Provisions of the Company Law on Dividend Ratio

Legal analysis: The dividend clause of the Company Law determines the dividend right of shareholders, which is the basic right enjoyed by shareholders and shall not be infringed upon by anyone. However, shareholders hope to get dividends on the premise that the company has distributable profits. If the company has no profit, there is no way to pay dividends. Shareholders shall receive dividends in proportion to the paid-in capital contribution; When the company increases its capital, shareholders have the priority to subscribe for the capital contribution in proportion to the paid-in capital contribution. Except that all shareholders agree not to share the dividend according to the proportion of capital contribution or not to subscribe for the capital contribution in priority according to the proportion of capital contribution.

Legal basis: People's Republic of China (PRC) Company Law.

Article 34 Shareholders shall receive dividends in proportion to the paid-in capital contribution; When the company increases its capital, shareholders have the priority to subscribe for the capital contribution in proportion to the paid-in capital contribution. Except that all shareholders agree not to share the dividend according to the proportion of capital contribution or not to subscribe for the capital contribution in priority according to the proportion of capital contribution.

Article 166 When distributing the after-tax profits of the current year, the company shall allocate 10% of the profits to the company's statutory reserve fund. If the accumulated amount of the statutory common reserve fund of the company is more than 50% of the registered capital of the company, it may not be withdrawn.

If the statutory reserve fund of the company is insufficient to make up for the losses of the previous year, the profits of the current year shall be used to make up for the losses before the statutory reserve fund is withdrawn in accordance with the provisions of the preceding paragraph.

After the company withdraws the statutory reserve fund from the after-tax profits, it may also withdraw the reserve fund from the after-tax profits upon the resolution of the shareholders' meeting or general meeting.