CITIC Securities Co., Ltd

About Haiguang Information Technology Co., Ltd

2024 Annual Continuous Supervision and Follow-up Report

CITIC Securities Co., Ltd. (hereinafter referred to as "CITIC Securities" or the "Sponsor") acted as the sponsor of the initial public offering and listing on the STAR Market of Haiguang Information Technology Co., Ltd. (hereinafter referred to as "Haiguang Information" or the "Company" or the "Listed Company"). In accordance with the Administrative Measures for the Sponsorship Business of Securities Issuance and Listing, the Rules for the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange and other relevant regulations, CITIC Securities performs the duties of continuous supervision and issues this 2024 annual follow-up report for continuous supervision.

1. Overview of continuous supervision

1. The sponsor has formulated a continuous supervision work system, formulated a corresponding work plan, and clarified the work requirements for on-site inspection.

2. The sponsor has signed a sponsorship agreement with the company, which has clarified the rights and obligations of both parties during the continuous supervision period, and has been reported to the Shanghai Stock Exchange for the record.

3. During the period of continuous supervision, the sponsor will carry out daily communication with the company, on-site return visits, etc

Continued to supervise the work and conducted on-site inspections of the company on March 5 and March 13, 2025.

4. During the period of continuous supervision, the sponsor shall perform the duties of continuous supervision in accordance with the requirements of relevant laws and regulations and normative documents, including:

(1) Consult the articles of association, the rules of procedure of the three sessions and other corporate governance systems, and the materials of the three sessions;

(2) Consult the company's internal control systems such as financial management, accounting and internal audit, and check the company's 2024 internal control self-evaluation report, 2024 internal control assurance report and other documents;

(3) Check the details of the company's capital transactions with major shareholders and their related parties, as well as relevant internal deliberation documents and information disclosure documents, and check the 2024 annual audit report issued by the accountant and the special report on the occupation of non-operating funds and other related capital transactions in 2024;

(4) Check the relevant systems of the company's raised funds, information disclosure documents and decision-making procedures documents for the use of raised funds, bank statements of the special account for raised funds, detailed accounts for the use of raised funds, and the 2024 annual assurance report on the deposit and use of raised funds issued by accountants;

(5) Conduct interviews with senior management of the company;

(6) Conduct public information inquiries about the company and its major shareholders, directors, supervisors, and senior managers;

(7) Inquire about the commitments announced by the company and verify the fulfillment of the commitments;

(8) Pay attention to media reports related to the issuer through public network search, public opinion monitoring, etc.

2. Problems found by the sponsor and the sponsor representative and their rectification

Based on the above-mentioned continuous supervision work carried out by the sponsors, the sponsor and the sponsor representative did not find any major problems with the company during the continuous supervision period.

3. Major risk matters

During the period of continuous supervision, the Company's main risk issues are as follows:

(1) Core competitiveness risks

1. The company's R&D work does not meet the expected risk

High-end processors belong to the frontier core technology field, existing product upgrades and new product development need to continue to invest a lot of money and personnel, but the process and results of the R & D project are uncertain, if the company fails to make a correct judgment in the future research and development direction, in the research and development process fails to continue to break through key technologies or performance indicators do not meet expectations, the company will face the risk that it is difficult to recover the early R & D investment, and the expected benefits are difficult to achieve, which will adversely affect the company's performance.

2. Intellectual property risks

As a scientific and technological innovation enterprise, the company currently has a large number of patents, software copyrights, integrated circuit layout design, proprietary technology and other intellectual property rights, which are the key factors for the company to achieve competitive advantages and sustainable development. In the course of business development, the company has risks such as theft, improper use or intellectual property disputes. In addition, due to the high degree of internationalization of the integrated circuit design business, there are differences in the interpretation and determination of the scope of intellectual property rights in different countries and different legal systems, which may lead to international intellectual property disputes and even litigation, which in turn affects the company's business development.

(2) Business risks

1. High risk of customer concentration

Due to the obvious head effect of the server industry, the company's main customers are concentrated in several major domestic server manufacturers, with a high degree of customer concentration, if the company's main customers have business risks, and the company fails to expand more high-quality customers in a timely manner, the company will face greater business risks.

2. The concentration of suppliers is high and the risk of difficulty in replacing some suppliers

The company's suppliers include wafer fabs, packaging and testing plants, IP licensing manufacturers, EDA tool manufacturers, etc., with a high concentration of suppliers. Due to the high degree of specialization and technical threshold in the field of integrated circuits, the products of some suppliers are scarce and proprietary, if they cannot maintain a stable cooperative relationship with them, or due to geopolitics, the company is in the entity list and other external environmental factors that cause the supplier to terminate business cooperation with the company, the company will replace the new supplier at a higher cost, which will have an adverse impact on the company's production and operation, research and development.

3. Risk of inventory decline

The company's strategic inventory increased, and the book value of the inventory at the end of the period was 542,528.23 million yuan, accounting for 19.00% of the total assets at the end of the period. If the market environment changes, competition intensifies or technology updates lead to obsolete inventory, resulting in unsalable products and overstocked inventory, the risk of falling prices of the company's inventory will increase, which will adversely affect the company's profitability.

(3) Financial risks

1. Intangible asset impairment risk caused by a high capitalization ratio of R&D expenditure

During the reporting period, the company's R&D investment was 3445.7556 million yuan, accounting for 37.61% of operating income, and the amount of R&D expenditure capitalization was 587.1865 million yuan, with a capitalization ratio of 17.04%, although the proportion of the company's R&D expenditure decreased compared with the same period of the previous year, the amount of self-developed intangible assets formed was still at a high level. If there are major changes in the external market and the existing technology is replaced by other new technologies, the company may face a large risk of impairment of self-developed intangible assets.

2. Accounts receivable recovery risk

At the end of the reporting period, the book value of the company's accounts receivable was 2275.2973 million yuan, accounting for 7.97% of the total assets at the end of the period, and the balance of accounts receivable accounted for 25.08% of the current operating income. With the expansion of the company's business scale, accounts receivable may continue to increase, if the financial status of downstream customers changes and loses the ability to repay.

It may lead to the inability to fully recover accounts receivable, which will adversely affect the company's future performance and cash flow.

(4) Industry risks

Risk of rising raw material costs. In recent years, with the acceleration of the localization process of the semiconductor industry chain and the continuous changes in the international situation, the demand for raw materials in the domestic semiconductor industry has been rising, and the overall procurement price has shown an upward trend. Most of the domestic integrated circuit design enterprises are in the growth period, and compared with their international counterparts, the financial strength is relatively weak, and the technology gap needs to be narrowed. On the other hand, the shortcomings in the upstream and downstream of the industrial chain have also limited the development of China's high-end chip design industry to a certain extent. The company responds to the rise in upstream prices by accelerating product iteration and selecting advanced packaging and testing designs, and if the upstream raw material prices continue to rise in the future, it may have an adverse impact on the company's operations.

(5) Other major risks

Management risk due to scale expansion. During the reporting period, the company's business scale continued to expand. With the development of the company's business and the implementation of the investment projects of raised funds, the company's revenue scale and asset scale will continue to grow, and higher requirements will be put forward for management personnel in strategic planning, business development, product research and development, marketing and sales, financial management, internal control, etc. If the company's organizational model and management system fail to be adjusted and improved in a timely manner with the expansion of the company's scale, and the management level cannot be further improved with the expansion of the scale, the company will face the management risks caused by the expansion of the scale to a certain extent.

4. Major violations

Based on the above-mentioned continuous supervision work carried out by the sponsor, the sponsor did not find any material violations of the company during the continuous supervision period.

5. Reasons and reasonableness of changes in major financial indicators

In 2024, the company's main financial data and indicators are as follows:

Unit: 10,000 yuan

Key Accounting Data 2024 2023 The current period is the same as that of the previous year

Period increase or decrease (%)

Operating income 916,214.81 601,199.90 52.40

Net attributable to shareholders of listed companies 193,099.05 126,317.86 52.87

profit

Deduction attributable to shareholders of listed companies 181,577.76 113,635.80 59.79

Unless the net profit is recurring

Cash flow from operating activities 97,708.11 81,370.53 20.08

Net

Net attributable to shareholders of listed companies 2,025,095.92 1,870,508.40 8.26

asset

Total assets 2,855,949.20 2,290,254.80 24.70

Key Financial Indicators 2024 2023 The current period is the same as that of the previous year

Period increase or decrease (%)

Basic earnings per share (RMB/share) 0.83 0.54 53.70

Diluted earnings per share (RMB/share) 0.83 0.54 53.70

Basis after deducting non-recurring gains and losses 0.78 0.49 59.18

Earnings per share (RMB/share)

The weighted average return on equity was 9.92 7.11 an increase of 2.81 hundred

(%) Points

After deducting non-recurring gains and losses, the increase of 9.32 6.40 increased by 2.92 hundred

Weighted average return on equity (%) points

R&D investment to operating income ratio 37.61 46.74 decreased by 9.13 hundred

Example (%) points

The company's operating income, net profit attributable to shareholders of listed companies, and net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses achieved rapid growth year-on-year, mainly due to the fact that during the reporting period, the company continued to maintain high-intensity R&D investment around the general computing market, continuously achieved technological innovation and product performance improvement, and was more widely recognized by users, further expanding the application field of products, and further increasing the proportion of the localized market, which promoted the significant growth of the company's performance.

Basic earnings per share, diluted earnings per share and basic earnings per share after deducting non-recurring gains and losses increased significantly over the same period last year, mainly due to the significant increase in market sales of the company's products, significant growth in revenue and profit, and the overall increase in earnings per share.

During the reporting period, the company continued to increase R&D investment, with R&D investment increasing by 22.63% year-on-year, and the proportion of R&D investment in operating income decreased year-on-year due to the growth rate of operating income being higher than the growth of R&D investment. Sixth, the changes in core competitiveness

(1) The company's core competitiveness

Relying on the leading core technology advantages, the first-class integrated circuit talent team, excellent product performance and ecology, and high-quality customer resources, the company has formed a core competitive advantage.

1. Leading core technology advantages

High-end processors are complex in design, and their core technologies were previously only in the hands of a few leading international companies. The company is one of the few integrated circuit design enterprises with both high-end general-purpose processor and co-processor research and development capabilities

Karma. Based on the x86 instruction framework, the "CUDA-like" computing environment, the international advanced processor design technology and the upstream and downstream needs of the industrial chain, the company vigorously develops high-end processor products that meet the needs of China's informatization development, and carries out continuous research and development and optimization to continuously improve the performance of high-end processors. The company attaches great importance to the security of the processor, and effectively improves the security of Haiguang's high-end processor by expanding the security algorithm instruction set, natively supporting trusted computing and encryption virtualization solutions. The performance and ecology of CPU products and DCU products developed by the company are in a leading position in China.

The company has carried out a systematic intellectual property layout in high-end processors and related fields.

The company has obtained 836 invention patents, 115 utility model patents, 3 design patents and integration

There are 299 circuit layout design registration certificates and 304 software copyrights.

2. First-class integrated circuit talent team

High-end processor design is a technology-intensive industry, and professional R&D personnel are the cornerstone of the continuous improvement of the R&D capabilities of chip design enterprises. Most of the company's backbone R&D personnel have employment backgrounds in well-known chip companies

Experience in successful development of x86 processors or ARM processors. As of December 31, 2024, the Company researches

There were 2,157 technical personnel, accounting for 90.18%, including 1,674 with master's degree or above.

The company's R&D personnel have a solid theoretical foundation, rich practical experience, and reasonable knowledge structure, and play an important role in various key positions of the company, which can strongly support the company's technological innovation and product iteration, and ensure the smooth completion of Haiguang's high-end processor R&D tasks.

The company has established a mature team in internal management, supply chain, product sales, etc., and the core backbone has many years of experience in company operation management or market sales, and has clear goals and plans for the company's future development direction and the market positioning of the company's products.

3. Excellent product performance and ecology

Haiguang CPU is compatible with x86 instruction set, with excellent processor performance parameters and supports mainstream operating systems at home and abroad

system, database, virtualization platform or cloud computing platform can effectively be compatible with the millions of system software and application software based on x86 instruction set that currently exist, and has excellent ecosystem advantages. Haiguang DCU has high compatibility and rich software and hardware ecology, mainly for computing-intensive applications such as big data processing and commercial computing.

The company actively integrates into the open source community at home and abroad, and actively provides the open source community with adaptation and optimization solutions suitable for Haiguang CPU and Haiguang DCU, ensuring the compatibility of Haiguang high-end processors in the open source ecosystem. With

With the continuous advancement of information technology application innovation, more leading enterprises in China have actively carried out ecological construction and adaptation based on Haiguang's high-end processors, carried out research and development, mutual authentication and continuous optimization in operating systems, databases, middleware, cloud computing platform software, artificial intelligence technology frameworks and programming environments, core industry applications, etc., and developed a number of domestic complete machine systems, basic software and application software with international influence, which are basically independent and controllable in key areas of the national economy such as finance, telecommunications, and transportation. A complete domestic software and hardware ecological chain based on Haiguang CPU and Haiguang DCU has been established.

4. High-quality upstream and downstream industrial chain

As a leading chip design enterprise in China, the company maintains close ties with the upstream and downstream of the industrial chain. The upstream of the industrial chain mainly includes EDA tool suppliers and IP developers related to chip design, wafer processing enterprises related to chip manufacturing and their upstream equipment manufacturers and material suppliers, as well as packaging and testing related packaging enterprises and their upstream equipment manufacturers and material suppliers. In terms of IP, EDA design tools, chip manufacturing and packaging, the company continues to increase cooperation with upstream enterprises to promote the coordinated development of the industrial chain. The downstream of the industrial chain is mainly server machine manufacturing enterprises and some direct users of servers. Haiguang's high-end processor products have been widely recognized by domestic industry users, and have gradually expanded Inspur, Lenovo, Xinhua III, Tongfang and other well-known domestic server manufacturers, and developed a variety of servers, workstations and other products based on Haiguang processors, effectively promoting the industrialization of Haiguang's high-end processors. The company takes advantage of the unique advantages of its high-end processors in terms of function, performance, ecology and security, and unites machine manufacturers, basic software suppliers, application software suppliers, system integrators and industry users to establish an industrial chain based on Haiguang's high-end processors.

At present, Haiguang CPU has been applied to telecommunications, finance, Internet, education, transportation and other industries; Haiguang DCU is mainly commercialized in computing-intensive applications such as big data processing and business computing. Compared with the world's leading chip companies, the company is rooted in the local Chinese market, better understands the needs of Chinese customers, and can provide more safe and controllable products and more comprehensive and meticulous solutions and after-sales services, with localized competitive advantages. With the gradual emergence of the demonstration effect of the company's products in the above fields and the continuous strengthening of the company's marketing efforts, the company's high-end processor products will be expanded to more fields and occupy a larger market share.

(2) Changes in core competitiveness

During the period of continuous supervision, the sponsor did not conduct interviews with the company's senior management by reviewing the listed companies and market information in the same industry, reviewing the company's prospectus, periodic reports and other information disclosure documents, and interviewing the company's senior management

It was found that there had been a significant adverse change in the company's core competitiveness.

7. Changes in R&D expenditure and R&D progress

(1) Changes in R&D expenditure

Unit: 10,000 yuan

Item Current Previous Year Change (%)

Expensed R&D investment 285,856.91 196,886.29 45.19

Capitalized R&D investment 58,718.65 84,091.27 -30.17

The total R&D investment was 344,575.56 280,977.56 22.63

The total R&D investment accounted for 37.61 46.74 percentage points, a decrease of 9.13 percentage points

Proportion of business income (%)

R&D investment capitalized 17.04 29.93 decreased by 12.89 percentage points

Specific gravity (%)

The total R&D investment in the current period was 3445.7556 million yuan, a year-on-year increase of 22.63%. The main department is the company's continuous addition

Large R&D investment, continuous realization of technological innovation, product iteration, and improvement of the company's technical strength and market competitiveness growth.

During the reporting period, the company's R&D investment continued to grow compared with the same period last year, and among the research projects, the capitalization projects such as the engineering technology of the new generation of Haiguang coprocessor products were accepted and completed; The R&D progress of expense-based projects such as the R&D of key technologies of Haiguang processors and the design of a new generation of Haiguang general-purpose processor chips has been accelerated, and the investment has increased a lot, which has reduced the capitalization investment in the current period.

(2) R&D progress

The company's research projects are as follows:

Unit: 10,000 yuan

Expected progress is planned

Preface Project Name Total Investment Current Investment Cumulative Investment or Level to Purpose Technology Specific Application

No. Specification Amount Amount Segment Benchmark Level Prospects

Results

NEW ONE

Dai Hai

1 The new generation of Haiguang General 152,676.13 287,340.61 Development of Guangtong Domestic Haiguang General

Processor chip design stage is used to lead processors

Rationale

chip

Haiguang Haiguang Co-ordination

2 2024 Processor Closure 68,798.53 106,907.28 Development and Processing Domestic processors, seas

Key technology research and development projects with stage equipment set up leading optical general-purpose office

Calculators

Expected progress is planned

Preface Project Name Total Investment Current Investment Cumulative Investment or Level to Purpose Technology Specific Application

No. Specification Amount Amount Segment Benchmark Level Prospects

Results

Sea light

3 Haiguang coprocessor new unsuitable 34,373.66 42,619.37 Development cooperation domestic Haiguang co-processing office

A leading stage manager for process technology research

chip

NEW ONE

Dai Hai

4 The new generation of the Haiguang Association is not suitable 24,050.54 26,045.32 Development of the Optical Association Domestic Haiguang Cooperation Office

The process of the processor is realized with a stage of processing leading the processor

core

slice

Sea light

Cooperation

5 Haiguang Co-processor New Adaptation 17,993.02 17,993.02 Development Processor Domestic Haiguang Co-processor

Technology research is used as a stage of new technology leading therapeutics

Surgical research

investigate

Sum / 297,891.87 480,905.60 / / / /

plan

8. Whether the progress of the new business is consistent with the previous information disclosure (if any)

During the period of continuous supervision, the sponsor conducted interviews with the company's senior management by reviewing the company's prospectus, periodic reports and other information disclosure documents, and based on the aforesaid verification procedures, the sponsor did not find any new business in the company.

9. The use of the raised funds and whether they are compliant

During the period of continuous supervision, the sponsor checked the company's management and use system of raised funds, bank statements of special accounts for raised funds and detailed accounts for the use of raised funds, and conducted spot checks on vouchers for the payment of large amounts of raised funds, consulted information disclosure documents and decision-making procedure documents for the use of raised funds, inspected the site of the raised funds investment project on the spot, understood the construction progress of the project and the progress of the use of funds, and obtained the report on the use of raised funds issued by the listed company and the assurance report on the use of raised funds issued by the annual audit accountant. Interviews with senior management of the company.

In October 2021, the company completed the "R&D of a new generation of Haiguang general processor" and "a new generation of Haiguang cooperation

The three fund-raising projects of "R&D" and "Construction of Advanced Processor Technology R&D Center" are registered for the record, and the construction period of the project is 3 years. In order to ensure the consistency of the implementation of the fundraising project and the adequacy of the invested funds, the company was listed on the Science and Technology Innovation Board in August 2022 and the large amount of investment in the fundraising project was carried out only after the raised funds were received, and there was a time lag between the arrival time of the raised funds and the project planning plan. In order to strictly control the overall quality of the fundraising and investment project and ensure the smooth progress of the project

Under the premise of not changing the investment content, total investment, implementation subject and implementation location of the fund-raising project, combined with the actual investment amount of the company's fund-raising project, the company has reached the predetermined completion of the above three fund-raising projects

The availability period has been extended from September 2024 to September 2025. The company called on April 10, 2024

The fourth meeting of the second board of directors and the fourth meeting of the second board of supervisors were held, and relevant matters were deliberated and approved.

Based on the aforesaid verification procedures, the sponsor believes that: during the period of continuous supervision, the company has established and implemented a management system for raised funds, the necessary decision-making procedures and information disclosure procedures have been fulfilled for the use of raised funds, and there is no serious delay in the progress of raised funds, and no illegal use of raised funds has been found based on the aforesaid inspection. 10. Shareholding, pledge, freezing and reduction of shareholdings, pledges, freezes and holdings of controlling shareholders, actual controllers, directors, supervisors and senior managers

The company has no controlling shareholder and no actual controller. As of the end of the reporting period, the directors, supervisors, senior managers and core technical personnel serving in the company indirectly held shares of the company through Blue Ocean Qingzhou Partnership; Some of the directors

Indirectly holds shares of the company through Sugon and Haifu Tianding partnerships. As of December 31, 2024, the sea

There is no pledge, freezing or reduction of the shares of Haiguang Information held by directors, supervisors, senior managers and core technical personnel of Optical Information.

11. Other matters on which the sponsor deems it necessary to express its opinion

Based on the above-mentioned continuous supervision work carried out by the sponsor, during the period of continuous supervision, the sponsor did not find any other matters on which the sponsor should express its opinion.

(No text below)