or provision of guarantees to others within a consecutive twelve-month period where the amount exceeds 30% of the Company's latest audited total assets;

(5) employee share ownership schemes or equity incentive schemes; and

(6) other matters prescribed by laws, administrative regulations, the securities regulatory rules of the place where the Company's shares are listed the Hong-Kong Listing Rules or the Articles of Association, and other matters which are determined by an ordinary resolution of the general meeting to have a material impact on the Company and are required to be passed by special resolution.

Article 45 A Shareholder shall exercise voting rights according to the number of voting shares represented by him/her/it, with one vote for each share, except for holders of class shares.

Shares of the Company held by the Company shall carry no voting rights, and such shares shall not be counted in the total number of voting shares present at the general meeting.

The Board, independent non-executive Directors and Shareholders who meet the conditions prescribed by relevant provisions may solicit voting rights from Shareholders. In soliciting voting rights from Shareholders, information including specific voting intentions shall be fully disclosed to the persons solicited. Soliciting voting rights from Shareholders by way of compensation or disguised compensation is prohibited. The Company shall not impose a minimum shareholding percentage restriction on the solicitation of voting rights.

For the purposes of the first paragraph of this Article, Shareholders include Shareholders who appoint proxies to attend general meetings.

Article 46 When a general meeting considers matters relating to connected transactions-related party/connected transactions, connected Shareholders shall abstain from voting and shall not exercise voting rights on behalf of other Shareholders. The number of voting shares represented by them shall not be counted in the total number of valid votes; the resolution of the general meeting shall fully disclose the voting results of non-connected Shareholders.

Where a Shareholders' general meeting considers significant matters affecting the interests of minority investors, the votes of minority investors shall be counted separately. The results of the separate count shall be publicly disclosed in a timely manner.

Where a Shareholder purchases voting shares of the Company in violation of paragraphs (1) and (2) of Article 63 of the Securities Law, the voting rights of the shares in excess of the specified proportion shall not be exercised within 36 months after the purchase and shall not be included in the total number of shares with voting rights present at the general meeting.

III-12 -

Connected Shareholders shall automatically abstain and waive their voting rights when voting at a general meeting. The chairman of the meeting shall require connected Shareholders to abstain. Any Shareholder who is not required to abstain shall have the right to request connected Shareholders to abstain.

Such connected transaction-related party/connected transaction matter shall be voted on by non-connected Shareholders attending the meeting, and shall be passed if more than half of the valid voting rights are cast in favour of such connected transaction related party/connected transaction matter; if such transaction matter falls within the scope of a special resolution, it shall be passed by not less than two-thirds of the valid voting rights.

When a general meeting considers a proposal on the provision of guarantees to a Shareholder, actual controller or his/her/its related parties, such Shareholder or any Shareholder controlled by such actual controller shall not participate in the voting on such matter, and such matter shall be passed by more than half of the voting rights held by the other Shareholders attending the general meeting.

III-13 -

Article 47 Except where the Company is in crisis or under other special circumstances, without approval by special resolution at a general meeting, the Company shall not enter into a contract with any person other than a Director or senior management member to place the management of all or material business of the Company in the charge of such person.

Article 48 The list of Director candidates shall be submitted to the general meeting for voting by way of proposal.

When a general meeting votes on the election of Directors, the cumulative voting system shall be adopted in accordance with the Articles of Association or a resolution of the general meeting.

When a general meeting elects two or more independent Directors, the cumulative voting system shall be adopted.

The cumulative voting system referred to in the preceding paragraph means that when a general meeting elects Directors, each share shall carry the same number of voting rights as the number of Directors to be elected, and the voting rights held by a Shareholder may be exercised cumulatively.

Article 49 Except under the cumulative voting system, a general meeting shall vote on all proposals item by item. Where there are different proposals on the same matter, voting shall be conducted in the chronological order in which the proposals were submitted. Except where a general meeting is suspended or unable to pass a resolution due to force majeure or other special reasons, the general meeting shall not set aside a proposal or refrain from voting on it.

Article 50 When considering a proposal, the general meeting shall not amend the proposal. If it is changed, it shall be deemed a new proposal and shall not be voted on at that general meeting.

Article 51 The same voting right may be exercised by only one of on-site voting or other voting methods. Where the same voting right is voted more than once, the result of the first vote shall prevail.

Article 52 Voting at a general meeting shall be conducted by registered ballot.

Article 53 Before a general meeting votes on a proposal, two Shareholder representatives shall be elected to participate in vote counting and vote scrutiny. Where the matters under consideration involve the interests of a Shareholder, the relevant Shareholder and proxy shall not participate in vote counting or vote scrutiny.

When a general meeting votes on a proposal, the lawyer and Shareholder representatives shall be jointly responsible for vote counting and vote scrutiny, and the voting results shall be announced on the spot. The voting results of resolutions shall be recorded in the minutes.

Article 54 The ending time of a physical general meeting shall not be earlier than that of other voting methods. The chairman of the meeting shall announce the voting

III-14 -

status and results of each proposal and, based on the voting results, announce whether the proposal has been passed. The voting results of resolutions shall be recorded in the minutes.

Before the voting results are formally announced, the Company, vote counters, scrutineers, Shareholders and other relevant parties involved in the physical general meeting and other voting methods shall owe a duty of confidentiality in respect of the voting status.

Article 55 Shareholders attending a general meeting shall express one of the following opinions on proposals submitted for voting: for, against or abstain.

Ballot papers which are not completed, are completed incorrectly, are illegible, or are not cast shall be deemed as the voter's waiver of his/her/its voting rights, and the voting result for the number of shares held by such voter shall be counted as "abstain".

Pursuant to applicable laws and regulations and the Hong Kong Listing Rules, if any Shareholder is required to abstain from voting on a resolution, or if any Shareholder is restricted to voting only in favour of (or against) a resolution, any votes cast by such Shareholder or his/her/its representative in contravention of the relevant requirements or restrictions shall not be counted.

Article 56 If the chairman of the meeting has any doubt as to the result of a resolution submitted for voting, he/she may arrange for the votes cast to be counted. If the chairman of the meeting does not arrange a vote count, any Shareholder or proxy attending the meeting who objects to the result announced by the chairman of the meeting shall have the right to request a vote count immediately after the voting result is announced, and the chairman of the meeting shall immediately arrange for the votes to be counted.

Article 57 A resolution of a general meeting shall specify the number of Shareholders and proxies attending the meeting, the total number of voting shares held by them and the percentage of the total number of voting shares of the Company represented thereby, the voting method, the voting result for each proposal, the contents of each resolution passed and other relevant matters.

Article 58 Where a proposal at a meeting is not passed, or where the general meeting changes a resolution of a previous general meeting, a special note shall be made in the resolution of the general meeting.

Article 59 Where a general meeting passes a proposal on the election of Directors, the new Directors shall take office in accordance with the Articles of Association. Where a general meeting passes a proposal on cash dividends, bonus shares or conversion of capital reserve into capital, the Company shall implement the specific plan within 2 months after the conclusion of the general meeting.

Article 60 The contents of a resolution of a general meeting of the Company shall be void if they violate laws or administrative regulations. Where the convening procedures or voting method of a general meeting violate laws, administrative regulations or the Articles of Association, or the contents of a resolution violate the

III-15 -

Articles of Association, a Shareholder may, within 60 days from the date on which the resolution is passed, request the people's court to revoke it.

Chapter 8 Supplementary Provisions

Article 61 These Rules of Procedure, as an appendix to the Articles of Association, shall become effective upon approval by resolution of the general meeting. The provisions applicable to companies listed on the ChiNext Market of the Shenzhen Stock Exchange shall be implemented from the date on which the Company completes its initial public offering of RMB ordinary shares (A Shares) and listing. From the effective date of these Rules of Procedure, the original Rules of Procedure for General Meetings of the Company shall automatically cease to be effective.

Article 62 Amendments to these Rules of Procedure shall be proposed by the Board in the form of draft amendments and submitted to the general meeting for consideration and approval.

Article 63 Unless otherwise specified, terms used in these Rules of Procedure shall have the same meanings as those terms in the Articles of Association.

Article 64 For the purposes of these Rules of Procedure, "or above" and "within" shall include the number itself, while "more than", "less than" and "below" shall not include the number itself.

Article 65 Matters not covered by these Rules of Procedure shall be handled in accordance with state laws, regulations, normative documents, the securities regulatory rules of the place where the Company's shares are listed and the Hong Kong Listing Rules and the Hong Kong Listing Rules the relevant provisions of the Articles of Association. In the event of any inconsistency, if these Rules of Procedure are inconsistent with the relevant provisions of the aforesaid laws, regulations, normative documents, the securities regulatory rules of the place where the Company's shares are listed or the Articles of Association, the relevant provisions of laws, regulations, normative documents, the securities regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules and the Articles of Association shall prevail.

If these Rules of Procedure conflict with laws, regulations or normative documents promulgated by the state in the future or the Articles of Association as amended through lawful procedures, the relevant state laws, regulations, normative documents and the Articles of Association shall be implemented, and these Rules of Procedure shall be amended immediately and submitted to the general meeting for consideration and approval.

Beijing Fourth Paradigm Technology Co., Ltd. Phancy Group Co., Ltd.

June May 20265

APPENDIX IV

PROPOSED AMENDMENTS TO THE RULES OF PROCEDURE FOR BOARD MEETINGS OF PHANCY GROUP CO., LTD.

Rules of Procedure for Board Meetings

Chapter 1 General Provisions

Article 1 In order to further regulate the procedures and decision-making processes of the Board of Phancy Group Co., Ltd. (hereinafter referred to as the "Company"), procure the Directors and the Board to perform their duties effectively, and enhance the standards of regulated operation and scientific decision-making of the Board, these Rules of Procedure are formulated in accordance with the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), the Guidelines on the Articles of Association of Listed Companies, the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (hereinafter referred to as the "Trial Administrative Measures"), the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (hereinafter referred to as the "Hong Kong Listing Rules") and other relevant laws and regulations, as well as the Articles of Association of Phancy Group Co., Ltd. (hereinafter referred to as the "Articles of Association").

Article 2 The Company shall establish the Board in accordance with law. The Board is the operating decision-making body of the Company and shall operate and manage the corporate property of the Company in accordance with the Company Law and other relevant laws, regulations and the Articles of Association, and shall be accountable to the general meeting.

Chapter 2 Composition and Subordinate Bodies of the Board

Article 3 The Board of the Company shall comprise 110 Directors. The Board shall have one Chairman, one employee representative Director and four independent non-executive Directors. At any time, there shall be not less than three independent non-executive Directors and they shall account for not less than one-third of the total number of members of the Board. Among the independent non-executive Directors appointed by the Company, there shall be at least one person who has appropriate professional qualifications in compliance with regulatory requirements, or appropriate accounting or related financial management expertise (specifically, such person shall have relatively extensive accounting expertise and experience and, through experience as a professional accountant, auditor, chief financial officer or chief accounting officer of a listed company or through performing similar functions, have experience in internal controls and in preparing or auditing financial statements comparable to those of the Company, or experience in analysing audited financial statements of listed companies, and shall satisfy other relevant requirements under the listing rules of the stock exchange of the place where the Company's shares are listed). At least one of the Company's independent non-executive Directors shall ordinarily reside in Hong Kong. The Chairman shall be elected by more than half of all Directors of the Board.

Article 4 The Board shall establish a Board office to handle the daily affairs of the Board. The secretary to the Board shall concurrently serve as the person in charge of the Board office and shall keep custody of the seal of the Board.

APPENDIX IV

PROPOSED AMENDMENTS TO THE RULES OF PROCEDURE FOR BOARD MEETINGS OF PHANCY GROUP CO., LTD.

Chapter 3 Powers of the Board

Article 5 The Board shall diligently perform the duties prescribed by relevant laws, regulations and the Articles of Association, ensure that the Company complies with the laws, regulations and the Articles of Association, treat all Shareholders fairly, and pay attention to the interests of other stakeholders.

Article 6 The Board shall exercise the following powers in accordance with law:

(1) to convene general meetings and report its work to the general meeting;

(2) to implement the resolutions of the general meeting;

(3) to determine the Company's business plans and investment proposals;

(4) to formulate the Company's profit distribution plans and plans for making up losses;

(5) to formulate plans for the Company's increase or reduction of registered capital, issuance of bonds or other securities and listing;

(6) to formulate plans for the Company's major acquisitions, acquisition of shares of the Company, or for merger, division, dissolution or change of corporate form;

(7) within the scope authorised by the general meeting and in compliance with the Hong Kong Listing Rules, to determine matters such as the Company's external investments, acquisition and disposal of assets, asset pledges, external guarantees, entrusted wealth management, connected transactions related party/connected transactions and external donations;

(8) to determine the establishment of the Company's internal management structure;

(9) to appoint or dismiss the Company's general manager, secretary to the Board and other senior management, and determine their remuneration, rewards and penalties; based on the nomination of the general manager, to determine the appointment or dismissal of the Company's deputy general managers, financial controller and other senior management, and determine their remuneration, rewards and penalties;

(10) to formulate the Company's basic management systems;

(11) to formulate amendment proposals to the Articles of Association;

(12) to manage the Company's information disclosure matters;

(13) to propose to the general meeting the engagement or replacement of the accounting firm that audits the Company;

(14) to receive work reports from the general manager of the Company and inspect the work of the general manager;

IV-2 -

(15) in accordance with the authorisation of the general meeting, to determine the acquisition of shares of the Company under the circumstances specified in items (3), (5) and (6) of paragraph 1 of Article 25 of the Articles of Association; and

(16) other powers conferred by laws, administrative regulations, departmental rules, the securities regulatory rules of the place where the Company's shares are listed, the Hong Kong Listing Rules, the Articles of Association or the general meeting.

The Board shall establish an Audit Committee, a Remuneration and Appraisal Committee, a Strategy Committee and a Nomination Committee, and may establish other special committees as necessary (collectively, the "Special Committees") to provide recommendations or advisory opinions for major decisions of the Board. The Special Committees shall be accountable to the Board and perform their duties in accordance with the Articles of Association and the authorisation of the Board, and proposals of the Special Committees shall be submitted to the Board for consideration and decision. The composition and rules of procedure of the Special Committees shall be separately determined by the Board. The Special Committees shall not make any resolution in the name of the Board, provided that, where they do not violate the mandatory provisions of the Articles of Association, relevant PRC laws, regulations and normative documents and the listing rules of the stock exchange of the place of listing, they may exercise decision-making powers in respect of authorised matters pursuant to a special authorisation from the Board.

Matters beyond the scope of authorisation of the general meeting shall be submitted to the general meeting for consideration.

Chapter 4 Authority of the Board

Article 7 Transactions conducted by the Company (excluding the provision of guarantees) that meet any of the following criteria shall be submitted to the Board for consideration:

(1) the total assets involved in the transaction account for 10% or more of the Company's latest audited total assets, and where both book value and appraised value exist for the total assets involved in the transaction, the higher value shall be used as the basis for calculation;

(2) the operating revenue relating to the transaction target (such as equity interests) for the latest accounting year accounts for 10% or more of the Company's audited operating revenue for the latest accounting year, and the absolute amount exceeds RMB10 million;

IV-3 -

(3) the net profit relating to the transaction target (such as equity interests) for the latest accounting year accounts for 10% or more of the Company’s audited net profit for the latest accounting year, and the absolute amount exceeds RMB1 million;

(4) the transaction amount (including liabilities and expenses assumed) accounts for 10% or more of the Company’s latest audited net assets, and the absolute amount exceeds RMB10 million;

(5) the profit generated from the transaction accounts for 10% or more of the Company’s audited net profit for the latest accounting year, and the absolute amount exceeds RMB1 million;

(6) the transaction amount (including liabilities and expenses assumed) the net asset value of the transaction target (such as equity interests) involved (where both book value and appraised value exist, the higher value shall prevail) accounts for 10% or more of the listed company’s latest audited net assets, and the absolute amount exceeds RMB10 million;

(7) other transactions of the Company that shall be considered by the Board in accordance with the Hong Kong Listing Rules the securities regulatory rules of the place where the Company’s shares are listed or other applicable laws and regulations.

Save as otherwise provided by the securities regulatory rules of the place where the Company’s shares are listed, where

Where the data involved in the calculation of the above indicators are negative, their absolute values shall be used for calculation.

Article 8 The Board shall have approval authority over the provision of guarantees by the Company other than those expressly required by laws, administrative regulations, departmental rules, the securities regulatory rules of the place where the Company’s shares are listed, the Hong Kong Listing Rules or the Articles of Association to be considered by the general meeting. Except for the circumstances specified in Article 19 of these Rules of Procedure, when the Board considers a guarantee matter, it must be approved by more than half of all Directors and not less than two-thirds of the Directors present at the Board meeting.

The Board shall determine the authority for external investments, acquisition and disposal of assets, asset pledges, external guarantees, entrusted wealth management, connected transactions related party/connected transactions and external donations, and establish strict review and decision-making procedures; major investment projects shall be evaluated by relevant experts and professionals and submitted to the general meeting for approval.

IV-4 -

Article 9 Transactions between the Company and connected persons-related parties/connected persons (excluding the provision of guarantees) that meet any of the following criteria shall be submitted to the Board for consideration and approval:

(1) transactions with connected natural persons-related parties/connected natural persons with a transaction amount of RMB300,000 or more (including liabilities and expenses assumed);

(2) transactions with connected legal persons-related parties/connected legal persons (or other organisations) with a transaction amount (including liabilities and expenses assumed) of RMB3 million or more and accounting for 0.5% or more of the absolute value of the latest audited net assets;

(3) other transactions between the Company and connected persons-related parties/connected persons that shall be considered by the Board in accordance with the Hong Kong Listing Rules the securities regulatory rules of the place where the Company's shares are listed or other applicable laws and regulations.

Chapter 5 Chairman

Article 10 The Chairman shall be a Director of the Company and shall be elected and removed by more than half of all Directors. The Chairman shall exercise the following powers:

(1) to preside over general meetings and convene and preside over Board meetings;

(2) to supervise and inspect the implementation of Board resolutions;

(3) to sign important Board documents or other documents that shall be signed by the legal representative of the Company;

(4) to exercise the powers of the legal representative;

(5) other powers granted by the Board.

Chapter 6 Board Meeting System

Article 11 Board meetings are divided into regular meetings and extraordinary meetings. The Board shall convene at least two-four regular Board meetings each year. All Board meetings shall be convened by the Chairman; where the Chairman is unable or fails to perform his or her duties, a Director jointly elected by more than half of the Directors shall convene and preside over the meeting.

Written notice shall be given to all Directors at least 104 days before each regular Board meeting, specifying the time, venue and agenda of the meeting.

IV-5 -

The Company shall hold one meeting each year, chaired by the Chairman and attended only by independent non-executive Directors, to independently review the Company's operating conditions and perform other duties required under the securities regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules.

Article 12 Before issuing a notice of a regular Board meeting, the Board office shall fully solicit opinions from all Directors, initially formulate meeting proposals and submit them to the Chairman for determination. Before determining the proposals, the Chairman shall, as necessary, solicit opinions from the general manager and other senior management.

Article 13 Shareholders representing one-tenth or more of the voting rights, or one-third or more of the Directors, the Audit Committee or two or more independent non-executive Directors, may propose to convene an extraordinary Board meeting. The Chairman shall convene and preside over the Board meeting within 10 days after receiving the proposal.

Article 14 Where the Board convenes an extraordinary Board meeting, written notice shall be given to all Directors three days before the meeting is convened. In urgent circumstances where an extraordinary Board meeting needs to be convened as soon as possible, notice of the meeting may be given at any time by telephone or other oral means, provided that the convener shall give an explanation at the meeting.

Article 15 A notice of Board meeting shall include the following contents:

(1) the date and venue of the meeting;
(2) the duration of the meeting;
(3) the reason and agenda items; and
(4) the date of issuance of the notice.

An oral meeting notice shall at least include the contents set out in items (1) and (2) above, as well as an explanation of the urgent circumstances requiring the extraordinary Board meeting to be convened as soon as possible.

Article 16 After a notice of regular Board meeting has been issued, if it is necessary to change the time, venue or other matters of the meeting or to add, change or cancel any meeting proposal, a written notice of change shall be issued three days before the originally scheduled meeting date, explaining the circumstances and setting out the relevant contents of the new proposal and related materials. If the period is less than three days, the meeting date shall be postponed accordingly or the meeting shall be held as scheduled after obtaining the approval of all Directors attending the meeting.

IV-6 -

After a notice of extraordinary Board meeting has been issued, if it is necessary to change the time, venue or other matters of the meeting or to add, change or cancel any meeting proposal, the approval of all Directors attending the meeting shall be obtained in advance and corresponding records shall be made.

Article 17 Unless otherwise provided in the Articles of Association, a Board meeting may be held only if more than half of the Directors are present. Unless otherwise provided by laws, administrative regulations, departmental rules or the Articles of Association, a resolution of the Board must be approved by more than half of all Directors.

Voting on Board resolutions shall be conducted on the basis of one person, one vote.

Where the general manager and the secretary to the Board do not concurrently serve as Directors, they shall attend Board meetings as non-voting attendees. Where the presider of the meeting considers it necessary, he or she may notify other relevant persons to attend the Board meeting as non-voting attendees.

Article 18 Directors may submit meeting proposals to the Board on any matter relating to the production, operation and management of the Company. The general manager may submit meeting proposals to the Board within the scope of duties prescribed by the Articles of Association.

Meeting proposals for Board meetings shall be collected by the Board office and, with the consent of the Chairman, delivered together with the meeting notice to the Directors and non-voting attendees for review. Before making a decision, the Chairman shall, as necessary, solicit opinions from the Directors and senior management.

Meeting proposals submitted to the Board shall satisfy the following conditions:

(1) the contents do not conflict with the provisions of laws, administrative regulations, departmental rules and the Articles of Association, and fall within the scope of powers of the Board prescribed in the Articles of Association;

(2) there is clear proposal content and specific resolution matters, and the submitter explains the relevant contents of the proposal at the time of submission;

(3) the proposal is submitted in writing.

Article 19 Where a Director has a connected-relationship-related party/connected relationship with an enterprise or individual involved in a matter to be resolved at a Board meeting, that Director shall promptly report to the Board in writing. A Director with such connected-relationship-related party/connected relationship shall not exercise voting rights on the resolution, nor act as proxy for another Director in exercising voting rights. Such Board meeting may be held if attended by more than half of the Directors who do not have a connected-relationship-related party/connected relationship, and any

IV-7 -

resolution made at the Board meeting shall be approved by more than half of the Directors who do not have a connected-relationship-related party/connected relationship. If the number of Directors without a connected-relationship-related party/connected relationship attending the Board meeting is fewer than three, the matter shall be submitted to the general meeting for consideration.

Article 20 Voting on Board resolutions shall be by show of hands or by ballot.

Board meetings and voting of the Company may be conducted by telephone or video conference.

Board resolutions may be passed in writing without convening a Board meeting after being signed by all Directors of the Board, provided that the proposed written resolution shall be delivered to each Director. For this purpose, each Director may sign different counterparts of the same written resolution, and all counterparts shall together constitute one valid written resolution. For this purpose, a Director's facsimile signature shall be valid and binding. Such written resolution shall have the same effect as a resolution passed at a duly convened Board meeting.

Article 21 Board meetings shall be attended by Directors in person. If a Director is unable to attend for any reason, he or she may appoint another Director in writing to attend on his or her behalf, and the proxy form shall specify the name of the proxy, the matters represented, the scope of authorisation and the validity period, and shall be signed or sealed by the appointor. A Director attending the meeting on behalf of another Director shall exercise the Director's rights within the scope of authorisation. If a Director fails to attend a Board meeting and also fails to appoint a representative to attend, he or she shall be deemed to have waived his or her voting rights at that meeting. A Director shall not accept appointment by more than two Directors to attend a Board meeting on their behalf at any one Board meeting. An independent non-executive Director may only appoint another independent non-executive Director to attend the meeting. If an independent non-executive Director fails to attend Board meetings in person for two three consecutive times and fails to appoint another Director to attend on his or her behalf, or if there is any other serious dereliction of duty, the Board or the Audit Committee may propose to the general meeting that he or she be removed.

Article 22 The Board shall prepare minutes of the decisions on matters considered at the meeting, and the Directors attending the meeting shall sign the minutes.

Minutes of Board meetings shall be kept as company records for a period of not less than 10 years.

Article 23 Minutes of Board meetings shall include the following contents:

(1) the date and venue of the meeting and the name of the convener;

(2) the names of the Directors attending the meeting and the names of the Directors (proxies) attending the Board meeting on behalf of others;

IV-8 -

(3) the meeting agenda;
(4) the key points of Directors' speeches; and
(5) the voting method and result for each resolution matter (the voting result shall state the number of votes for, against or abstaining).

Chapter 7 Secretary to the Board

Article 24 The Company shall have a secretary to the Board, who shall be responsible for the preparation of the Company's general meetings and Board meetings, custody of documents and management of Shareholder information of the Company. The secretary to the Board shall comply with the relevant provisions of laws, administrative regulations, departmental rules, the securities regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules and the Articles of Association.

Chapter 8 Supplementary Provisions

Article 25 These Rules of Procedure, as an appendix to the Articles of Association, shall become effective upon approval by resolution of the general meeting. The provisions applicable to companies listed on the ChiNext Market of the Shenzhen Stock Exchange shall be implemented from the date on which the Company completes its initial public offering of RMB ordinary shares (A Shares) and listing. The former Rules of Procedure for Board Meetings of the Company shall automatically cease to be effective from the date on which these Rules of Procedure become effective.

Article 26 Amendments to these Rules of Procedure shall be proposed by the Board by way of amendment drafts and submitted to the general meeting for consideration and approval.

Article 27 Unless otherwise specifically stated, terms used in these Rules of Procedure shall have the same meanings as those terms in the Articles of Association.

Article 28 For the purposes of these Rules of Procedure, the terms "not less than", "above" and "within" include the given number, and the terms "more than", "below" and "less than" exclude the given number.

Article 29 Matters not covered by these Rules of Procedure shall be implemented in accordance with the relevant national laws, regulations and normative documents, the securities regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules and the Articles of Association; where these Rules of Procedure are inconsistent with the relevant provisions of laws, regulations, normative documents, the securities regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules and the Articles of Association, the relevant provisions of laws,

regulations, normative documents, the securities regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules and the Articles of Association shall prevail.

If these Rules of Procedure conflict with any laws, regulations or normative documents promulgated by the State in the future or with the Articles of Association amended through lawful procedures, the relevant national laws, regulations, normative documents and the Articles of Association shall be implemented, and these Rules of Procedure shall be amended immediately and submitted to the general meeting for consideration and approval.

Phancy Group Co., Ltd.
June January 2026

IV-10 -

APPENDIX V

PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT NON-EXECUTIVE DIRECTORS OF PHANCY GROUP CO., LTD.

Working System for Independent Non-executive Directors

Article 1 In order to further improve the corporate governance structure of Phancy Group Co., Ltd. (hereinafter referred to as the "Company"), strengthen the restraint and supervision systems over the Board and the management, better protect the interests of minority Shareholders and promote the regulated operation of the Company, this Working System are formulated in accordance with the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), the Securities Law of the People's Republic of China, the Opinions of the General Office of the State Council on the Reform of the Independent Director System of Listed Companies, the Code of Corporate Governance for Listed Companies, the Measures for the Administration of Independent Directors of Listed Companies (hereinafter referred to as the "Measures for the Administration of Independent Directors"), the Rules Governing the Listing of Shares on the ChiNext Market of the Shenzhen Stock Exchange and the provisions of the Articles of Association of Phancy Group Co., Ltd. (hereinafter referred to as the "Articles of Association"), and with reference to the Securities Law of the People's Republic of China, the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (hereinafter referred to as the "Hong Kong Listing Rules") and other laws, regulations and normative documents.

Article 2 An independent non-executive Director means a Director who does not hold any office in the Company other than that of an independent non-executive Director and who has no relationship with the company by which he or she is engaged or with its substantial Shareholders that may hinder his or her independent and objective judgment. An independent non-executive Director must possess the independence required under Rule 3.13 of the Hong Kong Listing Rules.

Article 3 An independent non-executive Director shall perform his or her duties independently and shall not be influenced by any substantial Shareholder, actual controller or any other entity or individual having an interest in the Company. If he or she discovers any circumstance in relation to a matter under consideration that affects his or her independence, he or she shall make a declaration to the Company and abstain from the matter. If any circumstance materially affecting his or her independence arises during his or her term of office, he or she shall promptly notify the Company, propose remedial measures and, where necessary, resign.

Article 4 The number of independent non-executive Directors of the Company shall be not less than one-third of the total number of Directors of the Company.

Article 5 Among the independent non-executive Directors appointed by the Company, there shall be at least one person who has appropriate professional qualifications in compliance with regulatory requirements, or appropriate accounting or related financial management expertise (specifically, such person shall have relatively extensive accounting expertise and experience and, through experience as a professional

APPENDIX V

PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT NON-EXECUTIVE DIRECTORS OF PHANCY GROUP CO., LTD.

accountant, auditor, chief financial officer or chief accounting officer of a listed company or through performing similar functions, have experience in internal controls and in preparing or auditing financial statements comparable to those of the Company, or experience in analysing audited financial statements of listed companies, and shall satisfy other relevant requirements under the listing rules of the stock exchange of the place where the Company's shares are listed). At least one of the Company's independent non-executive Directors shall ordinarily reside in Hong Kong.

Chapter 2 Independence and Qualifications of Independent Non-executive Directors

Article 6 The independent non-executive Directors engaged by the Company shall be independent, and the following persons shall not serve as independent non-executive Directors:

(1) the person holds more than 1% of the total issued shares of the Company (excluding treasury shares);

(2) the person has received an interest in any securities of the Company by way of gift or other financial assistance from a core connected person (as defined under the Hong Kong Listing Rules) or from the Company itself, except for exceptions permitted under the Hong Kong Listing Rules;

(3) the person is a director, partner or principal of a professional adviser which currently provides services, or provided services within two years before his or her appointment, to any of the following companies/persons, or is an employee of such professional adviser who is or was involved in providing such services during the same period:

the Company, its holding company or any of their respective subsidiaries or core connected persons (as defined under the Hong Kong Listing Rules); or
any person who, within two years before the proposed date of appointment of the person as an independent non-executive Director, was a controlling shareholder of the Company, or, if the Company has no controlling shareholder, any person who was the chief executive or a Director (other than an independent non-executive Director) of the Company, or any of their close associates (as defined under the Hong Kong Listing Rules);

(4) the person currently has, or within one year before the proposed date of his or her appointment as an independent non-executive Director had, a material interest in any principal business activity of the Company, its holding company or any of their respective subsidiaries or core connected persons (as defined under the Hong Kong Listing Rules), or is involved in any material business transaction with the Company, its holding company or any of their respective subsidiaries or any core connected person (as defined under the Hong Kong Listing Rules);

V-2 -

(5) the person serves as a member of the Board for the purpose of safeguarding the interests of an entity whose interests differ from those of the Shareholders as a whole;

(6) the person currently has, or within two years before the proposed date of his or her appointment as an independent non-executive Director had, a connected relationship prescribed under the Hong Kong Listing Rules with any Director, chief executive or substantial Shareholder (as defined under the Hong Kong Listing Rules) of the Company;

(7) the person is currently (or within two years before the proposed date of his or her appointment as a Director was) an officer or director (other than an independent non-executive Director) of the Company, its holding company or any of their respective subsidiaries or any core connected person (as defined under the Hong Kong Listing Rules); and

(8) the person is financially dependent on the Company, its holding company or any of their respective subsidiaries or core connected persons;

(9) the person holds office in the Company or any of its subsidiaries, or the spouse, parent, child or major social relations of such person;

(10) the person directly or indirectly holds 1% or more of the issued shares of the Company, or is a natural person Shareholder among the top ten Shareholders of the Company, or the spouse, parent or child of such person;

(11) the person holds office with a Shareholder that directly or indirectly holds 5% or more of the issued shares of the Company or with any of the top five Shareholders of the Company, or the spouse, parent or child of such person;

(12) the person holds office in a subsidiary of the controlling Shareholder or actual controller of the Company, or the spouse, parent or child of such person;

(13) the person has material business dealings with the Company and its controlling Shareholder, actual controller or their respective subsidiaries, or a person who holds office in an entity having material business dealings with them or in the controlling shareholder or actual controller of such entity;

(14) the person provides financial, legal, consulting, sponsorship or other services to the Company and its controlling Shareholder, actual controller or their respective subsidiaries, including but not limited to all members of the project team of the intermediary providing the services, reviewers at all levels, signatories to the report, partners, directors, senior management and principal responsible persons;

V-3 -

(15) the person has fallen within any of the circumstances listed in Items 9 to 14 during the preceding twelve months;

(16) other persons who are not independent as prescribed by laws, administrative regulations, regulatory rules of the place where the Company's shares are listed and the Articles of Association.

Article 7 An independent non-executive Director shall satisfy the following basic conditions:

(1) possessing the qualifications to serve as a director of a listed company in accordance with laws, administrative regulations, the regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules and other relevant provisions;

(2) having basic knowledge of the operation of listed companies and being familiar with relevant laws, administrative regulations, departmental rules and rules;

(3) having at least five years of work experience in law, accounting, economics or other fields necessary for performing the duties of an independent non-executive Director;

(4) possessing the independence required under relevant laws, regulations, the regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules and the Articles of Association—Articles of Association;

(5) having good personal integrity and no adverse record such as material dishonesty;

(6) other conditions prescribed by relevant laws and regulations, the Hong Kong Listing Rules or the Articles of Association—Articles of Association.

Chapter 3 Nomination, Election and Replacement of Independent Non-executive Directors

Article 8 The Board of the Company and Shareholders who individually or jointly hold 31% or more of the issued shares of the Company may nominate candidates for independent non-executive Directors, subject to election and determination by the general meeting.

Article 9 The nominator of an independent non-executive Director shall obtain the consent of the nominee before making the nomination. The nominator shall fully understand the nominee's occupation, educational background, professional title, detailed work experience, all concurrent positions and other relevant matters.

Article 10 Before the general meeting for the election of independent non-executive Directors is convened, the Board of the Company shall complete the relevant procedures for the nomination of independent non-executive Directors in accordance with applicable requirements and disclose detailed information on the candidates for independent non-executive Directors, so as to ensure that Shareholders have sufficient knowledge of the candidates before voting.

Article 11 After an independent non-executive Director has been elected and appointed by the general meeting, the Company shall, in accordance with the relevant provisions of the Hong Kong Listing Rules, confirm the following matters in the announcement of the appointment of such independent non-executive Director:

(1) confirm whether he or she possesses the independence described in this Working System and the relevant provisions of the Hong Kong Listing Rules;

(2) confirm whether he or she previously had or currently has any financial or other interest in the business of the Company or its subsidiaries, and whether he or she has any connected relationship with any core connected person of the Company (as defined under the Hong Kong Listing Rules);

(3) state whether there are any other factors that may affect his or her independence at the time of his or her appointment.

Article 12 The term of office of an independent non-executive Director shall be the same as that of the other Directors of the Company. Upon expiry of the term, he or she may be re-elected and re-appointed, provided that the consecutive term of office shall not exceed nine six years; if an independent non-executive Director has served for more than nine years, his or her further appointment shall be subject to consideration and approval by Shareholders at a general meeting by way of a separate resolution in accordance with the Hong Kong Listing Rules; the documents accompanying that resolution sent to Shareholders shall set out the reasons why the Board considers that the person remains independent and should be re-elected, and such other contents as required under the listing rules of the place where the Company's shares are listed.

Article 13 After an independent non-executive Director has assumed office, if there is any change that may affect his or her independence, such independent non-executive Director shall notify the Company and the regulatory authorities of the place where the Company's shares are listed. The Stock Exchange of Hong Kong Limited as soon as possible, and shall confirm his or her independence to the Company annually. The Company shall disclose in its annual report whether it has received confirmations from independent non-executive Directors and state whether it still considers such independent non-executive Directors to be independent.

V-5 -

Article 14 If an independent non-executive Director fails to attend Board meetings in person for three-two consecutive times and fails to appoint another Director to attend on his or her behalf, or if there is any other serious dereliction of duty, the Board or the Audit Committee may propose to the general meeting that he or she be removed. Unless the above circumstances or other circumstances under which a person may not serve as an independent non-executive Director as prescribed by the Company Law and the regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules arise, an independent non-executive Director shall not be removed without cause before the expiry of his or her term. In the event of early removal, the Company shall disclose the matter as a special disclosure item, and the removed independent non-executive Director may make a public statement if he or she considers the Company's reasons for removal to be improper.

Article 15 An independent non-executive Director may resign before the expiry of his or her term of office. An independent non-executive Director who resigns shall submit a written resignation report to the Board, stating any circumstances relating to his or her resignation or any matters that he or she considers necessary to bring to the attention of the Shareholders and creditors of the Company.

Article 16 If the number of independent non-executive Directors on the Board of the Company falls below the minimum number required under this Working System, the regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules and the Articles of Association Articles of Association as a result of the resignation or removal of an independent non-executive Director or for any other reason, the Board shall immediately notify The Stock Exchange of Hong Kong Limited and publish an announcement setting out the relevant details and reasons, and shall appoint a sufficient number of independent non-executive Directors within three months after it ceases to comply with the relevant requirements.

Chapter 4 Duties of Independent Non-executive Directors

Article 17 Independent non-executive Directors shall have the powers conferred upon Directors by the Company Law the Hong Kong Listing Rules, the regulatory rules of the place where the Company's shares are listed and other relevant laws and regulations, which in principle include:

(1) participating in Board decisions and expressing clear opinions on matters under consideration;

(2) supervising potential material conflicts of interest between the Company and its controlling Shareholder, actual controller, Directors and senior management as set out in Articles 23, 26, 27 and 28 of the Administrative Measures for Independent Directors of Listed Companies, so as to procure that Board decisions are in the overall interests of the Company and protect the lawful rights and interests of minority Shareholders;

(3) providing professional and objective advice on the operation and development of the Company, and promoting the enhancement of the Board's decision-making standards;

– V-6 –

(4) other duties prescribed by laws, administrative regulations, the regulatory rules of the place where the Company's shares are listed, the Hong Kong Listing Rules and the Articles of Association Articles of Association.

Article 18 Independent non-executive Directors shall exercise the following special powers:

(1) independently engaging intermediaries to audit, consult on or verify specific matters of the Company;
(2) proposing to the Board to convene an extraordinary general meeting;
(3) proposing to convene a Board meeting;
(4) publicly soliciting Shareholder rights in accordance with law;
(5) expressing independent opinions on matters that may prejudice the interests of the Company or minority Shareholders;
(6) other powers prescribed by laws, administrative regulations, the regulatory rules of the place where the Company's shares are listed and the Articles of Association.

Independent non-executive Directors exercising the powers set out in items (1) to (3) of the preceding paragraph shall obtain the consent of more than half of all independent non-executive Directors.

Where independent non-executive Directors exercise the powers set out in the second paragraph, the Company shall disclose the same in a timely manner. Where the above powers cannot be exercised normally, the Company shall disclose the specific circumstances and reasons.

Article 19 The following matters shall be submitted to the Board for consideration after being approved by more than half of all independent non-executive Directors of the Company:

(1) related party transactions required to be disclosed;
(2) plans for changes to or waivers of undertakings by the Company and relevant parties;
(3) decisions made and measures taken by the board of directors of an acquired company in respect of an acquisition;

– V-7 –

(4) other matters prescribed by laws, administrative regulations, the regulatory rules of the place where the Company's shares are listed and the Articles of Association.

Article 18 Article 20 In addition to performing the above duties, independent non-executive Directors shall also express independent opinions on the following matters:

(1) connected transactions which meet the requirements under the regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules for review by or opinion from independent non-executive Directors;

(2) other material transactions which meet the requirements under the regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules for review by or opinion from independent non-executive Directors;

(3) matters which independent non-executive Directors consider may prejudice the interests of minority Shareholders;

(4) other matters prescribed by relevant laws and regulations, the regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules or the Articles of Association Articles of Association.

Independent non-executive Directors shall express one of the following types of opinions on the matters referred to in the preceding paragraph: consent; qualified opinion and the reasons therefor; dissenting opinion and the reasons therefor; or inability to express an opinion and the impediments thereto.

Article 21 The Company shall convene meetings attended by all independent Directors on a regular or irregular basis (the "Independent Directors' Special Meeting"). Matters specified in items (1) to (3) of paragraph 1 of Article 18 and Article 23 of the Administrative Measures for Independent Directors of Listed Companies shall be considered at an Independent Directors' Special Meeting.

The Independent Directors' Special Meeting may study and discuss other matters of the Company as necessary.

The Independent Directors' Special Meeting shall be convened and chaired by one independent Director jointly elected by more than half of all independent Directors. Where the convener fails or is unable to perform his or her duties, two or more independent Directors may convene the meeting themselves and elect one representative to chair the meeting.

The Company shall provide convenience and support for the convening of Independent Directors' Special Meetings.

V-8 -

Article 19 Article 22 Independent non-executive Directors shall sign and confirm their independent opinions issued, and such opinions shall be recorded in the minutes of the Board meeting.

Chapter 5 Rights and Obligations of Independent Non-executive Directors

Article 20 Article 23 The Company shall ensure that independent non-executive Directors enjoy the same right to information as other Directors. For any matter requiring a decision by the Board, the Company must give prior notice to independent non-executive Directors within the statutory time period and provide sufficient information at the same time. If an independent non-executive Director considers the information insufficient, he or she may request supplementation.

Article 21 Article 24 Independent non-executive Directors shall have the right to participate in the special committees established under the Board and shall be eligible to serve as chairmen of such special committees, so as to give full play to the role of independent non-executive Directors in promoting and supervising the Company's business development and regulated operation.

Article 22 Article 25 Independent non-executive Directors shall hold at least one meeting each year with the Chairman of the Board without the attendance of executive Directors.

Independent non-executive Directors shall attend meetings of the Board and the special committees of the Board on which they serve regularly and on time, actively participate in meeting affairs, carefully read meeting documents, proactively investigate and obtain the circumstances and information necessary for making decisions, express clear opinions on matters under consideration with a normal, reasonable and prudent attitude and diligent conduct, and contribute to the Company through their professional knowledge, skills and background.

If the Board considers that a substantial Shareholder or Director has a material conflict of interest in a matter to be considered by the Board, such matter shall be resolved by convening a physical Board meeting rather than by written resolution. If neither the independent non-executive Directors nor their close associates have a material interest in the transaction, the independent non-executive Directors shall attend such Board meeting.

Article 23 Article 26 If an independent non-executive Director is unable to attend a Board meeting in person for any reason, he or she shall prudently select a proxy and appoint another independent non-executive Director in writing to attend on his or her behalf. The appointor shall independently assume legal liability.

Article 24 Article 27 The Company shall provide the working conditions necessary for independent non-executive Directors to perform their duties. The secretary to the Board shall actively assist independent non-executive Directors in performing their duties, including by briefing them on relevant circumstances and providing materials, regularly informing them of the Company's operations and, where necessary, arranging

V-9 -

on-site inspections by independent non-executive Directors. Where independent opinions, proposals or written explanations issued by independent non-executive Directors are required to be announced, the Company shall promptly assist with the announcement procedures.

Article 25 Article 28 Where independent non-executive Directors independently engage external audit firms or consulting agencies, they shall submit in writing to the Board information on the intermediaries to be engaged and the scope of work, and shall obtain the approval of the Board. The reasonable expenses required shall be borne by the Company.

Article 26 Article 29 The Company shall pay remuneration and allowances to independent non-executive Directors. The payment standards shall be formulated by the Board or the Remuneration Committee and submitted to the general meeting for consideration and approval. Except for the above remuneration and allowances, independent non-executive Directors shall not obtain any additional, undisclosed benefits from the Company, its controlling Shareholder, actual controller or other institutions or persons having connected relationships with the Company.

Article 27 Article 30 Independent non-executive Directors owe duties of good faith and diligence to the Company and all Shareholders. Independent non-executive Directors shall comply with the laws, regulations, the regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules and the Articles of Association Articles of Association, faithfully perform their duties and safeguard the interests of the Company. When their own interests conflict with the interests of the Company and the Shareholders, they shall act in the best interests of the Company and the Shareholders.

Article 28 Article 31 Where an independent non-executive Director resigns or his or her term of office expires, the obligations owed by him or her to the Company and the Shareholders shall not be automatically discharged before the resignation report becomes effective, within a reasonable period after it becomes effective, or within a reasonable period after the end of his or her term of office. His or her obligation to keep the Company's trade secrets confidential shall remain effective after the end of his or her term of office until such secrets become public information. The duration of other obligations shall be determined in accordance with the principle of fairness, having regard to the length of time between the occurrence of the event and the departure from office, and the circumstances and conditions under which his or her relationship with the Company ends.

Chapter 6 Supplementary Provisions

Article 29 Article 32 Matters not covered by these duties and Rules of Procedure Work Rules shall be implemented in accordance with the relevant national laws, regulations and normative documents, the regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules and the Articles of Association Articles of Association. If this Working System conflict with any laws, regulations and normative documents, the regulatory rules of the place where the Company's shares are

listed the Hong Kong Listing Rules, other provisions of the regulatory authorities of the place where the Company's shares are listed the Hong Kong securities regulatory authorities or the Articles of Association Articles of Association, the relevant laws, regulations and normative documents, the regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules, other provisions of the regulatory authorities of the place where the Company's shares are listed the Hong Kong securities regulatory authorities or the Articles of Association Articles of Association shall prevail.

Article 30 Article 33 For the purposes of this Working System, the terms "not less than", "above" and "at least" include the given number, and the terms "exceeding" and "below" exclude the given number.

Article 31 Article 34 This Working System shall become effective on the date on which they are considered and approved by the general meeting. The provisions applicable to companies listed on the ChiNext Market of the Shenzhen Stock Exchange shall be implemented from the date on which the Company completes its initial public offering of RMB ordinary shares (A Shares) and listing.

Article 32 Article 35 This Working System shall be interpreted by the Board of the Company.

Phancy Group Co., Ltd.
June January 2026

APPENDIX VI

PROPOSED AMENDMENTS TO THE ADMINISTRATIVE MEASURES FOR RELATED PARTY/CONNECTED TRANSACTIONS OF PHANCY GROUP CO., LTD.

Beijing Fourth Paradigm Technology Co., Ltd. Phancy Group Co., Ltd.
Administrative Measures for Related Party/Connected Transactions

Article 1 For the purposes of strengthening the management of related party/connected transactions of Beijing Fourth Paradigm Technology Co., Ltd. Phancy Group Co., Ltd. (hereinafter referred to as the "Company"), regulating related party/connected transaction activities, effectively preventing and controlling operational risks, ensuring the legality, fairness and reasonableness of related party/connected transactions, and safeguarding the lawful rights and interests of the Company and all its Shareholders, these Measures are specially formulated in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Administrative Measures for Information Disclosure by Listed Companies, the Rules Governing the Listing of Shares on the ChiNext Market of the Shenzhen Stock Exchange (hereinafter referred to as the "ChiNext Listing Rules"), the Self-Regulatory Guidelines for Listed Companies of the Shenzhen Stock Exchange No. 7 — Transactions and Related Party Transactions, the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (hereinafter referred to as the "Hong Kong Listing Rules") and other laws, regulations, rules and normative documents, as well as the Articles of Association of Beijing Fourth Paradigm Technology Co., Ltd. Phancy Group Co., Ltd. (hereinafter referred to as the "Articles of Association").

Article 2 These Measures shall apply to the Company and its subsidiaries included in the scope of the Company's consolidated financial statements.

Article 3 These Measures shall be binding on the Shareholders, Directors and senior management of the Company, and the Shareholders, Directors and senior management of the Company shall comply with them.

Article 4 The Company's related party/connected transaction activities shall follow the principles of impartiality, fairness and openness, be conducted under written agreements, and be in the overall interests of the Company and all its Shareholders. The execution of agreements shall follow the principles of equality, voluntariness, equivalence and consideration, and the contents of agreements shall be clear and specific and comply with the relevant provisions of the regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules. The Company's related party/connected transaction activities shall comply with relevant laws, regulations, departmental rules and regulatory requirements of regulatory authorities.

APPENDIX VI

PROPOSED AMENDMENTS TO THE ADMINISTRATIVE MEASURES FOR RELATED PARTY/CONNECTED TRANSACTIONS OF PHANCY GROUP CO., LTD.

Chapter 2 Identification of Related Parties/Connected Persons and Related Party/Connected Transactions

Article 5 The Company's related parties/connected persons include related parties as defined under domestic securities regulatory rules such as the ChiNext Listing Rules, and connected persons as defined under Hong Kong securities regulatory rules such as the Hong Kong Listing Rules.

Article 6 According to the ChiNext Listing Rules, the Company's related parties include related legal persons and related natural persons.

Any legal person or other organisation falling under any of the following circumstances shall be a related legal person of the Company:

(1) a legal person or other organisation that directly or indirectly controls the Company;

(2) a legal person or other organisation, other than the Company and its controlled subsidiaries, which is directly or indirectly controlled by the entity referred to in the preceding item;

(3) a legal person or other organisation, other than the Company and its controlled subsidiaries, which is directly or indirectly controlled by a related natural person of the Company listed in the third paragraph of this Article, or in which such person serves as a director (excluding a person who is an independent director of both parties) or senior management member;

(4) a legal person or other organisation holding 5% or more of the shares of the Company, and its parties acting in concert;

(5) any other legal person or other organisation which the China Securities Regulatory Commission, the Shenzhen Stock Exchange or the Company, based on the principle of substance over form, determines to have a special relationship with the Company that may cause the Company to tilt its interests in favour of such legal person or organisation.

Any natural person falling under any of the following circumstances shall be a related natural person of the Company:

(1) a natural person who directly or indirectly holds 5% or more of the shares of the Company;

(2) a Director or senior management member of the Company;

(3) a director, supervisor or senior management member of a legal person or other organisation that directly or indirectly controls the Company;

– VI-2 –

(4) close family members of the persons referred to in items (1) to (3) of this paragraph, including spouses, parents, parents of spouses, siblings and their spouses, children aged 18 or above and their spouses, siblings of spouses and parents of children's spouses;

(5) any other natural person whom the China Securities Regulatory Commission, the Shenzhen Stock Exchange or the Company, based on the principle of substance over form, determines to have a special relationship with the Company that may cause the Company to tilt its interests in favour of such natural person.

Any legal person or natural person falling under any of the following circumstances shall be deemed to be a related party of the Company:

(1) due to an agreement entered into or arrangement made with the Company or its related party, after such agreement or arrangement takes effect, or within the next twelve months, such person falls under any of the circumstances prescribed in the second or third paragraph of this Article;

(2) within the preceding twelve months, such person fell under any of the circumstances prescribed in the second or third paragraph of this Article.

Article 7 The definition and scope of connected persons shall be subject to the Hong Kong Listing Rules. According to the Hong Kong Listing Rules, except for the exemptions provided therein, connected persons of the Company and its subsidiaries generally include the following parties:

(1) directors, supervisors, general managers or substantial shareholders of the Company or any of its subsidiaries¹ (other than insignificant subsidiaries²) (being persons entitled to exercise, or control the exercise of, 10% or more of the voting power at general meetings of the Company);

¹ Pursuant to the requirements of the Hong Kong Listing Rules, a subsidiary includes an entity whose accounts should be consolidated under Hong Kong or International Financial Reporting Standards, or a subsidiary undertaking as defined in Schedule 1 to the Hong Kong Companies Ordinance (generally referring to holding more than half of the equity interest, voting rights, or controlling the appointment or removal of a majority of the board members, irrespective of whether such company is consolidated under the financial reporting standards).

² Pursuant to the provisions of the Hong Kong Listing Rules, a insignificant subsidiary refers to a subsidiary whose total assets, profits and revenue, when compared with those of the Group, satisfy either of the following conditions: (a) the relevant percentage ratios for each of the most recent three financial years (or, if the financial year in question is less than three years, commencing from the date of incorporation or establishment of such subsidiary) are less than 10% per annum; or (b) the relevant percentage ratio for the most recent financial year is less than 5%. However, if a person is connected with two or more subsidiaries of the Company, the Stock Exchange of Hong Kong Limited will aggregate the total assets, profits and revenue of such subsidiaries to determine whether, on a combined basis, they constitute "insignificant subsidiaries" of the Company.

(2) any person who has been a director of the Company or any of its subsidiaries (other than insignificant subsidiaries) in the past 12 months (together with the persons referred to in item (1) of this Article, "basic connected persons");

(3) any associate of a basic connected person (as defined in Appendix I to this these policy Measures);

(4) a non-wholly owned subsidiary of the Company in which any connected person at the Company level is, individually or collectively, entitled to exercise or control the exercise of 10% or more of the voting power at the general meeting of such non-wholly owned subsidiary (excluding, for this 10% threshold, any indirect interest held by such connected person in such non-wholly owned subsidiary through the Company), and any subsidiary of such non-wholly owned subsidiary;

(5) any person whom The Stock Exchange of Hong Kong Limited (hereinafter referred to as the "Hong Kong Stock Exchange") considers should be treated as a connected person (as defined in the Hong Kong Listing Rules);

(6) The Hong Kong Stock Exchange will not normally treat PRC government bodies as connected persons of listed issuers. According to the Hong Kong Listing Rules, PRC government bodies include but are not limited to: (1) the PRC central government, including the State Council, state ministries and commissions, institutions directly under the State Council, offices of the State Council, public institutions directly under the State Council and bureaus administered by state ministries and commissions; (2) PRC provincial-level governments, including provincial governments, municipalities directly under the central government and autonomous regions, together with their respective administrative bodies, agencies and institutions; and (3) PRC local governments below the provincial level, including district, municipal and county governments, together with their respective administrative authorities, agencies and institutions.

Article 8 In addition to the persons referred to above, related parties/connected persons of the Company shall also include any natural person or legal person determined to be a related party/connected person under the rules of the China Securities Regulatory Commission, the Shenzhen Stock Exchange or the Hong Kong Stock Exchange as in effect from time to time thereafter. If the definition of related parties/connected persons under these Measures conflicts with the ChiNext Listing Rules, the Hong Kong Listing Rules or other laws and regulations that take effect thereafter, the relevant laws and regulations in effect on the date on which a related party/connected person is determined shall prevail.

VI-4 -

Article 9 The Company's related party/connected transactions include related party transactions as defined under domestic securities regulatory rules such as the ChiNext Listing Rules, and connected transactions as defined under Hong Kong securities regulatory rules such as the Hong Kong Listing Rules, means any transaction between the Company or its subsidiaries and a connected person of the Company, as well as transactions with a third party of a specified category from which a connected person of the Company may derive benefits through the interests in the entities involved in such transactions, including but not limited to leases, licences, provision of products, provision of guarantees, provision of financial assistance, issue of shares, provision of services or sharing of services, establishment of joint arrangements, and other transactions.

According to the ChiNext Listing Rules, a related party transaction refers to a transaction between the Company or other entities such as subsidiaries within the scope of its consolidated financial statements and related parties of the Company.

According to the Hong Kong Listing Rules, a connected transaction refers to any transaction between the Company or its subsidiaries and connected persons of the Company, including but not limited to purchases or sales of assets, entering into or terminating finance leases or operating leases or sub-leases, granting, accepting, exercising, transferring or terminating an option to purchase or sell assets or subscribe for securities, deciding not to exercise an option to purchase or sell assets or subscribe for securities, licensing, provision of products, provision of guarantees or indemnities, provision or receipt of financial assistance, issue of new shares or sale or transfer of treasury shares, provision or receipt of services or sharing of services, establishment of joint venture arrangements, purchase or provision of raw materials, semi-finished products and/or finished products, or other transactions recognised by The Stock Exchange of Hong Kong Limited as connected transactions.

Article 10 According to the ChiNext Listing Rules, related party transactions of the Company refer to matters involving the transfer of resources or obligations between the Company or its controlled subsidiaries and related parties of the Company, including:

(1) purchase or sale of assets;
(2) external investments (including entrusted wealth management and investments in subsidiaries, but excluding the establishment of or capital increase in wholly-owned subsidiaries);
(3) provision of financial assistance (including entrusted loans);
(4) provision of guarantees (meaning guarantees provided by the Company to others, including guarantees for controlled subsidiaries);
(5) leasing in or leasing out assets;
(6) entering into management contracts (including entrusted operation, entrusted management and similar arrangements);

– VI-5 –

(7) giving or receiving assets as gifts;
(8) restructuring of creditor's rights or debts;
(9) transfer of research and development projects;
(10) entering into licensing agreements;
(11) waiver of rights (including waiver of pre-emptive rights, preferential capital contribution rights, etc.);
(12) purchase of raw materials, fuel and power;
(13) sale of products and goods;
(14) provision or receipt of services;
(15) entrusted sale or sale on consignment;
(16) joint investment by related parties.

In addition to the above transactions, matters occurring between the Company and related parties in the ordinary course of business which may result in the transfer of resources or obligations shall also constitute related party transactions of the Company.

Article 11 According to the Hong Kong Listing Rules, connected transactions of the Company may be classified into one-off connected transactions and continuing connected transactions.

One-off connected transactions refer to connected transactions other than the continuing connected transactions described below.

Continuing connected transactions refer to connected transactions involving goods, services or the provision of financial assistance which are expected to continue or recur over a period of time, and are usually transactions conducted by the Company in the ordinary course of business, including but not limited to:

sale of products and goods;
provision or receipt of services;
subscription for products managed by the Company;
entrusted sale or sale on consignment;

– VI-6 –

provision, receipt or sharing of services;
entering into licensing agreements;
purchase or provision of raw materials, semi-finished products and/or finished products;
transfer or acceptance of transfer of research and development projects;
entering into agreements or arrangements to establish any form of joint venture (whether in partnership or corporate form) or to conduct any other form of joint venture arrangement;
entrusted or commissioned management of assets and businesses;
purchase or sale of assets (including deemed disposals under the Hong Kong Listing Rules, namely, regardless of whether the Company consolidates a subsidiary in its accounts, an allotment of share capital by the subsidiary may result in a reduction in the percentage of equity interest held by the Company in that subsidiary, and such reduction in equity interest caused by the allotment of share capital is deemed to be a disposal); granting, accepting, transferring, exercising, not exercising or terminating an option to purchase or sell assets or subscribe for securities;
granting, accepting, transferring, exercising, not exercising or terminating (except where the Company or its subsidiary has no discretion to terminate the option under the original agreement) an option (being a right, but not an obligation, to purchase or sell assets or subscribe for securities) to purchase or sell assets or subscribe for securities;
entering into or terminating finance leases or operating leases or sub-leases (including leasing or sub-leasing properties);
giving indemnities (including guarantees for subsidiaries), or providing or receiving financial assistance. "Financial assistance" includes granting credit, lending money, or giving indemnities, guarantees or security for loans;
other matters that should be recognised as continuing related party/connected transactions under the Hong Kong Listing Rules and other transactions as determined by applicable securities regulatory rules, other stock exchange listing rules (if applicable), and relevant guidelines.
VI-7 -

Chapter 3 Management of Related Party/Connected Transactions

Article 12 The Company's general meeting shall be responsible for approving related party/connected transactions which are required by laws, regulations and securities regulatory authorities to be decided by the general meeting.

The Board of the Company shall be responsible for approving related party/connected transactions which are required to be approved by the Board other than those prescribed in the preceding paragraph, as well as other related party/connected transactions prescribed by securities regulatory authorities.

The Audit Committee of the Board of the Company shall be responsible for confirming the list of connected persons of the Company, conducting overall review of related party/connected transactions and regularly reviewing the overall status of the Company's related party/connected transactions, including reviewing the decision-making and performance status of the Company's related party/connected transactions within 10 days after the end of each half-year, and reviewing the overall status of the Company's related party/connected transactions within 30 days after the end of each year, forming review opinions and reporting them to the Board of the Company.

Independent non-executive Directors shall express independent opinions on related party/connected transactions which are required by the regulatory rules of the place where the Company's shares are listed to be approved by independent Shareholders and on other related party/connected transactions (including continuing related party/connected transactions) on which independent non-executive Directors are required to express independent opinions.

The Audit Committee of the Company shall be responsible for supervising the consideration, voting, disclosure and performance of related party/connected transactions.

The Chief Executive Officer General Manager's Office of the Company shall consider and decide on related party/connected transactions within its authority.

Article 13 The Board Office of the Company shall be responsible for the management of related parties/connected persons, the compilation and dynamic maintenance of the list of related parties/connected persons, the organisation of the decision-making procedures of the Company's general meeting and the Board for related party/connected transactions, information disclosure of related party/connected transactions and applications for disclosure waivers.

The finance management department shall be responsible for accounting records, accounting, reporting and statistical analysis of related party/connected transactions, and shall report quarterly to the Board Office for filing.

VI-8 -

The legal affairs department shall be responsible for identifying and reviewing related parties/connected persons and related party/connected transactions, examining related party/connected transaction agreements, and reporting quarterly to the Board Office for filing.

The relevant functional departments of the Company shall be responsible for preparing proposals for related party/connected transactions within their respective scope of duties, signing related party/connected transaction agreements and supervising and reporting the progress of related party/connected transactions.

Article 14 Before each transaction occurs, the relevant functional department of the Company shall report to the Board Office, which shall organise the following departments to conduct contract review and countersigning in respect of the transaction, including:

(1) the legal affairs department, responsible for reviewing the background of the counterparty, identifying whether the transaction is a related party/connected transaction, and disclosing, level by level, the related party/connected relationship between the related party/connected person and the Company.

(2) the finance management department, responsible for verifying transaction-related data and conducting percentage ratio tests;

(3) the Board Office, responsible for checking the list of related parties/connected persons, determining whether the counterparty is a related party/connected person already included in the list, whether any potential related party/connected person exists and whether the list of related parties/connected persons needs to be updated, and whether the transaction needs to be disclosed.

The review results of related party/connected transactions shall be reported to the Board Office for filing, and the Board Office shall organise the performance of the decision-making procedures for related party/connected transactions. Before the decision-making procedures have been fully completed, no agreement relating to a related party/connected transaction shall be signed, and no such transaction shall be conducted, without authorisation.

Article 15 Each subsidiary of the Company shall be responsible for coordinating the management of related party/connected transactions conducted by it, shall implement the review process for related party/connected transactions in accordance with the relevant requirements of the Company, and shall report the review results of each related party/connected transaction to the Board Office of the Company.

VI-9 -

Article 16 Each functional department of the Company shall designate personnel responsible for the management of related parties/connected persons and related party/connected transactions within that department, and each subsidiary of the Company shall designate the department and personnel responsible for the management of related parties/connected persons and related party/connected transactions within that subsidiary, and report the same to the Board Office of the Company for filing.

Chapter 4 Reporting of Related Parties/Connected Persons

Article 17 The Directors and senior management of the Company, Shareholders holding 5% or more of the shares of the Company and their parties acting in concert, and the actual controller shall promptly submit to the Board of the Company the list of related parties of the Company and descriptions of related relationships, and the Company shall properly register and manage the same.

Article 18 Related parties/connected persons of the Company shall promptly inform the Board Office of the Company of their related party/connected relationships with the Company; where information on related parties/connected persons changes, they shall also promptly inform the Board Office of such changes.

Each department and subsidiary of the Company shall promptly submit to the Board Office of the Company information on the Company's related parties/connected persons arising from transactions directly conducted by them; where the relevant information on related parties/connected persons changes, they shall promptly submit such changes to the Board Office.

Article 19 Each year, the Board Office of the Company shall issue confirmation letters on changes in related parties/connected persons to the related parties/connected persons identified by the Company, compile and update the information (if necessary), submit the updated list of related parties/connected persons to the Audit Committee of the Board of the Company for review, and send it to each department and subsidiary of the Company for reference. After confirming the list of related parties/connected persons of the Company, the Audit Committee of the Board of the Company shall promptly report to the Board of the Company.

Article 20 Information on related parties/connected persons of the Company required to be filed includes:

(1) in the case of a legal person, the name and organisation code of the legal person shall be specified; in the case of a natural person, the name and identity card number of the natural person shall be specified;

(2) descriptions of the related party/connected relationship with the Company, etc.

Chapter 5 Decision-making on Related Party/Connected Transactions

Article 21 Where the Company or any subsidiary proposes to conduct a related party/connected transaction with a related party/connected person, it shall perform the decision-making procedures in accordance with this Chapter before proceeding.

VI-10 -

A proposal for a related party/connected transaction submitted to a meeting for decision-making shall provide a detailed explanation of the specific contents, pricing policy, necessity and feasibility of the transaction, and its impact on the interests of the Company and Shareholders.

Article 22 Related party/connected transactions required to be disclosed shall be submitted to the Board for consideration after being approved by more than half of all independent non-executive Directors of the Company.

Article 23 Where the Company proposes to conduct a related party transaction as defined under the ChiNext Listing Rules, it shall perform the consideration procedures and make timely disclosure in accordance with the following standards:

(1) for a transaction between the Company and a related party (other than provision of guarantees) where the transaction amount accounts for 5% or more of the absolute value of the Company's latest audited net assets and exceeds RMB30 million, an appraisal report or audit report shall be provided and the transaction shall be submitted to the general meeting for consideration;

(2) a transaction between the Company and a related legal person where the transaction amount accounts for 0.5% or more of the absolute value of the Company's latest audited net assets and exceeds RMB3 million, or a transaction between the Company and a related natural person where the transaction amount is RMB300,000 or more, shall be considered by the Board after being approved by more than half of all independent non-executive Directors of the Company.

Where a transaction between a subsidiary within the scope of the Company's consolidated financial statements and a related party as defined under the ChiNext Listing Rules reaches the above standards, the consideration procedures shall be performed and timely disclosure shall be made in accordance with the above provisions.

Article 24 Where the Company provides a guarantee to a related party, in addition to being considered and approved by more than half of all non-related Directors, it shall also be considered and approved by not less than two-thirds of the non-related Directors attending the Board meeting and a resolution shall be passed, and it shall be submitted to the general meeting for consideration.

Where the Company provides a guarantee to a controlling Shareholder, actual controller or his/her/its related parties, the controlling Shareholder, actual controller and his/her/its related parties shall provide counter-guarantees.

Where the guaranteed party becomes a related party of the Company as a result of a transaction or related party transaction, the Company shall, concurrently with the implementation of such transaction or related party transaction, perform the

VI-11 -

corresponding consideration procedures and information disclosure obligations in respect of the existing related-party guarantee.

Where the Board or the general meeting has not considered and approved the related-party guarantee matter prescribed in the preceding paragraph, the parties to the transaction shall take effective measures such as early termination of the guarantee.

Article 25 Where the Company proposes to conduct a related party transaction as defined under the ChiNext Listing Rules, and the subject matter of the transaction is equity interest and reaches the standard for consideration by the general meeting, the Company shall provide an audit report on the financial reports of the subject matter of the transaction for the latest year and latest period; where the subject matter of the transaction is a non-cash asset other than equity interest, an appraisal report shall be provided. The audit opinion issued by the accounting firm shall be a standard unqualified opinion, the date of the audited financial reports shall be no more than 6 months from the date of use of the audit report, and the valuation benchmark date of the appraisal report shall be no more than 1 year from the date of use of the appraisal report. Related party transactions relating to the Company's ordinary course of business may be exempted from audit or appraisal.

The audit report and appraisal report prescribed in the preceding paragraph shall be issued by a securities service institution that complies with the Securities Law.

Article 26 The Company shall not provide financial assistance to related parties, except where the Company provides financial assistance to a related investee company that is not controlled by the Company's controlling Shareholder or actual controller, and the other shareholders of such investee company provide financial assistance on the same terms in proportion to their capital contributions.

Where the Company provides financial assistance to the related investee company prescribed in the preceding paragraph, in addition to being considered and approved by more than half of all non-related Directors, it shall also be considered and approved by not less than two-thirds of the non-related Directors attending the Board meeting, and shall be submitted to the general meeting for consideration.

Article 27 According to the ChiNext Listing Rules, where the Company proposes to conduct the following transactions, the provisions of Article 23 of these Measures shall apply on the basis of aggregation over a consecutive 12-month period:

(1) transactions with the same related party;

(2) transactions with different related parties relating to the same subject matter of transaction.

The same related party referred to above includes other related parties controlled by the same entity as such related party or having equity control relationships with such related party.

VI-12 -

Transactions in respect of which the relevant obligations have already been performed in accordance with this Chapter shall not be included in the scope of aggregation.

Article 28 Where the Company proposes to conduct a connected transaction as defined under the Hong Kong Listing Rules and any of the following standards is met, the transaction shall be considered and approved by the Company's General Manager (Chief Executive Officer)'s Office; where any subsidiary proposes to conduct a connected transaction and any of the following standards is met, the transaction shall be considered and approved by such subsidiary in accordance with the relevant decision-making procedures; after the above decision-making procedures have been completed, the transaction shall be reported to the Board Office of the Company for filing:

(1) an issue or repurchase of securities that complies with full exemption provisions of the Hong Kong Listing Rules;

(2) the Company or any subsidiary enters into a service contract with its director;

(3) consumer goods or consumer services, or sharing of administrative services, that comply with full exemption provisions of the Hong Kong Listing Rules;

(4) the highest applicable percentage ratio under the Hong Kong Listing Rules is (1) less than 0.1%; (2) less than 1%, and the transaction constitutes a connected transaction only because the connected person involved is connected only at the level of a subsidiary of the Company; or (3) less than 5%, and the total consideration (or, in the case of financial assistance, the total amount of financial assistance together with any monetary advantage given to the connected person or commonly held entity) is less than HK$3 million;

(5) a transaction with a connected person at the subsidiary level of the Company that complies with the Hong Kong Listing Rules and is conducted on normal commercial terms or better, provided that: (1) the transaction is approved by the Board of the Company; and (2) the independent non-executive Directors of the Company confirm that the terms of the transaction are fair and reasonable, that the transaction is conducted on normal commercial terms, and that it is in the interests of the Company and its Shareholders as a whole;

(6) a transaction between the Company and a connected person who is connected with the Company only by virtue of his/her/its relationship with an insignificant subsidiary of the Company;

(7) a transaction with an associate of a passive investor (as defined in the Hong Kong Listing Rules) that complies with the Hong Kong Listing Rules.

– VI-13 –

Article 29 Where the Company proposes to conduct a connected transaction as defined under the Hong Kong Listing Rules and the following standards are met, the transaction shall be submitted to the Board of the Company for consideration and approval after being considered and approved by the Company's General Manager (Chief Executive Officer)'s Office; where any subsidiary proposes to conduct a connected transaction and the following standards are met, after such subsidiary has performed the relevant decision-making procedures, the Company's General Manager (Chief Executive Officer)'s Office shall submit the transaction to the Board of the Company for consideration and approval; after the above decision-making procedures have been completed, the transaction shall be reported to the Board Office of the Company for filing; such connected transactions shall be disclosed in a timely manner by way of announcement after consideration and approval by the Board of the Company:

(1) the highest applicable percentage ratio under the Hong Kong Listing Rules: (1i) is 0.1% or more but less than 5%; or (2ii) is less than 25% and the total transaction amount is less than HK$10 million.

(2) Transactions with connected persons at the level of the Company's subsidiaries entered into in compliance with the Hong Kong Listing Rules on normal commercial terms or terms more favourable to the Company, provided that: (i) such transactions are approved by the Board of the Company; and (ii) the Company's independent non-executive Directors confirm that the transaction terms are fair and reasonable, conducted on normal commercial terms and in the overall interests of the Company and its shareholders;

(3) Other connected transactions required to be disclosed under Chapter 14A of the Hong Kong Listing Rules.

Article 30 Where the Company proposes to conduct a connected transaction as defined under the Hong Kong Listing Rules, and the transaction does not fall within the categories described in Articles 1928 and 2029 above, it shall be submitted to the general meeting of the Company for consideration and approval after being considered and approved by the Board of the Company; where any subsidiary proposes to conduct a connected transaction that does not fall within the categories described in Articles 1928 and 2029 above, after such subsidiary has performed the relevant decision-making procedures, the Company's General Manager (Chief Executive Officer)'s Office shall submit the transaction to the Board of the Company for consideration and approval, and after being considered and approved by the Board of the Company, the transaction shall be submitted to the general meeting of the Company for consideration and approval; after the above decision-making procedures have been completed, the transaction shall be reported to the Board Office of the Company for filing; such connected transactions shall be disclosed in a timely manner by way of announcement and circular after consideration and approval by the Board of the Company.

VI-14 -

Article 31 Related party/connected transactions proposed to be conducted by the Company or any subsidiary that are required to be disclosed shall be submitted to the Board or the general meeting for consideration after being considered and approved by a special meeting of the Company's independent non-executive Directors, and shall be disclosed in the announcement on the related party/connected transactionconnected transactions that require approval by the company's shareholders' meeting shall be submitted to the company's Board of Directors for deliberation after obtaining prior approval from the company's Independent Non-executive Directors. Independent non-executive Directors may engage an independent financial adviser to issue a report as a basis for their judgment, and the relevant expenses shall be borne by the Company.

For related party/connected transactions proposed to be conducted by the Company or any subsidiary that are required to be considered and approved by the general meeting of the Company, the Audit Committee of the Board of the Company shall also review the related party/connected transaction matter, form written opinions and submit them to the Board of the Company for consideration. The Audit Committee of the Board of the Company may engage an independent financial adviser to issue a report as a basis for its judgment, and the relevant expenses shall be borne by the Company.

Article 32 Where the Company or any subsidiary conducts any of the following related party/connected transactions, the amount of the related party/connected transactions shall be calculated on the basis of aggregation over a consecutive 12-month period, and the provisions of this Chapter shall apply accordingly:

(1) transactions with the same connected person or persons who are connected with one another;

(2) transactions involving the acquisition or disposal of parts of an asset, or securities or interests in a company (or a group of companies); or

(3) such transactions will result in the Company and its subsidiaries becoming substantially involved in a new business.

Transactions in respect of which the general meeting decision-making procedures have already been performed in accordance with the aggregation principle shall not be included in the relevant scope of aggregation.

Article 33 When the Board of the Company considers matters relating to related party/connected transactions, related/connected Directors shall abstain from voting and shall not exercise voting rights on behalf of other Directors, and their voting rights shall not be counted in the total number of voting rights.

VI-15 -

For the purposes of the preceding paragraph, related/connected Directors refer to Directors who have a material interest in the transaction under the ChiNext Listing Rules and the Hong Kong Listing Rules, including Directors falling under any of the following circumstances:

(1) being a counterparty to the transaction;

(2) holding office in the counterparty to the transaction, or in a legal person or other organisation that can directly or indirectly control the counterparty to the transaction, or in a legal person or other organisation directly or indirectly controlled by the counterparty to the transaction;

(3) having direct or indirect control over the counterparty to the transaction;

(4) being a close family member of the counterparty to the transaction or of its direct or indirect controller;

(5) being a close family member of the directors, supervisors or senior management of the counterparty to the transaction or of its direct or indirect controller;

(6) being a person determined by the China Securities Regulatory Commission, the Shenzhen Stock Exchange or the Company to be a person whose independent commercial judgment may be affected for other reasons.

(7) being a party to the relevant transaction or arrangement or an associate of a party to the transaction or arrangement (as defined in Appendix I to these Measures);

(8) the relevant transaction or arrangement confers a benefit (whether economic or otherwise) on him/her or his/her associate (as defined in Appendix I to these Measures).

Such Board meeting may be held if attended by more than half of the non-related/connected Directors, and any resolution passed at such Board meeting shall be approved by more than half of the non-related/connected Directors. Where the number of non-related/connected Directors attending such Board meeting is less than 3, the transaction shall be submitted to the general meeting of the Company for consideration.

Article 34 When the general meeting of the Company considers matters relating to related party/connected transactions, any Shareholder who has a material interest in the transaction under the ChiNext Listing Rules and the Hong Kong Listing Rules (hereinafter referred to as a "connected Shareholder") shall abstain from voting and shall not exercise voting rights on behalf of other Shareholders. The number of voting shares represented by related/connected Shareholders shall not be counted in the total number of voting shares required to be counted for the relevant resolution.

– VI-16 –

Related/connected Shareholders referred to in the preceding paragraph include Shareholders falling under any of the following circumstances:

(1) being a counterparty to the transaction;

(2) having direct or indirect control over the counterparty to the transaction;

(3) being directly or indirectly controlled by the counterparty to the transaction;

(4) being directly or indirectly controlled by the same legal person or natural person as the counterparty to the transaction;

(5) being a close family member of the counterparty to the transaction or of its direct or indirect controller;

(6) holding office in the counterparty to the transaction, or in a legal person entity that can directly or indirectly control the counterparty to the transaction, or in a legal person entity directly or indirectly controlled by the counterparty to the transaction;

(7) having his/her/its voting rights restricted or affected due to an equity transfer agreement or other agreement with the counterparty to the transaction or its related party that has not yet been fully performed;

(8) being a legal person or natural person determined by the China Securities Regulatory Commission or the Shenzhen Stock Exchange to be likely to cause the Company to tilt its interests in his/her/its favour;

(9) being a party to the relevant transaction or arrangement or an associate of a party to the transaction or arrangement (as defined in the Hong Kong Listing Rules);

(10) the relevant transaction or arrangement confers on him/her/it or his/her/its associate (as defined in the Hong Kong Listing Rules) a benefit (whether economic or otherwise) not available to other Shareholders.

VI-17 -

Article 35 According to the ChiNext Listing Rules, the following transactions between the Company and related parties may be exempted from consideration and disclosure as related party transactions:

(1) one party subscribes in cash for shares, corporate bonds or enterprise bonds, convertible corporate bonds or other derivatives issued by the other party to unspecified investors;

(2) one party, as a member of the underwriting syndicate, underwrites shares, corporate bonds or enterprise bonds, convertible corporate bonds or other derivatives issued by the other party to unspecified investors;

(3) one party receives dividends, bonuses or remuneration pursuant to a resolution of the general meeting of the other party;

(4) other transactions recognised by the Shenzhen Stock Exchange.

The related shareholders referred to in the preceding paragraph include the following shareholders or shareholders who are: (i) a contact person of one of the parties to the transaction or arrangement in question or of one of the parties to the transaction or arrangement in question (for the definition, see the Hong Kong Listing Rules); and (ii) a related transaction or arrangement which confers on itself or its associates an interest not available to the other shareholders (whether economic or otherwise) (for the definition, see the Hong Kong Listing Rules).

For connected transactions that satisfy the conditions for exemption from disclosure, the Board of the Company may apply to the Hong Kong Stock Exchange for a waiver in accordance with the Hong Kong Listing Rules.

Chapter 6 Special Provisions on Continuing Related Party/Connected Transactions

Article 36 According to the ChiNext Listing Rules, when the Company conducts ordinary-course related party transactions with related parties, disclosure and consideration procedures shall be performed in accordance with the following provisions

(1) the Company may reasonably estimate the annual amount of ordinary-course related party transactions by category, perform consideration procedures and disclose the same; where the actual implementation exceeds the estimated amount, the Company shall re-perform the consideration procedures and disclosure obligations in respect of the excess amount;

(2) the Company's annual reports and interim reports shall disclose ordinary-course related party transactions by category on an aggregated basis;

VI-18 -

(3) where the term of an ordinary-course related party transaction agreement entered into between the Company and a related party exceeds three years, the relevant consideration procedures and disclosure obligations shall be re-performed every three years.

Article 37 According to the Hong Kong Listing Rules, where the Company or any subsidiary conducts continuing connected transactions with connected persons, the corresponding decision-making procedures and disclosure obligations shall be performed in accordance with this Chapter:

(1) for a continuing connected transaction occurring for the first time, the Company and the connected person shall enter into a written agreement, submit the transaction to the Board or the general meeting of the Company for consideration according to the annual aggregate transaction amount involved under the agreement, and disclose details of the transaction in a timely manner; where the actual implementation by the Company thereafter exceeds is likely to exceed the estimated aggregate amount, the Company shall, based on the excess amount, re-submit the transaction revised annual caps to the Board or the general meeting of the Company for consideration and disclose it. Pending approval of the new annual caps by the Board or the general meeting of the Company, the actual continuing connected transactions amount shall not exceed the original caps;

(2) for a continuing connected transaction agreement that has been considered and approved by the general meeting or the Board of the Company and is being implemented, if there is no material change to the principal terms during implementation, the Company shall disclose the actual performance of each agreement in its annual report as required and state whether it complies with the provisions of the agreement; if the principal terms of the agreement materially change during implementation or the agreement expires and needs to be renewed, the Company shall re-submit the newly amended or renewed continuing connected transaction agreement to the Board or the general meeting of the Company for consideration according to the annual aggregate transaction amount involved under the agreement;

(3) the relevant functional department in charge of each continuing connected transaction and the finance management department shall prepare the budget for the annual transaction amount;

(4) at the beginning of each accounting year, the Board Office of the Company shall compile statistics on continuing connected transaction matters, determine the caps for each category of continuing connected transactions for the year, and promptly notify all relevant functional departments;

VI-19 -

(5) if, after compiling statistics, the Board Office of the Company expects that the annual transaction amount of a continuing connected transaction will exceed the pre-approved annual cap, the Board Office shall promptly consolidate the information, organise the corresponding decision-making procedures based on the new annual cap, and disclose details of the transaction in a timely manner;

(6) connected transactions which exceed the pre-approved annual caps and for which the required decision-making procedures have not been performed shall not be implemented.

Article 38 A continuing related party/connected transaction agreement entered into between the Company and a related party/connected person shall include:

(1) pricing policy and basis;

(2) transaction price;

(3) aggregate transaction amount for each year and the basis for determination;

(4) payment time and method;

(5) other principal terms required to be disclosed.

Article 39 The term of a continuing related party/connected transaction agreement entered into between the Company and a related party/connected person shall generally be limited to three years or less. Where the term exceeds three years, the Company shall re-perform the relevant decision-making procedures and disclosure obligations every three years as required comply with the applicable approval and disclosure requirements for connected transactions under the Hong Kong Listing Rules, and the independent financial adviser appointed by the Company shall explain the reasons for the term exceeding three years and why such term is consistent with normal business practice for agreements of this type in the industry.

Article 40 The independent non-executive Directors of the Company shall review the continuing related party/connected transactions each year and confirm in the annual report whether such transactions were:

(1) entered into in the ordinary and usual course of business of the Company's group;

(2) conducted on normal commercial terms or better; and

(3) conducted in accordance with the relevant agreements, on terms that are fair and reasonable and in the interests of the shareholders of the listed issuer as a whole.

Article 41 The Company's external auditors shall issue a letter to the Board of the Company each year expressing opinions on the continuing related party/connected transactions of the Company and its subsidiaries, and the Company shall provide a copy of the external auditors' letter to the Hong Kong Stock Exchange at least 10 business days before the bulk printing of its annual report. The Company shall allow the external auditors to inspect the relevant accounts so that the external auditors may express the relevant opinions.

Article 42 The Company shall disclose details of continuing related party/connected transactions each year in its annual report, including the transaction date, parties, contents, purpose, transaction amount and principal transaction terms of each related party/connected transaction, and the nature and extent of the interests held by the related parties/connected persons in such transaction.

Chapter 7 Disclosure of Related Party/Connected Transactions

Article 43 For related party/connected transactions required to be disclosed under the ChiNext Listing Rules, the Hong Kong Listing Rules and other provisions, the Company shall disclose the entering into, change, termination and performance of such related party/connected transaction agreements and other matters in accordance with the relevant provisions.

Article 44 According to the ChiNext Listing Rules and the relevant transaction announcement format guidelines, the contents required to be disclosed in an announcement on a related party transaction mainly include:

(1) overview of the related party transaction;
(2) introduction of the related party;
(3) basic information on the subject matter of the related party transaction;
(4) appraisal and pricing of the related subject matter;
(5) principal contents and performance arrangements of the related party transaction contract or agreement;
(6) impact of the related party transaction on the Company;
(7) consideration procedures required to be performed for the related party transaction;
(8) historical related party transactions requiring special explanation (excluding ordinary-course related party transactions);
(9) compensation undertaking letter from the related party (if any);
(10) opinions of intermediaries (if applicable).

– VI-21 –

Article 45 The Company shall enter into written agreements for related party/connected transactions. The contents of the agreements shall be clear and specific. The Company shall disclose matters including the entering into, change and termination of related party/connected transaction agreements and the pricing basis for related party/connected transactions in accordance with the relevant regulatory rules of the place where the Company's shares are listed.

Article 46 For ordinary-course related party/connected transaction agreements which were previously considered and approved by the general meeting or the Board and are being implemented, if there is no material change to the principal terms during implementation, the Company shall disclose the actual performance of each agreement in periodic reports as required and state whether it complies with the agreement and the regulatory rules of the place where the Company's shares are listedthe Hong-Kong Listing Rules.

Article 47 According to the regulatory rules of the place where the Company's shares are listed, the contents required to be disclosed in an announcement on a related party/connected transaction mainly include:

(1) a general description of the connected transaction;

(2) date of the transaction;

(3) The name of the counterparty, description of the main business and its connection to the company; overview of the Company's principal business, the identities of the counterparty and the ultimate beneficial owner, their principal businesses and an explanation of their connected relationship with the Company;

(4) transaction price and the basis and terms for determination;

(5) payment time and method;

(6) reasons for and benefits of conducting the transaction;

– VI-22 –

(7) opinion of the Board;

(8) whether any connected Director is required to abstain from voting at the Board meeting;

(9) in the case of a continuing related party/connected transaction, the term of the contract, aggregate transaction amount for each year and basis for determination, and the actual transaction amounts of the same type of related party/connected transactions in the past three years shall also be disclosed; the independent non-executive Directors shall give confirmations on the matters referred to in Rule 14A.55 of the Hong Kong Listing Rules; and the auditors shall give a statement confirming the matters referred to in Rule 14A.556 of the Hong Kong Listing Rules;

(10) other contents required by the Hong Kong Listing Rules.

Article 48 According to the regulatory rules of the place where the Company's shares are listed, the contents required to be disclosed in a circular on a connected transaction mainly include:

(1) all contents disclosed in the corresponding connected transaction announcement;

(2) whether any connected Shareholder is required to abstain from voting at the general meeting;

(3) written opinion of the independent non-executive Directors;

(4) written opinion of the independent financial adviser;

(5) basic information on the Company;

(6) other contents required by the regulatory rules of the place where the Company's shares are listed the Hong Kong Listing Rules.

Article 49 During negotiations for a related party/connected transaction, if the price of the Company's shares fluctuates significantly due to market rumours or reports concerning such related party/connected transaction, the Company shall, depending on the circumstances, publish a clarification announcement in accordance with the relevant provisions.

VI-23 -

Chapter 8 Accountability

Article 50 Related parties/connected persons of the Company shall not use their related party/connected relationships to harm the interests of the Company. If a violation causes losses to the Company, they shall be liable for compensation.

Article 51 Where a related party/connected person misappropriates the Company's assets or harms the interests of the Company and its Shareholders, the Company shall have the right to take effective measures to require the related party/connected person to cease the infringement, and shall have the right to apply to the people's court for judicial freezing of the Company's assets misappropriated by the related party/connected person and the shares of the Company held by such person (if any).

Article 52 Where Directors or senior management of the Company violate laws, regulations or these Measures by assisting or tolerating the misappropriation of the Company's assets or harm to the Company's interests by related parties/connected persons, the Board of the Company may, depending on the seriousness of the circumstances, impose disciplinary sanctions on the directly responsible persons and remove Directors or senior management who bear serious responsibility, and shall have the right to make appropriate compensation claims against them according to the extent of losses suffered by the Company; where a crime is constituted, the matter shall be transferred to judicial authorities for handling.

Article 53 Where the Company's related party/connected transaction management bodies at all levels and relevant personnel commit dereliction of duty or malfeasance in the course of handling related party/connected transaction matters, causing impact on or losses to the Company, the Company shall have the right, depending on the seriousness of the circumstances, to impose disciplinary measures on the directly responsible persons, including criticism, warning and removal from office.

Article 54 Where Shareholders of the Company suffer economic losses due to conduct by related parties/connected persons that harms the interests of the Company and other Shareholders and lawfully institute civil compensation proceedings, the Company shall have the obligation, subject to compliance with laws, regulations and the Articles of Association, to provide support such as providing relevant materials.

Chapter 9 Supplementary Provisions

Article 55 According to the Hong Kong Listing Rules, "associate" as referred to in these Measures includes:

(1) in relation to a natural person, the connected person's:

(1) (a) spouse; his/her (or his/her spouse's) children or step-children, natural or adopted, under the age of 18 (each an "immediate family member");

(b) the trustee, acting in its capacity as trustee, of any trust of which he/she or his/her immediate family members are beneficiaries (or, in the case of a discretionary trust, to his/her knowledge, discretionary objects), excluding any employees' share scheme or occupational retirement scheme established for a wide scope of participants where the aggregate interests of the connected person in the scheme are less than 30% (the "trustee"); or

(c) any 30%-controlled company held directly or indirectly by him/her, his/her immediate family members and/or the trustee, individually or together, or any subsidiary of such company; or

(2) (a) a person cohabiting with him/her as a spouse, or his/her child, step-child, parent, step-parent, brother, step-brother, sister or step-sister (each a "family member"); or

(b) any company held directly or indirectly by the family members, individually or together, or held under majority control by the family members together with him/her, his/her immediate family members and/or the trustee, or any subsidiary of such company.

(2) in relation to a legal person, the connected person's:

(1) subsidiary or holding company, or a fellow subsidiary of that holding company;

(2) the trustee, acting in its capacity as trustee, of any trust of which the company is a beneficiary (or, in the case of a discretionary trust, to its knowledge, a discretionary object) (the "trustee"); or

(3) any 30%-controlled company held directly or indirectly by the company, the companies referred to in paragraph (1) above and/or the trustee, individually or together, or any subsidiary of such 30%-controlled company.

VI-25 -

(3) If a person or his/her/its associates, other than indirectly through the listed issuer's group, together hold less than 10% of the interests in a 30%-controlled company, such company will not be regarded as an associate of that person.

(4) If the following circumstances are met, a person's associates include any joint venture partner of a co-operative or contractual joint venture (whether or not the joint venture is a separate legal person):

(1) such person (being an individual), his/her immediate family members and/or trustee; or
(2) such person (being a company), any of its subsidiaries, holding company or fellow subsidiaries of the holding company and/or trustee,

together directly or indirectly hold 30% (or such other percentage prescribed by PRC law, being the percentage required to trigger a mandatory general offer or to establish legal or management control over an enterprise) or more of the interests in the paid-up capital or assets of the joint venture or the profits or other income attributable to the joint venture under the contract.

(5) In addition to the above, other natural persons and legal persons determined to be associates under the Hong Kong Listing Rules. If the definition of associates under these Measures conflicts with the Hong Kong Listing Rules that take effect thereafter, the Hong Kong Listing Rules in effect on the date on which associates are determined shall prevail.

Article 56 According to the Hong Kong Listing Rules, "insignificant subsidiary" as referred to in these Measures means a subsidiary of the Company that satisfies one of the following conditions:

(1) the percentage ratios calculated by reference to total assets, revenue and profits for the past three financial years are all less than 10%;
(2) the percentage ratios calculated by reference to total assets, revenue and profits for the latest financial year are all less than 5%.

Article 57 According to the Hong Kong Listing Rules, the "percentage ratios" referred to in these Measures include:

(1) assets ratio: the total assets involved in the relevant transaction divided by the Company's latest disclosed audited or unaudited total assets;
(2) revenue ratio: the revenue attributable to the assets involved in the relevant transaction (excluding revenue or income items of an incidental nature) divided by the Company's audited revenue disclosed for the latest year;

– VI-26 –

(3) profits ratio: the profits attributable to the assets involved in the relevant transaction (after deducting all expenses other than tax, but before non-controlling interests) divided by the Company's audited profit disclosed for the latest year;

(4) consideration ratio: the consideration for the transaction divided by the total market capitalisation of the listed company (calculated by multiplying the average closing price of the Company's shares on the Hong Kong Stock Exchange for the 5 trading days before the transaction agreement by the total number of shares of the Company); and

(5) equity capital ratio: where the consideration involves shares of the Company, the nominal value of the equity capital consideration divided by the nominal value of the total issued share capital of the Company before the transaction.

Article 58 Matters not covered by these Measures shall be handled in accordance with the relevant provisions of state laws, regulations, normative documents, the ChiNext Listing Rules, the Hong Kong Listing Rules and the Articles of Association. Where these Measures conflict with the above provisions, the provisions of state laws, regulations, normative documents, the Hong Kong Listing Rules and the Articles of Association shall prevail.

Article 59 Unless otherwise specified, terms used in these Measures shall have the same meanings as those terms in the Articles of Association or the regulatory rules of the place where the Company's shares are listed.

Article 60 The Board of the Company shall have the power to interpret these Measures. The Board Office of the Company shall, in accordance with the latest requirements on related party/connected transactions issued by the China Securities Regulatory Commission, the Shenzhen Stock Exchange and the Hong Kong Stock Exchange, update and adjust these Measures in a timely manner and notify the relevant departments.

Article 61 These Measures shall become effective and be implemented from the date on which they are considered and approved by the BoardGeneral Meeting. The provisions applicable to companies listed on the ChiNext Market of the Shenzhen Stock Exchange shall be implemented from the date on which the Company completes its initial public offering of RMB ordinary shares (A Shares) and listing.

VI-27 -

Appendix I

Definition of Associates

According to the Hong Kong Listing Rules, associates of any basic connected person include:

Where the basic connected person is an individual

(1) the individual's spouse, and children or step-children, natural or adopted, under the age of 18 of the individual or his/her spouse ("immediate family members");

(2) the trustee of any trust acting in its capacity as trustee, where the trust has the individual or any of his/her immediate family members as beneficiaries (excluding any employees' share scheme or occupational retirement scheme established for a wide scope of participants where the aggregate interests of the connected person in the scheme are less than 30%), or, in the case of a discretionary trust, has them as discretionary objects (to his/her knowledge);

(3) any 30%-controlled company (as defined in the Hong Kong Listing Rules) held directly or indirectly by the basic connected person, his/her immediate family members and/or trustee, individually or together, or any subsidiary of such company;

(4) any person cohabiting with him/her as a spouse, his/her child, step-child, parent, step-parent, sibling or step-sibling ("family members"); or any company held directly or indirectly by any family member, individually or together, or held under majority control by the family members together with him/her, his/her immediate family members and/or trustee, or any subsidiary of such company; and

(5) if the basic connected person, his/her immediate family members and/or trustee together directly or indirectly hold 30% (or such other percentage prescribed by PRC law that applies to trigger a mandatory general offer or to establish legal or management control over the enterprise) or more of the interests in the paid-up capital or assets of any co-operative or contractual joint venture (whether or not the joint venture is a separate legal person) or the profits or other income attributable to the joint venture under the contract, the joint venture partner of such joint venture shall be an associate of the basic connected person.

– VI-28 –

Where the basic connected person is a company (i.e. a substantial corporate shareholder)

(1) the substantial corporate shareholder's subsidiaries, holding company, or fellow subsidiaries of that holding company ("related companies");

(2) the trustee of any trust acting in its capacity as trustee, where the trust has the substantial corporate shareholder as a beneficiary, or, in the case of a discretionary trust, has it as a discretionary object (to the knowledge of the substantial corporate shareholder);

(3) any 30%-controlled company held directly or indirectly by such basic connected person, its related companies and/or trustee, individually or together, or any subsidiary of such company; and

(4) if the basic connected person, its related companies and/or trustee together directly or indirectly hold 30% (or such other percentage prescribed by PRC law that applies to trigger a mandatory general offer or to establish legal or management control over the enterprise) or more of the interests in the paid-up capital or assets of any co-operative or contractual joint venture (whether or not the joint venture is a separate legal person) or the profits or other income attributable to the joint venture under the contract, the joint venture partner of such joint venture shall be an associate of the basic connected person.

– VI-29 –

APPENDIX VII

PROPOSED ADOPTION OF THE MANAGEMENT SYSTEM FOR EXTERNAL GUARANTEES OF PHANCY GROUP CO., LTD.

Management System for External Guarantees

Article 1 In order to further regulate the external guarantee activities of Phancy Group Co., Ltd. (the "Company"), strengthen the management of external guarantees, effectively control and prevent risks relating to the Company's external guarantees, and ensure the safety and integrity of the Company's assets, this system is formulated in accordance with the Company Law of the People's Republic of China (the "Company Law"), the Securities Law of the People's Republic of China (the "Securities Law"), the Rules Governing the Listing of Shares on the ChiNext Market of the Shenzhen Stock Exchange, the Guidelines for the Supervision of Listed Companies No. 8 – Regulatory Requirements for Fund Transactions and External Guarantees of Listed Companies, the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Hong Kong Listing Rules"), the Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 2 – Standardised Operation of Companies Listed on the ChiNext Market and other laws, regulations and rules, as well as the relevant provisions of the Articles of Association of Phancy Group Co., Ltd. (the "Articles of Association").

Article 2 "External guarantee" as referred to in this system means an act whereby the Company, as a third party, provides guarantee for debts owed by a debtor to a creditor, and where the debtor fails to perform its debts, the Company performs the debts or assumes liabilities as agreed. Forms of guarantee include suretyship, mortgage and pledge.

"External guarantee" referred to in the preceding paragraph includes guarantees provided by the Company for its controlled subsidiaries.

Article 3 "Total amount of external guarantees of the Company and its controlled subsidiaries" as referred to in this system means the sum of the total amount of external guarantees of the Company, including guarantees provided by the Company for its controlled subsidiaries, and the total amount of external guarantees of the Company's controlled subsidiaries.

Article 4 The Company's external guarantees must comply with the Company Law, the Securities Law, the Articles of Association and other relevant requirements, and the debt risks arising from external guarantees shall be strictly controlled.

Article 5 The Company implements unified management over external guarantees. Without approval by the Board or the general meeting, no person shall have the authority to sign contracts, agreements or other similar legal documents relating to external guarantees in the name of the Company.

VII-1 -

APPENDIX VII

PROPOSED ADOPTION OF THE MANAGEMENT SYSTEM FOR EXTERNAL GUARANTEES OF PHANCY GROUP CO., LTD.

Article 6 The Directors and senior management of the Company shall prudently handle and strictly control the debt risks arising from guarantees, and shall assume joint and several liability in accordance with law for losses arising from external guarantees provided in violation of regulations or in an improper manner.

Article 7 This system applies to the Company and its wholly-owned subsidiaries and controlled subsidiaries. Without approval of the Company, subsidiaries shall not provide external guarantees or provide guarantees to each other. Where a subsidiary needs to provide an external guarantee, it shall submit the guarantee application to the general meeting of the Company for consideration, and may implement it only after approval.

Article 8 Controlling shareholders and actual controllers shall safeguard the Company's independent decision-making in the provision of guarantees, support and cooperate with the Company in performing internal decision-making procedures and information disclosure obligations for external guarantees in accordance with law and regulations, and shall not force, instruct or require the Company and relevant personnel to provide external guarantees in violation of regulations.

Where controlling shareholders or actual controllers force, instruct or require the Company to engage in guarantee activities in violation of regulations, the Company and its Directors and senior management shall refuse and shall not assist, cooperate or acquiesce.

Article 9 The independent non-executive Directors of the Company shall make a special explanation in the annual report on the Company's accumulated and current external guarantees and express independent opinions.

Chapter 2 Scope of External Guarantees

Article 10 The Company may provide guarantees for legal person entities that have normal production and operation, sound financial systems, reasonable working capital, considerable economic strength and good credit standing, and that satisfy any of the following conditions:

(1) entities that have an existing material business relationship with the Company;

(2) wholly-owned subsidiaries, controlled subsidiaries and investee companies of the Company; and

(3) enterprises that have mutual guarantee transactions with the Company.

The enterprises referred to in items (1) to (3) of the preceding paragraph must all have relatively strong debt repayment ability.

Article 11 The Company shall not provide any form of guarantee for any unincorporated entity or individual.

VII-2 -

Chapter 3 Review of External Guarantees

Article 12 Before deciding on a guarantee, the Company shall understand the credit standing of the guaranteed party and fully analyse the benefits and risks of the guarantee.

The credit standing of the guaranteed party includes but is not limited to the following:

(1) basic information of the guaranteed party (including enterprise name, registered address, legal representative, business scope, related-party relationship and other relationships with the Company);
(2) name of the creditor;
(3) the debt contract entered into between the guaranteed party and the creditor;
(4) the method, term and amount of the guarantee, etc.;
(5) the audited financial report of the guaranteed party and analysis of its repayment ability;
(6) whether the guaranteed party has any record of non-performing loans with its principal account-opening bank; and
(7) other important information.

Article 13 No guarantee shall be provided for a guaranteed party falling under any of the following circumstances or where the information provided by the guaranteed party is insufficient:

(1) the guaranteed party does not comply with national laws and regulations or national industrial policies;
(2) the property rights of the guaranteed party are unclear, its restructuring has not been completed, or its establishment does not comply with national laws, regulations or national industrial policies;
(3) the guaranteed party provides false financial statements or other information and intends to obtain a guarantee from the Company by deception;
(4) the Company has previously provided a guarantee for it and it has had overdue bank borrowings, interest arrears or other circumstances;
(5) the operating condition of the guaranteed party has deteriorated and it is an enterprise with poor credit standing;

VII-3 -

(6) the guaranteed party is unable to provide a counter-guarantee or has failed to provide effective property for counter-guarantee; and

(7) other circumstances under which the Board or the general meeting considers that a guarantee cannot be provided.

Article 14 Where the Company provides guarantees for controlling shareholders, actual controllers and their related parties, the controlling shareholders, actual controllers and their related parties shall provide counter-guarantees.

The counter-guarantee or other effective risk prevention measures provided by the guaranteed party must correspond to the amount of the guarantee provided by the Company. Where the property provided by the guaranteed party for counter-guarantee is property prohibited from circulation or non-transferable under laws and regulations, the Company shall refuse to provide a guarantee for it.

Chapter 4 Decision-making on External Guarantees

Article 15 The highest decision-making body for the Company's external guarantees is the general meeting of the Company.

The Board shall exercise the decision-making power for external guarantees in accordance with relevant laws and regulations and the provisions of the Articles of Association on the Board's approval authority for external guarantees. Where a matter exceeds the Board's approval authority prescribed in the Articles of Association, the Board shall propose a plan and submit it to the general meeting for approval.

The Board shall organise, manage and implement external guarantee matters approved by the general meeting.

Article 16 For guarantee matters within the authority of the Board, in addition to approval by more than half of all Directors, a resolution shall also be passed with the consent of two-thirds or more of the Directors attending the Board meeting.

Article 17 When the Board considers external guarantee matters, related Directors shall abstain from voting and shall not exercise voting rights on behalf of other Directors. A Board meeting shall be attended by more than half of the non-related Directors, and resolutions made shall be passed by more than half of the non-related Directors. Where fewer than three non-related Directors attend the Board meeting, the Company shall submit the transaction to the general meeting for consideration.

VII-4 -

Article 18 Where the Company provides a guarantee, it shall be submitted to the Board or the general meeting for consideration. The following external guarantee activities of the Company shall be submitted to the general meeting for consideration and approval after being considered and approved by the Board:

(1) a single guarantee amount exceeding 10% of the Company’s latest audited net assets;

(2) any guarantee provided after the total amount of external guarantees of the Company and its controlled subsidiaries exceeds 50% of the Company’s latest audited net assets;

(3) any guarantee provided after the total amount of external guarantees of the Company and its controlled subsidiaries exceeds 30% of the Company’s latest audited total assets;

(4) a guarantee provided for a guaranteed party with an asset-liability ratio exceeding 70%;

(5) the amount of guarantees within any consecutive 12 months exceeding 30% of the Company’s latest audited total assets;

(6) the amount of guarantees within any consecutive 12 months exceeding 50% of the Company’s latest audited net assets and with an absolute amount exceeding RMB50 million;

(7) (Applicable to the Hong Kong Listing Rules) in respect of an external guarantee or a series of external guarantees of the Company (aggregated in accordance with the Hong Kong Listing Rules), any percentage ratio (as defined in the Hong Kong Listing Rules) calculated in respect of such external guarantee is 25% or more;

(8) guarantees provided to Shareholders, actual controllers and their related parties; and

(9) other guarantee circumstances which are required by the Shenzhen Stock Exchange or the Articles of Association to be considered and approved by the general meeting.

When the Board considers guarantee matters, approval must be obtained from two-thirds or more of the Directors attending the Board meeting.

When the general meeting considers the guarantee matter under item (5) of the preceding paragraph, it must be approved by two-thirds or more of the voting rights held by the Shareholders attending the meeting.

VII-5 -

When the general meeting considers a resolution on providing a guarantee for a Shareholder, actual controller and its related parties (or connected persons (as defined in the Hong Kong Listing Rules)), such Shareholder or the Shareholder controlled by such actual controller shall not participate in the voting. Except for the circumstances specified in the preceding paragraph of this Article, such resolution shall be passed by more than half of the voting rights held by other Shareholders attending the general meeting. Where the Company provides a guarantee, it shall disclose the matter externally in a timely manner after consideration by the Board.

In accordance with the Hong Kong Listing Rules, the Company shall make timely disclosure in respect of external guarantees based on the calculation of the percentage ratios, unless an exemption applies.

Where the general meeting violates the approval authority and consideration procedures for external guarantees, the relevant Shareholders who violate the approval authority and consideration procedures shall assume joint and several liability. Where the Board violates the approval authority and consideration procedures for external guarantees, the relevant Directors who violate the approval authority and consideration procedures shall assume joint and several liability.

Article 19 Where the Company provides a guarantee for a wholly-owned subsidiary, or provides a guarantee for a controlled subsidiary and the other shareholders of the controlled subsidiary provide guarantees in the same proportion according to their respective interests, and the interests of the Company are not prejudiced, the provisions of items (1), (2) and (4) of the first paragraph of Article 18 of this system may be exempted from application, unless otherwise provided in the Articles of Association.

Chapter 5 Execution of Guarantee Contracts

Article 20 After an external guarantee of the Company has been considered and approved by the Board or the general meeting, the finance department of the Company shall, based on the relevant meeting resolutions, be responsible for handling specific procedures such as drafting, submitting for review and signing the relevant agreements and contracts for the external guarantee.

Article 21 A written guarantee contract must be entered into for any external guarantee of the Company. A guarantee contract shall contain the contents required by the Civil Code of the People's Republic of China and other laws and regulations. A guarantee contract shall at least include the following:

(1) the creditor and debtor;
(2) the type and amount of the principal creditor's rights guaranteed;
(3) the period for the debtor to perform the debt;
(4) the method of guarantee;

VII-6 -

(5) the scope of guarantee;
(6) the guarantee period; and
(7) other matters that the parties consider necessary to agree upon.

Article 22 When a guarantee contract is entered into, the finance department of the Company shall, together with the Company's legal advisers, comprehensively and carefully review the signing parties and relevant contents of the principal contract, guarantee contract and counter-guarantee contract (if any). For provisions that violate laws, regulations, the Articles of Association, relevant resolutions of the Board or the general meeting, or impose unreasonable obligations on the Company or create unpredictable risks, the counterparty shall be required to amend them. If the counterparty refuses to make amendments, the finance department of the Company shall refuse to handle the guarantee procedures for it and shall report to the Board or the general meeting.

Article 23 The chairman of the Company or other persons duly authorised shall sign guarantee contracts on behalf of the Company in accordance with resolutions of the Board or the general meeting. Without approval and authorisation by resolution of the general meeting or the Board of the Company, no person shall sign a guarantee contract on behalf of the Company without authorisation.

Article 24 The Company may enter into mutual guarantee agreements with enterprise legal persons that satisfy the conditions prescribed in this system. The finance department of the Company shall promptly require the counterparty to truthfully provide relevant financial and accounting statements and other information that can reflect its debt repayment ability.

Article 25 Where the Company provides a guarantee for a related party, such guarantee shall have reasonable commercial logic and shall be submitted to the general meeting for consideration after being considered and approved by the Board.

Where the Company provides a guarantee for a related party, regardless of the amount, it shall be submitted to the general meeting for consideration and approval after being considered and approved by the Board.

Article 26 When accepting counter-guarantee mortgages or counter-guarantee pledges, the finance department of the Company shall, together with the Company's legal advisers, improve the relevant legal procedures, in particular by promptly completing procedures such as mortgage or pledge registration.

VII-7 -

Chapter 6 Risk Management of External Guarantees

Article 27 The finance department of the Company is the management and basic review department for the Company's guarantee activities. After a guarantee contract is entered into, the finance department of the Company shall designate personnel (the "responsible handling person") to be responsible for dynamic control, follow-up management and registration on a case-by-case basis, and shall pay attention to the corresponding guarantee validity period. Before the maturity of the debts guaranteed by the Company, the responsible handling person shall actively urge the guaranteed party to perform its repayment obligations within the agreed period.

Article 28 The Board shall establish a regular inspection system and inspect all guarantee activities of the Company each year to verify whether the Company has engaged in any non-compliant guarantee activities.

Article 29 The responsible handling person shall pay attention to changes in the production and operation, assets and liabilities, external guarantees and other liabilities, division, merger, legal representative and external commercial credit standing of the guaranteed party, especially repayment upon maturity, conduct rehearsal and analysis of possible risks, and report to the finance department of the Company in a timely manner based on actual circumstances.

Article 30 Where the guaranteed party fails to perform repayment obligations in a timely manner after the debts become due, or where the guaranteed party becomes bankrupt or is liquidated, or creditors claim that the Company should perform guarantee obligations, the responsible handling person of the Company shall promptly understand the debt repayment status of the guaranteed party and prepare to initiate counter-guarantee (if any) recovery procedures upon becoming aware of the matter, and shall at the same time notify the secretary to the Board, who shall immediately report to the chairman and the Board of the Company.

Article 31 Where the guaranteed party fails to perform and the guarantee creditor claims that the Company should assume guarantee liability, the finance department of the Company shall immediately initiate counter-guarantee (if any) recovery procedures and at the same time notify the secretary to the Board, who shall immediately report to the chairman and the Board of the Company.

Article 32 After the Company performs guarantee obligations for a debtor, it shall take effective measures to recover from the debtor. The finance department of the Company shall simultaneously notify the secretary to the Board of the recovery status, and the secretary to the Board shall immediately report to the chairman and the Board of the Company.

Article 33 Where the Company discovers evidence proving that the guaranteed party has lost or may lose its ability to perform debts, it shall promptly take necessary measures to effectively control risks. If it discovers malicious collusion between the creditor and the debtor that prejudices the interests of the Company, it shall immediately

VII-8 -

take measures such as requesting confirmation that the guarantee contract is invalid. Where economic losses are caused due to default by the guaranteed party, recovery shall be made from the guaranteed party in a timely manner.

Article 34 Where the Company acts as a guarantor and there are two or more guarantors for the same debt and it is agreed that guarantee liability shall be assumed according to the agreed shares, the Company shall refuse to assume guarantee liability beyond its agreed share.

Chapter 7 Information Disclosure of External Guarantees

Article 35 Any department or personnel participating in the Company's external guarantee matters shall be responsible for promptly reporting the status of external guarantees to the secretary to the Board and providing documents and information required for information disclosure.

Chapter 8 Relevant Liabilities

Article 36 The provision of external guarantees by the Company shall be strictly implemented in accordance with this system. For relevant personnel who handle guarantee procedures in violation of procedures, the Board shall decide to impose corresponding sanctions based on the Company's losses, the magnitude of risks and the seriousness of the circumstances. While pursuing accountability, the Company shall also pursue their economic and legal liabilities based on the magnitude of economic losses caused to the Company.

Article 37 Where any Director, senior management member or any other person of the Company signs a guarantee contract without authorisation and beyond authority without following the procedures prescribed in this system, after the Company assumes corresponding liability in accordance with laws and regulations, the Company shall have the right to recover from such unauthorised person or person acting beyond authority.

Article 38 Where the Company incurs losses because the handling personnel or any other person makes a decision without authorisation that causes the Company to assume liabilities that are not required by law to be assumed by a guarantor, the Company shall have the right to require such person to assume compensation liability and impose corresponding internal sanctions.

Chapter 9 Supplementary Provisions

Article 39 This system shall come into effect and be implemented from the date on which it is considered and approved by the general meeting. The provisions applicable to companies listed on the ChiNext Market of the Shenzhen Stock Exchange shall be implemented from the date on which the Company completes its initial public offering of RMB ordinary shares (A Shares) and listing.

Article 40 For the purposes of this system, the term "or more" includes the number itself, while "exceed" does not include the number itself.

VII-9 -

Article 41 Matters not covered by this system shall be handled in accordance with relevant national laws, regulations, normative documents and the Articles of Association. Where this system is inconsistent with relevant laws, regulations, normative documents and the Articles of Association, the relevant laws, regulations, normative documents and the Articles of Association shall prevail. If this system conflicts with any national laws, regulations or normative documents promulgated in the future or the Articles of Association amended through lawful procedures, the relevant national laws, regulations, normative documents and the Articles of Association shall apply, and this system shall be amended in a timely manner and submitted to the general meeting for consideration and approval.

Article 42 The Board shall have the right to interpret this system.

Phancy Group Co., Ltd.
June 2026

VII-10 -

APPENDIX VIII

PROPOSED ADOPTION OF THE MANAGEMENT SYSTEM FOR EXTERNAL INVESTMENTS OF PHANCY GROUP CO., LTD.

Management System for External Investments

Article 1 In order to further regulate the external investment activities of Phancy Group Co., Ltd. (the "Company"), prevent risks relating to external investments, and clarify the approval authority and approval procedures for the Company's external investment decisions, this system is formulated in accordance with the Company Law of the People's Republic of China (the "Company Law"), the Rules Governing the Listing of Shares on the ChiNext Market of the Shenzhen Stock Exchange (the "ChiNext Listing Rules"), the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Hong Kong Listing Rules"), the Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 2 - Standardised Operation of Companies Listed on the ChiNext Market and other laws, regulations and normative documents, as well as the relevant provisions of the Articles of Association of Phancy Group Co., Ltd. (the "Articles of Association"), and in light of the actual circumstances of the Company.

Article 2 "External investment" as referred to in this system includes:

(1) investments in other enterprises, including equity investments such as establishing limited liability companies, joint stock limited companies or other commercial entities in which investments may be made in accordance with law, increasing capital in other enterprises, and acquiring equity interests in other enterprises;

(2) entrusted wealth management, entrusted loans, investments in controlled subsidiaries, investments in trading financial assets and available-for-sale financial assets, held-to-maturity investments, etc.;

(3) other forms of investment prescribed by laws, regulations and the Articles of Association.

Article 3 All external investment activities of the Company must comply with the Company's long-term development plan and development strategy, be conducive to expanding its principal business and production capacity, be conducive to the sustainable development of the Company, have expected investment returns, and be conducive to improving the overall economic interests of the Company.

Article 4 Where an investment project is required to be submitted to government authorities for approval in accordance with relevant national requirements on the administration of investment activities, the necessary approval procedures shall be performed to ensure that all investment activities of the Company are compliant and lawful and conform to the national macroeconomic policies.

Article 5 This system applies to the external investment activities of the Company and its controlled subsidiaries.

APPENDIX VIII

PROPOSED ADOPTION OF THE MANAGEMENT SYSTEM FOR EXTERNAL INVESTMENTS OF PHANCY GROUP CO., LTD.

Chapter 2 Authority and Procedures for External Investment Decisions

Article 6 The general manager of the Company may organise relevant business departments to study and demonstrate proposed investment projects of the Company and put forward recommendations to provide a basis for decision-making.

Article 7 The Company implements a system of professional management and decision-making at different levels for external investments. The general meeting, the Board and the general manager of the Company are the decision-making bodies for the Company's external investments, and shall make decisions on the Company's external investments within their respective scope of authority. No other department or individual shall have the authority to make decisions on external investments.

Article 8 The general manager of the Company may make decisions on external investment activities of the Company and its controlled subsidiaries which do not meet the thresholds set out in Articles 9 and 10.

Article 9 Where an external investment of the Company reaches any of the following thresholds, it may be implemented only after being considered and approved by the Board of the Company:

(1) the total assets involved in the transaction account for 10% or more of the Company's latest audited total assets; where both book value and appraised value exist for the total assets involved in the transaction, the higher value shall prevail;

(2) the net assets involved in the transaction target (such as equity interests) account for 10% or more of the Company's latest audited net assets, and the absolute amount exceeds RMB10 million; where both book value and appraised value exist for the net assets involved in the transaction, the higher value shall prevail;

(3) the operating revenue related to the transaction target (such as equity interests) for the latest accounting year accounts for 10% or more of the Company's audited operating revenue for the latest accounting year, and the absolute amount exceeds RMB10 million;

(4) the net profit related to the transaction target (such as equity interests) for the latest accounting year accounts for 10% or more of the Company's audited net profit for the latest accounting year, and the absolute amount exceeds RMB1 million;

(5) the transaction amount (including debts and expenses assumed) accounts for 10% or more of the Company's latest audited net assets, and the absolute amount exceeds RMB10 million;

(6) the profit generated from the transaction accounts for 10% or more of the Company's audited net profit for the latest accounting year, and the absolute amount exceeds RMB1 million;

VIII-2 -

(7) (Applicable to the Hong Kong Listing Rules) in respect of an external investment or a series of external investments of the Company (aggregated in accordance with the Hong Kong Listing Rules), any percentage ratio (as defined in the Hong Kong Listing Rules) calculated in respect of such external investment is 5% or more but less than 25%.

Where any data involved in the calculation of the indicators (1) to (6) above is negative, its absolute value shall be used for calculation.

Article 10 Where an external investment of the Company reaches any of the following thresholds, it shall be approved by the Board and then considered and approved by the general meeting:

(1) the total assets involved in the transaction (where both book value and appraised value exist, the higher value shall prevail) account for 50% or more of the Company's latest audited total assets;

(2) the operating revenue related to the transaction target (such as equity interests) for the latest accounting year accounts for 50% or more of the Company's audited operating revenue for the latest accounting year, and the absolute amount exceeds RMB50 million;

(3) the net profit related to the transaction target (such as equity interests) for the latest accounting year accounts for 50% or more of the Company's audited net profit for the latest accounting year, and the absolute amount exceeds RMB5 million;

(4) the transaction amount (including debts and expenses assumed) accounts for 50% or more of the Company's latest audited net assets, and the absolute amount exceeds RMB50 million;

(5) the profit generated from the transaction accounts for 50% or more of the Company's audited net profit for the latest accounting year, and the absolute amount exceeds RMB5 million;

(6) (Applicable to the Hong Kong Listing Rules) in respect of an external investment or a series of external investments of the Company (aggregated in accordance with the Hong Kong Listing Rules), any percentage ratio (as defined in the Hong Kong Listing Rules) calculated in respect of such external investment is 25% or more.

Where any data involved in the calculation of the indicators (1) to (5) above is negative, its absolute value shall be used for calculation.

VIII-3 -

Article 11 The transaction amount referred to in the above provisions of this system means the transaction amount paid and the debts and expenses assumed, etc. Where the transaction arrangement involves consideration that may be paid or received in the future, does not involve a specific amount, or the amount is determined based on prescribed conditions, the estimated maximum amount shall be taken as the transaction amount. Percentage ratios shall be calculated in accordance with the Hong Kong Listing Rules.

An external investment involves related party/connected transactions shall also be complied with the relevant provisions of the ChiNext Listing Rules and the Hong Kong Listing Rules.

Article 12 Where the subject matter of an external investment is equity interests, and the purchase or sale of such equity interests will result in a change in the scope of the Company's consolidated financial statements, all assets, operating revenue and net profit of the target company shall be deemed to be the total assets involved in the external investment, the operating revenue related to the subject matter of the external investment and the net profit referred to in Articles 8, 9 and 10 of this system.

Article 13 For an external investment which reaches the thresholds set out in Article 10 of this system, if the subject matter of the external investment is equity interests, the Company shall engage an accounting firm qualified to practise securities business to issue an audit report on the financial accounting reports of the subject matter of the external investment for the latest year and latest period in accordance with the Accounting Standards for Business Enterprises, and the audit cut-off date shall not be more than six months from the date of the general meeting convened to consider the transaction; if the subject matter of the external investment is non-cash assets other than equity interests, the Company shall engage an asset appraisal firm qualified to practise securities business to issue an appraisal report, and the appraisal reference date shall not be more than one year from the date of the general meeting convened to consider the transaction.

Article 14 Where the Company makes an external investment to establish a limited liability company and the capital contribution may be paid in instalments in accordance with Article 47 of the Company Law, the provisions of Articles 8, 9 and 10 of this system shall apply based on the total capital contribution agreed in the agreement.

Article 15 After an investment project has been considered and approved by the Board or the general meeting, the general manager shall be responsible for its implementation. The general manager shall report the progress of the external investment to the Board in a timely manner. Where there is a material change in the conditions for the external investment which may affect the investment returns, recommendations such as suspension or adjustment of the investment project plan shall be put forward in a timely manner, and the matter shall be resubmitted to the Board or the general meeting for consideration in accordance with the approval procedures.

VIII-4 -

Chapter 3 Other Material Matters

Article 16 The Company's external investment activities shall strictly perform information disclosure obligations in accordance with relevant laws, regulations and the Articles of Association.

Article 17 The finance department shall keep complete accounting records for the Company's external investment activities, carry out detailed accounting, and establish separate detailed ledgers for each investment project to record relevant information in detail. The accounting methods for external investments shall comply with the requirements of accounting standards and accounting systems.

The controlled subsidiaries of the Company shall regularly submit financial and accounting statements to the Company in accordance with the Company's requirements, and shall submit accounting statements and provide accounting information in a timely manner in accordance with the Company's requirements for the preparation of consolidated financial statements.

Article 18 The independent non-executive Directors have the right to inspect the Company's external investment activities. The Audit Committee has the right to supervise the Company's external investment activities.

Chapter 4 Supplementary Provisions

Article 19 This system shall come into effect and be implemented from the date on which it is considered and approved by the general meeting. The provisions applicable to companies listed on the ChiNext Market of the Shenzhen Stock Exchange shall be implemented from the date on which the Company completes its initial public offering of RMB ordinary shares (A Shares) and listing.

Article 20 For the purposes of this system, the terms "or more" and "within" include the number itself, while the terms "less than", "exceed", "fewer than" and "below" do not include the number itself.

Article 21 Matters not covered by this system shall be handled in accordance with relevant national laws, regulations and the Articles of Association. Where this system is inconsistent with relevant laws, regulations and the Articles of Association, the relevant laws, regulations and the Articles of Association shall prevail. If this system conflicts with any national laws or regulations promulgated in the future or the Articles of Association amended through lawful procedures, the relevant national laws, regulations and the Articles of Association shall apply, and this system shall be amended in a timely manner and submitted to the general meeting for consideration and approval.

Article 22 The Board shall have the right to interpret this system.

Phancy Group Co., Ltd.
June 2026

VIII-5 -

APPENDIX IX

PROPOSED ADOPTION OF THE MANAGEMENT SYSTEM FOR PROCEEDS OF PHANCY GROUP CO., LTD.

Management System for Proceeds (Draft)

Article 1 In order to regulate the use and management of proceeds of Phancy Group Co., Ltd. (the "Company"), improve the efficiency of the use of proceeds and effectively protect the interests of investors, this system is formulated in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Administrative Measures for Registration of Securities Issuance by Listed Companies, the Rules for the Supervision of Proceeds of Listed Companies, the Rules Governing the Listing of Shares on the ChiNext Market of the Shenzhen Stock Exchange (the "ChiNext Listing Rules"), the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 2 – Standardised Operation of Companies Listed on the ChiNext Market (the "Standardised Operation Guidelines") and other relevant laws, regulations and normative documents, as well as the Articles of Association of Phancy Group Co., Ltd. (the "Articles of Association"), and in light of the actual circumstances of the Company.

Article 2 The proceeds referred to in this system mean funds raised by the Company from investors through the issuance of shares and derivatives thereof and used for specific purposes, excluding funds raised by the Company through the implementation of equity incentive schemes.

Where a proceeds-funded investment project (the "proceeds-funded project") is implemented through a subsidiary of the Company or another enterprise controlled by the Company, such subsidiary or other controlled enterprise shall comply with this system.

Article 3 The Board of the Company shall fully demonstrate the feasibility of proceeds-funded projects, ensure that investment projects have good market prospects and profitability, effectively prevent investment risks and improve the efficiency of the use of proceeds.

Article 4 The Company shall use proceeds prudently, and the proceeds shall be used exclusively for their designated purposes. The Company's use of proceeds shall comply with national industrial policies and relevant laws and regulations, practise the concept of sustainable development, fulfil social responsibilities, and in principle be used for the principal business, and be conducive to enhancing the Company's competitiveness and innovation capability. The use of proceeds shall be consistent with the undertakings in the prospectus or offering document, and the Company shall not arbitrarily change the investment direction of proceeds or change the use of proceeds in disguised form. Any change by the Company to the use of proceeds set out in the prospectus or offering document must be resolved by the general meeting.

IX-1 -

APPENDIX IX

PROPOSED ADOPTION OF THE MANAGEMENT SYSTEM FOR PROCEEDS OF PHANCY GROUP CO., LTD.

The Company shall truthfully, accurately and completely disclose the actual use of proceeds, and shall engage an accounting firm to conduct assurance on the deposit and use of proceeds at the same time as the annual audit. Where any circumstance occurs that seriously affects the normal progress of the proceeds investment plan, the Company shall make a timely announcement. The Board shall comprehensively review the progress of proceeds-funded investment projects every half year, prepare and disclose the Special Report on the Deposit, Management and Actual Use of Proceeds of the Company. The relevant special report shall include the basic information of the proceeds and the deposit, management and use thereof as prescribed in these rules. Where there is any difference between the actual investment progress of a proceeds-funded investment project and the investment plan, the Company shall explain the specific reasons.

The finance department of the Company shall establish a ledger for the use of proceeds and record in detail the expenditure of proceeds and the investment in proceeds projects. The internal audit function of the Company shall inspect the deposit, management and use of proceeds at least once every quarter and report the inspection results to the Audit Committee in a timely manner. Where the Audit Committee of the Company considers that there are violations, material risks in the management of proceeds or that the internal audit function has failed to submit an inspection result report as required in the preceding paragraph, it shall report to the Board in a timely manner. The Board shall report to the Shenzhen Stock Exchange and make an announcement in a timely manner after receiving the report.

Article 5 Where a proceeds-funded project is implemented through a subsidiary of the Company (including a wholly-owned subsidiary or controlled subsidiary) or another enterprise controlled by the Company, the Company shall ensure that such subsidiary or other controlled enterprise complies with this system.

Article 6 Where the Company suffers losses due to the use of proceeds in violation of this system, the relevant responsible persons shall assume civil compensation liability.

Article 7 The Directors and senior management of the Company shall diligently perform their duties, urge the Company to use proceeds in a standardised manner, consciously safeguard the security of the Company's proceeds, and shall not manipulate, participate in, assist or tolerate any unauthorised or disguised change by the Company to the use of proceeds.

Article 8 The controlling shareholders, actual controllers and other related parties of the Company shall not directly or indirectly occupy or misappropriate the Company's proceeds, and shall not use the Company's proceeds or proceeds-funded projects to obtain improper benefits.

Chapter 2 Special Account Deposit of Proceeds

Article 9 The Company shall prudently select commercial banks and open special accounts for proceeds (the "Special Accounts"). The Company's proceeds shall be deposited in Special Accounts approved by the Board for centralised management. Special Accounts shall not be used to deposit non-proceeds funds or for other purposes.

IX-2 -

Where the Company conducts financing on two or more occasions, special accounts for proceeds shall be established separately and independently.

Where proceeds are invested in overseas projects, in addition to complying with the first paragraph of this Article, the Company and the sponsor shall also take effective measures to ensure the security and standardised use of proceeds invested in overseas projects, and disclose the relevant specific measures and actual effects in the Special Report on the Deposit, Management and Actual Use of Proceeds of the Company.

Article 10 Within one month after the proceeds are in place, the Company shall enter into a tripartite supervision agreement (the "Agreement") with the sponsor or independent financial adviser and the commercial bank depositing the proceeds (the "Commercial Bank"). After the Agreement is signed, the Company may use the proceeds. The Agreement shall at least include the following:

(1) the Company shall deposit the proceeds in a centralised manner in the Special Account;

(2) the account number of the Special Account for proceeds, the proceeds-funded project involved in the Special Account, and the amount deposited;

(3) where the amount withdrawn by the Company from the Special Account in one withdrawal or cumulatively within 12 months exceeds RMB50 million or 20% of the net proceeds, the Company and the Commercial Bank shall promptly notify the sponsor or independent financial adviser;

(4) the Commercial Bank shall issue bank statements to the Company every month and copy them to the sponsor or independent financial adviser;

(5) the sponsor or independent financial adviser may at any time make inquiries with the Commercial Bank on information relating to the Special Account;

(6) the supervisory duties of the sponsor or independent financial adviser, the notification and cooperation duties of the Commercial Bank, and the supervision methods of the sponsor or independent financial adviser and the Commercial Bank over the Company's use of proceeds;

(7) the rights, obligations and liabilities for breach of contract of the Company, the Commercial Bank and the sponsor or independent financial adviser;

(8) where the Commercial Bank fails on three occasions to promptly issue bank statements to the sponsor or independent financial adviser or notify large withdrawals from the Special Account, or fails to cooperate with the sponsor in inquiring into and investigating information relating to the Special Account, the Company may terminate the Agreement and close the Special Account for proceeds.

The Company shall make a timely announcement of the principal contents of the Agreement after it is signed.

IX-3 -

Where the Company implements a proceeds-funded project through a controlled subsidiary, the Company, the controlled subsidiary implementing the proceeds-funded project, the Commercial Bank and the sponsor or independent financial adviser shall jointly sign the Agreement, and the Company and its controlled subsidiary shall be deemed to be one party jointly.

Where the above Agreement is terminated early before the expiry of its term, the Company shall enter into a new agreement with the relevant parties within one month from the date of termination of the Agreement and make a timely announcement.

Chapter 3 Use of Proceeds

Article 11 The Company shall ensure the truthfulness and fairness of the use of proceeds, prevent proceeds from being occupied or misappropriated by controlling shareholders, actual controllers and other related parties, and take effective measures to prevent related parties from obtaining improper benefits through proceeds-funded projects.

Where the Company discovers that controlling shareholders, actual controllers or other related parties have occupied proceeds, it shall promptly require the party occupying the funds to return them, disclose the reasons for the occupation, its impact on the Company, the repayment and rectification plan and progress of rectification, and the Board shall pursue the legal liability of the relevant parties in accordance with law.

Article 12 In principle, the Company's proceeds shall be used for its principal business. Proceeds shall not be used for financial investments such as entrusted wealth management (except cash management) or entrusted loans, or high-risk investments such as securities investment or derivatives investment, and shall not be directly or indirectly invested in companies whose principal business is the trading of negotiable securities.

The Company shall not use proceeds for pledges, entrusted loans or other investments that change the use of proceeds in disguised form.

Article 13 Where any of the following circumstances occurs in respect of a proceeds-funded project, the Company shall re-demonstrate the feasibility and expected returns of the project and decide whether to continue implementing the project:

(1) there is a material change in the market environment relating to the proceeds-funded project;

(2) after the proceeds are received, the proceeds-funded project has been suspended for more than one year;

(3) the completion deadline under the proceeds investment plan has been exceeded and the amount of proceeds invested has not reached 50% of the relevant planned amount;

(4) other abnormal circumstances occur in respect of the proceeds-funded project.

IX-4 -

Where any circumstance specified in the preceding paragraph occurs, the Company shall make timely disclosure. The Company shall disclose in its latest periodic report the progress of the project and the reasons for the abnormality. Where adjustment to the proceeds investment plan is required, the adjusted proceeds investment plan (if any) shall also be disclosed. Where a change to the proceeds-funded project is involved, the relevant consideration procedures for changing the use of proceeds shall apply.

The Company shall disclose in its latest periodic report the specific circumstances of re-demonstration of proceeds-funded projects during the reporting period.

Article 14 Where a proceeds-funded project is expected to be unable to be completed within the original period and the Company proposes to postpone its implementation, it shall be considered and approved by the Board in a timely manner, and the sponsor or independent financial adviser shall express a clear opinion. The Company shall promptly disclose the specific reasons for failure to complete on schedule, and explain the current deposit and accounting status of the proceeds, whether there are circumstances affecting the normal progress of the proceeds use plan, the expected completion time and phased investment plan, and measures to ensure completion on schedule after the postponement.

Article 15 Where the Company has invested self-raised funds in a proceeds-funded project in advance and replaces such self-raised funds with proceeds after the proceeds are in place, the replacement shall be implemented within six months after the proceeds are transferred into the Special Account.

During the implementation of a proceeds-funded investment project, proceeds shall in principle be used for direct payment. Where it is genuinely difficult to make direct payment with proceeds for matters such as payment of personnel remuneration or purchase of overseas products and equipment, replacement may be implemented within six months after payment is made with self-raised funds.

Where the Company replaces self-raised funds that have been invested in a proceeds-funded project in advance with proceeds, the replacement shall be considered and approved by the Board, and the sponsor or independent financial adviser shall express a clear consent opinion and disclosure shall be made.

Where the Company has disclosed in the issuance application documents that it proposes to replace self-raised funds invested in advance with proceeds and the amount invested in advance has been determined, it shall make an external announcement before implementing the replacement.

Article 16 When the Company uses proceeds for any of the following matters, the matter shall be considered and approved by the Board, and the sponsor or independent financial adviser shall express a clear opinion:

(1) replacing self-raised funds invested in proceeds-funded projects in advance with proceeds;

(2) using temporarily idle proceeds for cash management;
(3) using temporarily idle proceeds to temporarily replenish working capital;
(4) changing the use of proceeds;
(5) changing the implementation location of a proceeds-funded project;
(6) adjusting the planned progress of a proceeds-funded project;
(7) using surplus proceeds;
(8) using the portion of actual net proceeds exceeding the planned proceeds amount (the "excess proceeds");
(9) other circumstances recognised by securities regulatory authorities as a change in the use of proceeds.

Where the Company changes the use of proceeds, uses excess proceeds, or uses surplus proceeds reaching the threshold for consideration by the general meeting, the matter shall also be considered and approved by the general meeting.

Article 17 After a single or all proceeds-funded projects of the Company are completed, where surplus proceeds (including interest income) are used for other purposes and the amount is less than RMB5 million and less than 5% of the net proceeds of the project, the procedures prescribed in Article 16 may be exempted, and the use shall be disclosed in the annual report.

Where the use of surplus proceeds (including interest income) reaches or exceeds 10% of the net proceeds of the project and is more than RMB10 million, it shall also be considered and approved by the general meeting.

Article 18 The Company may temporarily use idle proceeds to replenish working capital, provided that relevant consideration procedures are performed in accordance with the Articles of Association and the regulatory rules of the place where the Company is listed. Temporary replenishment of working capital shall be implemented through the Special Account for proceeds and shall be limited to production and operation relating to the principal business. It shall not be used through direct or indirect arrangements for placing or subscription of new shares, or for trading in shares and derivatives thereof, convertible corporate bonds, etc.

Article 19 Where the Company temporarily uses idle proceeds to replenish working capital, the following conditions shall be satisfied:

(1) the use of proceeds shall not be changed in disguised form or affect the normal progress of the proceeds investment plan;

IX-6 -

(2) proceeds previously used for temporary replenishment of working capital have been returned (if applicable);

(3) the period for a single replenishment of working capital shall not exceed 12 months;

(4) idle proceeds shall not be directly or indirectly used for high-risk investments such as securities investment and derivatives trading.

Where the Company temporarily uses idle proceeds to replenish working capital, the amount, term and other matters shall be considered and approved by the Board of the Company, the sponsor shall express a clear opinion, and the Company shall disclose the relevant information in a timely manner.

Article 20 Where the Company uses idle proceeds to replenish working capital, the matter shall be considered and approved by the Board of the Company, and the Company shall announce the following contents within two trading days after the Board meeting:

(1) basic information on the proceeds, including the time of receipt of the proceeds, the amount of proceeds, net proceeds and investment plan, etc.;

(2) the use of proceeds, the idle status and the reasons therefor;

(3) the reasons for the shortage of working capital, and the amount and term of idle proceeds used to replenish working capital;

(4) the estimated amount of financial expenses saved by using idle proceeds to replenish working capital, whether there is any act of changing the investment direction of proceeds in disguised form, and measures to ensure that the normal progress of proceeds-funded projects will not be affected;

(5) the opinion issued by the sponsor or independent financial adviser;

(6) other contents required by the Shenzhen Stock Exchange.

Before the maturity date for replenishment of working capital, the Company shall return such funds to the Special Account for proceeds and make an announcement within two trading days after all funds have been returned. Where the Company expects that it will be unable to return such funds to the Special Account for proceeds on schedule, it shall perform the consideration procedures and make a timely announcement before the maturity date in accordance with the requirements of the preceding paragraph. The announcement shall include the whereabouts of the funds, the reasons why they cannot be returned, and the reasons and term for continuing to use them to replenish working capital.

IX-7 -

Article 21 The Company shall properly arrange the use plan for excess proceeds according to the Company's development plan and actual production and operation needs. Excess proceeds shall be used for projects under construction and new projects, and for repurchasing shares of the Company and cancelling them in accordance with law. The Company shall specify the specific use plan for excess proceeds no later than the completion of all proceeds-funded projects in the same batch, and use the excess proceeds in accordance with the plan.

Where the Company uses excess proceeds to invest in projects under construction and new projects, it shall also fully disclose information such as the construction plan, investment necessity and reasonableness, investment cycle and rate of return of the relevant projects. Where the projects involve related party transactions, purchase of assets, external investments, etc., the Company shall also perform consideration procedures and information disclosure obligations in accordance with the Articles of Association, the Administrative Measures for Related Party/Connected Transactions, the Management System for External Investments, the ChiNext Listing Rules and other relevant requirements.

Where it is genuinely necessary to use temporarily idle excess proceeds for cash management or temporary replenishment of working capital, the necessity and reasonableness shall be explained. Where the Company uses temporarily idle excess proceeds for cash management or temporary replenishment of working capital, the amount, term and other matters shall be considered and approved by the Board, the sponsor shall express a clear opinion, and the Company shall disclose the relevant information in a timely manner.

The Company shall explain the use of excess proceeds and the use plan for the following year in the annual special report on the deposit, management and use of proceeds.

Article 22 An announcement on the use plan for excess proceeds shall include the following:

(1) basic information on the proceeds, including the time of receipt of the proceeds, the amount of proceeds, the amount by which actual net proceeds exceed planned proceeds, the names and amounts of projects in which investment has been made, the accumulated planned amount and actual amount used;

(2) introduction to the projects proposed to be invested in, including the basic information of each project, whether related party transactions are involved, feasibility analysis, economic benefit analysis, investment progress plan, explanation of approvals already obtained or pending from relevant authorities, and risk warnings (if applicable);

(3) the independent opinion of the sponsor or independent financial adviser on the reasonableness, compliance and necessity of the use plan for excess proceeds.

IX-8 -

Article 23 Where the Company plans to use excess proceeds to repay bank loans or permanently replenish working capital, the matter shall be considered and approved by the Board and the general meeting, the sponsor or independent financial adviser shall express a clear consent opinion and disclosure shall be made, and the following requirements shall be satisfied and the following contents shall be disclosed in the announcement:

The amount used to permanently replenish working capital and repay bank loans shall not cumulatively exceed 30% of the total amount of excess proceeds within any 12-month period.

Within 12 months after replenishing working capital, the Company shall not conduct high-risk investments such as securities investment or derivatives trading, or provide financial assistance to parties other than controlled subsidiaries. The Company shall make a clear undertaking to this effect in the announcement.

Article 24 The Company may conduct cash management with temporarily idle proceeds. Cash management shall be implemented through the Special Account or a dedicated settlement account for products that has been publicly disclosed. Where cash management is implemented through a dedicated settlement account for products, the account shall not be used to deposit non-proceeds funds or for other purposes. The implementation of cash management shall not affect the normal progress of the proceeds investment plan. The Company shall make a timely announcement when opening or closing a dedicated settlement account for products.

Cash management products shall satisfy the following conditions:

(1) they shall be highly secure products such as structured deposits and large-denomination certificates of deposit, and shall not be non-principal-protected products;

(2) they shall have good liquidity and the product term shall not exceed 12 months;

(3) cash management products shall not be pledged.

Article 25 Where the Company uses idle proceeds for cash management, provided that relevant consideration procedures are performed in accordance with the Articles of Association and the regulatory rules of the place where the Company is listed. The Company shall announce the following contents within two trading days after the Board meeting:

(1) basic information on the proceeds, including the time of receipt of the proceeds, the amount of proceeds, net proceeds and investment plan, etc.;

(2) the use of proceeds, the idle status and the reasons therefor;

(3) the amount and term of cash management, whether there is any act of changing the use of proceeds in disguised form, and measures to ensure that the normal progress of proceeds-funded projects will not be affected;

IX-9 -

(4) the issuer, type, investment scope, term, amount, method of income distribution, expected annualised rate of return, if any, of the cash management products, and the Board's specific analysis and explanation of the safety and liquidity of the investment products;

(5) the opinion issued by the sponsor or independent financial adviser.

Where the Company discovers material risk circumstances such as deterioration of the financial condition of the issuer of a cash management product or losses faced by the invested product, it shall promptly disclose an external risk warning announcement and explain the risk control measures adopted by the Company to ensure fund safety.

Where cash management activities trigger disclosure and/or shareholder approval requirements under Chapter 14 of the Hong Kong Listing Rules, the Company shall further comply with the relevant provisions of the Hong Kong Listing Rules.

Chapter 4 Change in the Use of Proceeds

Article 26 Where any of the following circumstances exists, it shall be deemed a change in the use of proceeds. The Board shall make a resolution in accordance with law, the sponsor shall express a clear opinion, the matter shall be submitted to the general meeting for consideration, and the Company shall disclose the relevant information in a timely manner:

(1) cancelling or terminating the original proceeds-funded project and implementing a new project or permanently replenishing working capital;

(2) changing the implementation entity of a proceeds-funded project (except where the implementation entity is changed between the Company and its wholly-owned subsidiaries);

(3) changing the implementation method of a proceeds-funded project;

(4) other circumstances recognised as a change in the use of proceeds under the regulatory rules of the place where the Company is listed.

Where the circumstance specified in item (1) of the preceding paragraph exists, the sponsor shall, in light of the previously disclosed documents relating to the proceeds, specifically explain the main reasons for the change in the proceeds-funded investment project and the reasonableness of the previous sponsor opinion.

Article 27 The Board of the Company shall scientifically and prudently select new investment projects, conduct feasibility analysis on the new investment projects, and ensure that the investment projects have good market prospects and profitability, can effectively prevent investment risks and improve the efficiency of the use of proceeds.

The changed use of proceeds of the Company shall in principle be invested in the Company's principal business.

IX-10 -

When considering a resolution on changing the use of proceeds, Directors shall pay full attention to the reasonableness and necessity of the change, and make prudent judgments after fully understanding the feasibility, investment prospects and expected returns of the changed project.

Article 28 Where the Company proposes to change a proceeds-funded project to be implemented by way of a joint venture, it shall carefully consider the necessity of the joint venture on the basis of fully understanding the basic information of the joint venture partner. The Company shall hold a controlling interest to ensure effective control over the proceeds-funded project.

Article 29 Where the Company changes the implementation location of a proceeds-funded project, or the implementation entity of a proceeds-funded project is changed between the Company and its wholly-owned subsidiaries, it shall not be deemed a change in the use of proceeds. The Company shall make an announcement within two trading days after the matter is considered and approved by the Board, explaining the change, reasons, impact on the implementation of the proceeds-funded project and the opinion issued by the sponsor or independent financial adviser.

Chapter 5 Management and Supervision of Proceeds

Article 30 Where there is any difference between the actual investment progress of a proceeds-funded project and the investment plan, the Company shall explain the specific reasons. Where the annual actual use of proceeds for a proceeds-funded project differs by more than 30% from the estimated use amount for the year under the most recently disclosed proceeds investment plan, the Company shall adjust the proceeds investment plan and disclose, in the special report on the deposit and use of proceeds and the periodic report, the most recently disclosed annual proceeds investment plan, the current actual investment progress, the adjusted estimated investment plan by year and the reasons for the change in the investment plan, etc.

The Company shall cooperate with the continuous supervision work of the sponsor or independent financial adviser and the audit work of the accounting firm, and promptly provide, or apply to banks to provide, necessary information relating to the deposit, management and use of proceeds.

Article 31 Where the Company has used proceeds during the year, it shall, according to the relevant requirements of the CSRC and the Shenzhen Stock Exchange, at the same time as conducting the annual audit, engage an accounting firm to conduct a special review of the use of proceeds, including the actual investment projects, actual investment amounts, actual investment timing and degree of project completion, and to provide reasonable assurance and issue an assurance conclusion on whether the special report issued by the Board has been prepared in accordance with the Standardised Operation Guidelines and relevant format guidelines and whether it truthfully reflects the actual annual deposit and use of proceeds. The Company shall disclose the assurance conclusion in the annual special report on the deposit and use of proceeds.

IX-11 -

Where the assurance conclusion is a "qualified conclusion", "adverse conclusion" or "disclaimer of conclusion", the Board of the Company shall analyse the reasons for such conclusion given by the certified public accountants in the assurance report, propose rectification measures and disclose them in the annual report.

Article 32 The sponsor or independent financial adviser shall conduct an on-site inspection of the deposit and use of the Company's proceeds at least once every half year. In accordance with the relevant requirements of the CSRC and the Shenzhen Stock Exchange, after the end of each accounting year, the sponsor or independent financial adviser shall issue a special verification report on the annual deposit and use of proceeds of the Company. The Company shall disclose the special verification conclusion in the annual special report on the deposit and use of proceeds.

Where the accounting firm has issued an assurance conclusion of "qualified conclusion", "adverse conclusion" or "disclaimer of conclusion" on the deposit and use of the Company's proceeds, the sponsor or independent financial adviser shall also carefully analyse in its verification report the reasons for such assurance conclusion issued by the accounting firm and put forward a clear verification opinion.

Where the sponsor or independent financial adviser discovers that the Company or the Commercial Bank has failed to perform the tripartite agreement as agreed, or discovers material non-compliance or material risks in the management of the Company's proceeds during an on-site inspection of the Company, it shall promptly report to the Shenzhen Stock Exchange and make disclosure.

Article 33 The independent non-executive Directors shall pay attention to whether there is any material difference between the actual use of proceeds and the Company's information disclosure. With the consent of more than one-half of the independent non-executive Directors, the independent non-executive Directors may engage an accounting firm to issue an assurance report on the deposit and use of proceeds. The Company shall actively cooperate and bear the necessary expenses.

Article 34 The Company, its Directors and senior management shall use proceeds or supervise the normal use of proceeds in accordance with the requirements of this system. Where proceeds are used in violation of relevant laws and regulations and this system, or information disclosure obligations are not performed in accordance with law, the relevant responsible persons shall assume corresponding legal liability.

IX-12 -

Chapter 6 Supplementary Provisions

Article 35 This system shall come into effect from the date on which it is considered and approved by the general meeting and the Company completes its initial public offering of RMB ordinary shares (A Shares) and listing on the ChiNext Market, and the Board of the Company shall be responsible for its interpretation.

Article 36 Matters not covered by this system shall be handled in accordance with relevant national laws, administrative regulations, normative documents and the Articles of Association. Where this system is inconsistent with relevant laws, administrative regulations, normative documents and the Articles of Association, the relevant laws, administrative regulations, normative documents and the Articles of Association shall prevail. If this system conflicts with any national laws, administrative regulations or normative documents promulgated in the future or the Articles of Association amended through lawful procedures, the relevant laws, administrative regulations, normative documents and the Articles of Association shall apply, and this system shall be amended in a timely manner and submitted to the general meeting for consideration and approval.

IX-13 -

APPENDIX X

PROPOSED ADOPTION OF THE MANAGEMENT SYSTEM FOR PREVENTING OCCUPATION OF COMPANY FUNDS BY CONTROLLING SHAREHOLDERS, ACTUAL CONTROLLERS AND OTHER RELATED PARTIES OF PHANCY GROUP CO., LTD.

Management System for Preventing Occupation of Company Funds by Controlling Shareholders, Actual Controllers and Other Related Parties

Article 1 In order to strengthen and regulate the fund management of Phancy Group Co., Ltd. (the "Company"), establish a long-term mechanism to prevent controlling shareholders, actual controllers and other related parties from occupying the Company's funds, eliminate the occurrence of fund occupation by controlling shareholders, actual controllers and other related parties, and protect the lawful rights and interests of the Company, its Shareholders and other stakeholders, this system (the "System") is formulated in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Rules Governing the Listing of Shares on the ChiNext Market of the Shenzhen Stock Exchange (the "ChiNext Listing Rules"), the Guidelines for the Supervision of Listed Companies No. 8 - Regulatory Requirements for Fund Transactions and External Guarantees of Listed Companies, the Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 2 - Standardised Operation of Companies Listed on the ChiNext Market and other laws, regulations and normative documents, as well as the relevant provisions of the Articles of Association of Phancy Group Co., Ltd. (the "Articles of Association").

Article 2 "Controlling shareholder" as referred to in this System means a Shareholder who satisfies any of the following conditions: a Shareholder whose shareholding accounts for more than 50% of the total share capital of the Company; or a Shareholder whose shareholding ratio is less than 50% but whose voting rights attached to the shares held by it are sufficient to have a material impact on resolutions of the general meeting; or a Shareholder falling under other circumstances as determined by relevant laws and regulations, the China Securities Regulatory Commission (the "CSRC") and the Shenzhen Stock Exchange.

"Actual controller" as referred to in this System means a natural person, legal person or other organisation that is able to actually control the actions of the Company through investment relationships, agreements or other arrangements.

"Related party" as referred to in this System means a related party as defined under relevant laws, regulations, the ChiNext Listing Rules and the Accounting Standards for Business Enterprises No. 36 - Related Party Disclosures, including related legal persons and related natural persons.

Article 3 Controlling shareholders, actual controllers and other related parties shall not misappropriate the interests of the Company in any manner.

APPENDIX X

PROPOSED ADOPTION OF THE MANAGEMENT SYSTEM FOR PREVENTING OCCUPATION OF COMPANY FUNDS BY CONTROLLING SHAREHOLDERS, ACTUAL CONTROLLERS AND OTHER RELATED PARTIES OF PHANCY GROUP CO., LTD.

Chapter 2 Principles for Preventing Occupation of Funds by Controlling Shareholders, Actual Controllers and Other Related Parties

Article 4 Controlling shareholders, actual controllers and other related parties shall not occupy the Company's funds in the course of operating fund transactions with the Company.

Article 5 Controlling shareholders, actual controllers and other related parties shall not occupy the Company's funds in any of the following manners:

(1) requiring the Company to advance or bear wages, welfare benefits, insurance, advertising and other expenses, costs and other expenditures for them;

(2) requiring the Company to repay debts on their behalf;

(3) requiring the Company to lend funds to them for use, whether with or without consideration, directly or indirectly;

(4) requiring the Company to provide entrusted loans to them through banks or non-bank financial institutions;

(5) requiring the Company to entrust them to conduct investment activities;

(6) requiring the Company to issue commercial acceptance bills for them without genuine transaction background;

(7) requiring the Company to provide funds to them by way of purchase payments, asset transfer payments, prepayments or otherwise where there is no consideration in the form of goods or services, or where the consideration is obviously unfair or clearly contrary to commercial logic;

(8) failing to repay in a timely manner debts arising from the Company's assumption of guarantee liabilities for them;

(9) requiring the Company to provide funds to them through current accounts with no commercial substance;

(10) fund occupation arising from transaction matters which has not been resolved within the prescribed or committed period;

(11) requiring the Company to deposit cash with a finance company controlled by the controlling shareholders, actual controllers and other related parties, where the interest rate and other terms are significantly lower than the market average, thereby clearly damaging the interests of the Company or transferring benefits to the controlling shareholders, actual controllers and other related parties;

X-2 -

(12) requiring the Company to use bank deposits to provide pledged financing for the controlling shareholders, actual controllers and other related parties;

(13) other circumstances as determined by the CSRC and the Shenzhen Stock Exchange.

Controlling shareholders, actual controllers and other related parties shall not occupy the Company's funds by means such as "occupation during a period and repayment at period-end" or "small amounts in multiple batches".

When certified public accountants conduct the audit of the Company's annual financial accounting report, they shall issue a special explanation on any occupation of funds of the Company by controlling shareholders, actual controllers and other related parties in accordance with the above requirements, and the Company shall make an announcement in respect of such special explanation.

Article 6 Where the Company provides guarantees for controlling shareholders, actual controllers and other related parties, it must require the counterparty to provide counter-guarantees and shall strictly perform the relevant approval procedures in accordance with the ChiNext Listing Rules and other relevant laws and regulations and the Articles of Association.

Chapter 3 Duties and Measures for Preventing Fund Occupation

Article 7 The Directors and senior management of the Company shall diligently perform their duties in accordance with relevant national laws, regulations, normative documents and the Articles of Association, and safeguard the security of the Company's funds.

Article 8 The general meeting, the Board and other bodies of the Company shall consider and approve, in accordance with their respective authority and duties (or authorisations), related party transactions between the Company and controlling shareholders, actual controllers and other related parties arising from production and operating activities such as procurement and sales. Monetary fund payments between the Company and controlling shareholders, actual controllers and other related parties shall be strictly managed in accordance with the settlement process for related party transactions.

Article 9 Where operating fund transactions occur between controlling shareholders, actual controllers and other related parties and the Company, including fund payments for purchases of goods and receipt of services on normal commercial terms, and payments of loan interest and consideration for asset acquisitions, the approval procedures shall be strictly performed in accordance with the Company's fund approval and payment processes.

X-3 -

Article 10 Controlling shareholders, actual controllers and their related parties shall not affect the financial independence of the Company by any of the following means:

(1) sharing bank accounts or borrowing bank accounts and other financial accounts of the Company, or depositing the Company's funds in any manner into accounts controlled by the controlling shareholders, actual controllers and their related parties;

(2) non-operating occupation of the Company's funds in various ways;

(3) requiring the Company to provide guarantees in violation of laws or regulations;

(4) incorporating the Company's financial accounting system into the management system of the controlling shareholders or actual controllers, such as by sharing the financial accounting system or allowing the controlling shareholders or actual controllers to directly access information such as the Company's operating conditions and financial position through the financial accounting system;

(5) other circumstances recognised by relevant laws and regulations and the stock exchange.

Article 11 The person in charge of finance shall ensure the financial independence of the Company and shall not be influenced by controlling shareholders, actual controllers and other related parties. If he or she receives instructions from controlling shareholders, actual controllers and other related parties to occupy or transfer funds, assets or other resources or otherwise misappropriate the interests of the Company, he or she shall expressly refuse and report to the Board in a timely manner.

Article 12 When the Company enters into operating fund transactions with Directors, senior management, controlling shareholders, actual controllers and other related parties, it shall strictly perform the relevant consideration procedures and information disclosure obligations, clearly specify the settlement period for operating fund transactions, and shall not provide funds or other financial assistance in disguised form to Directors, senior management, controlling shareholders, actual controllers and other related parties in the form of operating fund transactions.

Where relevant parties force, instruct or require the Company to engage in guarantee activities in violation of regulations, the Company and its Directors and senior management shall refuse and shall not assist, cooperate with or acquiesce in such activities.

X-4 -

Article 13 Where the Directors and senior management of the Company become aware that the Company's controlling shareholders, actual controllers and other related parties have occupied the Company's funds, misappropriated or encroached upon the Company's assets, or required the Company to provide guarantees in violation of laws or regulations, they shall promptly report to the Board or the Audit Committee of the Company and urge the Company to perform its information disclosure obligations in accordance with relevant requirements. If the Company fails to perform its information disclosure obligations in a timely manner, or if the disclosed contents are inconsistent with the actual circumstances, the relevant Directors and senior management shall immediately report to the Shenzhen Stock Exchange.

Article 14 Controlling shareholders, actual controllers and other related parties undertake that, if there is any occupation of the Company's funds by controlling shareholders, actual controllers and other related parties or any requirement for the Company to provide guarantees in violation of laws or regulations, they shall not transfer the shares of the Company held or controlled by them before the occupied funds have been fully repaid and the non-compliant guarantees have been fully released, except where the proceeds from the transfer of the shares held or controlled by them are used to repay the occupied funds or release the non-compliant guarantees.

Chapter 4 Accountability and Penalties

Article 15 Where the controlling shareholders, actual controllers and other related parties of the Company violate this System by using their related-party relationship to occupy or transfer the Company's funds, assets or other resources, thereby causing losses or potential losses to the Company, the Board of the Company shall take protective measures such as litigation and property preservation in a timely manner to avoid or reduce losses, and shall pursue the liabilities of the relevant persons.

Article 16 Funds of the Company occupied by controlling shareholders, actual controllers and other related parties shall, in principle, be repaid in cash. The use of non-cash assets by controlling shareholders, actual controllers and other related parties to repay occupied funds of the Company shall be strictly controlled.

Where controlling shareholders, actual controllers and other related parties propose to repay occupied funds of the Company with non-cash assets, the following requirements shall be observed:

The assets to be used for repayment must belong to the same business system as the Company and be conducive to enhancing the Company's independence and core competitiveness and reducing related party transactions, and shall not be assets that have not yet been put into use or assets without an objectively clear net book value.

The Company shall engage intermediary institutions that comply with the Securities Law of the People's Republic of China to appraise assets that satisfy the conditions for repayment with assets. The appraised value of the assets or the audited net

X-5 -

book value shall be used as the pricing basis for repayment with assets, provided that the final pricing shall not prejudice the interests of the Company and shall fully take into account the present value of the occupied funds and apply a discount. The audit report and appraisal report shall be publicly announced.

The independent non-executive Directors shall express independent opinions on the plan for repayment with assets by related parties of the Company, or engage intermediary institutions that comply with the Securities Law of the People's Republic of China to issue an independent financial adviser report.

A plan for repayment with assets by related parties of the Company shall be considered and approved by the general meeting, and related-party Shareholders shall abstain from voting.

Article 17 Where Directors and senior management of the Company approve, without authorisation, fund occupation by controlling shareholders, actual controllers or other related parties, the Board will hold the relevant persons accountable and deal with the matter seriously. Where the amount involved is substantial, the Board will pursue the legal liability of the relevant responsible persons depending on the seriousness of the circumstances. If losses are caused to the Company, the relevant responsible persons shall assume compensation liability.

Article 18 Where funds of the Company or its subsidiaries are occupied by controlling shareholders, actual controllers and other related parties, upon the proposal of more than half of the Directors of the Company or the independent non-executive Directors and upon consideration and approval by the Board of the Company, an application may be made for judicial freezing of the shares held by the controlling shareholders. The specific repayment method may be analysed and implemented in accordance with relevant requirements based on the actual circumstances. Related Directors shall abstain from voting when the Board considers the relevant matters.

Chapter 5 Supplementary Provisions

Article 19 Matters not covered by this System shall be handled in accordance with relevant national laws, regulations, normative documents and the Articles of Association. Where this System is inconsistent with relevant laws, administrative regulations, normative documents and the Articles of Association, the relevant laws, regulations, normative documents and the Articles of Association shall prevail. If this System conflicts with any national laws, regulations or normative documents promulgated in the future or the Articles of Association amended through lawful procedures, the relevant national laws, regulations, normative documents and the Articles of Association shall apply, and this System shall be amended in a timely manner and submitted to the general meeting for consideration and approval.

Article 20 The Board of the Company shall be responsible for interpreting this System.

X-6 -

Article 21 This System shall come into effect and be implemented from the date on which it is considered and approved by the general meeting. The provisions applicable to companies listed on the ChiNext Market of the Shenzhen Stock Exchange shall be implemented from the date on which the Company completes its initial public offering of RMB ordinary shares (A Shares) and listing.

X-7 -

APPENDIX XI

PROPOSED ADOPTION OF THE MANAGEMENT SYSTEM FOR THE HOLDING OF SHARES IN THE COMPANY BY DIRECTORS AND SENIOR MANAGEMENT AND CHANGES THEREOF OF PHANCY GROUP CO., LTD.

Management System for the Holding of Shares in the Company by Directors and Senior Management and Changes Thereof (Draft)

Article 1 In order to further strengthen the management of the shares of Phancy Group Co., Ltd. (the "Company") held by the Directors and senior management of the Company and changes thereof, this management system (the "System") is formulated in accordance with the Company Law of the People's Republic of China (the "Company Law"), the Securities Law of the People's Republic of China (the "Securities Law"), the Rules Governing the Listing of Shares on the ChiNext Market of the Shenzhen Stock Exchange, the Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 2 – Standardised Operation of Companies Listed on the ChiNext Market, the Interim Measures for the Administration of Share Reductions by Shareholders of Listed Companies, the Rules for the Management of Shares of Listed Companies Held by Directors and Senior Management and Changes Thereof, the Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 10 – Management of Share Changes, the Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 18 – Share Reductions by Shareholders, Directors and Senior Management (the "Share Reduction Guidelines"), the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and other relevant laws, regulations and normative documents, as well as the Articles of Association of Phancy Group Co., Ltd. (the "Articles of Association"), and in light of the actual circumstances of the Company.

Article 2 This System applies to the management of the shares of the Company held by the Directors and senior management of the Company and changes thereof.

Article 3 The shares of the Company held by the Directors and senior management of the Company mean all shares of the Company registered in their names and held through accounts of others. Where the Directors and senior management of the Company engage in margin financing and securities lending transactions, the shares of the Company held by them also include shares of the Company recorded in their credit accounts.

Article 4 Before trading in the Company's shares, the Directors and senior management of the Company shall understand the provisions on prohibited acts such as insider dealing and market manipulation under the Company Law, the Securities Law and other relevant laws, regulations, normative documents and other relevant requirements, and shall not conduct illegal or non-compliant transactions. When the foregoing persons reduce their holdings of shares of the Company and derivatives thereof, they shall comply with the requirements of laws, administrative regulations, departmental rules, business rules and other normative documents. Where they make undertakings regarding shareholding ratio, holding period, method of change, number of changes, change price and other matters, they shall strictly perform such undertakings.

APPENDIX XI

PROPOSED ADOPTION OF THE MANAGEMENT SYSTEM FOR THE HOLDING OF SHARES IN THE COMPANY BY DIRECTORS AND SENIOR MANAGEMENT AND CHANGES THEREOF OF PHANCY GROUP CO., LTD.

Chapter 2 Prohibited Acts in Share Changes

Article 5 The shares of the Company held by the Directors and senior management of the Company shall not be transferred under any of the following circumstances:

(1) within one year from the date on which the Company's shares are listed and traded;

(2) within six months after the resignation of the Directors or senior management;

(3) where the Company is under investigation by the CSRC or judicial authorities for suspected securities or futures-related violations or crimes, or where less than six months have elapsed since the Company was subject to administrative penalty or criminal punishment;

(4) where the Directors or senior management are under investigation by the CSRC or judicial authorities for suspected securities or futures-related violations or crimes relating to the Company, or where less than six months have elapsed since they were subject to administrative penalty or criminal punishment;

(5) where the Directors or senior management have been subject to administrative penalty by the CSRC for securities or futures-related violations and have not fully paid the confiscated amounts or fines, except as otherwise provided by laws or administrative regulations or where the proceeds from the share reduction are used to pay the confiscated amounts or fines;

(6) the Directors or senior management have been publicly censured by a stock exchange for violations of rules or regulations relating to this listed company and less than three months have elapsed;

(7) where the Company may trigger circumstances of compulsory delisting due to a material violation of laws, from the date on which the relevant prior notice of administrative penalty or judicial judgment is made until either of the following circumstances occurs:

the Company's shares are terminated from listing and delisted;
the Company receives the relevant administrative penalty decision or effective judicial judgment of the people's court, showing that the Company has not triggered circumstances of compulsory delisting due to a material violation of laws.

(8) other circumstances prescribed by laws, regulations, the rules of the China Securities Regulatory Commission (the "CSRC") and the Shenzhen Stock Exchange (the "SZSE"), and the Articles of Association.

XI-2 -

Article 6 The Directors and senior management of the Company shall not trade in the Company's shares during the following periods:

(1) within 15 days before the announcement of the Company's annual report or half-yearly report; where the announcement date is postponed for special reasons, the period shall be calculated from 15 days before the originally scheduled announcement date;

(2) within five days before the announcement of the Company's quarterly report, results forecast or preliminary results;

(3) from the date on which a material matter that may have a significant impact on the trading prices of the Company's securities and derivatives thereof occurs or during the decision-making process, until the date on which it is disclosed in accordance with law;

(4) the periods prescribed in the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (including when they are in possession of inside information relating to the Company's securities, when they have not completed the required procedures for dealing as set out in paragraph B.8 of Appendix C3, or during the blackout periods prescribed in Appendix C3, etc.), and such restrictions apply to the Directors of the Company, their spouses and minor children, the persons under items (3), (4) and (5) of Article 7 of the System, and persons restricted by The Stock Exchange of Hong Kong Limited or the Securities and Futures Commission of Hong Kong (the "Relevant Persons");

(5) other periods prescribed by laws, regulations, the CSRC and the SZSE.

Article 7 The Directors and senior management of the Company shall ensure that the following natural persons, legal persons or other organisations do not trade in the Company's shares and derivatives thereof by reason of becoming aware of inside information:

(1) the spouses, parents, children, brothers and sisters of the Directors and senior management of the Company;

(2) legal persons or other organisations controlled by the Directors and senior management of the Company;

(3) persons in whom the Directors of the Company have or are deemed to have interests for the purposes of Part XV of the Securities and Futures Ordinance;

(4) the relevant trust, if the Director is the sole trustee;

XI-3 -

(5) where a Director places an investment fund containing securities of the Company under the management of a professional management institution, the fund manager, regardless of whether the fund manager has been granted full discretionary authority;

(6) the Company's securities affairs representative and his or her spouse, parents, children, brothers and sisters;

(7) other natural persons, legal persons or other organisations that are determined by the CSRC, the SZSE, The Stock Exchange of Hong Kong Limited, the Securities and Futures Commission of Hong Kong or the Company, based on the principle of substance over form, to have a special relationship with the Company or the Directors or senior management of the Company and may become aware of inside information.

Article 8 Where the Directors or senior management of the Company violate the relevant provisions of the Securities Law by selling the Company's shares or other securities with equity nature held by them within six months after purchase, or purchasing them again within six months after sale, the gains derived therefrom shall belong to the Company, and the Board of the Company shall recover such gains.

The shares or other securities with equity nature held by the Directors and senior management referred to in the preceding paragraph include shares or other securities with equity nature held by their spouses, parents and children and those held through accounts of others.

If the Board of the Company fails to implement the first paragraph of this Article, Shareholders shall have the right to require the Board to implement it within 30 days. If the Board of the Company fails to implement it within the aforesaid period, Shareholders shall have the right to directly institute proceedings in the people's court in their own names for the interests of the Company.

If the Board of the Company fails to implement the first paragraph of this Article, the responsible Directors shall assume joint and several liability in accordance with law.

Article 9 The Directors and senior management of the Company shall not sell short the shares of the Company by way of securities lending, and shall not engage in derivatives transactions with the shares of the Company as the underlying contract subject matter.

XI-4 -

Chapter 3 Information Reporting and Disclosure

Article 10 The Directors and senior management of the Company shall entrust the Company to report their personal identity information (including but not limited to name, position, identity document number, securities account, dates of appointment and resignation, etc.) through the website of the stock exchange at the following times or within the following periods:

(1) within two trading days after the appointment of a newly appointed Director is approved by the general meeting (or employees' representative meeting) or the appointment of a newly appointed senior management member is approved by the Board (provided that, in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, a newly appointed Director shall report as soon as practicable after his or her appointment is approved);

(2) within two trading days after any change occurs in the reported personal information of an incumbent Director or senior management member (provided that, in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, an incumbent Director shall report as soon as practicable after changes occur in certain personal information);

(3) within two trading days after the resignation of an incumbent Director or senior management member (provided that, in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, an incumbent Director shall report as soon as practicable after resignation);

(4) other times required by laws, regulations and securities regulatory rules of the place where the Company's shares are listed.

Article 11 Before trading in the Company's shares and derivatives thereof, the Directors and senior management of the Company shall notify the secretary to the Board in writing of their trading plans. The secretary to the Board shall check the progress of the Company's information disclosure and material matters. If the trading may involve impropriety, the secretary to the Board shall promptly notify in writing the Directors and senior management proposing to trade and remind them of the relevant risks. In accordance with the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, before the Relevant Persons deal or trade ("deal" or "trade" as defined in Appendix C3) in the Company's shares and derivatives thereof, they shall comply with and complete the required procedures for dealing as set out in paragraph B.8 of Appendix C3.

XI-5 -

Article 12 If any of the following matters changes, the Company shall publish a disclosure of interests form in the format prescribed by the Securities and Futures Ordinance of Hong Kong within three business days after the relevant matter occurs:

(1) any change in the interests and short positions in any shares of the Company (or any of its associated corporations) held by a Director or chief executive of the Company, or any interests in debentures (including changes in the nature of interests, if applicable) (the relevant form shall be completed by the Director and reported through the relevant filing system);

(2) any change in the interests and short positions in voting shares of the Company held by a substantial Shareholder of the Company (i.e. a person interested in 5% or more of any class of voting shares of the listed company) (the relevant form shall be completed by the Shareholder and reported through the relevant filing system);

(3) the Company directly or indirectly holds 5% or more of the issued ordinary shares of another listed company.

Article 13 The secretary to the Board of the Company shall be responsible for managing the identity information and data and information on shares of the Company held by the Directors and senior management of the Company and the natural persons, legal persons or other organisations specified in Article 7, handling online reporting of personal information for the Directors and senior management in a unified manner, and checking quarterly the disclosure of trading in the Company's shares by the Directors and senior management. If any violation of laws or regulations is discovered, the secretary to the Board shall promptly report to the CSRC and the SZSE.

Article 14 The Directors and senior management of the Company shall entrust the Company to report to the SZSE the identity information (including name, position, identity document number, securities account, dates of appointment and resignation, etc.) of themselves and their close relatives (including spouses, parents, children, brothers and sisters, etc.) within the following periods:

(1) within two trading days after the appointment of a newly appointed Director is approved by the general meeting (or employees' representative meeting);

(2) within two trading days after the appointment of a newly appointed senior management member is approved by the Board;

(3) within two trading days after any change occurs in the reported personal information of an incumbent Director or senior management member;

(4) within two trading days after the resignation of an incumbent Director or senior management member;

(5) other times required by the SZSE.

XI-6 -

The above reported data shall be deemed to be an application submitted by the relevant persons to the SZSE for the management of the shares of the Company held by them in accordance with relevant requirements.

Article 15 The Company and its Directors and senior management shall ensure that the information reported by them to the SZSE, China Securities Depository and Clearing Corporation Limited Shenzhen Branch and The Stock Exchange of Hong Kong Limited is true, accurate, timely and complete, agree that the SZSE may timely publish changes in the shares of the Company held by the relevant persons, and assume the legal liabilities arising therefrom.

Article 16 Where, due to the Company's issuance of shares, implementation of equity incentive schemes or other circumstances, restrictive conditions such as additional transfer prices, additional performance appraisal conditions or lock-up periods are imposed on the transfer by Directors and senior management of the shares of the Company held by them, the Company shall, when handling share change registration, exercise or other procedures, apply to the SZSE and China Securities Depository and Clearing Corporation Limited Shenzhen Branch to register the shares held by the relevant persons as shares subject to selling restrictions.

Article 17 Where there is any change in the shares of the Company held by the Directors and senior management of the Company (other than changes resulting from the distribution of stock dividends or capitalisation of capital reserves by the Company), they shall report to the Company within two trading days from the date on which such fact occurs, and the Company shall make an announcement on the website of the stock exchange.

Article 18 Where the Directors and senior management of the Company plan to transfer shares through centralised bidding transactions or block trades on the SZSE, they shall report the share reduction plan to the SZSE and disclose it 15 trading days before the first sale.

The contents of the share reduction plan shall include but not be limited to the number of shares proposed to be reduced, source of shares, reasons for reduction, method of reduction, time interval for reduction, price range for reduction and other information.

The time interval for share reduction shall comply with the requirements of the SZSE. The time interval for share reduction disclosed each time shall not exceed three months.

Within the time interval for share reduction specified in the preceding paragraph, if the Company undergoes material matters such as high bonus issue or capitalisation of reserves or merger and reorganisation, the Directors and senior management who have disclosed a share reduction plan but have not yet disclosed an announcement on completion of the share reduction plan shall simultaneously disclose the progress of the share reduction and explain the relationship between the share reduction and the aforesaid material matters.

XI-7 -

After the share reduction plan has been completed, the Directors and senior management of the Company shall make an announcement within two trading days. Where no share reduction has been implemented within the pre-disclosed time interval for share reduction, or the share reduction plan has not been fully implemented, an announcement shall be made within two trading days after the expiry of the time interval for share reduction.

Where shares of the Company held by Directors and senior management are subject to compulsory enforcement by a people's court through centralised bidding transactions or block trades on the SZSE, the Directors and senior management shall disclose the matter within two trading days after receiving the relevant enforcement notice. The disclosure shall include the number, source, method and time interval of the shares proposed to be disposed of, etc.

Article 19 Where Directors and senior management reduce their shareholdings after shares are distributed due to divorce, each of the transferor and transferee of the shares shall not transfer more than 25% of the total number of shares of the Company held by each of them each year during the term determined when such Director or senior management member assumed office and within six months after the expiry of the term, and shall continue to jointly comply with relevant laws and regulations on share reductions by Directors and senior management.

Article 20 Before trading in the shares of the Company, the Directors and senior management of the Company shall notify the secretary to the Board in writing of their trading plans. The secretary to the Board shall check the progress of the Company's information disclosure and material matters. If such trading may violate laws and regulations, relevant requirements of the SZSE or the Articles of Association, the secretary to the Board shall promptly notify the relevant Directors and senior management in writing.

Chapter 4 Management of Accounts and Share Changes

Article 21 The Directors and senior management of the Company shall strengthen the management of securities accounts held by them, timely report to the Board the securities accounts held by them, the securities of the Company held by them and changes thereof, and are strictly prohibited from handing over their securities accounts to others for operation or use. The Company shall register and file basic information on securities accounts of its incumbent Directors and senior management and those who have resigned within the preceding six months, and update such information in a timely manner based on changes.

Article 22 After the Directors and senior management of the Company entrust the Company to report their personal information, the SZSE will send the reported data to China Securities Depository and Clearing Corporation Limited Shenzhen Branch, which will lock up the shares of the Company registered in the securities accounts opened under their identity document numbers.

XI-8 -

Article 23 On the first trading day of each year, based on the shares of the Company listed on the SZSE registered in the names of the Directors and senior management of the Company on the last trading day of the preceding year, the statutory quota of shares transferable by them for the current year shall be calculated at 25%. At the same time, China Securities Depository and Clearing Corporation Limited Shenzhen Branch shall unlock the unrestricted tradable shares held by such persons within the quota of shares transferable for the current year.

Where decimals arise in calculating the unlockable quota, the number shall be rounded to the nearest integer. Where the balance of shares of the Company held in an account is less than 1,000 shares, the quota of shares transferable for the current year shall be the number of shares of the Company held in such account.

Where the shares of the Company held by the Directors and senior management change due to the Company's distribution of rights and interests or otherwise, the quota of shares transferable for the current year shall be adjusted accordingly.

Article 24 During the term determined when the Directors and senior management of the Company assumed office and within six months after the expiry of the term, the shares transferred by them each year through centralised bidding, block trades, agreement transfers and other means shall not exceed 25% of the total number of shares of the Company held by them, except for share changes resulting from judicial enforcement, inheritance, bequest, lawful division of property and other circumstances.

Article 25 Where the shares held by the Directors and senior management of the Company are registered as shares subject to selling restrictions, after the conditions for lifting the restrictions are satisfied, the Directors and senior management may entrust the Company to apply to the SZSE and China Securities Depository and Clearing Corporation Limited Shenzhen Branch for lifting the restrictions.

Article 26 During the lock-up period, the rights to income, voting rights, pre-emptive placing rights and other relevant rights and interests attached to the shares of the Company held by the Directors and senior management shall not be affected.

Article 27 Shares of the Company that are transferable but not transferred by Directors and senior management in the current year shall be included in the total number of shares of the Company held by them at the end of the current year, and such total number shall be used as the basis for calculating transferable shares in the following year. Where, due to the Company's issuance of shares, implementation of an equity incentive scheme, or after one year from the Company's listing, new unrestricted shares of the Company are added during the year to the securities accounts of the Directors and senior management of the Company through purchases on the secondary market, conversion of convertible bonds, exercise of rights, acquisitions by agreement or other means, 75% of such newly added shares shall be automatically locked up. Newly added shares subject to selling restrictions shall be included in the basis for calculating transferable shares in the following year. Where the shares of the Company held by Directors and senior

XI-9 -

management increase due to the Company's distribution of rights and interests, the number transferable for the current year may be increased in the same proportion.

Chapter 5 Supplementary Provisions

Article 28 Matters not covered by this System shall be handled in accordance with relevant national laws, administrative regulations, normative documents and the Articles of Association. Where this System is inconsistent with relevant laws, administrative regulations, normative documents and the Articles of Association, the relevant laws, regulations, normative documents and the Articles of Association shall prevail. If this System conflicts with any national laws, administrative regulations or normative documents promulgated in the future or the Articles of Association amended through lawful procedures, the relevant laws, administrative regulations, normative documents and the Articles of Association shall apply, and this System shall be amended in a timely manner and submitted to the Board for consideration and approval.

Article 29 The Board of the Company shall be responsible for interpreting and amending this System.

Article 30 This System shall be considered and approved by the Board and shall come into effect and be implemented from the date on which the Company completes its initial public offering of ordinary shares (A Shares) and listing on the ChiNext Market of the SZSE.

XI-10 -

NOTICE OF THE 2026 SECOND EXTRAORDINARY GENERAL MEETING

范式

PHANCY

NOTICE OF THE 2026 SECOND EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2026 second extraordinary general meeting (the "General Meeting") of Phancy Group Co., Ltd. (the "Company") will be held at Conference Room, Level 2, Block A, Hongyuan New Era, Shangdi West Road, Haidian District, Beijing, PRC at 2:00 p.m. on June 26, 2026 (Friday) for the purpose of considering and, if thought fit, passing the following resolutions. Unless the context otherwise requires, terms used in this notice shall have the same meanings as those defined in the circular of the Company dated June 10, 2026 (the "Circular").

RESOLUTIONS

To consider and approve the resolution on the application by the Company for the initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange.

1.1 Type of shares
1.2 Par value per share
1.3 Number of shares to be issued
1.4 Pricing method
1.5 Issuance method
1.6 Target subscribers
1.7 Underwriting method
1.8 Place of listing of the shares
1.9 Timing of issuance
1.10 Use of proceeds
1.11 Domestic shares of the Company

EGM-1 -

NOTICE OF THE 2026 SECOND EXTRAORDINARY GENERAL MEETING

1.12 Validity period of the resolution

Note: The A Share Offering will be conducted pursuant to the specific mandate granted by the Shareholders under this resolution No. 1.

To consider and approve the resolution on the investment projects to be funded by proceeds from the Company's initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange and the feasibility thereof.
To consider and approve the resolution on the plan for assuming the accumulated unrecovered losses before the Company's initial public offering of Renminbi ordinary shares (A Shares).
To consider and approve the resolution on the Shareholder dividend return plan for the three years after the Company's initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange.
To consider and approve the resolution on the plan for stabilising the share price within three years after the Company's initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange.
To consider and approve the resolution on undertakings and binding measures relating to the Company's initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange.
To consider and approve the resolution on measures to make up for the diluted immediate returns in relation to the Company's initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange.
To consider and approve the resolution on the proposed authorisation to the Board by the General Meeting to handle matters relating to the initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange.
To consider and approve the resolution on the engagement of intermediaries.
To consider and approve the resolution on the Articles of Association of Phancy Group Co., Ltd. applicable after the Company's initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange.
To consider and approve the resolution on the internal governance policies applicable after the Company's initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange.

11.1 To consider and approve the resolution on the proposed amendments to the Rules of Procedure for General Meetings of Phancy Group Co., Ltd.

EGM-2 -

11.2 To consider and approve the resolution on the proposed amendments to the Rules of Procedure for Board Meetings of Phancy Group Co., Ltd.

11.3 To consider and approve the resolution on the proposed amendments to the Working System for Independent Non-executive Directors of Phancy Group Co., Ltd.

11.4 To consider and approve the resolution on the proposed amendments to the Administrative Measures for Related Party/Connected Transactions of Phancy Group Co., Ltd.

11.5 To consider and approve the resolution on the proposed adoption of the Management System for External Guarantees of Phancy Group Co., Ltd.

11.6 To consider and approve the resolution on the proposed adoption of the Management System for External Investments of Phancy Group Co., Ltd.

11.7 To consider and approve the resolution on the proposed adoption of the Management System for Proceeds of Phancy Group Co., Ltd.

11.8 To consider and approve the resolution on the proposed adoption of the Management System for Preventing Occupation of Company Funds by Controlling Shareholders, Actual Controllers and Other Related Parties of Phancy Group Co., Ltd.

11.9 To consider and approve the resolution on the proposed adoption of the Management System for the Holding of Shares in the Company by Directors and Senior Management and Changes Thereof of Phancy Group Co., Ltd.

Among the above resolutions, resolutions numbered 1.1 to 1.12, resolutions numbered 2 to 8, resolution numbered 10 and resolutions numbered 11.1 to 11.2 are special resolutions, and the remaining resolutions are ordinary resolutions. Details of the resolutions to be proposed at the General Meeting are set out in the Circular, which is available on the website of the Hong Kong Stock Exchange (www.hkexnews.hk) and the website of the Company (www.4paradigm.com).

By order of the Board
Phancy Group Co., Ltd.
範式智能技術集團股份有限公司
Dr. Dai Wenyuan
Chairman and Executive Director

Hong Kong, June 10, 2026

Notes:

Pursuant to the Listing Rules, the resolutions at the meeting (except for resolutions relating to procedural or administrative matters which the chairman decides to allow to be voted on by a show of hands) will be voted on by way of poll. The poll results will be published on the website of the Hong Kong Stock Exchange and the website of the Company in accordance with the requirements of the Listing Rules.
Any Shareholder of the Company entitled to attend and vote at the meeting may appoint more than one proxy to attend and vote on his/her/its behalf. A proxy need not be a Shareholder of the Company. If more than one proxy is appointed, the number of Shares represented by each proxy so appointed must be specified in the relevant proxy form. Every Shareholder present in person or by proxy shall have one vote for each Share held by him/her/it.
In order to be valid, the proxy form, together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power of attorney or authority, must be deposited at the Company's H Share registrar, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong, not less than 24 hours before the time appointed for holding the meeting or any adjournment thereof, as the case may be. Completion and return of the proxy form will not preclude a Shareholder of the Company from attending and voting in person at the meeting; in such event, the said proxy form shall be deemed to have been revoked.
For the purpose of determining the entitlement to attend and vote at the meeting, the register of members of the Company will be closed from June 23, 2026 (Tuesday) to June 26, 2026 (Friday), both days inclusive, during which period no transfer of Shares will be registered. In order to qualify for attending and voting at the extraordinary general meeting, unregistered holders of Shares of the Company shall ensure that all share transfer documents together with the relevant share certificates are lodged with the Company's H Share registrar, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong, for registration by no later than 4:30 p.m. on June 22, 2026 (Monday).
In the case of joint registered holders of any Shares, any one of such persons may vote at the general meeting in respect of such Shares, either in person or by proxy, as if he/she/it were solely entitled thereto; provided that if more than one of such joint holders is present at the general meeting in person or by proxy, the person whose name stands first in the register of members of the Company in respect of such Shares shall alone be entitled to vote in respect thereof.
All times and dates in this notice refer to Hong Kong times and dates.

As at the date of this notice, the executive Directors are Dr. Dai Wenyuan and Mr. Chen Yuqiang; the non-executive Directors are Dr. Yang Qiang, Mr. Dou Shuai and Mr. Zhang Jing; the independent non-executive Directors are Mr. Li Jianbin, Mr. Liu Chijin, Ms. Ke Yele and Mr. Pan Jialin; and the employee representative Director is Mr. Chai Yifei.

EGM-4 -

AI assistant

Phancy Group Co., Ltd. — Proxy Solicitation & Information Statement 2026

51031_rns_2026-06-10_18403dbc-2d48-4730-b6ac-b201c33e6a86.pdf

范式

PHANCY

Phancy Group Co., Ltd.

範式智能技術集團股份有限公司

CONTENTS

DEFINITIONS

范式

PHANCY

Phancy Group Co., Ltd.

範式智能技術集團股份有限公司

I. INTRODUCTION

II. MATTERS TO BE RESOLVED AT THE GENERAL MEETING

1. Application by the Company for the initial public offering of Renminbi ordinary shares (A Shares) and listing on the ChiNext Market of the Shenzhen Stock Exchange

Specific Measures and Plan

Authority to Amend the Plan

Implementation of the Plan

Binding Measures under the Plan

II. Intensify Market Development Efforts

III. Strengthen Operation Management and Internal Control

IV. Optimise the Investment Return Mechanism

9. Proposed engagement of intermediaries

III. REASONS FOR AND PURPOSES OF THE OFFERING AND LISTING

IV. EFFECT OF THE OFFERING AND LISTING ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

V. EQUITY FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

2026 Placing

2025 Subscription and Placing

VI. CLOSURE OF REGISTER OF MEMBERS

VII. EXTRAORDINARY GENERAL MEETING AND PROXY ARRANGEMENT

VIII. RECOMMENDATION

Letter of Undertaking on Assuming Compensation or Indemnification Liability in Accordance with Law

Letter of Undertaking on Binding Measures for Failure to Perform Undertakings

Measures and Undertakings on Share Repurchase and Share Buy-back

Letter of Undertaking on the Profit Distribution Policy

Phancy Group Co., Ltd. Letter of Undertaking on Ensuring Not to Affect or Interfere with the Review

Statement of Phancy Group Co., Ltd. on Relationship with Intermediaries

Phancy Group Co., Ltd. Letter of Undertaking on Consistency between Application Electronic Files and Reserved Originals

Phancy Group Co., Ltd. Special Undertaking on Shareholder Information Disclosure in connection with the Initial Public Offering of Renminbi Ordinary Shares (A Shares) and Listing on the ChiNext Market

Undertaking on Share Buy-back in the Event of Fraudulent Offering and Listing

Beijing Fourth Paradigm Technology Co., Ltd. Phancy Group Co., Ltd.

Chapter 1 General Provisions

Chapter 2 Functions and Powers of General Meetings

Chapter 3 Authorisation by General Meetings

Chapter 4 Convening of General Meetings

Chapter 5 Proposals and Notices of General Meetings

Chapter 6 Holding of General Meetings

Chapter 7 Voting and Resolutions at General Meetings

Chapter 8 Supplementary Provisions

Chapter 1 General Provisions

Chapter 2 Composition and Subordinate Bodies of the Board

Chapter 3 Powers of the Board

Chapter 4 Authority of the Board

Chapter 7 Secretary to the Board

Chapter 8 Supplementary Provisions

Chapter 2 Independence and Qualifications of Independent Non-executive Directors

Chapter 4 Duties of Independent Non-executive Directors

Chapter 5 Rights and Obligations of Independent Non-executive Directors

Chapter 6 Supplementary Provisions

Chapter 2 Identification of Related Parties/Connected Persons and Related Party/Connected Transactions

Chapter 3 Management of Related Party/Connected Transactions

Chapter 4 Reporting of Related Parties/Connected Persons

Chapter 5 Decision-making on Related Party/Connected Transactions

Chapter 7 Disclosure of Related Party/Connected Transactions

Chapter 8 Accountability

Chapter 9 Supplementary Provisions

Appendix I

Definition of Associates

Chapter 2 Scope of External Guarantees

Chapter 3 Review of External Guarantees

Chapter 4 Decision-making on External Guarantees

Chapter 5 Execution of Guarantee Contracts

Chapter 6 Risk Management of External Guarantees

Chapter 7 Information Disclosure of External Guarantees

Chapter 8 Relevant Liabilities

Chapter 9 Supplementary Provisions

Chapter 2 Authority and Procedures for External Investment Decisions

Chapter 3 Other Material Matters

Chapter 4 Supplementary Provisions

Phancy Group Co., Ltd. Proxy Solicitation & Information Statement 2026