On May 29, SZSE and its wholly-owned subsidiary Shenzhen Securities Information Co., Ltd. (hereinafter referred to as “SSIC”) released an announcement saying that according to the index methodology, after taking into full account the representation of market capitalization, securities liquidity, operating compliance and other factors of SZSE-listed companies, SZSE and SSIC will make regular adjustments to the constituents of the Shenzhen Component Index, the ChiNext Index and the SZSE 100 (hereinafter collectively referred to as the “core indices of SZSE”). The recent adjustment will take effect on 12 June 2023.

SZSE and SSIChas beenactively building the core index system of SZSE to present the distinctive advantages of SZSE-listed companies from multiple dimensions so as to promote high-level self-reliance and self-improvement in science and technology as well as high-quality development. After this adjustment, the proportion of listed companies from strategic emerging industries and key areas in the core indices will increase steadily with remarkable performance, and the indices will be able to better reflect the market.

Shenzhen Component Index: representing the sound fundamentals of SZSE from multiple dimensions and boosting the quality and efficiency of the real economy

The Shenzhen Component Index is the benchmark index of SZSE. Eleven constituents of the index will be replaced by five Main Board-listed companies and six ChiNext Board-listed companies. After the adjustment, there will be 23 constituent companies with a listing time of less than two years. Based on the reconstitution, as at 30 April 2023, the total market capitalization of the Shenzhen Component Indexaccounted for 64% ofthat ofthe SZSE A-share market. The number of Main Board-listed constituents was 351, with a weight of 70%, and that of ChiNext Board-listed constituents was 149, with a weight of 30%.

The Shenzhen Component Index is the benchmark index with the highest proportion of manufacturing constituents in the Chinese stock market. After the adjustment, the weight of manufacturing constituents of the Shenzhen Component Index will reach 73%, showing that the capability of the index to reflect the real economy is further enhanced. The weight of constituents from strategic emerging industries will be 69% and that of constituents from the three key areas of advanced manufacturing, digital economy and green and low-carbon development 65%, showing a cluster development trend. The weight of central state-owned enterprise (SOE) constituents will be 27%, representing 36% of operating income and 31% of net profit of the constituent stocks, reflecting their role as the mainstay of the national economy. The weight of private enterprise constituents will be 56%. In 2022, their operating income and net profit grew by 28%and 30% respectively, a stable growth on the whole.

ChiNext Index: demonstrating remarkable clustering advantages of strategic emerging industries and features of green and low-carbon industries that are growing in scale

The ChiNext Index is positioned as both the benchmark index and investment target of the ChiNext Board market. It has remarkable innovation and growth advantages. In particular, the implementation of the ChiNext Board reform and the registration-based IPO system over the last three years has been continuously injected vitality into the ChiNext Board market and demonstrated strong build-up effect of strategic emerging industries. In the recent adjustment, 10 constituents of the ChiNext Index will be removed. After the adjustment, the number of companies listed under the registration-based IPO system will reach17, with a weight of 5.6%, and the weight of high-tech companies will be 94%, that of constituents from strategic emerging industries 91%, and that of constituents from the three key areas of advanced manufacturing, digital economy and green and low-carbon development83%.

According to the data in their 2022 annual reports, the adjusted constituents continued to increase R&D input, with an average R&D intensity of 9.2%and an average number of patents owned of 223. Their return on equity recorded 16%, operating income increased by 41% year on year, and net profit grew by 33% year on year, maintaining high growth and sound profitability. The development momentum of the constituents from green industries such as new energy vehicles, new energy and energy conservation and environmental protection was particularly strong, with year-on-year growths in net profit of 83%, 77%and 37% respectively.

SZSE 100: focusing on large-cap blue chips, highlighting the innovation feature and demonstrating strong leading effect of core assets of SZSE

Launched in 2003,SZSE 100 has been operating for two decades. Positioned as an index of large-cap blue chips and highlighting the innovation feature, it is an important index that represents leading innovation-oriented enterprises in China. In this adjustment, two of the constituents ofSZSE 100 will be replaced. After the adjustment, the constituents from strategic emerging industries will take up72% and those from the three key areas of advanced manufacturing, digital economy and green and low-carbon development 68%.

SZSE 100 represents the core assets of SZSE. The data of their 2022 annual reports show that 61 of the constituents after the adjustment ranked 1st in their respective industry segments in terms of operating income and 65 stood1st in terms of net profit. The constituents of SZSE 100 continued their fine dividend distribution tradition. In 2022, 92 paid out dividends to shareholders and their cash dividends of the year totaled CNY 199 billion, accounting for 47% of the totalcash dividends of the SZSE market, of which 85did so for the third year straight. As always, the constituents of SZSE 100 took the lead in practicing sustainable development. Their overall ESG performance was among the best in the A-share market. According to the CNI ESG rating results, 92 were assigned a medium to high grade of BBB or above, of which 21 got the highestgrade of AAA.