Article 3 The Exchange will issue a delisting risk warning to a company if any of the following applies:

(1) the company's shareholders' equity in the last fiscal year is shown as negative in the auditor's report;
(2) the company's annual report of the last fiscal year is issued an adverse opinion or a disclaimer of opinion by the certified public accountant and the circumstance is deemed serious by the Exchange;
(3) the company's outstanding external guarantee (excluding those included in the consolidated financial statements) in the last fiscal year exceeds RMB 100 million and 100 percent of its net asset value (except for companies whose principal business is provision of guarantee), as shown in the auditor's report;
(4) capital misallocated by the company to its controlling shareholder and other related parties in the last fiscal year exceeds RMB 20 million or 50 percent of its net asset value;
(5) the company is publicly censured by the Exchange more than once within 24 months;
(6) for 20 consecutive trading days, the company's shares close below its par value; or
(7) the cumulative trade volume of the company's shares through the Exchange's trading system within a period of 120 consecutive trading days falls below 3 million shares.

Article 4 Upon occurrence of any of the circumstances set out in (1), (2), (3) and (4) of Article 3, the company shall, after its board of directors has deliberated its annual report, submit a report in writing to the Exchange in a timely manner with the opinion of its board of directors included. The company's shares and derivatives are suspended from trading on the day its annual report is disclosed. In case the disclosure is made on a non-trading day, trading is suspended on the following trading day. Upon trade resumption, a delisting risk warning on the company's shares will be issued by the Exchange.

Article 5 Upon occurrence of any of the circumstances set out in (5), (6) and (7) of Article 3, the company shall submit the opinion of its board of directors in writing to the Exchange and, within two trading days, release a public cautionary announcement that its shares are likely to be imposed a delisting risk warning. The company's shares and derivatives are suspended from trading on the day of the announcement and a delisting risk warning on the company's shares will be issued by the Exchange upon its trade resumption.

Article 6 Since the delisting risk warning is imposed, the company shall, at least within the first five trading days of each month, disclose the measures taken for lifting the delisting risk warning and the progress of relevant work.

Article 7 The company may file an application with the Exchange for lifting the delisting risk warning if it meets any of the following conditions:

(1) since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (1) of Article 3, the subsequent audited annual report reveals that its shareholders' equity turns positive;
(2) since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (2) of Article 3, the subsequent audited annual report reveals that such circumstance no longer exists;
(3) since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (3) of Article 3, the subsequent audited annual report reveals that the company's outstanding external guarantee (excluding those included in the consolidated financial statements) falls below RMB 50 million or 50 percent of its net asset value;
(4) since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (4) of Article 3, the subsequent audited annual report reveals that the capital misallocated by the company to its controlling shareholder and other related parties has been repaid;
(5) for a period of 12 months since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (5) of Article 3, the company receives no more public censure by the Exchange;
(6) for a period of 90 trading days since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (6) of Article 3, the company's shares close above the par value for 20 trading days in a row; or
(7) within a period of 120 trading days since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (7) of Article 3, the cumulative trading volume of its shares in 90 consecutive days exceeds 3 million shares.

Article 8 An announcement shall be made by the company on the next day after it applies to the Exchange for lifting the delisting risk warning.

Article 9 When the Exchange has approved the company's application to lift the delisting warning, an announcement shall be made by the company at least one day before such warning is lifted.

Article 10 Where a listed company applies for lifting the delisting risk warning pursuant to (1), (2), (3) or (4) of Article 7 and is granted so, but the audit report on the subsequent annual report reveals abnormal operation of its principal business, the Exchange will put its shares under special treatment pursuant to Section 13.3.1 of the Listing Rules.