1. The net assets, i.e. property rights, of individual enterprises after audit evaluation are transferred to state-owned enterprises and become state-owned enterprises.

2. Private enterprises issue additional shares to state-owned enterprises, turn enterprises into state-owned holding enterprises and state-owned shareholding enterprises, and turn them into state-owned enterprises. Shanghai Laofengxiang Co., Ltd. evolved from Laofengxiang Jewelry Store and was established in 1848. The originality of its trademark Laofengxiang also comes from the name of Laofengxiang Jewelry Store, which is a classic jewelry brand in China spanning three centuries. Lao Fengxiang used to be a 100% state-owned enterprise. 1992, the company issues A shares, and the SASAC of Huangpu District holds 42% of the shares of our listed company. Now it has completely transformed into a listed company with mixed ownership.