Investor Protection Series of Special Articles (3)

Learning and comprehending the new requirements of the Securities Law, effectively improving corporate governance levels

Phoenix Media implements the situation report on the implementation of the new Securities Law.

The revision of the Securities Law summarizes the practical experience of China's securities market reform, development, regulation and law enforcement, risk prevention and control over the years. Based on a thorough analysis of the operating rules and developmental characteristics of the securities market, a series of new institutional reforms have been made to improve the system. This lays a foundation for the long-term stable development of the capital market and also puts forward higher requirements for listed companies. Phoenix Media has carried out the following work this year around implementing the new Securities Law.

1. Deeply understand the essence of the new law to ensure that corporate governance keeps pace with the times.

The company actively organized company directors and supervisors, relevant department personnel, and controlling shareholder-related personnel to participate in authoritative institution training on the new Securities Law. They learned about the important changes in perfecting the securities issuance system, improving the securities trading system, improving the acquisition system of listed companies, strengthening information disclosure requirements, enhancing investor protection, significantly increasing the cost of securities illegal activities, and strengthening regulatory enforcement and risk prevention and control. They understood the regulatory intent and mastered the latest provisions, striving to understand and abide by the law.

Through the training, the company's personnel felt both increased pressure and hope. The pressure comes from the increasingly high requirements of regulations on corporate governance, significant increase in the cost of violations and illegal activities, and the implementation of the registration system which is likely to lead to the polarization of companies and the possibility of many companies being marginalized. The hope is that Phoenix Media, as a company rated A in information disclosure by the Shanghai Stock Exchange for three consecutive years, has a good foundation. As long as they can timely comply with regulatory changes, improve corporate governance and internal control levels, they will have the opportunity to stand out among many listed companies and achieve better development through the capital market. Currently, the company has optimized and adjusted regulatory systems such as the "Insider Information Management System" according to the requirements of the new law.

2.Improve the quality of information disclosure to provide sufficient basis for value judgment

One of the core elements of the registration system is to ensure that market participants make sufficient, timely, and verifiable information disclosure under the effective supervision of legal regulations and regulatory authorities. The revision of the Securities Law this time singles out a chapter on information disclosure, highlighting the relevant requirements for strengthening market information disclosure. The main contents include expanding the scope of information disclosure obligations, improving the content of information disclosure, and emphasizing the need to fully disclose information necessary for investors to make value judgments and investment decisions. These provisions as a whole contribute to improving the quality of listed companies, further enhancing the functions of the capital market, and creating a better environment for all participants. The Shanghai Stock Exchange also issued a notice in February of this year on "Implementing the New Securities Law Carefully and Doing Well in the Information Disclosure of Listed Companies".

In addition to ensuring authenticity, accuracy, completeness, timeliness, and fairness, Phoenix Media strives to make its information disclosure concise, clear, and easy to understand, making it easier for investors to read and comprehend. In the process of disclosing annual reports, the company actively discloses industry information, including its business model, competitive advantages, and segmented operating data, to provide sufficient information for investors' value judgment. According to the new law, the scope of guarantee has been expanded from directors and executives to supervisors. When making voluntary disclosures, the company adheres to the principle of caution, especially in responding to investor questions on the Shanghai Stock Exchange's E interactive platform, ensuring objectivity and rationality, and avoiding chasing hotspots.

3.Strengthen Investor Relations Management to Effectively Protect Investor Interests

The company has always attached great importance to investor relations management work, maintaining smooth communication with various types of investors through various methods such as securities strategy meetings, investor meetings, inviting investors to conduct research, telephone conferences, and the Shanghai Stock Exchange E Interactive platform. After the new law was promulgated, the company's emphasis on investor relations management further increased, especially during the epidemic period. Investors were very concerned about issues such as online education development and the impact of the epidemic. We overcame difficulties and increased communication with investors. We organized multiple telephone conferences with institutional investors through well-known securities companies such as China International Capital Corporation, China Merchants Securities, and Founder Securities to fully communicate with them. Since the beginning of this year, we have replied to 29 types of questions on the Shanghai Stock Exchange E Interactive platform, timely answering questions that small and medium-sized investors care about.

After the release of the 2019 annual report and the first quarter report of 2020, we organized performance briefings on the Shanghai Stock Exchange platform to communicate with investors on important issues such as business development and cash dividends.

The company has always adhered to a high cash dividend payout ratio to reward investors. Since the company's listing, it has implemented a cumulative cash dividend of 4.581 billion yuan, accounting for 106.09% of the funds raised, ranking among the top in listed companies. In recent years, the company's cash dividend payout ratio has been close to 60%, which has been recognized by the majority of investors.

Release date: July 23, 2020