Huaxun Fangzhou Co.Ltd(000687) : Announcement on passive reduction due to forced closing of some shares held by the actual controller of the company

Securities code: 000687 securities abbreviation: * ST Huaxun Announcement No.: 2022-019

Huaxun Fangzhou Co.Ltd(000687)

Some shares of the company held by the actual controller of the company were forcibly closed

Announcement leading to passive reduction

Mr. Wu Guangsheng, the actual controller of the company, guarantees that the information provided to the company is true, accurate and complete without false records, misleading statements or major omissions.

The company and all members of the board of directors guarantee that the contents of the announcement are consistent with the information provided by the information disclosure obligor.

Huaxun Fangzhou Co.Ltd(000687) (hereinafter referred to as the “company” or “listed company”) disclosed the pre disclosure announcement on the risk of closing positions and passive reduction of some shares held by the actual controller of the company on January 14, 2022, Due to the business dispute between Mr. Wu Guangsheng, the actual controller of the company, and Shenwan Hongyuan Group Co.Ltd(000166) Securities Co., Ltd. (hereinafter referred to as ” Shenwan Hongyuan Group Co.Ltd(000166) “), the lawsuit is still in the stage of enforcement, Shenwan Hongyuan Group Co.Ltd(000166) will forcibly sell Mr. Wu Guangsheng’s securities code 000687 * ST Huaxun securities in the margin trading account * * * * (Shenzhen) of Shenwan Hongyuan Group Co.Ltd(000166) * * * * securities business department according to the notice of assistance in execution issued by the court.

On February 7, 2022, the company received the notification letter on passive reduction of Huaxun ark shares issued by Mr. Wu Guangsheng and learned that it passively reduced 1778220 shares of the company through centralized bidding from January 27, 2022 to January 28, 2022, and the reduction amount has exceeded half of the passive reduction plan previously disclosed by the company.

1、 Passive reduction of shareholders

1. Reduction of passive shareholders’ shares

Shareholder name reduction method average price of reduction during the reduction period reduction number of shares (shares) reduction proportion (%)

(yuan / share)

Centralized bidding transaction January 27, 2022 1.35 849720 0.11

Wu Guangsheng January 28, 2022 1.28 928500 0 0.12

Total 1778220 0.23

Mr. Wu Guangsheng’s passive reduction of shares comes from some shares increased by bidding in the secondary market through the trading system of Shenzhen Stock Exchange from December 6, 2017 to December 5, 2018, For details, please refer to the announcement on the expiration and implementation of the shareholding increase plan of the actual controller and its persons acting in concert issued by the company on December 6, 2018. 2. Shareholding before and after this passive reduction

Shareholder name: shares held before this reduction shares held after this reduction

Said the nature of shares accounted for the total share capital accounted for the total share capital

Proportion of shares (%) proportion of shares (%)

Total shares held by Wu Guangsheng 7113248 0.93 5335028 0.70

Securities code: 000687 securities abbreviation: * ST Huaxun Announcement No.: 2022-019

Including: shares with unlimited sales conditions 1862800 0.24 84580 0.01

Shares with limited sales conditions 5250448 0.69 5250448 0.69

As of January 28, 2022, Mr. Wu Guangsheng held 5335028 shares of the company, accounting for 0.70% of the company’s share capital, including 5250448 restricted shares, accounting for 98.41% of the company’s shares and 0.69% of the company’s share capital; 5000000 Pledged Shares, accounting for 93.72% of the company’s shares and 0.65% of the company’s share capital; 5250448 shares have been frozen by the judiciary, accounting for 98.41% of the company’s shares and 0.69% of the company’s share capital.

2、 Other relevant instructions

1. The passive reduction of some shares of the company held by the actual controller of the company is small, which will not change the control right of the company and affect the normal production and operation of the company;

2. The company will continue to pay attention to the changes in the shares of the actual controller and perform the obligation of information disclosure in accordance with relevant regulations. The information disclosure media designated by the company are Shanghai Securities News and http://www.cn.info.com.cn, All information publicly disclosed by the company shall be subject to the announcement published in the above designated media. Please invest rationally and pay attention to investment risks.

3、 Documents for future reference

1. Mr. Wu Guangsheng’s notification letter on passive reduction of Huaxun ark shares.

Huaxun Fangzhou Co.Ltd(000687)

Board of directors

February 7, 2022

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