Stock Code: 603899 Short Name: M&G Corporation

SHANGHAI M&G STATIONERY INC.

Annual Report 2024

Adhering to Long-termism and Basing on Facts

Letter to Shareholders

2024 was a year of challenges and progress for M&G. Amid increasing global anddomestic economic uncertainties, rapid market fluctuations, accelerated industrytransformations, weaker-than-expected consumer demand, and intensifying competition,we remained committed to long-termism and steadily advanced our new five-year strategy.With consistent strategies, we effectively navigated the pressures and challenges imposedby short-term external factors on our operations.Throughout 2024, M&G’s management and employees worked in unity and dedicatedthemselves to driving development through innovation, even amid challenges. Weresponded strategically to shifting market dynamics. With a focus on product capabilityenhancement and omni-channel development, we leveraged intelligent and digitaltechnologies to accelerate our R&D, manufacturing, and service. This has led toimprovements in quality, efficiency, and the cultivation of new quality productive forces.We also invigorated lean production and fostered sustainable development. Efforts to buildbrand culture and expand into international markets have made significant strides. Allabove factors provided essential momentum for the Company's long-term, sustainablegrowth.In 2024, the Company recorded revenue of RMB24,228 million, an increase of 3.76%,and a net profit attributable to its shareholders of RMB1,396 million, a decrease of 8.58%.Excluding share-based payments, the net profit attributable to shareholders was RMB1,446million, a decrease of 2.81%. The Company maintained a stable and healthy trajectory. Weactively laid the groundwork for a diversified long-term development strategy on our coretraditional business. The new businesses—direct office supplies and large retailstores—continued to grow, providing a solid foundation for sustainable future growth.In 2024, with regard to the capital market, we adhered to a scientific, consistent, andsteady dividend policy. Taking into account the Company's development stage andlong-term capital needs, we enhanced the predictability of our cash dividends andprogressively increased our payout ratio to ensure the continuity and stability ofshareholder return. With the 2024 profit distribution plan, the Company has distributedover RMB4.4 billion in cash dividends since its listing. In February 2025, the Company

completed its second share repurchase since going public. This boosted market confidence,actively maintained the Company's value, and safeguarded the overall and long-terminterests of our shareholders.

Every persistence makes the progress more stable; every innovation makes the futuremore promising.Looking ahead to 2025, in an ever-evolving and complex market environment, we willadhere to long-termism and pragmatic approaches, and rise to challenges head-on. We willremain consumer-centric and strive to improve quality and efficiency whilst prioritizingshareholder return. We will push forward in key areas such as technological innovation andtransformation, original design, green, intelligent and digital transformation, differentiation,balanced and coordinated development, brand value enhancement, and global expansion.This will enable the Company to achieve sustainable, high-quality growth and delivergreater value to our shareholders. We will be committed to long-termism in development,branding and capital market operations. By remaining steadfast in this vision, we believewe can transcend short-term fluctuations and stay competitive in the long run.Common prosperity is our ultimate goal. We would like to express our deepestgratitude to our employees for their hard work and dedication, to our partners for theirunwavering support, and to our shareholders for their continued trust. Together, we furtheradvance our brand with commitment, shape the future using technology, and empowervalue through culture. Together, we will embrace a future of high-quality development forM&G!

Board of Directors of Shanghai M&G Stationery Inc.

24 March 2025

Important NoticeI. The Board of Directors, Supervisory Committee, directors, supervisors and senior managementof the Company warrant that the contents of this report are true, accurate and complete, withoutany misrepresentation, misleading statements or material omissions, and severally and jointly bearthe legal responsibilities thereof.

II. All directors of the Company attended the Board meeting.

III. BDO China Shu Lun Pan CPAs (LLP) has issued the audit report with unqualified opinions tothe Company.

IV. Chen Huwen, the chairman of the Company, Tang Xianbao, CFO of the Company and Zhai Yu,the head of the accounting department (person in charge of accounting), warrant the truthfulness,accuracy and completeness of the financial report in this annual report.

V. Profit distribution plan or plan to convert surplus reserves into share capital approved by theBoard of Directors during the Reporting PeriodThe Company proposes to distribute cash dividend of RMB10.00 (tax inclusive) per 10 sharesbased on the Company's total share capital (exclusive of shares in the Company’s special securitiesaccount for repurchased shares) registered as at the registration date for the implementation of dividenddistribution. The profit distribution plan is subject to being submitted to the Company's 2024 AnnualGeneral Meeting of Shareholders for deliberation.

VI. Risks statement of the forward-looking statements

√ Applicable □ Not applicable

Forward-looking statements including future plans and development strategies involved in thisannual report do not constitute the Company's substantive commitments to investors. The investors areadvised to pay attention to investment risks.

VII. Is there any non-operating misappropriation of funds of the Company by any controllingshareholders and their related partiesNo

VIII. Has the Company provided any external guarantees in violation of the decision-makingproceduresNo

IX. Are there more than half of the directors who cannot warrant the truthfulness, accuracy andcompleteness of the annual report disclosed by the CompanyNo

X. Warning on significant risks

The Company has illustrated various risks and corresponding measures that the Company mightface in the production and operation. Please refer to the "Potential Challenges and Risks" set out in"Section III Management Discussion and Analysis". Investors are advised to pay attention to risk ofinvestment.

XI. Others

□ Applicable √ Not applicable

本报告分别以中、英文编制，在对中外文文本的理解上发生歧义时，以中文文本为准。

This English version is converted from the Chinese version.In case of any discrepancy between the Chinese version and the English version, the

Chinese version shall prevail.

Contents

Section I Definition ...... 7

Section II Company Profile and Key Financial Indicators ...... 8

Section III Management Discussion and Analysis ...... 12

Section IV Corporate Governance ...... 38

Section V Environmental and Social Responsibility ...... 54

Section VI Major Events ...... 57

Section VII Changes in Shares and Shareholders ...... 69

Section VIII Preferred Shares ...... 76

Section IX Bonds ...... 77

Section X Financial Report ...... 78

Section I Definition

I. DefinitionIn this report, unless the content requires otherwise, the following terms shall have the followingmeanings:

Section II Company Profile and Key Financial Indicators

I. Company Information

II. Contact Information

III. Introduction to General Information

IV. Information Disclosure and Place for Obtaining the Report

V. Stock Information

VI. Other Relevant Information

VII. Major Accounting Data and Financial Indicators for the Past Three Years(I) Major accounting data

Unit: Yuan Currency: RMB

(II) Key financial indicators

Explanation of major accounting data and financial indicators for the past three years by the end of theReporting Period

□ Applicable √ Not applicable

VIII. Difference in the Accounting Information under the PRC Accounting Standards for BusinessEnterprise ("PRC GAAP") and Overseas Accounting Standards(I) Difference in net profit and net asset attributable to shareholders of the listed company infinancial reports disclosed under International Accounting Standards and PRC GAAP

□ Applicable √ Not applicable

(II) Differences in net profit and net assets attributable to shareholders of the listed company infinancial reports disclosed under International Accounting Standards and PRC GAAP

□ Applicable √ Not applicable

(III) Explanation on the differences between PRC GAAP and Overseas Accounting Standards:

□ Applicable √ Not applicable

IX. Key Financial Data for the Year of 2024 by Quarter

Unit: Yuan Currency: RMB

Explanation on difference between information by quarter and information disclosed in periodicalreports

□ Applicable √ Not applicable

X. Items and Amounts of Non-recurring Gains or Losses

√ Applicable □ Not applicable

Unit: Yuan Currency: RMB

Items unlisted in the Explanatory Announcement on Information Disclosure by Companies OfferingSecurities to the Public No. 1: Non-Recurring Profits and Losses are identified as non-recurring profitand loss items and the items are of a significant amount, and non-recurring profit and loss items listed inthe Explanatory Announcement on Information Disclosure by Companies Offering Securities to thePublic No. 1: Non-Recurring Profits and Losses are defined as recurring profits and losses

□ Applicable √ Not applicable

XI. Items Measured at Fair Values

√ Applicable □ Not applicable

Unit: Yuan Currency: RMB

XII. Others

□ Applicable √ Not applicable

Section III Management Discussion and Analysis

I. Discussion and Analysis of Operation2024 was a year of difficulties and challenges, but also a year of striving and forging ahead. Thecomplexity and uncertainty of the external environment have increased, with rapid changes in the market,insufficient effective demand, and continued changes in consumer preferences, buying habits, andconsumption scenarios. In this context, the Company has adhered to long-termism and pragmaticapproaches, and remained consumer- and market-oriented. Supported by technological innovation andlean management, the Company has improved quality and efficiency to cultivate new quality productiveforces. It consolidated the competitive edges of its core traditional business, continued to develop newbusiness, and actively expanded into international markets. Digital tools have been employed to driveorganizational upgrades and transformation, further enhancing the Company’s overall competitiveness.Although the annual business goals were not fully achieved, the Company has maintained strongconfidence in its development, stayed committed to its strategy, and faced challenges head-on. Webelieve we have the capabilities to navigate through economic cycles.In the Reporting Period, the Company recorded revenue of RMB24,228 million, an increase of

3.76%, and a net profit attributable to its shareholders of RMB1,396 million, a decrease of 8.58%.Excluding share-based payments, the net profit attributable to shareholders was RMB1,446 million, adecrease of 2.81%. Operation of the Company in 2024 is reported as follows:

1. Core traditional business focused on product capability enhancement to meet diversifiedconsumer needsDuring the Reporting Period, the Company emphasized quality over quantity in productdevelopment to increase the on-shelf ratio and sales contribution of single products. New products weredeveloped from the perspective of consumers, cultivating high-quality, functional products that are bothattractive and easy to use. The product structure was optimized, further expanding the brand lineup andenriching the product line to increase the on-shelf ratio of must-have products. By combining internalindependent cultivation and collaboration with external IPs and leveraging international design resources,the Company has provided consumers with a wider range of purchasing options.Mass market stationery segment. The strategy of "exploitation of potential, collaboration, andproduct capability" was followed, continuously developing products that meet the essential needs of thegeneral public. The Company has brought customers a full range of stationery products of reliablequality and essential functions, whist scientifically managing the products across their lifecycle. It hascontinuously optimized the product structure and maintained competitiveness. Based on thecompleteness of category structure and positioning, the Company has enhanced product layout anddeveloped product tiers. Through in-depth exploration and response to consumers' evolving expectationsand needs, the Company has consistently launched high-quality products that resonate with consumers.

Premium stationery segment. The Company has actively optimized the product structure,increased the on-shelf ratio of best-selling products at key offline stationery shops, exerted efforts in thearrangements, promotion, and cultivation of products in all categories in the online market, and focusedon developing the best-selling products and delving into leading shops. The development ofhigh-function products continued to innovate, with the CMF innovative design (a refined selection andcombination of color, material, and finish) offering precise emotional value to enhance consumerexperience and providing more high-quality product choices.

Arts and kids drawing segment. Strong functional products were developed based on consumerpreferences and user experience, promoting the product offering of "food-grade, easy-to-clean, andanti-bacterial" high-end products. Offline, efforts were made to enhance the on-shelf ratio in key stores;online, platform data was analyzed to explore the potential of channel benchmark roles and promote therefined operations in segmented categories and store arrangements, continuously improving the arts andkids drawing segment in online channels.

Office stationery segment. The Company has strengthened the development and promotion ofoffice products, combining traffic price-quality ratio with differentiated innovation in productdevelopment to stimulate innovation and create distinctive products that enhance competitiveness. TheM&G Blackblade Pro Hobby Knife developed by the Company won the 2024 Red Dot Design Awardand the Golden Award for Office Supplies at the 2024 “Best Stationery of China” Awards. The Company

continued to expand M&G office stores and model office stores, advance channel transformation andempower services, and enhance the service capabilities in order to meet the demands of professionalchannels.

The Company has actively positioned itself in IP and Animation-, Comics, and Games(“ACGN”)-related products favored by younger consumers, accelerating the cultural transformation ofstationery products. By empowering stationery with IP, the products offer both practical value (usability),interest value, and emotional value (fun). “Qizhihaowan” is an independent trendy brand under theCompany, focusing on independent IP incubation, IP operation, joint brand development, and trendy toyderivatives. The brand is aimed at young consumers' emotional value and value propositions, activelyengaging in the "ACGN IP" field. By combining independent IP incubation and collaborations withpopular domestic and international IPs, the brand has deeply operated an IP product matrix, developingproducts such as "Goods and Stationery" to establish a deeper connection and communication with users.During the Reporting Period, Qizhihaowan experienced rapid growth, collaborating with variouswell-known domestic and international IPs to produce and distribute goods and stationery products,which received positive market feedback.

2. Core traditional business continued omni-channel, and improved retail service capabilities

During the Reporting Period, the Company continued to promote omni-channel development of itscore traditional business. Based on changes in consumer demand and habits, the Company continued tooptimize retail operation towards a channel structure with a multi-level distribution system as core. Thisomni-channel and multiple contact point enabled more direct access to customers through new offlinechannels, online channels and direct supply channels. Further the change from a wholesaler toward abrand retail service provider.

Develop traditional channels with a focus on improving the quality of single stores and theconstruction of positions. Efforts have been made to improve the quality of single model stores, thusempowering stores to enhance business quality and sales. The Company has further enhanced theconstruction of category positions based on the categories prioritised by the Company and optimisedstore displays. The promotion of the best-selling product offering has helped improve the on-shelf ratioof key categories at stores, achieve channel upgrades, expand business district coverage, and increasemarket share.

Improve the operational efficiency of channels with digital tools. The information-basedchannels and high data effectiveness have effectively assisted in enhancing operational efficiency. M&GAlliance APP's role of linking the headquarters to stationery store owners was leveraged to empowerstore owners through information sharing and private domain live streaming, which enhances storeengagement. The "JUBAOPEN" APP acts as a fundamental operational tool for daily business checks,providing real-time and accurate sell-through data to empower the real-time promotion decisions onbusiness of stationery shops and enhancing their capability in "the right match between right shops andright products".

Actively promote direct model. Continued efforts were made to promote headquarters directsupply, partner direct supply, office direct supply and premium stationery to create incremental sales.The office direct supply model further empowered business and developed and tapped the potential ofoffline professional channels. The premium stationery segment focused on core customers, and intendedto set a benchmark for large stores of premium products, and lead the ways of high-quality stores next toschools. The Company output the product offerings of large stores at retail summits to enhance thecooperative engagement with leading large stores in the industry.

Increase online channels. The Company vigorously developed online business, with the onlinedirect sales model and distribution model working in synergy to tap into the potential for online growth.Collaboration between product segments and channels has been strengthened, with a focus on theexploitation of product line arrangements and product capability of online categories. The Company hasdeveloped platform-specific products, joint creations, and customised products, offering a range of newproducts to meet the differentiated consumer demands of various platforms. The development of newchannel business has been accelerated, quickly seizing market share. During the Reporting Period, M&GTechnologies' revenue was RMB1,144 million, an increase of 33%.

3. Actively promote overseas markets layout

The Company has actively developed overseas markets, deepening its localized layout ininternational markets by developing locally tailored products. The Company has continuously increased

product on-shelf ratio to meet the diversified needs of overseas consumers, strengthening thecompetitiveness of overseas products. During the Reporting Period, the Company continued to expandinto the African and Southeast Asian markets, with the mission of "providing affordable stationery forlocal students" and carried out product promotion activities. During the Reporting Period, the Companyachieved revenue of RMB1,038 million in the overseas market, an increase of 21%. Whilst overseassales grew rapidly, the Company refined its overseas business models, channel models, team models,and product models, establishing a solid foundation for the continuous development of the Company'soverseas market.

4. Continue to strengthen brand presence

During the Reporting Period, the Company focused on high-end products that are “exquisite andthoughtful” and meet “upgraded consumer needs”, using scenarios such as Jiumu Store and flagshipstores as channel matrices, and platforms such as Douyin, Xiaohongshu, and personal media ascommunication matrices. This approach has driven the brand upgrade, providing "quality stationery foreveryone" and deepening consumers' impressions of an exquisite and high-quality brand. The aim is tomake consumers feel the "young consumer-centric and distinct M&G". Through more consumer-centricproduct development and promotion methods, brand marketing content and strategies closer to the users’inner world, and content formats such as “store visits,” “product recommendations”, and “emotionalvalue,” the Company has empowered products and channels with the brand, carrying out the fusioninnovation of national trend and brand. The brand has continuously delivered emotional value,conveying brand warmth in ways favored by younger generations. During the Reporting Period, theCompany won the 2024 BrandZ China Inspirational Star of Innovation award, showcasing the power ofChinese stationery brands to the world.

5. Consolidate and improve the Company's middle-end and back-end platform capabilities

Promote design and R&D. Adhering to the consumer-centric philosophy, the Company activelyperformed forward-looking research and design, focusing on technological innovation andtransformation, and original design. It has striven to optimise and improve details, accelerate the speedof technological progress and results transformation, and continuously inject new content and designpossibilities into traditional stationery. Based on category structure and category positioningcompleteness, the Company has improved its product layout and created product tiered groups, offeringconsumers high-quality, aesthetically appealing, and cost-effective products to enhance their usageexperience. By collaborating with domestic and international design resources, the Company hascontinuously improved the capability of international design and facilitated its global landscape. Duringthe Reporting Period, M&G's smart large screen microscope won the 2024 Red Dot Design Award andthe Golden Award for Creative Educational Products at the 2024 “Best Stationery of China” Awards.

M&G Business System (MBS). The Company has comprehensively and deeply promoted theMBS system, integrating it with business operations and further improving the system. Throughstructural reforms and capability platform building, the Company has established an MBS-driven leanoperation system, improving product capability and operational efficiency, whilst reducing costs,increasing efficiency, improving quality, and mitigating risks. The Company has established a lean talentmanagement model and MBS mechanisms, using the MBS for issue addressing and flow improvementamong employees, promoting regular improvement activities, and forming a "continuous improvement +talent development" dual-drive model.

Coordinate supply chain. The Company proactively promoted the application of intelligentmanufacturing technologies in the production and testing processes of the stationery industry, as well asthe application of machine vision technology in key links, thus significantly improving production andtesting efficiency. The quality assurance procedures were optimized, and the development of the supplychain quality system was refined. The core supply chains have received focused attention, empowerment,and optimization, raising their overall quality. Matching with the product capability enhancementstrategy, the Company has constructed a product capability based on high quality, optimal cost, fastdelivery, and strong innovation.

Logistics support. The Company is committed to building a logistics service system that cansupport multiple business models. It has provided differentiated, refined and efficient logistics servicesupport for each business department based on their business types and requirements. The Company hasreasonably planned the logistics and capacity across the country, achieving the nationwide layout andshipment covering "five warehouses across four regions, including East China, South China, North

China, and Central China". Utilizing digital tools and launching an intelligent scheduling system, theCompany has visualized and digitalized logistics services, providing comprehensive support for thedevelopment of various business platforms and significantly enhancing the operation and cost controlcapabilities of all warehouses.Digitalization development. The Company has fully advanced digital transformation, focusing onthree core goals: "business empowerment, efficiency enhancement, and ecosystem collaboration". It hasstrengthened the construction of its big data platform to capture and deeply analyze data from variousbusiness, market, and customer sources to provide scientific support for business decisions. Bycollaborating with departments such as finance, supply chain, sales, business segments, logistics, andhuman resources, the Company has enhanced the mid-end and back-end platform operations throughdata-driven improvements and overall digital management capabilities. This transformation supportsproduct upgrades, service upgrades, industry upgrades, and the exploration of incremental developmentopportunities.Construction of organization and talent. Talent development is the core driving force forsustainable development. The Company has always regarded talent as the first resource and hasestablished a systematic, multi-level talent management framework aligned with its strategic goals. TheCompany has gradually formed a virtuous cycle mechanism for "attracting, developing, utilizing, andretaining talent". It is committed to building a dynamic organization, fostering a people-oriented andinclusive corporate culture, continuously improving its compensation and benefits system, and inspiringemployees’ potential and innovation abilities. The Company has advanced the "Four Transformations"(online, experiential, digital, intelligent) of human resources, providing support for the rapid growth andefficient operation of the enterprise.

6. Large retail store business steadily developed

Jiumu Store has a clear positioning in the Company’s strategy, which is to become the bridgeheadfor the M&G brand and product upgrading, and also to become a national leading premium recreationand creativity retail brand. More exposure of the M&G brand can help drive development of M&G'spremium stationery products, strengthen retail capabilities, provide timely consumer insights, andprovide feedback for the brand's continuous upgrading and market expansion.

During the Reporting Period, the number of offline stores for Jiumu Store continued to expand. Thestores made further improvements in product portfolios, refined operations and consumer insights andservices, establishing a continuous mechanism for checking people, products, and stores. The onlinebusiness also saw growth across multiple channels, including Tmall, Pinduoduo, Douyin, communitye-commerce, and instant retail. Through the coordinated development of online and offline channels, theCompany has continuously optimized its operational capabilities, enhanced brand influence, and furthersolidified its leading position in the mid-to-high-end cultural and creative retail market for stationery.

In terms of membership operations, Jiumu Store focused on its membership base, establishing acomplete and efficient membership management system. The membership base has surpassed tenmillion, laying a solid foundation for the long-term development of the brand. In terms of productexpansion, investments in and sales of IP-related (ACGN, goods, and related merchandise) productshave increased, further enriching the product structure and enhancing the brand’s market appeal,particularly attracting more young consumers. The proportion of M&G and other own-branded productshas also increased, further raising the competitive threshold.

During the Reporting Period, M&G Life (including Jiumu Store) recorded revenue of RMB1,479million, an increase of 10%, among which Jiumu Store’s revenue was RMB1,406 million, an increase of13%. As of the end of the Reporting Period, the Company had 779 large retail stores in China, of which741 were Jiumu Stores and 38 were M&G Life stores.

Unit: RMB 0'000

7. Direct office supplies business experienced steady growth

As a pioneer and industry leader in procurement digitalization for enterprises, M&G Colipu hasfollowed requirements on well-informed, open and transparent government procurement, and metrequirements that enterprises desire to increase procurement efficiency and reduce procurement costs fornon-production office and administration supplies. It has continued to intensify core competitiveness byimproving service quality, enriching product categories, further identifying customers, increasinginternal proportions and building a nationwide supply chain system. The ultimate goal is to continuouslylead the industry.In terms of business scenarios, M&G Colipu has focused on four business segments, includingone-stop office supplies procurement, MRO industrial products, marketing gifts, and employee benefits.It has placed particular emphasis on expanding the supply chain for marketing gifts and MRO industrialproducts.In terms of customer development, M&G Colipu has not only continuously cultivated existingclients but has also expanded its client base. In the state-owned enterprise (“SOE”) sector, it hassuccessfully extended its business into areas such as military, power, and energy, including winning newprojects from China National Petroleum Corporation, Sinochem, and China Electronics Corporation. Inthe government sector, it has continued its in-depth cooperation with projects of China Military Onlineand the Central Government Procurement Centre. In the financial sector, new projects were successfullysecured with Huaxia Bank, Taikang Insurance, and Sunshine Insurance, further expanding its advantagein this field. In MRO industrial products, M&G Colipu has maintained its professional spirit of “digging10,000 meters deep from a 1-meter-wide opening”, continuing to tap the potential of existing partnersand extend new business in several projects with State Power Investment Corporation, China ThreeGorges Corporation, China Nonferrous Metal Mining, and China Electric Equipment Group.Middle-end and back-end platforms. By developing an innovative digital platform system tocontinuously improve platform operation and management capabilities, M&G Colipu has activelystepped up digital construction, empowered the centralized procurement of governments and enterpriseswith digital capability, and realized cost reduction and efficiency improvement. By piloting electronicinvoices with corporate customers and upgrading the five major self-developed engines, M&G Colipuassisted customers' digital transformation with its own digital capability. M&G Colipu has alsocontinuously optimized warehouse layout and efficiency nationwide, making innovations in thedata-driven and intelligent warehouse construction process.Employee incentives. During the Reporting Period, in order to expand operational scale, improveeconomic benefits, and enhance market competitiveness, as well as to build a long-term incentivemechanism for future development and governance, and fully motivate management and core employees,M&G Colipu implemented a capital increase. This included both employee equity incentives and acapital increase by the beneficial controller. During the Reporting Period, the related share-basedpayments for the employee stock incentives of M&G Colipu were recorded as part of the administrativeexpenses, totaling RMB75.56 million.During the Reporting Period, challenging as the environment was, M&G Colipu maintained itsstrategic focus and its operating performance continued to improve steadily. It recorded revenue ofRMB13,831 million, an increase of 4%.

Unit: RMB 0'000

8. M&A progress

During the Reporting Period, Axus Stationery continued to optimize its operations. It activelypursued export sales, focusing on the incremental exploration of key clients and the acquisition of newclients. Growth was achieved by acquiring new clients and recommending new products. Domestically,efforts were made to improve both offline and online business, with reasonable configuration of theproduction capacity and resources of its production bases. Axus Stationery has also carried out leanfactory management, achieving stable production and enhanced efficiency. Digital tools were utilized tooptimize the coordination between supply chain production and sales, reducing procurement costs andimproving operational efficiency.

During the Reporting Period, Beckmann's business developed steadily, seeing revenue ofapproximately RMB158 million. The European market operated smoothly, and Beckmann also entered

the US market. Domestically, online sales were conducted through official flagship stores on platformssuch as Tmall, JD.com, and Douyin, whilst an offline presence was established in stores such as JiumuStore and M&G Life, enjoying popularity among domestic consumers.

9. Enhance quality and efficiency and strengthen shareholder return

Active share repurchases demonstrate confidence in the Company’s development. Due toconfidence in its future development and corporate value, the Company launched a share repurchaseplan during the Reporting Period to protect the interests of the Company and its shareholders, andimprove the Company's long-term incentive mechanism. The repurchased shares would be used asequity incentives or in employee stock ownership plans. From August 2024 to February 2025, theCompany repurchased, through the stock exchange, a total of 5.18 million shares with RMB150 million.Increase the dividend payout ratio to safeguard the interests of shareholders. The Companyattaches great importance to investor return, safeguards shareholders' rights and interests and adopts aconsistent dividend policy. It brings investors long-lasting and stable return on investment through cashdividends and other profit distribution ways, and shares with shareholders the operating results of theCompany. It has increased the cash dividend payout ratio for three consecutive years. The Company'scash dividend per share for 2024 is expected to be RMB1.0 (to be deliberated by the general meeting ofshareholders), and cash dividends are expected to account for 65.61% of the net profit attributable to theparent company. Since the Company went public, the cumulative dividends and share repurchases(including the profit distribution plan for 2024) have exceeded RMB4.7 billion.

10. Sustainable development

During the Reporting Period, the Company continued to advance sustainable developmentcentering on its four major strategic pillars, and its MSCI ESG rating was upgraded to “A”. In terms ofsustainable products, the Company adopted sustainable raw materials such as recycled plastics andbiodegradable materials to reduce its environmental impact. In response to climate change, the Companyadvanced digital energy management, air compressor upgrades, and other energy-saving projects, whilstcontinuing to expand the use of renewable energy. In terms of sustainable supply chain, the Companyoptimized the ESG assessment standards for suppliers and launched carbon data collection for the supplychain. As for employee and community empowering, the Company engaged internal and externalstakeholders, including senior executives, employees, and channel partners, in public welfare donationsand volunteer services, continually broadening the participation and influence of its public welfareprojects. For its outstanding performance in ESG, the Company was included on the 2024 Fortune ChinaESG Impact List. During the Reporting Period, the Company was selected as a 2024 National GreenFactory, demonstrating its leadership in green production and energy-saving emissions reduction.

II. Industry Situation of the Company during the Reporting Period

1. Industry situation of the Company

According to Industrial Classification and Codes for National Economic Activities (GB/T4754-2017) issued by the National Bureau of Statistics, the Company is classified to stationery, arts,sports and entertainment products industry in the manufacturing sector. The Company is a member ofChina Stationery & Sporting Goods Association, and China Writing Instrument Association.

During the Reporting Period, revenue of the stationery and office supplies manufacturing industrydecreased by 1.6%, mainly due to product homogeneity, fierce price competition and slowing marketdemand (data source: China Stationery & Sporting Goods Association). According to data from therelevant e-commerce platform, stationery sales on Taobao declined 1% in 2024.

China encourages art education and quality education for students, deepens the integration of sportsand education, and promotes the healthy development of teenagers, which brings about newdevelopment opportunities for painting and calligraphy supplies, educational books, cultural and creativestudent supplies, digital and intelligent stationery, and teenagers’ sports equipment suitable for physicalexercise on campus.

The market of the direct office supplies has been growing very fast in China. According to theChina Public Procurement Development Report (2023) compiled and released by China Federation ofLogistics & Purchasing, the scale of public procurement transactions in China in 2023 exceeded RMB46trillion. With the accelerated development of China’s unified public resource trading platform, theconcentration of transactions, regulatory oversight, and data centralization in the public resource trading

market have been steadily increasing. In the context of the digital economy, digitalization, e-commerce,and centralized procurement have become the main forms of public resource trading from central tolocal governments. This process, initially starting with transparent procurement by government agencies,central state-owned enterprises (“SOEs”), and financial institutions, is now expanding to largeenterprises and local SOEs.

2. Industry features

(1) Periodicity

Writing instruments, student stationery and office supplies are less affected by economicfluctuations. With low unit price, writing instruments and student stationery are more of necessity goodswith relatively low income elasticity, relatively less sensitive to economic fluctuations.

(2) Seasonality

There is seasonality in the demand for student stationery. Months before a new semester (summerand winter vacation) is what the stationery industry calls "schooling peak season", during which sales ofstudent stationery usually peaks. Students and their parents will buy a lot of stationery in advance andstationery manufacturers promote their products.

There is less seasonality in the demand for student stationery. However, the demand for officestationery in the second half of the year might be slightly higher than that in the first half, as somecompanies bought stationery at the end of the year.

3. Development trend of the industry

With the changes in the way of life and consumption habit of consumers, China’s retail industryentered a new stage of redevelopment and innovation. Stationery industry faces challenges withuncertainty of external environment, diversification of retail channels, and more individualized demandsfrom main customers group (now being the post-00s and post-10s). With the changing demographics ofChina in particular the decreasing birth rate, stationery industry revenue growth comes less from by unitvolume growth, and more from consumption upgrade and product upgrade. Domestic market demandfor mid- to high-end stationery products keeps increasing. This provides opportunities for mid- tohigh-end stationery products with better quality and higher price. China's population of 1.4 billionaccounts for about 18% of global population, while leading stationery companies in China can continueto mostly rely on the huge domestic market, they also have room for international expansion ininternational markets, which could reinforce each other under favorable conditions. The global influenceof Chinese culture continues to rise. Not only do domestic consumers seek emotional resonance bypurchasing "Chinese trend" products, but overseas consumers are also beginning to embrace Chineseelements, showing a positive outlook on Chinese goods.

Leading enterprises focused on building omni-channel operation capabilities and implementedrefined management. With the popularity of the Internet, smart phones, and online transactions, people'sconsumption habits and consumption scenarios have changed. Consumers' access to information isbecoming more fragmented, and new-generation marketing means are becoming more diversified,including online media platforms (such as Weibo, WeChat, Xiaohongshu, and Douyin) and IP topiccreation, which further tests enterprises' ability to make quick response to industry trends. Comparedwith small- and medium-sized enterprises, leading enterprises boast stronger and richer whole networkmarketing and operation capabilities. They formulate refined marketing strategies by city to reachconsumers. In addition to online traffic, offline channels are also required to realize refined managementby empowering channels through organizational reform and information system. According to theNational Bureau of Statistics, online retail sales across the country recorded RMB15.5 trillion in 2024,an increase of 7.2%. Outstanding companies in the consumer industry seized the developmentopportunities of online consumption and achieved continuous sales growth through online and offlineintegration.

The new generation of young people has become a major force in driving new consumption. Theconsumption concepts of the youth group are changing, shifting from a focus on the practicality of goodsto an increasing emphasis on the emotional value of consumption. They are more eager to achieveemotional resonance and psychological satisfaction through their purchases. This pursuit of emotionalvalue is driving youth consumption towards personalization and experience-based consumption, whilstalso encouraging businesses to integrate emotional elements into product design and other processes.ACGN and cultural and creative merchandise have already broken through traditional boundaries,

reflecting youth consumers’ recognition of excellent cultural works such as animation and comics. Thistrend reflects a shift in consumption demand from "practicality" to "emotional value".Traditional retail stationery shops nearby school are still the dominant channel for China’sstationery industry, and shares of other retail formats are increasing faster. Sales terminals and channelsof the industry are becoming more diversified, upgrading and competition in channels becomes moreobvious. Domestic consumption for stationery in China becomes more brand conscious, innovative,individualized and more premium. There is a growing demand for premium cultural and creativeproducts, stationery products are moving from those primarily focus on functionality towards those withmore cultural and creative elements catering to customers. With continued development in the stationeryindustry, there could be higher industry consolidation, and leading companies could gain larger marketshares.

In the context of the digital economy, thanks to favorable factors such as policy driving, the rapidadvancement of centralized procurement by large- and medium-sized enterprises, and the competitionamong various digital procurement service providers, great progress has been made in the digitalization,e-commerce and centralization of public procurement in China, which have become the main form ofpublic resource transactions from central to local governments. According to the 2024 DigitalizedProcurement Development Report released by the China Federation of Logistics & Purchasing, the totalprocurement amount for enterprises nationwide reached RMB175 trillion in 2023. Among this, the totalamount of digitalized procurement was approximately RMB17 trillion, with a penetration rate increasingto 9.8%. More than 70 central enterprises have established online stores, with a clear trend of productdiversification. In addition to office supplies and industrial products, the procurement e-commerceplatforms of central enterprises have expanded into the areas of production materials and engineeringequipment.With the further development and application of information technology, data have become a newproduction element. Industrial digitization is becoming a major pillar of the digital economy, andtraditional industries are actively gaining new development momentum through digital empowerment.The investment in the manufacturing industry has shifted from the investment in equipment andassembly lines to the transformation of digital processes and digital transformation of products, in a bidto apply digital technology to reduce channel costs and management costs and become a digital-drivenmodern enterprise.With smart technology and products upgrade, promotion of national education informatization andthe development of the online education market, smart stationery products have developed rapidly in thepast few years. Technology-empowered smart pens and smart books are widely adopted in onlineeducation, providing an increasingly better user experience. Technology-empowered smart pens andsmart books are widely adopted in online education, providing a better user experience.

4. Company position in the industry

As a leader of "own brand + domestic demand" in China's stationery industry, the Company has astrong first-mover and leading advantage, with a wide and deep distribution network coverage in China'sstationery market. At the end of the Reporting Period, the Company has a national distribution networkcovering approximately 70,000 retail stationery shops using the store sign "M&G Stationery" acrossChina, enabling the Company to establish market leading position for its own brand products amidstcompetitions. The Company ranked first in "Top Ten Enterprises in China's Light Industry and WritingInstrument" for 12 consecutive years.

M&G Colipu is an iconic company in the field of B2B e-commerce procurement in China. After 12years since its start, thanks to its electronic transaction system, intelligent warehousing logisticsmanagement system, high-quality supply chain management and customized service, M&G Colipu hasbecome one of the industry leaders of digital enterprise procurement service provider. For many years,M&G Colipu has won many awards such as the Outstanding E-commerce Platform in China's Stationeryand Office Supplies Industry, the Outstanding Supplier of Government Procurement, and the MostInfluential E-commerce Platform in Financial Procurement.

III. The Company's Businesses during the Reporting Period

1. Principal business

M&G Stationery is a comprehensive stationery supplier and an office servicer. The Companyintegrates the value of creativity into its products and service advantages, advocates fashionable

stationery lifestyle, and provides solutions for study and work. Its core traditional businesses includedesigning, developing, manufacturing and selling writing instruments, student stationery, office suppliesand other products under brands, and also the e-commerce business M&G Technologies;its new businesses mainly comprise of direct office supplies business - M&G Colipu, and large retailstore business - Jiumu Store and M&G Life. During the Reporting Period, there were no significantchanges in the Company's operation model.

2. Principal operation model

The Company has an independent and complete operation from design and development of brandsand products, procurement of raw materials and accessories, product manufacturing, supply chainmanagement and warehouse and logistics, to distribution network management. The Company is capableof performing independent operation of business in the market. For R&D model, the Company has an"entire design system" covering the whole process starting from customer value proposition to productdesign, product mold to brand image design, incorporating trend-, theme and experience-oriented R&Dmodel to develop new products with a comprehensive categories approach based on consumer insight.For manufacturing model, the Company uses the brand manufacturing model that features sales-drivenproduction, in-house and OEM outsourcing. The Company has an independent system from raw materialprocurement to manufacturing and selling, and has established its brands in the market. We have theadvantages from participating in the whole value chain from design, research and developing,manufacturing and selling stationery. For sales model, based on features of stationery products andcurrent situations of stationery consumption at home and abroad, the Company has developed its salesmodel that relies on regional distributors, complemented by direct sales to offices 2B customers,direct-sale store, KA sales, online sales, as well as international distribution. We are the one of leadingcompanies in China’s stationery business that engage in large-scale brand sales management andfranchise management. In addition to operations on platforms such as Tmall, JD, and Pinduoduo, M&GTechnologies also conducts live streaming on platforms such as Douyin and Kuaishou through its ownlive streaming room or cooperation with KOLs on the platforms. M&G Technologies is also responsiblefor online full platform marketing and management of authorized online stores.M&G large retail store businesses include two store types: Jiumu Store and M&G Life. Targetingfemale consumers aged 15-29, Jiumu Store primarily sells stationery, cultural and recreative products,educational and entertainment products, and daily household and home products. Jiumu Stores aremostly located in high-quality shopping malls in prime urban districts. Jiumu Store represents theCompany's ongoing exploration in new retail model in lifestyle products with a distinct cultural element.Jiumu Store started franchising in July 2018, where franchisees pay contract deposit and decoration feeaccording to contracts, and store rent, store staff salary, utilities and other costs incurred in franchisingstores. M&G Life mainly targets students aged 8-15, primarily selling stationery products. M&G Lifestores are mostly located in Xinhua Bookstore and compound bookstores. M&G Life represents theCompany's efforts to move beyond the dominant traditional channels of retail stationery shops nearbyschools.

In the direct office supplies business, M&G Colipu provides governments, public institutions,Fortune Global 500 companies and other SMEs with cost-effective one-stop supplies procurementservice. M&G Colipu has a rich product offering, with application scenarios covering one-stop officesupplies, MRO industrial products, marketing gifts, and employee benefits, which include more than onemillion product categories such as office paper, office stationery, office supplies, office equipment,computers and accessories, digital and communications, office appliances, daily necessities, businessgifts, food and beverages, office furniture, labor protection supplies, and industrial supplies. Byshortening the supply chain, M&G Colipu provides customers with one-stop, cost-effective procurementand customized value-added services.

With changing demographics of China in particular the decreasing birth rate, it becomesincreasingly difficult to achieve revenue growth from unit volume growth in the future, and stationeryindustry growth is increasingly driven by consumption upgrade and product upgrade. The Company’score traditional businesses are challenged with demands from more individualized population born after2000 and 2010. Stationery consumption in China is becoming more brand conscious, innovative,individualized and more premium. There is a clear growth in demand for better cultural and creativeproducts, which accelerates industry transformation towards one with more cultural and creativeelements. M&G Technologies reflects channel diversification trend and helps the Company'somni-channel strategy by expansion of online business. Jiumu Store serves as the Company's bridgehead

to continue products and channels upgrading of its core traditional business, and it plays an importantrole in promoting the Company's brands and products upgrade. M&G Colipu meets demands forpurchasing office supplies from corporations and institutions, which helps boosting the sales of writinginstruments and office stationery of the Company's core traditional business.

3. Major driver for revenue growth

Driven by market forceWith the changes in the way of life and consumption habit of consumers, the mix of "people,product, and place" in retail industry has been reconstructed, sales channels have become morediversified, and channel upgrades and channel competition have become increasingly fierce. As thedomestic market demand for mid- to high-end stationery products keeps increasing, this providesopportunities for mid- to high-end stationery products. China's population of 1.4 billion accounts forabout 18% of global population, while leading stationery companies in China can continue to mostlyrely on the huge domestic market, they also have room for international expansion in internationalmarkets, which could reinforce each other under favorable conditions.Driven by innovationInnovation as one of driving forces for continuous development with a focusing on consumers. TheCompany continued to promote technological innovation, product innovation, channel innovation andbusiness model innovation. Through product innovation and business model innovation, the Companyhas formed a pattern of coordinated development, high-quality development and sustainabledevelopment of multi-business model. Meanwhile, it actively promoted the high-end, digital, intelligentand green transformation in its business operations, and coordinated the upgrading of traditionalbusinesses, the growth of emerging businesses and the cultivation of future businesses.Driven by the Company's competitive advantagesWith professional teams, market insights, unique brand advantages, channel advantages, supplychain advantages, R&D and design advantages, the Company continued to promote technologicalinnovation and product innovation, and maintained a strong forward driving force through high-end,omni-channel, digitalization, lean production and dynamic organization.Driven by policyThe continuous investment of the state in education, the three-child policy, the increased childcaresubsidies, and a favorable policy context for the development of the cultural industry encourage andpromote the integrated development of the cultural industry and upstream and downstream industries,invigorate economic transformation and social development, and drive the steady development of thestationery industry. A series of national policies on the centralized procurement industry have beenpromulgated, rapid progress was made in centralized procurement of large- and medium-sizedenterprises, the transparency of procurement information and the competitive mechanism of centralizedprocurement promoted the concentration of office supplies industry and promoted the vigorousdevelopment of direct office supplies industry.Driven by industry integrationWith continued development in the market, market concentration of stationery industry becomesgreater, leaving more room for industry consolidation. Leading companies in the stationery industry withgood brand recognition are in a strong position, and more market share is gained by leading companies.Through mergers and acquisitions of high-quality targets at home and abroad, the Company furtherenhanced its competitiveness and brand power in segmented categories.

IV. Analysis on Core Competitiveness during the Reporting Period

√ Applicable □ Not applicable

As one of the largest stationery manufacturers in the world, the Company enjoys uniquecompetitive advantages in terms of brand, channel, supply chain, design, and R&D in its core traditionalbusiness. As for the direct office supplies business, M&G Colipu leads the way as a supplier forgovernments and enterprises in the online channel. During the Reporting Period, no significant changeoccurred to the core competitive edges of the Company, which are summarized as follows:

1. Corporate culture and team

M&G is a company with a strong sense of mission and social responsibility, with an aim to "makestudy and work more joyful and effective". The Company has been in business for more than 30 years

and has always kept its original aspiration in mind. It has promoted development through innovation andbreakthroughs, and provided consumers with high-quality products and services. It is committed toproviding Chinese students with affordable good domestic stationery, and continues to devote itself tovarious social welfare undertakings, thereby promoting its continuous development. At the same time,the Company has cultivated an excellent team that highly recognizes the Company's values, has passionand technology, is good at innovation and competitive in the industry, is united and enterprising, andkeeps unremitting struggle.

2. Brand advantage

As a leader of "own brand + domestic demand" in China's stationery industry, the Company hasestablished a leading position for its own brand products amidst competitions of domestic market. TheCompany ranked the first in "Top Ten Enterprises in China's Light Industry and Writing Instrument" for12 consecutive years. M&G brand has sound brand recognition among consumers, and served as thedesignated stationery brand for Boao Forum for Asia for many years. The Company was selected as oneof the “Excellent Products of the Era" in the light industry among the first batch of China’s FamousConsumer Products by the Ministry of Industry and Information Technology. The Company has won thetitle of "China Annual No.1 Stationery Brand Award" for three consecutive years and "China's 500 MostValuable Brands" for seven straight years, winning international praise with excellent quality and brandreputation and showing the brand value of Chinese stationery to the world.

3. Channel advantage

The Company has a strong first-mover and leading advantage with a wide and deep coverage ofdistribution network across China. The Company has established an efficient distribution managementsystem and a domestic terminal network with deep penetration. During the Reporting Period, theCompany continued to broaden and deepen the national network and perfected online and offlinechannels, forming an omni-channel, multi-level and multi-contact marketing network. At the end of theReporting Period, the Company has 36 tier-one distributor partners, and about 1,200 tier-two andtier-three distributor partners across China, covering approximately 70,000 retail stationery shops with"M&G Stationery" logo across China, over 700 large retail stores, and more than one thousand ofauthorized stores in Taobao system, JD.com, Pinduoduo, Douyin, and other e-commerce channels.

4. Supply chain advantage

The Company benefits from experience of large-scale manufacturing accumulated throughout thepast years, independent mold development capability, stable supply chain, sound quality control systemand introduction of advanced information management systems. The Company has the capability oflarge-scale manufacturing with high quality control standard. The good and stable product quality haswon general recognition and favorable comments from consumers. The Company promotes theapplication of intelligent manufacturing technology in the production and inspection links of thestationery industry, and applies machine vision technology in various key links to greatly improve theefficiency of production and inspection, thus serving as a benchmark and demonstration role fortransforming the extensive industrial mode into an intensive one.

With the idea of partnership in its business operation, the Company has strived to build a highstandard supply chain ecosystem. The Company keeps iterating and upgrading its scientific managementfor supply chain, and has obtained new practice achievements in information collaboration across thevalue chain, inventory optimization, financial support for supply chain, management informatization ofquality and order, and optimization of supplier performance to help business partners get strongeroperation system and simultaneously improve both loyalty and operation capability of our businesspartners.

5. Design and R&D advantage

The Company has the capability to respond timely to market and strong R&D capacity for newproducts. The Company conducts market research for new product development and identifies markettrends. The Company launches about one thousand new products each year to meet consumer needs. TheCompany has been awarded with such four major international industrial design awards as German iFAward, Red Dot Design Award, G-mark, and IDEA for its product design. The Company has a designstudio in Israel, highlighting the world-class design capabilities of M&G Stationery. As of the end of theReporting Period, the Company owned more than 1,300 patents for invention, design and utility models.

The Company has broken through the foreign technical barriers and got hold of the raw materialformula and production technology with domestic independent intellectual property rights, greatlyenhancing the percentage of home-made raw materials and finished products. The Company has beenrecognized as a national high-tech enterprise since 2010, and has built a number of national or provinciallevel technology platforms such as National Industrial Design Center, China Key Laboratory of LightIndustry and Writing Instrument Engineering Technology, Shanghai Writing Instrument EngineeringTechnology Research Center. The testing laboratory of the Company had CNAS certificationqualification and its testing capabilities have reached a world-class level.

6. M&G Colipu's competitive advantages

M&G Colipu is committed to providing one-stop procurement service solutions for variouscustomers including government, State-owned Key Enterprises and state-owned enterprises, finance,intermediate market (top 500 private enterprises), and MA (Fortune Global 500), with business scenarioscovering one-stop office supplies, MRO industrial products, marketing gifts, and employee benefits. Ithas been working hard in the industry and has accumulated rich service experience, project experienceand customer resources. Currently, M&G Colipu has evolved into a leading supplier for governmentsand enterprises in the online channel, enjoying high brand influence in the industry and being widelyrecognised by customers and suppliers regarding reputation.

Over the years, M&G Colipu has made meticulous arrangements for the supply chain ofmanufacturers. Its product development covers well-known brands at home and abroad, with more thanone million of product categories. Through technological innovation and business upgrades, it hasachieved full-process visualization and traceability from procurement to supply chain management, andoptimized resource allocation and supply chain collaboration efficiency. Leveraging big data analysis, itaccurately grasps market demand and changes, drives precise adjustment and iterative upgrades ofproduct strategies, and continuously optimizes the product system.

Additionally, M&G Colipu enjoys a nationwide efficient logistic distribution network. It also hasan industry-leading intelligent main warehousing system, "Automated Storage and Retrieval System(AS/RS) System", and a new intelligent warehouse in East China, covering the whole country andallowing efficient and rapid order response. Furthermore, M&G Colipu is equipped with intelligentlogistic systems, such as automated guide vehicles (AGVs), to provide timely and accurate services forcustomers. Meanwhile, it provides a variety of online ordering solutions, including the shopping mall foroffice supplies, the shopping mall for MRO industrial products, the marketing gift & benefitsredemption platform, etc., to provide customers with convenient procurement services anytime andanywhere.

As a pioneer and industry leader in procurement digitalisation, M&G Colipu has won the titles ofNational E-commerce Demonstration Enterprise and Shanghai E-commerce Demonstration Enterprise. Ithas a technical R&D team of approximately one hundred members. M&G Colipu has a business cloudsystem that allows comprehensive digital management such as online organisation, communication,business, and management. M&G Colipu has independently developed a digital transaction system andrapid and professional system integration development technology, which has been certified asInformation System Security Protection Grade III, allowing it to provide a variety of personalisedvalue-added services for different customers, ensure the security and completeness of transaction data,and achieve system integration with key customers.

M&G Colipu has a professional team of nearly 2,000 people with enterprising spirit and years ofindustry experience, providing end-to-end services from pre-sales to after-sales across 31 provinces,municipalities and autonomous regions in China. Relying on a strong brand presence, strong financialstrength, and rich product strength, M&G Colipu adheres to the information-based construction of anintegrated, transparent and efficient procurement system. With the application of software and hardwareintelligent technology and strong system integration technical support, such procurement system meetsthe diversified, complex and digital procurement needs of customers, keeps increasing comprehensivecompetitiveness, and continues to create value for customers.

V. Financial Performance during the Reporting Period

In 2024, the Company recorded revenue of RMB24,228 million, an increase of 3.76%, and a netprofit attributable to its shareholders of RMB1,396 million, a decrease of 8.58%, while net profitattributable to its shareholders after deducting non-recurring profit and loss amounted to RMB1,234

million, a decrease of 11.75%. As at the end of 2024, the total asset of the Company amounted toRMB16,587 million, an increase of 8.31%. The net asset attributable to shareholders of the listedcompany amounted to RMB8,910 million, an increase of 13.75%. The Company has maintained healthygrowth and its assets are in a good condition.

(I) Analysis of principal operation

1. Analysis of change in certain items in income statement and cash flow statement

Unit: Yuan Currency: RMB

Explanation on the reason for change in net cash flow from investing activities: The net cashoutflow for purchasing bank financial products increased compared with the same period last year.Explanation on the reason for change in other gains: The government subsidies associated withoperating activities received and the over-deductions of the taxable amount for value added tax duringthe Reporting Period increased compared with the same period last year.Explanation on the reason for change in income from investment: The losses on investments inassociates decreased and income from bank financial products increased during the Reporting Periodcompared with the same period last year.

Explanation on the reason for change in gain on change in fair value: The bank financial productsheld during the Reporting Period increased compared with the same period last year, leading to anincrease in the corresponding gain.

Explanation on the reason for change in losses on credit impairment: The accounts receivableincreased during the Reporting Period, leading to the increased provisions for bad debt.

Explanation on the reason for change in losses on assets impairment: Axus Stationery madeimpairment provisions for fixed assets during the Reporting Period, while inventory valuationallowances were reversed in the same period last year.

Explanation on the reason for change in gains from asset disposal: Asset disposal incurred lossduring the Reporting Period, while it generated income in the same period last year.

Explanation on the reason for change in non-operating profits: The liquidated damages receivedfrom customers during the Reporting Period increased compared with the same period last year.

Explanation on the reason for change in non-operating expenses: The losses on the retirement offixed assets during the Reporting Period increased compared with the same period last year.

A detailed description of the major changes in the Company's business type, profit composition or profitsource in the current period

□ Applicable √ Not applicable

2. Analysis of revenue and cost

√ Applicable □ Not applicable

During the Reporting Period, exclusive of related-party transactions, the Company's core traditionalbusiness increased by 2% as compared to the corresponding period of last year, and new businessincreased by 5% as compared to the corresponding period of last year.

(1) Result of principal business by industry, product, region and sales model

Unit: Yuan Currency: RMB

Principal business by industry, product, region, and sales model

1. Revenue from principal business of the Company includes revenue from manufacturing and sellingstationery and office supplies, revenue from retail industry and revenue from service industry.

2. Revenue from retail industry refers to revenue gained by M&G Colipu and M&G Life through sellingnon-M&G products.

3. Revenue from service industry refers to management fee for franchising.

4. Writing instruments refer to products of writing utensil sold by the Company (excluding M&GColipu).

5. Student stationery refers to products of student stationery sold by the Company (excluding M&GColipu).

6. Office stationery refers to products of office supplies sold by the Company (excluding M&G Colipu).

7. Other products refer to products sold by the Company (excluding M&G Colipu) apart from writinginstruments, student stationery and office supplies.

8. Direct office supplies refer to products in all categories sold by M&G Colipu.

Unit: RMB 0'000

(2) Analysis of production and sales volume

√ Applicable □ Not applicable

Explanation on production and sales volumeNo

(3) Performance of major procurement contracts and major sales contracts

□ Applicable √ Not applicable

(4) Analysis of cost

Unit: RMB Yuan

Explanation on other situations of cost analysisNo

(5) Change in the scope of consolidation due to change in the equity of major subsidiaries duringthe Reporting Period

□ Applicable √ Not applicable

(6) Major change in or adjustment to the Company's business, products or services during theReporting Period

□ Applicable √ Not applicable

(7) Major customers and suppliers

A. Major customers of the CompanySales of the top 5 customers amounted to RMB5,799.64 million, accounting for 23.94% of the totalannual sales. Of the sales of the top 5 customers, sales of related parties amounted to RMB0, accountingfor 0% of the total annual sales.

Unit: RMB Yuan

During the Reporting Period, the sales attributable to a single customer exceeded 50% of the total sales,there are new customers among the top 5 customers, or a small number of customers were heavilydepended on.

□ Applicable √ Not applicable

B. Major suppliers of the Company

√ Applicable □ Not applicable

Purchase amount of the top 5 suppliers amounted to RMB1,524.51 million, accounting for 7.73% of thetotal annual purchase amount. Of the purchase amount of the top 5 suppliers, purchase amount of relatedparties amounted to RMB0, accounting for 0% of the total annual purchase amount.

Unit: RMB Yuan

During the Reporting Period, the procurement from a single supplier exceeded 50% of the total amount,and there were new suppliers among the top 5 suppliers or a small number of suppliers were heavilydepended on.

□ Applicable √ Not applicable

Other descriptionsNo

3. Expenses

√ Applicable □ Not applicable

Unit: RMB Yuan

4. R&D investment

(1) Table of R&D investment

√ Applicable □ Not applicable

Unit: RMB Yuan

(2) Details of R&D personnel

√ Applicable □ Not applicable

(3) Explanation

√ Applicable □ Not applicable

The total R&D investment of the parent company accounted for 3.41% of the parent company's revenue.

(4) Reasons for the major changes in the composition of R&D personnel and the impact on thefuture development of the Company

□ Applicable √ Not applicable

5. Cash flow

√ Applicable □ Not applicable

Unit: RMB Yuan

(II) Explanation on significant change of profit caused by non-core business

□ Applicable √ Not applicable

(III) Analysis of assets and liabilities

√ Applicable □ Not applicable

1. Assets and liabilities

Unit: RMB Yuan

During the Reporting Period,the balance of M&GColipu’s commercialacceptance bills decreasedcompared with the beginningof the year.

Other descriptionsNo

2. Overseas assets

√ Applicable □ Not applicable

(1) Asset size

Including: overseas assets of 376,042,463.25 (unit: Yuan, currency: RMB), accounting for 2.27% of thetotal assets.

(2) Explanation for the high proportion of overseas assets

□ Applicable √ Not applicable

3. Major restricted assets as at the end of the Reporting Period

√ Applicable □ Not applicable

1. Mortgaged assets

(1) The subsidiary, Axus Stationery, entered into the Maximum Mortgage Contract numberedZD9874202200000005 with Shanghai Pudong Development Bank Co., Ltd. Fengxian Sub-branch on 15September 2022, under which it pledges its lands and plants under Property HFDQ Zi (2013) No.015437, Property HFDQ Zi (2013) No. 013396 and Property HFDQ Zi (2015) No. 015718 at themaximum principal limit of RMB200 million and for the term of credit line from 15 September 2022 to14 September 2025.

(2) As of 31 December 2024, Axus Stationery used its other current assets - RMB140 million ofterm deposits due within one year as collateral guarantee for the bank acceptance bill in the amount ofRMB140 million issued by the Suqian Branch of the Bank of Jiangsu.

(3) As of 31 December 2024, Axus Stationery used its other current assets - RMB1 million of termdeposits due within one year as collateral guarantee for the bank acceptance bill issued in the amount ofRMB1 million.

(4) The subsidiary Jiangsu Marco Pen Co., Ltd. (江苏马可笔业有限公司) entered into theMaximum Mortgage Contract numbered BD133202411010001201 with Jiangsu Siyang RuralCommercial Bank Co., Ltd. on 30 October 2024, under which it pledges its lands and plants under Su(2019) Siyang County Real Estate No. 0018047, Su (2019) Siyang County Real Estate No. 0018032, Su(2019) Siyang County Real Estate No. 0017990 and Su (2019) Siyang County Real Estate No. 0017993at the maximum principal limit of RMB49,507,300 and for the term of credit line from 30 October 2024to 17 October 2027.

2. As of the end of the Reporting Period, the Company had restricted monetary funds ofRMB1,235,601,269.94, mainly including term deposits over three months and guarantee deposits forengineering payments.

4. Other descriptions

□ Applicable √ Not applicable

(IV) Analysis on industry operating information

√ Applicable □ Not applicable

For details, see "II. Description of the Company's industry conditions during Reporting Period" in"Section III Management Discussion and Analysis" of this report.

(V) Analysis of investmentOverall analysis of external equity investment

√ Applicable □ Not applicable

During the Reporting Period, the Company made external investments.

1. Shanghai M&G Online Selection Stationery Co., Ltd. (上海晨光在线甄选文具有限公司) wasnewly incorporated as a wholly-owned subsidiary with a registered capital of RMB20 million.

2. During the Reporting Period, the Company's majority-owned subsidiary M&G Colipu increasedits capital, upon which the Company's interest in the said subsidiary changed from 93.39% to 77.78%.Please refer to the Announcement on the Capital Increase of a Majority-owned Subsidiary and theCompany's Waiver of Preferential Subscription Rights and Related-party Transaction (AnnouncementNo.: 2024-020).

3. During the Reporting Period, the Company invested RMB35,292,100 to acquire an 8.6% interestin Beckmann, making Beckmann a wholly-owned subsidiary of the Company.

1. Significant equity investment

□ Applicable √ Not applicable

2. Significant non-equity investment

□ Applicable √ Not applicable

3. Financial assets measured at fair value

□ Applicable √ Not applicable

Securities investment

□ Applicable √ Not applicable

Description of securities investment

□ Applicable √ Not applicable

Private equity fund investment

□ Applicable √ Not applicable

Derivatives investment

□ Applicable √ Not applicable

4. Progress of major asset restructuring and integration during the Reporting Period

□ Applicable √ Not applicable

(VI) Sale of significant assets and equity interests

□ Applicable √ Not applicable

(VII) Analysis of major controlled companies and shareholding companies

√ Applicable □ Not applicable

Unit: 0'000 Currency: RMB

(VIII) Structured entities controlled by the Company

□ Applicable √ Not applicable

VI. Discussion and Analysis on Future Development of the Company(I) Industry pattern and trend

√ Applicable □ Not applicable

With the changes in the way of life and consumption habit of consumers, China’s retail industryentered a new stage of redevelopment and innovation. Stationery industry faces challenges withuncertainty of external environment, diversification of retail channels, and more individualized demandsfrom main customers group (now being the post-00s and post-10s). With the changing demographics ofChina in particular the decreasing birth rate, stationery industry revenue growth comes less from by unitvolume growth, and more from consumption upgrade and product upgrade. Domestic market demandfor mid- to high-end stationery products keeps increasing. This provides opportunities for mid- to

high-end stationery products with better quality and higher price. China's population of 1.4 billionaccounts for about 18% of global population, while leading stationery companies in China can continueto mostly rely on the huge domestic market, they also have room for international expansion ininternational markets, which could reinforce each other under favorable conditions. The global influenceof Chinese culture continues to rise. Not only do domestic consumers seek emotional resonance bypurchasing "Chinese trend" products, but overseas consumers are also beginning to embrace Chineseelements, showing a positive outlook on Chinese goods.Leading enterprises focused on building omni-channel operation capabilities and implementedrefined management. With the popularity of the Internet, smart phones, and online transactions, people'sconsumption habits and consumption scenarios have changed. Consumers' access to information isbecoming more fragmented, and new-generation marketing means are becoming more diversified,including online media platforms (such as Weibo, WeChat, Xiaohongshu, and Douyin) and IP topiccreation, which further tests enterprises' ability to make quick response to industry trends. Comparedwith small- and medium-sized enterprises, leading enterprises boast stronger and richer whole networkmarketing and operation capabilities. They formulate refined marketing strategies by city to reachconsumers. In addition to online traffic, offline channels are also required to realize refined managementby empowering channels through organizational reform and information system. According to theNational Bureau of Statistics, online retail sales across the country recorded RMB15.5 trillion in 2024,an increase of 7.2%. Outstanding companies in the consumer industry seized the developmentopportunities of online consumption and achieved continuous sales growth through online and offlineintegration.The new generation of young people has become a major force in driving new consumption. Theconsumption concepts of the youth group are changing, shifting from a focus on the practicality of goodsto an increasing emphasis on the emotional value of consumption. They are more eager to achieveemotional resonance and psychological satisfaction through their purchases. This pursuit of emotionalvalue is driving youth consumption towards personalization and experience-based consumption, whilstalso encouraging businesses to integrate emotional elements into product design and other processes.ACGN and cultural and creative merchandise have already broken through traditional boundaries,reflecting youth consumers’ recognition of excellent cultural works such as animation and comics. Thistrend reflects a shift in consumption demand from "practicality" to "emotional value".Traditional retail stationery shops nearby school are still the dominant channel for China’sstationery industry, and shares of other retail formats are increasing faster. Sales terminals and channelsof the industry are becoming more diversified, upgrading and competition in channels becomes moreobvious. Domestic consumption for stationery in China becomes more brand conscious, innovative,individualized and more premium. There is a growing demand for premium cultural and creativeproducts, stationery products are moving from those primarily focus on functionality towards those withmore cultural and creative elements catering to customers. With continued development in the stationeryindustry, there could be higher industry consolidation, and leading companies could gain larger marketshares.In the context of the digital economy, thanks to favorable factors such as policy driving, the rapidadvancement of centralized procurement by large- and medium-sized enterprises, and the competitionamong various digital procurement service providers, great progress has been made in the digitalization,e-commerce and centralization of public procurement in China, which have become the main form ofpublic resource transactions from central to local governments. According to the 2024 DigitalizedProcurement Development Report released by the China Federation of Logistics & Purchasing, the totalprocurement amount for enterprises nationwide reached RMB175 trillion in 2023. Among this, the totalamount of digitalized procurement was approximately RMB17 trillion, with a penetration rate increasingto 9.8%. More than 70 central enterprises have established online stores, with a clear trend of productdiversification. In addition to office supplies and industrial products, the procurement e-commerceplatforms of central enterprises have expanded into the areas of production materials and engineeringequipment.With the further development and application of information technology, data have become a newproduction element. Industrial digitization is becoming a major pillar of the digital economy, andtraditional industries are actively gaining new development momentum through digital empowerment.The investment in the manufacturing industry has shifted from the investment in equipment andassembly lines to the transformation of digital processes and digital transformation of products, in a bid

to apply digital technology to reduce channel costs and management costs and become a digital-drivenmodern enterprise.

With smart technology and products upgrade, promotion of national education informatization andthe development of the online education market, smart stationery products have developed rapidly in thepast few years. Technology-empowered smart pens and smart books are widely adopted in onlineeducation, providing an increasingly better user experience. Technology-empowered smart pens andsmart books are widely adopted in online education, providing a better user experience.

(II) Development strategy of the Company

√ Applicable □ Not applicable

1. Business strategy

To consolidate competitive advantages of core businesses by adhering to the mission of "makestudy and work more joyful and effective", being consumer centric, and emphasizing on innovation oftechnology and products; to further expand new businesses of one-stop office supplies service and directretail; to actively expand international market; and to promote digitalization, organization developmentand talents, and investment and mergers and acquisitions with synergy. With continued efforts in thosefour areas, the Company will realize the vision of becoming a "world-class M&G".

2. Sustainable development strategy

In order to realize the vision of “World-class M&G”, M&G has developed a sustainabledevelopment strategy together with its business strategy. With its vision of “Writing a SustainableBusiness Future”, M&G aims to lead the sustainable development of the industry by focusing on fourpillars: sustainable products, response to climate change, sustainable supply chain and empoweringemployees and communities.

(III) Operation plan

√ Applicable □ Not applicable

In the face of changing consumer preferences, buying habits and consumption scenarios, as well asthe recovering market and demographic trends in the domestic market, the Company will adhere tolong-termism. It will push forward in key areas such as technological innovation and transformation,original design, green, intelligent and digital transformation, differentiation, balanced and coordinateddevelopment, brand value enhancement, and global expansion, whilst improving quality and efficiencyto cultivate new quality productive forces. Also, it will promote the stable development of coretraditional business in all directions, continue to expand new business, beef up organizational upgradingand reform, and proactively exploit the global market, in order to maintain sustainable, healthy andhigh-quality development of the Company and keep forging ahead toward its vision of becoming a"world-class M&G".

In 2025, the Company plans revenue of RMB27.5 billion, an increase of 13.50%, mainly throughthe following:

1. Core traditional business

Product capability enhancement

The Company will adhere to the "consumer-centric" philosophy, accelerate technological andproduct innovation, and increase investment in R&D and innovation, developing products with a focuson bestsellers. It will reduce the quantity and improve the quality of product development, and improvethe on-shelf ratio and sales contribution of the single product. Moreover, the product structure will beoptimized by developing and cultivating high-quality and high-performance products that meet customerdemand for emotional value. The brand portfolio will be further expanded and the product offerings willbe enriched, focusing on breakthroughs in potential category segmentation opportunities and rapidresponses. The Company will strengthen IP empowerment. The combination of internal independentcultivation and collaboration with external IPs will be promoted to innovate product structures, enhanceproduct capability, improve international design capabilities, and provide consumers with morediversified choices of products. The ultimate goal is to achieve sustainable brand development.

Omni-channel offerings

The Company will focus on deepening channels and building the necessary infrastructure for branddevelopment. It will focus on key stationery shops to improve single store quality and strengthen the

loyalty of key stationery shops. Besides, the Company will also strengthen promotion for key categories,continuing to push for effective presence establishment of key categories at stores through strategicin-store placement and increasing presence in business districts. In addition, continued efforts will bemade to promote direct supply of office products and premium stationery products both at headquartersand partners level to create incremental sales. The Company will also explore new online distributionmanagement models to realize the full potential of online growth and expand market share domestically.It will seize opportunities in the overseas market, accelerate international expansion, and innovate withdiversified channels.

2. Develop the middle-end and back-end platform capabilities

The Company will continue to accelerate the digital transformation of the entire industrial chainand lean management driven by efficiency enhancement, supporting cost reduction and efficiency gainswhile developing new quality productive forces. The Company will strengthen the continuousconstruction of the big data platform, comprehensively capture and deeply analyze the key data of eachbusiness, market and customer, provide a strong and scientific basis for business decision-making, andpromote the overall improvement of digital management capability. Digital tools will support serviceextension, value-added services, and innovation, creating incremental development opportunities. Talentdigital management will be advanced, and an intelligent talent database will be built. The concept of"talent supply chain" will be deepened, and organizational capability upgrades will propel high-qualitybusiness development, creating a talent hub for the industry.

3. Continue to develop the large retail store business

Jiumu Store will focus on refined operations, scaled expansion, and talent pipeline development.Investment in IP-related product resources and the proportion of proprietary brands will be increased toenrich the product structure. By establishing a digital middle-end platform and leveraging digitalmanagement thinking and tools, the Company will enhance the business capabilities of single stores andcreate various store models to meet different market needs. The Company will maintain the rapid growthof offline channels and the multi-channel growth of the online business and increase the repurchase rateand customer unit price. Talent pipeline development will be strengthened, cultivating core talent in thebusiness sector to provide solid support for larger-scale national expansion and future business growth,ensuring the Company's sustainable development. M&G Life will improve the quality of existing singlestores, and promote the new business model together with the premium stationery direct supply segment.

4. Continue to grow M&G Colipu

M&G Colipu will continue to upgrade and optimize its electronic trading system, smartwarehousing and logistics management system, digitalized supply chain, and personalized services. TheCompany will embrace the digitalization trend, using AI technology to inject new energy into tenderingprocesses and helping improve the efficiency of the back-end platform. The development of coreproducts and proprietary products will be advanced, increasing the sales ratio of proprietary products.Efforts will be made to acquire new customers and continually enrich the customer structure. TheCompany will continue to solidify its industry position, playing an exemplary role as an industry leader,and establishing stable strategic partnerships with central enterprises, government bodies, financialinstitutions, and other partners. Collaboration will be deepened in areas such as public welfareinitiatives.

(IV) Potential risks

√ Applicable □ Not applicable

1. Risks in operation management

With the great growth in the scale of assets and sale of the Company, the Company faces newchallenges in operation management system, internal control system and staff management. Althoughthe Company has developed operation management system and internal control system that accord withfeatures of its business and technology in its development, and has recruited and cultivated stable coremanagement team, operation of the Company will be adversely affected if the aforesaid managementsystem and management staff fail to promptly adapt to the rapid expansion of the Company. Therefore,the Company will keep improving its management system and internal control system, and adopt variousmeasures to improve qualification of management staff.

2. Market risks

With social transformation and consumption upgrading, stationery market presents opportunitiesfor structure-based development. The stationery industry is facing the challenges of shrinking demand,weaker expectations and increasing downward pressure. If the Company is unable to anticipate markettrends in time and adapt to market changes from aspects of innovation and upgrading, qualitymanagement to sale strategy, the Company will encounter certain risks in market competition. Havingbeen aware of the problem, the Company adheres to being market- and customer-oriented, strengthenstechnological innovation, as well as promotes product, channel and brand upgrades. Efforts are alsomade to build a sounder quality management and control system. And market strategies are formulatedbased on market survey, analysis of big data and management discussion.

3. Risks from fiscal and taxation

According to Article 28 of Enterprise Income Tax Law of the People's Republic of China, theenterprise income tax on important high- and new-tech enterprises that are necessary to be supported bythe state shall be levied at the reduced tax rate of 15%. The Company was re-recognized as a nationalhigh- and new-tech enterprise on 15 November 2022, and started to implement the policy of reducedenterprise income tax rate of 15% on 1 January 2022 for 3 years. If the state adjusts preferential incometax policy for high- and new-tech enterprises, or the Company fails to pass the review after itsqualification of high- and new-tech enterprise expires, operation performance of the Company will beadversely affected. As such, the Company performs strict control according to assessment standards forhigh- and new-tech enterprises to ensure that it meets all indicators, and qualifies and passes the annualreview and renewal for high- and new-tech enterprises.

(V) Others

□ Applicable √ Not applicable

VII. Explanation on the Failure to Disclose as per Rules due to Inapplicability or Special Reasonssuch as State Secrets and Business Secrets and the Reasons Thereof

□ Applicable √ Not applicable

Section IV Corporate Governance

I. Particulars on Corporate Governance

√ Applicable □ Not applicable

During the Reporting Period, the Company, in strict compliance with the Company Law, theSecurities Law, and other applicable laws and regulations, as well as the relevant regulatory documentspromulgated by the China Securities Regulatory Commission and the Shanghai Stock Exchange,continuously optimized the corporate governance structure of the Company and improved theoperational level of the Company, strengthened the management of insider information, and enhancedthe awareness of information disclosure responsibility, to ensure continuous, stable and high-qualitydevelopment and effectively protect the legitimate rights and interests of investors and relevantstakeholders. The specific governance situation was as follows:

1. Shareholders and general meetings of shareholders: The Company holds general meetings ofshareholders in strict accordance with the requirements of the Articles of Association, the Rules ofProcedure of the General Meeting of Shareholders and other applicable rules. Proposals, procedures,and voting at the general meetings of shareholders were implemented in accordance with the relevantprovisions. When considering proposals related to related-party transactions, related shareholdersavoided voting to ensure fair related-party transactions. For the convenience of the Company'sshareholders, general meetings of shareholders allow its shareholders to vote on site or online. Thisensures the minority shareholders have the right to stay informed about and vote on major issues of theCompany and participate in the operation of the company and this also helps protect the interests ofminority shareholders.

2. Controlling shareholders and the listed companies: the Company and the controlling shareholdersachieved "five independences" in assets, personnel, finance, organization, and business, and theCompany's Board of Directors, Supervisory Committee and internal control institutions operatedindependently; the Company's related-party transaction procedures were legal and the price was fair, andthe obligation of information disclosure was fulfilled; the controlling shareholders had a normativebehavior, and did not directly or indirectly interfere with the Company's decision-making and businessactivities by manipulating the general meetings of shareholders.

3. Directors and the Board of Directors: As of the end of the Reporting Period, the Company's SixthBoard of Directors consisted of seven directors, including three independent directors, and thecomposition of the Board of Directors complied with the requirements of applicable laws, regulationsand the Articles of Association. All directors of the Company could, in accordance with the Articles ofAssociation, the Rules of Procedure of the Board of Directors and other applicable rules, earnestlyperform their duties as directors and make prudent and scientific decisions. The convening of eachmeeting met the requirements of relevant regulations. The Company's Board of Directors had fourspecial committees, namely, the Strategy Committee, the Audit Committee, the Remuneration andAppraisal Committee, and the Nomination Committee. Each special committee carried out work inaccordance with the relevant provisions of the implementation rules, gave full play to the professionalrole of each special committee, strengthened the democratic and scientific decision-making of the Boardof Directors, and ensured the sound development of the Company.

4. Supervisors and the Supervisory Committee: As of the end of the Reporting Period, theCompany's Sixth Supervisory Committee consisted of three supervisors, including one employeesupervisor, and the composition of the Supervisory Committee complied with the requirements ofapplicable laws, regulations and the Articles of Association. The Supervisory Committee of theCompany was responsible for the Company and its shareholders, strictly followed the relevantprovisions of the Articles of Association, the Rules of Procedure of the Supervisory Committee and otherapplicable rules, earnestly fulfilled its duties, convened the meetings of the Supervisory Committee bylaw, attended the general meeting of shareholders and the meetings of the Board of Directors, andexercised supervisory functions and powers in accordance with the law, supervising corporategovernance, major issues, financial conditions, and the compliance with rights and regulations of theCompany's directors and senior management in performing their duties, and promoting the legal andstandardized operations of the Company.

5. Information disclosure and transparency: The Company adhered to the principle of "truth,accuracy, completeness, timeliness, and fairness", and strictly followed the requirements of temporary

announcement and periodic report format guidelines for information disclosure. To help investors getfamiliar with the situation of the Company, the content to be disclosed must be concise, clear, and easyto understand and must truly and duly reflect the operating status of the Company.

Whether there are significant differences between corporate governance and laws, administrativeregulations and the requirements of the relevant regulations of the China Securities RegulatoryCommission on the governance of listed company; if there are significant differences, the reasons shouldbe explained

□ Applicable √ Not applicable

II. Measures taken by the controlling shareholders and actual controllers of the Company toensure the independence of the Company's assets, personnel, finance, organization, and business,as well as the solutions taken to address the impact on the Company's independence, workprogress and follow-up work plans

√ Applicable □ Not applicable

The Company was completely separated from the controlling shareholders in assets, personnel,finance, organization and business, possessing independent and complete business and the ability tooperate independently.

1. Asset independence

The Company had business premises that are independent from the controlling shareholders andhad an independent and complete asset structure. The Company had complete control over all assets, andno asset or fund was occupied by controlling shareholders to damage the interests of the Company.

2. Personnel independence

The personnel and remuneration management of the Company were completely independent. Thedirectors, supervisors and senior management of the Company were elected and appointed in strictaccordance with the relevant provisions of the Company Law and the Articles of Association. Thepresident, vice president, chief financial officer and secretary of the Board of Directors of the Companydid not receive remuneration from the controlling shareholders and their affiliated enterprises and heldany positions other than directors and supervisors.

3. Financial independence

The Company had an independent financial and accounting department, has established anindependent accounting system and financial management system, and made financial decisionsindependently. The Company's chief financial officer and financial accounting personnel are all full-timestaff and do not hold part-time jobs in the controlling shareholder or their affiliated enterprises. TheCompany opened a basic deposit account independently and paid taxes independently.

4. Organizational independence

The Company has established a sound organizational system, which operates independently and hasno affiliation with the controlling shareholders or their functional departments.

5. Business independence

The Company's business is independent from the controlling shareholders and their affiliatedenterprises. The Company has an independent and complete design, R&D, manufacturing and salessystem, conducts business independently, and does not rely on shareholders or any other related parties.

Engagement of controlling shareholders, actual controllers and other organizations under their control inthe same or similar business as the Company, as well as the impact of horizontal competition or majorchanges in horizontal competition on the Company, measures taken, progress of the resolution and thefollow-up resolution

□ Applicable √ Not applicable

III. Brief Introduction to General Meetings of Shareholders

Holders of the preferred shares with restored voting power request for convening extraordinary generalmeetings of shareholders

□ Applicable √ Not applicable

Particulars on general meetings of shareholders

□ Applicable √ Not applicable

IV. Information on Directors, Supervisors and Senior Management(I) Shareholding change and remuneration of directors, supervisors and senior management currently employed and retired during the Reporting Period

√ Applicable □ Not applicable

Unit: share

Note 1: During the Reporting Period, as the company performance did not meet the unlocking conditions, the 43,680 restricted shares that had been granted to FuChang but remained in lockup were repurchased and cancelled.Note 2: During the Reporting Period, as the company performance did not meet the unlocking conditions, the 9,560 restricted shares that had been granted to BaiKai but remained in lockup were repurchased and cancelled.Note 3: During the Reporting Period, as the company performance did not meet the unlocking conditions, the 42,760 restricted shares that had been granted to ZhouYonggan but remained in lockup were repurchased and cancelled.Note 4: The term of office of Chen Huxiong, Chen Xueling and Fu Chang as directors will expire on 19 April 2026, and their term of office as senior managementwill expire on 20 April 2026.

Particulars on other information

□ Applicable √ Not applicable

(II) Employment of directors, supervisors and senior management currently employed and retiredduring the Reporting Period

1. Employment in shareholders’ companies

√ Applicable □ Not applicable

2. Employment in other companies

√ Applicable □ Not applicable

(III) Remuneration of directors, supervisors and senior management

√ Applicable □ Not applicable

(IV) Changes in directors, supervisors and senior management of the Company

√ Applicable □ Not applicable

(V) Particulars on punishments by securities regulatory authorities in the past three years

□ Applicable √ Not applicable

(VI) Others

□ Applicable √ Not applicable

V. Meetings of the Board of Directors held during the Reporting Period

VI. Performance of Functions and Duties by Directors(I) Attendance of directors at board meetings and general meetings of shareholders

Particulars on two consecutive absences in person from board meetings

□ Applicable √ Not applicable

(II) Directors' objections to the Company's related matters

□ Applicable √ Not applicable

(III) Others

□ Applicable √ Not applicable

VII. Special Committees under the Board of Directors

√ Applicable □ Not applicable

(I) Members of special committees under the Board of Directors

(II) During the Reporting Period, the Audit Committee held 5 meetings

(III) During the Reporting Period, the Remuneration and Appraisal Committee held 1 meeting

(IV) During the Reporting Period, the Strategy Committee held 1 meeting

(VI) Details of the matter in question

□ Applicable √ Not applicable

VIII. Particulars on Risks in the Company Identified by the Supervisory Committee

□ Applicable √ Not applicable

The Supervisory Committee has no objection to the supervision matters during the Reporting Period.

IX. Employee of Parent Company and the Principal Subsidiaries of the Company at the End of theReporting Period(I) Employees

(II) Remuneration policy

√ Applicable □ Not applicable

To conform to the Company's organizational strategy, the Company implements a competitiveremuneration policy where the employees' remuneration is determined considering the job value,person-job fit and performance. By establishing and improving competitive remunerations and benefits,performance appraisal systems and incentive systems, as well as by actively promoting the long-termincentive and retention plan for mid- and senior-level personnel, the Company attracted all kinds ofprofessional talents and formed healthy competitive work environment to stimulate the vitality andpotential of employees, build a stable, professional team, and ensure the growth of the Company'sperformance.

(III) Training program

√ Applicable □ Not applicable

Talent is the core driving force for organizational development. The Company places particularemphasis on the construction of leadership pipelines, the reserve of management at all levels, and thetraining of professional talent for strategic key positions. The Company has carefully developed acomprehensive management curriculum system and is committed to the development of its internaltrainer team. By implementing diversified learning programs, including the new manager transformationproject and the training project for management trainees, and combining these with an online learningplatform, the Company has effectively enhanced the capabilities of its management team and theprofessional quality of its successors.

The Company focuses on enhancing employees' core professional skills, using a combination ofcentralized training and a mentor system to promote the comprehensive development of employees. Inthe field of production and manufacturing, special attention is given to the cultivation and reserve ofcore technical workers. A graded and categorized management model has been adopted, improving thejob qualification certification and specialized training system. Upholding the philosophy of "learningthrough practice and practicing through learning", the Company has established an efficient technicalworker training mechanism aimed at continuously improving employees' professional technical skills,ensuring they can quickly adapt to changes in market demands.

(IV) Labor outsourcing

√ Applicable □ Not applicable

X. Profit Distribution or Capital Accumulation Plan(I) Formulation, implementation or adjustment of the cash dividend policy

√ Applicable □ Not applicable

1. The existing profit distribution policy of the Company is implemented after it was passed at the19th meeting of the 5th session of the Board of Directors and 2022 annual shareholders' meeting.

2. Principle in profit distribution of the Company: The Company implements the dividenddistribution policy which entitles the shareholders to the same rights and same dividends, under whichshareholders are entitled to receive dividends and other kinds of distribution of interests based on thenumber of shares held by them. The Company adopts active profit distribution policy, which emphasizesinvestors' reasonable investment returns while maintaining sustainability and stability. The Company is

allowed to distribute profit in cash or shares, but its profit distribution shall not exceed the range of theaccumulated distributable profits or affect the Company's ability to continue as a going concern.

3. Overall approaches to distribute profit of the Company: The Company distributes dividends incash or shares, or cash-and-shares, and if the Company satisfies the conditions for cash dividends,priority should be given to profit distribution by means of cash dividends.

4. Specific conditions and proportion for cash dividends: The Company primarily adopts cashdividend as its profit distribution policy. The Company may distribute cash dividend when it makes aprofit in the current year and the distributable profits are positive after making up losses, contributing tothe statutory reserves and surplus reserves, but the profit distribution shall not exceed the range of theaccumulated distributable profits. In general, if there are no material investment plans or significant cashexpenditure, the Company may distribute profit in cash for a single year not less than 20% of thedistributable profit realized in the current year.

In addition, as for the proportion of cash dividends to the total profit distribution, the Board ofDirectors shall take into full account of various factors such as features of the industries where theCompany operates, the stage of development, its own business model, level of profitability, and whetherthere is significant capital expenditure arrangement, to distinguish the following situations anddetermine differentiated cash dividend proportion in accordance with the procedures as required by theArticles of Association:

(1) If the Company is at a mature stage of development and has no significant capital expenditurearrangement, the proportion of cash dividends in the profit distribution shall be at least 80% when theprofit distribution is made;

(2) If the Company is at a mature stage of development and has significant capital expenditurearrangement, the proportion of cash dividends in the profit distribution shall be at least 40% when theprofit distribution is made;

(3) If the Company is at a growing stage of development and has no significant capital expenditurearrangement, the proportion of cash dividends in the profit distribution shall be at least 30% when theprofit distribution is made;

(4) If the Company is at a growing stage of development and has significant capital expenditurearrangement, the proportion of cash dividends in the profit distribution shall be at least 20% when theprofit distribution is made.

The aforesaid "significant investment plans" or "significant cash expenditure" refers to one of thefollowing:

(1) The proposed external investment, acquisition of assets or purchase of equipment by theCompany in the coming twelve months with accumulated expenses amounting to or exceeding 50% ofthe latest audited net assets of the Company and exceeding RMB50 million;

(2) The proposed external investment, acquisition of assets or purchase of equipment by theCompany in the coming twelve months with accumulated expenses amounting to or exceeding 30% ofthe latest audited total assets of the Company.

Significant investment plans or significant cash expenditure that meets the above conditions shallbe reviewed and approved at the general meeting after being reviewed by the Board meeting.

5. During the Reporting Period, the formulation and implementation of the cash dividend policy hascomplied with the Articles of Association and the resolutions of the general meetings. The dividenddistribution standards and proportions are clearly stated, and relevant decision-making procedures andsystems are complete. Independent directors have diligently served their obligations, and played theirroles. As minority shareholders have opportunities to fully express their opinions and appeals, theirlegitimate interests have been fully protected.

(II) Special description of the cash dividend policy

√ Applicable □ Not applicable

(III) If the Company records profit distributable to shareholders of the Company during theReporting Period is positive but there is no proposal for cash dividend, the Company shall disclosethe reasons, the usage and the utilization plan of the undistributed profits in detail

□ Applicable √ Not applicable

(IV) Profit distribution and bonus issue from capital reserves for the Reporting Period

√ Applicable □ Not applicable

Unit: Yuan Currency: RMB

(V) Cash dividends for the last three accounting years

√ Applicable □ Not applicable

Unit: Yuan Currency: RMB

Net profit attributable to ordinary shareholders of thelisted company in the consolidated financial statementsfor the last accounting year

XI. Equity Incentive Plan, Employee Shareholding Plan or Other Employee Incentive Measures ofthe Company and Their Impacts(I) Incentive matters disclosed in temporary announcements and without further progress orchange in subsequent implementation

√ Applicable □ Not applicable

(II) Incentive matters which have not been disclosed in temporary announcements or with furtherprogressEquity incentive

□ Applicable √ Not applicable

Other descriptions

□ Applicable √ Not applicable

Employee shareholding plan

□ Applicable √ Not applicable

Other incentive measures

□ Applicable √ Not applicable

(III) Equity incentives granted to directors and senior management during the Reporting Period

□ Applicable √ Not applicable

(IV) Establishment and implementation of appraisal mechanism and the incentive mechanism forsenior management during the Reporting Period

√ Applicable □ Not applicable

The Company has established a relatively perfect performance evaluation and incentive system.Based on the principle that the income of senior management is linked to the business performance ofthe enterprise, the Company followed an open, fair and impartial process to appoint senior management,and continuously and timely improved the assessment mechanism. The Company has established acompensation system in line with the development needs of the Company and the actual situation of theindustry to ensure the enthusiasm of senior management.The Company implemented the 2020 Restricted Share Incentive Plan to provide long-termincentives for senior management and core technicians, and formulated corresponding assessmentmethods to carry out scientific, standardized and institutionalized assessment management for seniormanagement and core technicians included in restricted share incentive plan. The Company hasguaranteed the stability of the core team and key employees and mobilizing their enthusiasm by virtue ofa reasonable, sound, flexible and effective remuneration and welfare system, and a long-term benefitmechanism mainly based on equity incentive plans.

XII. Construction and implementation of internal control system during the Reporting Period

√ Applicable □ Not applicable

During the Reporting Period, the Company has established a strict internal control managementsystem in strict accordance with the requirements of the Company Law, the Securities Law, the StockListing Rules of the Shanghai Stock Exchange, and other applicable laws, regulations and regulatorydocuments, as well as the Articles of Association. The Company has set up an Audit Committee underthe Board of Directors to review the internal control of the Company, supervise the effectiveimplementation of internal control and self-evaluation of internal control, and guide and coordinateinternal audit and other related matters. The Company has set up an Audit Department to independentlycarry out audit under the guidance of the Audit Committee under the Board of Directors. The AuditDepartment is accountable to the Audit Committee. The Audit Department evaluates the efficiency,results and effectiveness of the design and implementation of internal control through internal controlaudits, business management audits, special audits and economic responsibility audits, and promotes theCompany's continuous improvement and enhancement of the quality of internal control. The AuditDepartment reports the internal control defects found in the audit to the Supervisory Committee, theAudit Committee or the management according to the seriousness of the problems, and urges therelevant departments to take active measures to rectify them. According to the identification of majordefects in the Company's internal control, in 2024, the Company had no significant defects andimportant defects in the internal control of financial reporting and non-financial reporting. The Companyhas continuously improved the internal control system. Therefore, the internal control operationmechanism is effective, which has achieved the expected internal control objectives and protected theinterests of the Company and all shareholders.

Particulars on major defects in the internal control during the Reporting Period

□ Applicable √ Not applicable

XIII. Management and Control over the Subsidiaries during the Reporting Period

√ Applicable □ Not applicable

During the Reporting Period, the Company has implemented the Management System for HoldingSubsidiaries, stipulating the control measures and the responsibilities and authority of the parentcompany and the subsidiaries in the subsidiary's articles of association, personnel appointment andremoval, financial management, operation decision, information management, inspection andassessment, so as to ensure that the various businesses of the subsidiaries meet the requirements of theCompany's overall development strategy, ensure that the financial position of the subsidiaries iseffectively monitored by the Company, prevent significant operating risks of the subsidiaries, andprotect the security and integrity of assets.

XIV. Particulars on the Auditor's Report on Internal Control

√ Applicable □ Not applicable

The Company engaged BDO China Shu Lun Pan CPAs (LLP) to audit the implementation ofinternal control in its 2024 financial statements and the Audit Report on Internal Control was issued. Forthe full text of the report, see 2024 Audit Report on Internal Control disclosed on the website of theShanghai Stock Exchange (www.sse.com.cn) on 26 March 2025.Whether to disclose the audit report on internal control: yesOpinion type of the audit report on internal control: With unqualified opinion

XV. Self-inspection and Rectification of Problems in the Special Action on Governance of ListedCompaniesNot applicable

XVI. Others

□ Applicable √ Not applicable

Section V Environmental and Social Responsibility

I. Environmental Information

(I) Explanation on environmental protection of the companies and their major subsidiaries fallinginto the category of key pollutant discharging organizations designated by the environmentalprotection authorities

□ Applicable √ Not applicable

(II) Explanation on environmental protection of companies other than key pollutant dischargingunits

√ Applicable □ Not applicable

The Company does not belong to the key pollutant discharging units published by nationalenvironmental protection authorities. The Company pays great attention to environmental protection,strictly abides by the Environmental Protection Law of the People's Republic of China and otherrelevant laws and regulations, and keeps refining its environmental management system. The Company'sproduction base in Shanghai has passed the ISO14001 environmental management system certification.In routine management, the Company strengthens the monitoring and handling of "three wastes" andensures that they are discharged as per the requirements.All solid waste from the manufacturing process of the Company has been properly disposed of inaccordance with relevant laws, regulations and discharge standards to ensure compliant discharge andtreatment of waste. The Company keeps monitoring water consumption data to ensure compliantwastewater discharge and that domestic wastewater is treated in accordance with local regulations onsewage treatment. It also manages waste gas in strict accordance with relevant laws, regulations andstandards, and keeps upgrading and optimizing the facilities for waste gas pollution control to eliminateor relieve the adverse impacts of waste gas on the atmospheric environment to the greatest extent.

1. Administrative penalties for environmental issues

□ Applicable √ Not applicable

2. Disclosing other environmental information with reference to key pollutant discharging units

□ Applicable √ Not applicable

3. Reason for not disclosing other environmental information

□ Applicable √ Not applicable

(III) Information that is conducive to ecological protection, pollution prevention and control, andfulfillment of environmental responsibility

√ Applicable □ Not applicable

The Company attaches great importance to the impact of its operation on the environment, andtakes the initiative to shoulder the responsibility for environmental protection. It actively promoted theimplementation of strategies to cope with climate change, and continuously intensified the managementof environmental operation footprints. During the Reporting Period, the Shanghai base was selected intothe 2024 National Green Factory list.

Starting from consumer insights, the Company kept developing innovative and sustainable products,adopted sustainable raw material procurement, and actively promoted green and innovative product

packaging. Through marketing channels, product publicity and consumer interaction, it popularized theimportance of plastic reduction, low carbon and biodiversity protection among young consumers andenhanced the public's awareness and engagement in sustainable development.For more details, see the 2024 Environmental, Social, and Governance (ESG) Report disclosed bythe Company on the website of the Shanghai Stock Exchange (www.sse.com.cn) on 26 March 2025.

(IV) Measures taken to reduce carbon emissions during the Reporting Period and their effects

Detailed description

√ Applicable □ Not applicable

The Company has introduced advanced production technologies to continuously improveequipment energy efficiency and reduce energy waste. It has also carried out ongoing energy-savingdiagnostics and energy management optimization. During the Reporting Period, the Shanghai baseimplemented energy-saving and emission reduction projects, including air compressor energy-savingmodifications, injection molding machine efficiency improvements, and the launch of a digital energymanagement system.The Company continues to optimize its energy structure and increase the share of renewable energyusage. During the Reporting Period, the Company continued to advance its photovoltaic powergeneration project. The electricity generated from photovoltaic systems reached 14.67 million kWh,equivalent to a reduction of 6,519 tons of CO2 equivalent. Additionally, the Shanghai base and AxusStationery continued to increase renewable energy use by purchasing green electricity. During theReporting Period, a total of 6.93 million kWh of green electricity was purchased.For more details, see the 2024 Environmental, Social, and Governance (ESG) Report disclosed bythe Company on the website of the Shanghai Stock Exchange (www.sse.com.cn) on 26 March 2025.

II. Overview of Social Responsibility(I) Whether a social responsibility report, sustainability report or ESG report is disclosedseparately

√ Applicable □ Not applicable

The Company has disclosed the 2024 Environmental, Social, and Governance (ESG) Report on thewebsite of the Shanghai Stock Exchange (www.sse.com.cn) on 26 March 2025.

(II) Particulars on the fulfillment of social responsibility

√ Applicable □ Not applicable

Detailed description

√ Applicable □ Not applicable

The Company always undertakes social responsibilities of its own accord. During the ReportingPeriod, the Shanghai M&G Charity Foundation continued to give play to the superior resources of theCompany, highlighted and deeply engaged in rural art education, special population development and

other public welfare activities, and continued to further foster the "Golden Seed Plan" educationassistance program, the "Art Education Plan" program, the Autism Support Program and other publicwelfare programs, gathering forces from all walks of life to follow up on social topics to care forchildren's childhood and power the development of a harmonious society.

For more details, see the 2024 Environmental, Social, and Governance (ESG) Report disclosed bythe Company on the website of the Shanghai Stock Exchange (www.sse.com.cn) on 26 March 2025.

III. Consolidation and Expansion of the Achievements of Poverty Alleviation and RuralRevitalization

√ Applicable □ Not applicable

Detailed description

√ Applicable □ Not applicable

The Shanghai M&G Charity Foundation actively responded to the state's call for rural art education,integrated social resources and initiated the Art Education Plan based on the status quo of scatteredresources for art education, promoting the creation of industrial ecology for rural art education forchildren and beefing up rural revitalization and local art quality through art education.

For more details, see the 2024 Environmental, Social, and Governance (ESG) Report disclosed bythe Company on the website of the Shanghai Stock Exchange (www.sse.com.cn) on 26 March 2025.

Section VI Major Events

I. Performance of Undertakings(I) Undertakings by the Company's beneficial controllers, shareholders, related parties, acquirers, the Company and other related parties during orsubsisted in the Reporting Period

√ Applicable □ Not applicable

(II) Where the Company has profit forecasts on assets or projects, and the Reporting Period waswithin the term of profit forecasts, the Company has to state whether such profit forecasts onassets or projects are fulfilled and the reasons thereof

□Fulfilled □Unfulfilled √ Not applicable

(III) Execution of the performance undertakings and its impact on the goodwill impairmenttesting

□ Applicable √ Not applicable

II. Non-operating Misappropriation of Funds of the Company by any Controlling Shareholdersand Their Related Parties during the Reporting Period

□ Applicable √ Not applicable

III. Illegal Guarantee

□ Applicable √ Not applicable

IV. Explanation of the Company's Board of Directors on the "Auditor's Report with ModifiedAudit Opinions" Issued by the CPA

□ Applicable √ Not applicable

V. Analysis and Explanation from the Company on the Reasons and Impact of the Change ofAccounting Policies, Accounting Estimates or Correction on Significant Accounting Errors(I) Analysis and explanation from the Company on the reasons and impact of the change ofaccounting policies or accounting estimates

□ Applicable √ Not applicable

(II) Analysis and explanation from the Company on the reasons and impact of the correction onsignificant accounting errors

□ Applicable √ Not applicable

(III) Communication with the previous accounting firm

□ Applicable √ Not applicable

(IV) Approval process and other descriptions

□ Applicable √ Not applicable

VI. Appointment and Dismissal of the Accounting Firm

Unit: 0'000 Currency: RMB

Explanation on appointment and dismissal of the accounting firm

√ Applicable □ Not applicable

During the Reporting Period, the BDO China Shu Lun Pan CPAs (LLP) was re-appointed as the auditinstitution.

Explanation on the change of accounting firm during the auditing period

□ Applicable √ Not applicable

Explanation on any over 20% (inclusive) reduction in audit fee compared to last year

□ Applicable √ Not applicable

VII. Risk of Suspension of Listing(I) Causes of suspension of listing

□ Applicable √ Not applicable

(II) Measures to be taken by the Company

□ Applicable √ Not applicable

(III) Situation and causes for termination of listing

□ Applicable √ Not applicable

VIII. Matters Related to Bankruptcy and Reorganization

□ Applicable √ Not applicable

IX. Material Litigation and Arbitration

□ The Company had material litigation and arbitration during the year

√ The Company did not have material litigation and arbitration during the year

X. Suspected Violation of Laws and Regulations, Punishment and Rectification to the ListedCompany, Its Directors, Supervisors, Senior Management, Controlling Shareholders, and ActualControllers

□ Applicable √ Not applicable

XI. Explanation on Credibility Status of the Company, Its Controlling Shareholders and BeneficialControllers during the Reporting Period

√ Applicable □ Not applicable

During the Reporting Period, since the Company, its controlling shareholders and beneficialcontrollers maintained sound credibility, there had been no refusal to implement effective judgments of acourt or default of any material overdue debt.

XII. Major Related-party Transactions(I) Related-party transactions in relation to daily operation

1. Events disclosed in temporary announcements and without further progress or change insubsequent implementation

□ Applicable √ Not applicable

2. Events disclosed in temporary announcements and with further progress or change insubsequent implementation

√ Applicable □ Not applicable

The 5th meeting of the 6th session of Board of Directors and 2023 Annual General Meeting ofShareholders of the Company considered and approved the Proposal on the Expected Daily

Related-party Transactions in 2024, and issued the Announcement on the Expected Daily Related-partyTransactions in 2024 (number: 2024-004) on 30 March 2024.

In 2024, the estimated income from selling goods to the sales entities controlled by Guo Weilongamounted to RMB250,000,000.00, and the estimated income from selling goods to the sales entitiescontrolled by Guo Shaomin amounted to RMB250,000,000.00. It was estimated that fees for leasing thehouses of M&G Group (including office buildings, workshops, parking space, warehouses anddormitories) amounted to RMB4,621,000.00; fees for leasing parking space of M&G Group amounted toRMB14,000.00; utilities amounted to RMB6,000,000.00. It was estimated that the expenses incurred byM&G Colipu in leasing M&G Group's office building and parking space amounted toRMB11,762,000.00, the expenses incurred by Colipu Information Technology in leasing M&G Group'soffice building amounted to RMB3,126,000.00, and the expenses incurred by Qizhihaowan in leasingM&G Group's office building and parking space amounted to RMB1,748,000.00.In 2024, the actual income from selling goods to the sales entities controlled by Guo Weilongamounted to RMB180,530,383.08, and the actual income from selling goods to the sales entitiescontrolled by Guo Shaomin amounted to RMB85,811,972.83. The actual fees for leasing the houses ofM&G Group (including office buildings, workshops, parking space, warehouses and dormitories)amounted to RMB4,620,952.40; fees for leasing parking space of M&G Group amounted toRMB12,000; utilities amounted to RMB5,187,212.36. The actual expenses incurred by M&G Colipu inleasing M&G Group's office building and parking space amounted to RMB11,812,898.35, the actualexpenses incurred by Colipu Information Technology in leasing M&G Group's office building amountedto RMB3,125,755.72, and the actual expenses incurred by Qizhihaowan in leasing M&G Group's officebuilding and parking space amounted to RMB1,747,970.48.

3. Events not disclosed in temporary announcements

□ Applicable √ Not applicable

(II) Related transactions as a result of acquisition and disposal of assets or equity

1. Events disclosed in temporary announcements and without further progress or change insubsequent implementation

□ Applicable √ Not applicable

2. Events disclosed in temporary announcements and with further progress or change insubsequent implementation

□ Applicable √ Not applicable

3. Events not disclosed in temporary announcements

□ Applicable √ Not applicable

4. Disclosable performance achievements during the Reporting Period when involved withagreed-upon performance

□ Applicable √ Not applicable

(III) Major related transactions in joint external investment

1. Events disclosed in temporary announcements and without further progress or change insubsequent implementation

□ Applicable √ Not applicable

2. Events disclosed in temporary announcements and with further progress or change insubsequent implementation

□ Applicable √ Not applicable

3. Events not disclosed in temporary announcements

□ Applicable √ Not applicable

(IV) Creditor’s rights and debts with related parties

1. Events disclosed in temporary announcements and without further progress or change insubsequent implementation

□ Applicable √ Not applicable

2. Events disclosed in temporary announcements and with further progress or change insubsequent implementation

□ Applicable √ Not applicable

3. Events not disclosed in temporary announcements

□ Applicable √ Not applicable

(V) Financial business between the Company and the affiliated financial companies, theCompany's holding financial company and the related party

□ Applicable √ Not applicable

(VI) Others

□ Applicable √ Not applicable

XIII. Material Contracts and Their Performance(I) Trusteeship, contracting and leasing matters

1. Trusteeship

□ Applicable √ Not applicable

2. Contracting

□ Applicable √ Not applicable

3. Leasing

□ Applicable √ Not applicable

(II) Guarantees

□ Applicable √ Not applicable

(III) Entrusting others to manage cash assets

1. Entrusted wealth management

(1) Overall condition of entrusted wealth management

√ Applicable □ Not applicable

Unit: 0'000 Currency: RMB

Others

□ Applicable √ Not applicable

(2) Individual entrusted wealth management

√ Applicable □ Not applicable

Unit: 0'000 Currency: RMB

Others

□ Applicable √ Not applicable

(3) Provision for the impairment of entrusted wealth management

□ Applicable √ Not applicable

2. Entrusted loans

(1) Overall condition of entrusted loans

□ Applicable √ Not applicable

Others

□ Applicable √ Not applicable

(2) Individual entrusted loans

□ Applicable √ Not applicable

Others

□ Applicable √ Not applicable

(3) Provision for the impairment of entrusted loans

□ Applicable √ Not applicable

3. Others

□ Applicable √ Not applicable

(IV) Other material contracts

□ Applicable √ Not applicable

XIV. Progress on the use of raised capital

□ Applicable √ Not applicable

XV. Explanation of Other Major Events that Have a Material Impact on Investors' ValueJudgments and Investment Decisions

□ Applicable √ Not applicable

Section VII Changes in Shares and Shareholders

I. Changes in Share Capital(I) Statement of changes in shares

1. Statement of changes in shares

Unit: share

2. Explanation of changes in shares

√ Applicable □ Not applicable

According to the Company's 2020 Restricted Share Incentive Plan and the authorization of the2019 Annual General Meeting of Shareholders:

Upon consideration and approval at the 5th meeting of the 6th session of Board of Directors and the5th meeting of the 6th session of Supervisory Committee, the Company completed the cancellation ofpart of the restricted shares under such Incentive Plan with China Securities Depository and ClearingCorporation Limited Shanghai Branch on 11 June 2024, repurchasing and canceling 2,768,150 restrictedshares of 351 awardees. After the completion of the repurchase and cancellation, the total shares of theCompany decreased from 926,596,570 shares to 923,828,420 shares.

3. Impact of changes in shares on the earnings per share, net asset value per share and otherfinancial indicators in the last year and period (if any)

√ Applicable □ Not applicable

(1) Basic earnings per share

Basic earnings per share are based on the combined net profit attributable to the ordinaryshareholders of the parent company divided by the weighted mean of the Company's outstandingordinary shares:

Unit: Yuan Currency: RMB

(2) Diluted earnings per share

Diluted earnings per share are based on the combined net profit (diluted) attributable to the ordinaryshareholders of the parent company divided by the weighted mean (diluted) of the Company'soutstanding ordinary shares:

Unit: Yuan Currency: RMB

4. Other contents that the Company deems necessary and the securities regulatory authoritiesrequire disclosing

□ Applicable √ Not applicable

(II) Changes in restricted shares

√ Applicable □ Not applicable

Unit: share

Note: "Number of restricted shares removed during the year" in the above table refers to 2,768,150shares repurchased and cancelled. The cancellation date is 11 June 2024.

II. Issuance and Listing of Securities(I) Issuance of securities as at the Reporting Period

□ Applicable √ Not applicable

Explanation on issuance of securities as at the Reporting Period (please provide separate explanation onthe bonds with different interest rates during their duration):

□ Applicable √ Not applicable

(II) Changes in the total number of ordinary shares and shareholder structure of the Companyand changes in the structure of assets and liabilities of the Company

□ Applicable √ Not applicable

(III) Existing internal employee shares

□ Applicable √ Not applicable

III. Shareholder and Beneficial Controller(I) Total number of shareholders

(II) Table of shareholdings of the top ten shareholders and the top ten public shareholders (orunrestricted shareholders) as at the end of the Reporting Period

Unit: share

Explanation on the above-mentioned shareholders'entrusting voting rights, accepting voting rightsentrusted and waiver of voting rights

5% or greater shareholders, top ten shareholders and top ten unrestricted public shareholders involved inrefinancing shares lending

□ Applicable √ Not applicable

Changes in the top ten shareholders and top ten unrestricted public shareholders compared with the priorperiod due to refinancing shares lending/returning

□ Applicable √ Not applicable

Shareholdings of the top ten restricted shareholders and the restrictions

□ Applicable √ Not applicable

(III) Strategic investors or general legal persons becoming the top ten shareholders because ofplacing of new shares

□ Applicable √ Not applicable

IV. Controlling Shareholder and Beneficial Controllers(I) Controlling shareholder

1. Legal person

√ Applicable □ Not applicable

2. Natural person

□ Applicable √ Not applicable

3. Special explanation on the Company not having controlling shareholders

□ Applicable √ Not applicable

4. Explanation of the change in controlling shareholders during the Reporting Period

□ Applicable √ Not applicable

5. Diagram of the ownership and controlling relationship between the Company and its

controlling shareholders

√ Applicable □ Not applicable

M&G Group

M&G Stationery

(II) Beneficial controllers

1. Legal person

□ Applicable √ Not applicable

2. Natural person

√ Applicable □ Not applicable

58.02%

3. Special explanation on the Company not having beneficial controllers

□ Applicable √ Not applicable

4. Explanation of the change of the Company's control during the Reporting Period

□ Applicable √ Not applicable

5. Diagram of the ownership and controlling relationship between the Company and itsbeneficial controllers

√ Applicable □ Not applicable

ChenXueling

ChenHuwen

ChenHuxiong

M&GGroup

KeyingInvestment

JiekuiInvestment

M&GStationery

6. Control of the Company by beneficial controllers by way of trust or other means of asset

management

□ Applicable √ Not applicable

(III) Other explanation regarding the controlling shareholders and the beneficial controllers

□ Applicable √ Not applicable

V. The Total Shares Pledged by the Controlling Shareholder or the First Majority Shareholder andthe Person Acting in Concert Account for More Than 80% of the Company’s Shares Held byThem

□ Applicable √ Not applicable

0.88%

VI. Other Legal Person Shareholders with More Than 10% Shareholdings

□ Applicable √ Not applicable

VII. Explanation on Limitation on Reduction of Shareholding

□ Applicable √ Not applicable

VIII. Implementation of Share Repurchase during the Reporting Period

√ Applicable □ Not applicable

Unit: 00’000’000 Currency: RMB

Section VIII Preferred Shares

□ Applicable √ Not applicable

Section IX Bonds

I. Corporate Bonds (Including Enterprise Bonds) and Non-financial Enterprise Debt FinancingInstruments

□ Applicable √ Not applicable

II. Convertible Corporate Bonds

□ Applicable √ Not applicable

Section X Financial Report

I. Auditor’s Report

√ Applicable □ Not applicable

Xin Kuai Shi Bao Zi [2025] No. ZA10261

To the shareholders of Shanghai M&G Stationery Inc.:

I. Audits' OpinionWe have audited the accompanying financial statements of Shanghai M&G Stationery Inc.(hereinafter referred to as "M&G"), which comprise the consolidated and parent company's balancesheets as at 31 December 2024, the consolidated and parent company's income statements, theconsolidated and parent company's cash flow statements, and the consolidated and parent company'sstatements of changes in shareholders' equity for the year of 2024, as well as notes to financialstatements.

In our opinion, the accompanying financial statements were prepared in accordance with theAccounting Standards for Business Enterprises in all material aspects and give a true and fair view of theconsolidated and parent company's financial position of M&G as at 31 December 2024 and of itsconsolidated and parent company's operating results and cash flows for the year of 2024.

II. Basis of Auditors' Opinion

We have conducted our audit in accordance with the Chinese Auditing Standards for CertifiedPublic Accountants. The "Responsibilities of Certified Public Accountants for Auditing of FinancialStatements" in the auditor's report further illustrate our responsibilities under those standards. Inaccordance with the Code of Professional Ethics of Chinese Certified Public Accountants, we areindependent of M&G and have performed other responsibilities in respect of professional ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

III. Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance inour audit of the financial statements for the current period. These matters were addressed in the contextof our audit of the financial statements as a whole and, in forming our opinion thereon, we do notprovide a separate opinion on these matters.

The key audit matters identified in our audit are summarized as follows:

IV. Other InformationThe management of M&G (hereinafter referred to as the "management") is responsible for the otherinformation which comprises all the information covered in M&G 2024 Annual Report other than thefinancial statements and this auditor's report.Our audit opinion on the financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon.In conjunction with our audit to the financial statements, our responsibility is to read the otherinformation. During the process, we considered whether there is material inconsistency or there is likelymaterial misstatement between the other information and the financial statements or the information weobtained during the audit.As we have performed the work on the other information obtained before the date of our auditor'sreport, we shall report if we confirmed there was a material misstatement among the other information.We have nothing needed to be reported on this case.

V. Responsibilities of the Management and Governing Bodies for the Financial StatementsThe management shall be responsible for the preparation of financial statements in accordance withthe Accounting Standards for Business Enterprises to enable them to be fairly reflected, and to design,implement and maintain the necessary internal controls so that there is no material misstatement due tofraud or error in the financial statements.In the preparation of the financial statements, the management is responsible for assessing M&G'scontinuous operating capacity, disclosing matters relating to continuous operations (if applicable), andapplying the continuing operating assumptions unless the management plans to perform liquidation,cease operation or otherwise has no realistic choice.The governing bodies are responsible for overseeing the financial reporting process of M&G.

VI. Responsibilities of CPA for the Audit of the Financial StatementsOur objective is to obtain reasonable assurance of the financial statements as a whole whether thereis a material misstatement due to fraud or error and to issue an auditor's report containing audit opinion.Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted inaccordance with China Standards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with the auditing standards, we exercised professional judgmentand maintained professional skepticism throughout the audit. We also performed the following works:

(1) to identify and assess the risks of material misstatement of the financial statements, whether dueto fraud or error; design and perform audit procedures responsive to those risks; and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than for one resulting from error, as fraud mayinvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

(2) to understand the internal control related to the audit to design the appropriate audit procedures.

(3)to evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by the management.

(4) to draw a conclusion on the appropriateness of the management's use of the going concern basisof accounting and, based on the audit evidence obtained, whether a material uncertainty exists related toevents or conditions that may cast significant doubt on the ability of M&G to continue as a goingconcern. If we conclude that a material uncertainty exists, we are required to draw attention in ourauditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate,to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However, future events or conditions may cause M&G to cease to continue as a goingconcern.

(5) to evaluate the overall presentation, structure and content (including disclosure) of the financialstatements, and to assess whether the financial statements reflect the related transactions and eventsfairly.

(6) to obtain sufficient and appropriate audit evidence of the financial information of the entity orbusiness activity of the M&G in order to express an opinion on the consolidated financial statements.We are responsible for directing, supervising and performing group audits. We take full responsibilityfor the audit opinion.

We communicated with the governing bodies regarding, among other matters, the planned scopeand timing of the audit and significant audit findings, including any significant deficiencies in internalcontrol that we identify during the audit.

We also provided a statement to management on compliance with ethical requirements related toindependence, and communicated with governing bodies about all relationships and other matters thatmay be reasonably considered to affect our independence, as well as related precautions (if applicable).From the matters we had discussed with the governing bodies, we confirmed which matters weremost important to the audit of the financial statements for the current period and thus constituted the keyaudit matters. We set out these matters in the auditor's report. Unless the disclosure of these matters areforbidden by the laws and regulations, or, in rare cases, if it is reasonably expected that the negativeimpacts caused by discussing certain matters in the auditor's report would be larger than the benefits forpublic interest, we shall not disclose the matters in the auditor's report under such circumstances.

II. Financial Statements

Consolidated Balance Sheet31 December 2024

Prepared by: Shanghai M&G Stationery Inc.

Unit: Yuan Currency: RMB

The chairman of the Company: Chen Huwen CFO of the Company: Tang XianbaoPerson in charge of Accounting Department: Zhai Yu

Parent Company's Balance Sheet

31 December 2024

Prepared by: Shanghai M&G Stationery Inc.

Unit: Yuan Currency: RMB

The chairman of the Company: Chen Huwen CFO of the Company: Tang XianbaoPerson in charge of Accounting Department: Zhai Yu

Consolidated Income StatementJanuary - December 2024

Unit: Yuan Currency: RMB

In case of business combination under common control, net profit realized by the combined before thecombination in the period was nil; net profit realized by the combined in the previous period was nil.The chairman of the Company: Chen Huwen CFO of the Company: Tang XianbaoPerson in charge of Accounting Department: Zhai Yu

Income Statement of the Parent Company

January - December 2024

Unit: Yuan Currency: RMB

The chairman of the Company: Chen Huwen CFO of the Company: Tang XianbaoPerson in charge of Accounting Department: Zhai Yu

Consolidated Cash Flow Statement

January - December 2024

Unit: Yuan Currency: RMB

The chairman of the Company: Chen Huwen CFO of the Company: Tang XianbaoPerson in charge of Accounting Department: Zhai Yu

Cash Flow Statement of the Parent Company

January - December 2024

Unit: Yuan Currency: RMB

The chairman of the Company: Chen Huwen CFO of the Company: Tang XianbaoPerson in charge of Accounting Department: Zhai Yu

Consolidated Statements of Changes in Owners' Equity

January - December 2024

Unit: Yuan Currency: RMB

The chairman of the Company: Chen Huwen CFO of the Company: Tang Xianbao Person in charge of Accounting Department: Zhai Yu

Parent Company's Statement of Changes in Owners' Equity

January - December 2024

Unit: Yuan Currency: RMB