Employee Stock Ownership Plan of Zhejiang Xinsheng Technology: Detailed Explanation of the Holding Platform and Incentive Mechanism

Based on the public information I queried, below is the detailed information of the employee stock ownership plan of

:

(Stock Code: 874573) is an enterprise focusing on the manufacturing of computerized embroidery machines, whose main business includes the production and sale of components such as embroidery machine frames, table boards, and square tubes. The actual controllers of the company are and [1][2].

Xinsheng Technology uses

(referred to as “Haichuang Investment”) as the employee stock ownership platform, holding 5 million shares of the company, accounting for of the company’s total share capital[1][2].

1. Stabilize and motivate employees, optimize employee income distribution
2. Share the benefits of the company’s growth
3. Attract and retain outstanding talents
4. Fully mobilize the enthusiasm of the company’s core team and business backbones
5. Effectively align the interests of shareholders, the company, and core employees[1][2]

Time	Implementation Content	Number of Involved Personnel
July 26, 2018	First implementation of the equity incentive plan, completion of industrial and commercial registration	10 incentive objects
November 18, 2021	Implemented incentives for equity incentive objects, completed industrial and commercial change registration	11 incentive objects
August 8, 2022	Expanded the scope of incentives	2 incentive objects
December 1, 2022	Increased incentive shares	2 incentive objects + 1 new participant for share increase
April 4, 2023	Some employees withdrew from the partnership	Chen Haifeng, Chen Dengren, and Fang Jujiang withdrew
March 15, 2024	Employee withdrawal	Yu Risheng withdrew[1][2]

The partners of Haichuang Investment mainly include the company’s core management personnel and technical backbones. The capital contribution of the top five partners is as follows:

• Wang Haijiang: RMB 6.93 million (4.40%)
• Tao Yanhai: RMB 0.5198 million (3.30%)
• Ying Jianghui: RMB 0.4725 million (3.00%)
• Yang Jinkui: RMB 0.3465 million (2.20%)
• Heng Cheng: RMB 0.3465 million (2.20%)[1]

: Haichuang Investment, the employee stock ownership platform, undertakes that it will not transfer or entrust others to manage the shares it holds within 12 months from the date when the issuer’s shares are publicly issued and listed in this offering[1].

: After the company has been listed for 36 months and the date when the company’s shares held by the holding platform can be traded on the secondary market in accordance with relevant regulations (the “initial share reduction date”), the transfer restrictions on the company’s shares held by each partner of the holding platform through their partnership interests will be lifted after the initial share reduction date[1].

• Any partner may notify the executive partner in writing
  10 days in advance
  to request the sale of part of the company’s shares held by the partnership
• The executive partner shall sell the relevant shares on the secondary market within
  3 months
  after receiving the notice
• The net proceeds from the sale (after deducting necessary costs and taxes) shall be distributed to the partners in cash[1]

• The total number of the company’s shares that any partner requests to sell shall not exceed the product of the total number of the company’s shares held by the partnership at that time and the partner’s paid-in capital contribution ratio in the partnership
• The number of shares requested to be sold in a certain period shall not exceed the product of the total number of the company’s shares held by the partner and the restricted sale ratio specified in applicable laws, regulations, and trading rules[1]

• Unless otherwise agreed in writing by the actual controllers in advance, the incentive equity obtained by the incentive objects and the capital contributions to the holding platform are exclusive to the individual incentive objects, and shall not be transferred, sold, exchanged, or encumbered to other persons
• No incentive equity or capital contribution to the holding platform shall be held by a nominee[1]

The employee stock ownership plan of Xinsheng Technology reflects the company’s development philosophy of

. By means of equity incentives, it effectively aligns the interests of core talents, which is conducive to:

1. Enhancing employees’ sense of ownership and enthusiasm
2. Promoting the long-term stable development of the company
3. Establishing a sound internal governance structure
4. Laying a foundation for market value management after future listing

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[1] Public Transfer Prospectus of Zhejiang Xinsheng Technology Co., Ltd., Guosen Securities (September 2024) (https://pdf.dfcfw.com/pdf/H2_AN202409031639714215_1.pdf)

[2] Public Transfer Prospectus of Zhejiang Xinsheng Technology Co., Ltd., Guosen Securities (April 2025) (https://pdf.dfcfw.com/pdf/H2_AN202504181658560161_1.pdf)

[3] Company Introduction of Xinsheng Technology (874573) - New Third Board Stock Inquiry (https://xinsanban.eastmoney.com/F10/CompanyInfo/Introduction/874573)