CITIC Securities Co., Ltd

About Loongson Zhongke Technology Co., Ltd

2024 Semi-Annual Continuous Supervision Follow-up Report

CITIC Securities Co., Ltd. (hereinafter referred to as "CITIC Securities" or the "Sponsor"), as the sponsor of the initial public offering of shares of Loongson Zhongke Technology Co., Ltd. (hereinafter referred to as "Loongson Zhongke" or the "Company" or "Listed Company") and its listing on the Science and Technology Innovation Board, 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 semi-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 supervision and conducted an on-site inspection of the company on September 3, 2024.

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) Check the company's internal control systems such as financial management, accounting and internal audit;

(3) Check the details of the company's capital transactions with the controlling shareholder, actual controller and its related parties, as well as relevant internal review documents and information disclosure documents;

(4) Check the relevant systems of the company's raised funds, information disclosure documents and decision-making procedures for the use of raised funds, bank statements of the special account for raised funds, and detailed accounts for the use of raised funds, and implement the confirmation procedures for the special account of raised funds;

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

(6) Conduct public information inquiries about the company and its controlling shareholders, actual controllers, 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) The risk of a significant decline in performance or loss

The operating performance of integrated circuit design enterprises is greatly affected by the fluctuations of the downstream market. If the Company is unable to provide products and services that meet market demand in a timely manner, or if there is a material adverse change in downstream market demand, the Company may face the risk of declining performance.

Policy-related businesses are greatly affected by relevant policies and market fluctuations, and when demand is significantly reduced or delayed, the company will face the risk of declining performance.

(2) Core competitiveness risks

Core technology is the core competitiveness of the company, and the company has the risk of leakage of core technology or theft by others due to the loss of core technical personnel and poor patent protection measures. If the company fails to continuously strengthen the training, motivation and protection of technical talents, the company will face the risk of losing technical talents. With the continuous improvement of product manufacturing process and complexity, the company's tape-out cost has risen sharply, and the manpower and material resources invested will also increase. If the pace of investment is not grasped, or the product development fails, it will bring the risk of a decline in the company's operating performance.

(3) Operational risk - the risk of supplier concentration

The company operates primarily in a Fabless model. The company is mainly responsible for the design of chips, and the production procurement mainly includes chip processing services and the procurement of raw materials such as electronic components. During the reporting period, the company was the main supplier of processing services for its main chip products, and the purchase amount accounted for a relatively high amount. In the future, if the international political and economic situation changes drastically or the supplier's capacity tension intensifies, the supply of chip processing services may not be able to meet the company's demand, and the company will face the risk of rising procurement prices or extending the supply cycle, which will have a certain adverse impact on the company's production and operation.

(4) Financial risks

1. The risk of bad debts caused by accounts receivable

The company's accounts receivable at the end of the reporting period were large, which increased the company's operating risk. If the macroeconomic situation deteriorates or the customer itself has major operating difficulties, the company may face the risk of difficulties in the recovery of accounts receivable, and the company will make subsequent provisions for bad debts in accordance with accounting policies, which may adversely affect the company's profitability.

2. Risk of inventory decline

The company formulates purchasing and production plans based on existing customer order requirements and forecasts of future market demand. As of the end of the reporting period, the book value of the company's inventory was relatively high, and the company had made a provision for inventory decline of 55.6056 million yuan in accordance with the accounting policy, and the book value of the inventory after the provision was 970 million yuan, which occupied a large proportion of the company's working capital. If the market environment changes, competition intensifies or technology updates and iterations in the future, inventory backlog may be formed, and the company will further make provisions for inventory price decline, which will adversely affect the company's profitability.

3. Risks related to R&D investment

As a technology-intensive enterprise, the company adheres to the development strategy of independent innovation of core technologies, and the amount of R&D investment is relatively high during the reporting period, and part of the R&D investment forms development expenditure, which will be transferred to intangible assets in the future. If the industrial application of the company's research results is not as expected, it may have an adverse impact on the company's operation.

4. The risk of changes in government subsidies

The integrated circuit design industry is encouraged and supported by the national industrial policy. If the company does not continue to receive government subsidies in the future or if the government subsidies are significantly reduced, it may have a certain adverse impact on the company's earnings.

(5) Industry risk - market competition risk

The company is committed to building an independent ecosystem independent of the Wintel system and the AA system, which may cause

The high attention of competitors has intensified the competition in the industry. The company faces the risk of increased competition in the market.

The company carries out industrial ecological construction based on the two main lines of information system and industrial control system, and its products are mainly sold in the field of critical information infrastructure autonomy. In the global computer field, the CPU commercial market is basically occupied by Intel and AMD, and the company may be at a disadvantage in the fierce industry competition in the face of competitive pressure brought by leading companies.

(6) Macro environmental risks

The United States has continuously introduced export control policies against Chinese high-tech semiconductor companies, and economic globalization has been greatly challenged, bringing uncertain risks to the global semiconductor market and the stability of the chip supply chain. It may adversely affect the company's production and operation.

(7) Other major risks - the risk of intellectual property disputes

The company's processor and supporting chip design business involves a large number of intellectual property rights and various intellectual property related licensing, authorization, transfer, etc. It is usually complex, involving multiple jurisdictions at home and abroad, and may encounter legal challenges in terms of scope of application, mode of use, enforceability and even effectiveness, some of which may evolve into legal procedures such as litigation, arbitration, investigation, sanctions, and preservation measures. In connection with such legal proceedings, the company may incur high legal fees. Furthermore, since such legal proceedings usually involve multiple jurisdictions at home and abroad, the time period is long, and they may also be affected by various laws or extra-legal factors, when the final result of such legal proceedings is unfavorable to the Company, it may result in the Company facing the payment of liquidated damages, intellectual property licensing fees, damages, fines, etc. to the other party or a third party related to such intellectual property rights, and may also lead to the invalidation or revocation of the Company's intellectual property rights or related rights and licenses. It may also have an impact on the company's reputation.

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

According to the company's 2024 semi-annual report, the company's main financial data and indicators from January to June 2024 are as follows:

It looks like this:

Unit: 10,000 yuan

Key Accounting Data January-June 2024 January-June 2023 The period increased or decreased from the same period last year

（%）

Operating income 21,958.69 30,788.83 -28.68

-23,812.99 -10,378.53 attributable to shareholders of the listed company Not applicable

Net profit

attributable to shareholders of listed companies

Net net of non-recurring gains and losses -26,039.73 -17,518.44 Not applicable

profit

Cash flow from operating activities -17,765.28 -15,787.78 Not applicable

Net amount

Key accounting data June 30, 2024 June 30, 2023 The end of the Japan period compared to the same period last year

Increase/decrease (%)

331,511.32 354,892.49 -6.59 attributable to shareholders of listed companies

Net assets

Total assets 376,828.55 411,208.90 -8.36

Key Financial Indicators January-June 2024 January-June 2023 The current period increased or decreased from the same period last year

（%）

Basic earnings per share (RMB/share) -0.59 -0.26 Not applicable

Diluted earnings per share (RMB/share) -0.59 -0.26 N/A

-0.65 -0.44 after deducting non-recurring gains and losses does not apply

Basic earnings per share (RMB/share)

The weighted average return on equity was -6.94 -2.70, a decrease of 4.24 percentage points

（%）

After deducting non-recurring gains and losses

The weighted average return on equity was -7.59 -4.56, a decrease of 3.03 percentage points

（%）

R&D investment accounted for 126.07 86.94 of operating income, an increase of 39.13 percentage points

Proportion (%)

During the reporting period, the company achieved operating income of 219.5869 million yuan, a decrease of 28.68% over the same period of last year.

Among them, the operating income of chips was 163.356 million yuan, an increase of 8.51% over the same period of last year, and the operating income of solutions was 56.1734 million yuan, a decrease of 64.14% over the same period of last year. On the one hand, it is affected by the macroeconomic environment, the e-government market and some important customers in the company's traditional advantageous industrial control field have not yet resumed normal procurement; On the other hand, with the improvement of the competitiveness of Loongson chip products and the corresponding increase in chip sales revenue, the company adjusted its sales strategy and reduced the sales of complete solutions.

During the reporting period, the company achieved a net profit attributable to shareholders of listed companies of -238.1299 million yuan, mainly due to:

This was due to a decrease in operating income and gross margin, an increase in the provision for impairment losses and a decrease in other gains.

During the reporting period, the company's earnings per share was -0.59 yuan/share, mainly due to the decline in net profit during the reporting period.

During the reporting period, the proportion of the company's R&D investment in operating income increased by 39.13 percentage points, mainly due to the increase in R&D investment and the decline in operating income during the reporting period.

Sixth, the changes in core competitiveness

(1) The company's core competitiveness

1. Long-term insistence on the accumulation of technology and capabilities formed by independent research and development

Loongson Zhongke is the only one in China that insists on building an independent command system independent of the Wintel system and AA

The system of open information technology system and industrial ecology of the CPU enterprise. After long-term accumulation, it has formed a systematic accumulation of key core technologies for independent CPU research and development and software ecological construction.

Unlike most domestic integrated circuit design companies that purchase commercial IP for chip design, Loongson Zhongkejian

With independent research and development of core IP, it has formed a series of CPU IP cores, GPU IP cores, memory controllers and Hundreds of IP cores such as PHYs, high-speed bus controllers, and PHYs. During the reporting period, through the new generation of CPUs,

The traction of the development of SOC and bridge chip projects has mastered the high-bandwidth and low-latency inter-chip interconnection dragon chain technology

Continuously evolve the design and development capabilities of high-performance CPU cores, energy-efficient GPU cores, high-speed memory interfaces, and IO interfaces

Force.

With most domestic CPU companies, it is mainly based on ARM or X86 instruction system to integrate existing foreign letters

Different information technology systems, Loongson Zhongke has launched an independent instruction system LA, and based on LA, it has migrated or developed the core modules of the operating system, including the kernel, three major compilers (GCC, LLVM, GoLang), three virtual machines (Java, JavaScript, . NET), browsers, media players, KVM virtual machines, etc. It has formed a basic operating system for servers, desktops and industrial control applications. During the reporting period, through continuous R&D investment in the ecological construction of the international open source community, the formulation of the Dragon architecture standard specification system, and the product software closely combined with market demand, the company has established a complete technical capability for the construction of the basic software ecosystem, mastered key technologies such as binary translation and system compatibility, and high-performance graphics processor drivers, and promoted the continuous development and improvement of the LA architecture software ecosystem.

Unlike most domestic CPU design companies, which mainly rely on advanced technology to improve performance, Loongson Zhongke improves performance through design optimization and advanced technology, and gets rid of the dependence on the most advanced technology. Through the self-designed IP core,

Overcome the shortcomings of the lack of domestic process IP cores. During the reporting period, the design and verification of IP cores in various processes were basically completed according to the design requirements of CPU, SOC and bridge chips.

The above-mentioned core technology and capability accumulation formed in the process of long-term independent R&D and industrialization enable Loongson Zhongke to form rapid upgrades and iterations on the basis of existing technologies to improve performance, greatly reduce the cost of CPU and other chip development, better meet the needs of customers for customized basic software and hardware, and better build an independent information industry ecology.

2. The industrial ecology has obvious advantages

Loongson Zhongke adheres to the route of independent innovation and ecological construction. After continuous accumulation, the company has formed an independent instruction system architecture LA, and independently developed hundreds of core modules including processor cores, and has developed them in each core

The company has actively carried out intellectual property layout in the field of technology, and as of June 30, 2024, the company has been authorized cumulatively

728 patents.

Loongson Zhongke is one of the very few CPU companies in China that can carry out instruction system architecture and CPU IP nucleus

The enterprises with rights are very few enterprises that remain open in terms of equity structure and are not controlled by the whole machine manufacturer. for expansion

In the ecology of the Dalong architecture, starting in 2023, Loongson Zhongke will open the license of Loongson CPU core IP to some partners

As a partner, we support partners in the development of SoC cores based on Loongson's CPU core IP and Loongson's architecture instruction system

A number of companies have launched SoC chip products based on Dragon architecture processor IP cores. At the same time, the construction of the dragon architecture talent ecology was promoted in many universities, and during the reporting period, colleges and universities have completed the tape-out of teaching chips based on the dragon architecture and applied them to teaching.

At present, there are thousands of manufacturers cooperating with the company, and hundreds of thousands of downstream developers, and the independent information industry ecosystem based on Loongson processors is gradually taking shape.

3. Team advantage

Loongson Zhongke has long adhered to the talent selection and training standards of "red and specialized, red is more important than specialized", and has forged a team with soul, combat effectiveness and hard bones in the long-term development process. The Loongson team adheres to the fundamental purpose of making Loongson for the people, adheres to the work style of self-reliance and hard work, and adheres to the ideological method of seeking truth from facts. In the long-term R&D and industrialization practice, the team has formed a deep technical accumulation in processor R&D, basic software R&D, and customized development combined with customer needs. As of the end of the reporting period, the Company

68.27% of the employees are R&D technicians, and 45.19% of the R&D technicians have master's degree or above, providing an important talent base for the company's continuous technology and product innovation.

(2) Changes in core competitiveness

During the period of continuous supervision, the sponsor did not find any material adverse changes in the company's core competitiveness 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.

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

(1) Changes in R&D expenditure

Unit: 10,000 yuan

Project January-June 2024 January-June 2023 Magnitude of change (%)

Expensed R&D investment 21,322.80 19,721.99 8.12

Capitalized R&D investment 6,361.47 7,045.19 -9.70

Total R&D investment 27,684.27 26,767.18 3.43

Ratio of total R&D investment to operating income (%) 126.07 86.94 An increase of 39.13

percentage point

Proportion of capitalized R&D investment (%) 22.98 26.32 decreased by 3.34

percentage point

The company continues to increase R&D investment and accelerate R&D iteration. During the reporting period, the company's R&D investment was 276.8427 million yuan, a year-on-year increase of 3.43%, and the company did not have a large change in the total R&D investment.

(2) R&D progress

1. Research projects

As of June 30, 2024, the specific progress of the company's research projects is as follows:

Unit: 10,000 yuan

Serial No. Project Name Estimated Total Investment Current Investment Cumulative Investment Progress or Phased Achievements Proposed Objectives Technical Level Specific Application Prospects

Amount of capital

Completed the production of high-quality grade server chips for the server market, and advanced domestic data centers and clouds

1 Chip R&D Project A N/A 571.90 20,565.80 Product Verification Ability Multi-Core Processor Chip Product Level Calculation and High Performance

Able to calculate and other fields

For industrial control and end markets

SoC chip products that promote a variety of industrial control SoC chip products, integration 2

Design and development, initial sample verification, positive sample verification of processor cores, integrated PCI domestic advanced industrial control and finalization

2 Chip R&D project B is not applicable to 1,950.19 5,830.44 and productization work, including 2K3000 initial E3.0, SATA3.0, USB horizontal end and other fields

Sample delivery tape-out 3.0 and other interfaces, integration of self-developed 3

D GPU as well as GMAC connection

ports and other commonly used interfaces

Started the research and development of the next generation of processors supporting the bridge to adapt the Loongson series processor core to the domestic advanced Loongson No. 3 series

3 Chip R&D Project C N/A 78.62 1,289.03 Chip, integrated self-developed GPU, and horizontal processor supporting bridge

Abundant peripheral interface chips

4 Chip R&D project D N/A 426.95 2,917.51 Promote the productization of a variety of analog chips, and adapt to the simulation of Loongson CPU Domestic advanced Loongson CPU matching

Serial No. Project Name Estimated Total Investment Current Investment Cumulative Investment Progress or Phased Achievements Proposed Objectives Technical Level Specific Application Prospects

Amount of capital

The power chip is optimized for cost reduction chip level analog chip, and C

PU together, provides:

A full set of autonomous and controllable

Solution, should

For servers,

Desktop, industrial control, etc

field

Completed the positive sample verification of 3A6000 products, and oriented to the desktop and other markets with high performance domestic advanced desktops and notebooks

5 Chip R&D Project E N/A 2,113.89 9,346.57 R&D of next-generation desktop CPU products Competence, processor chip product level, etc

Hair work

Facing the desktop and notebook market, the domestic advanced desktop and notebook

6 Chip R&D project F N/A 156.10 9,041.28 Complete development and achieve design goals Cost-effective multi-core processor level and other fields

Chip products

SoCs for the industrial market

Chip products, integrated 1 or domestic advanced

7 Chip R&D Project G N/A 328.97 2,008.42 Promote the commercialization of positive samples Multiple low-power embedded processing Levels Industrial control

The device core, integrating a variety of industrial controls

interface

Carry out a variety of MCU chip product chemical combined with market applications, and launch domestic advanced smart home, five

8 chip R&D project H is not applicable to 239.75 1,878.99 work, as well as building motor application upgrade core leading level MCU production level gold electronics and other fields

Initial sample verification of environmental products

Serial No. Project Name Estimated Total Investment Current Investment Cumulative Investment Progress or Phased Achievements Proposed Objectives Technical Level Specific Application Prospects

Amount of capital

High performance for the server market

It can produce multi-core processor chips in data centers and clouds

9 Chip R&D Project I N/A 2,293.10 4,283.97 Complete the return of a new generation of products with more than 16 cores, and use the original server chips to achieve advanced computing and high performance

On the basis of post-chip basic testing, the inter-chip interconnection and horizontal energy calculation are improved

Increase the interface rate, increase the place

The performance of the processor is more than 50%.

Completed the definition of the new chip specification and the scheme theory of the series of domestic advanced printers for the printer market

10 Chip R&D project J is not applicable to 63.17 63.17 certificates, and the detailed design of the main control SoC chip production level is carried out

product

Integrated into the Loongson Bridge

11 Research and development of key core technologies Not applicable 2,379.23 10,928.30 Carry out second-generation technology research and development, and complete pre-silicon to meet the needs of graphics processing and general-purpose domestic advanced chips or processors

Project B verifies and delivers tape-out computing requirements at a level to improve the system

Graphics processing power

Continuously improve the physics of high-speed interfaces

The key core technology research and development of inter-chip interconnection and multi-category high-speed interface complete transmission rate improve the domestic advanced chip used in various chips

12 Item C N/A 5,914.15 11,558.86 into tape-out, post-silicon testing to verify the speed of data transmission and reception between the two levels, and each other horizontally or within the chip

Step by step to expand the high-speed interface protocol connection

Capacitive

Research and development of key core technologies Complete the initial design and simulation test of the energy efficiency core Further improve the mid-to-high-end processing Domestic advanced Integration into the Loongson system

13 item E N/A 70.90 94.24 certificate to verify the energy efficiency of the chip delivered tape-out cores, with a focus on power level processors,

The optimization of consumption to achieve the market can be applied to medium and high

Serial No. Project Name Estimated Total Investment Current Investment Cumulative Investment Progress or Phased Achievements Proposed Objectives Technical Level Specific Application Prospects

Amount of capital

Type: Processor core, mainstream water, industrial control, note

Ping, to the company's chip products to improve the cost of computers, cloud ends

For the core competitiveness to support the end and other fields

Achieve high performance, low power consumption, and for general-purpose processing

14 Key core technology research Not applicable 104.70 104.91 Complete the research work and start the design work High stability and good scalability between domestic advanced devices and memory

The DDR5 memory controller of Project F is horizontally interconnected

to meet future computing needs

Enables the integration of higher performance processing cores into the Loongson system for the next generation of high-performance processor cores

The R&D, design and optimization of key core technologies are currently focusing on the execution efficiency of IP cores from generation P.

15 Item G N/A 160.56 315.56 code development phase shifted to functional verification and physical rate, under the same process, the performance level can be applied to the desktop

In the design run-in stage, PCs, servers, etc. can be further improved compared with the previous generation

field

Packaging and testing technology with CPU/SOC/MCU and other types of cores to establish the packaging of high-performance chips Domestic advanced high-performance multi-core core

16 R&D N/A 115.40 3,053.04 pcs of mid-test capabilities, and continuous improvement of the test experimental platform horizontal chip packaging

Chip yield

In the international open source software community, LoongArch has completed the desktop office and server of the newly developed chip system

The open source ecosystem of the architecture is further developed and supported by complete software. In a number of international and domestic leading servers, embedded,

17 Operating System Basic Software N/A 3,681.00 33,557.85 Good. Linux kernel, GCC compilation tool, open source software community to achieve L level, part of the Internet of Things, cloud meter

R&D chain, LLVM compiler, Go language, R oongArch architecture support. Achieve international computing, big data, etc

ust language, QEMU system, V8 engine, . Development and application of binary compatibility system leading level in the field

The .NET programming framework and FFmpeg audio and video system are distributed across operating systems

Serial No. Project Name Estimated Total Investment Current Investment Cumulative Investment Progress or Phased Achievements Proposed Objectives Technical Level Specific Application Prospects

Amount of capital

A large number of important open source application software binaries such as codec acceleration libraries

The software community continues to be in the latest version. Development of a print-driven engine

A higher level and a more complete degree of implementation for Linux platform printers

LoongArch architecture support. Alpine, support

Debian and other important open source operating system companies

The LoongArch architecture is being developed

Native release, expected in a later release

Periodically release LoongArch schema operations

The system release is continuously revised and improved

"LA Architecture ABI Standard Specification"

A system architecture specification", implemented to the latest

Support for chip features and software functions. more

The newly released Loongson print driver engine is compatible

Loongson browser solution for stock web applications

solution, Loongson binary translation system,

Loongson applications are compatible with frameworks, GPU drivers, etc

products and solutions, related applications and

Device compatibility has been significantly improved. Development of Loongson

Self-developed first-generation GPU cores (at 2K200

0 and 7A2000).

Driver product upgrade version, which can be significantly improved

3D graphics performance in typical scenes

Serial No. Project Name Estimated Total Investment Current Investment Cumulative Investment Progress or Phased Achievements Proposed Objectives Technical Level Specific Application Prospects

Amount of capital

Based on the Loongson series of chips, on

Issued for terminals and servers

The 5000 series servers complete the two-socket and four-product solutions, which are the final

18 No. 3 series solution Not applicable 660.10 17,774.21 channel server development, into the productization and end category includes notebooks, desktops, domestic advanced desktops and servers

Case research and development to promote stage machines, all-in-one machines, cloud terminals, and horizontal applications in batches

self-service machines and other product solutions,

Servers include single, double, and quadruple

Road and other low, medium and high product solutions

Based on the Loongson series SoC chips, according to the reality

international application scenarios, research and development of different specifications,

The core module, development board and solution of the core based on the Loongson series SoC core industrial control, electrical

19 No. 2 series solution Not applicable 1,843.61 8,588.82 Solution, including cloud terminal, domestic solution chip, research and development of different specifications, domestic advanced power, display and control terminal,

Case R&D boards, embedded modules, edge controllers, consumption, development boards for application scenarios Horizontal edge computing, cloud

Distributed controllers, Loongson, printers or core module terminals, etc

controllers, etc., some projects have already realized the amount

Production or small batch shipment status

Develop a variety of MCU chip-based solutions Based on Loongson MCU chips, smart door locks, intelligence

solutions, including motor drives, ultrasonics, development with high reliability, high-energy metering, intelligence

20 No. 1 series solution Not applicable 257.99 3,720.47 Solution in the fields of smart door locks, smart water meters, etc. Security, high scalability industry Domestic advanced home, smart out

Case R&D solutions, some projects are in R&D or production of solutions, and at the same time are cooperation level lines, power tools

In the commercialization stage, some projects have been mass-produced and partners provide corresponding development and other industries

or small batch shipment status test tools to improve partners

Serial No. Project Name Estimated Total Investment Current Investment Cumulative Investment Progress or Phased Achievements Proposed Objectives Technical Level Specific Application Prospects

Amount of capital

with the competitiveness of the industry

Based on Loongson chips or Loongson colleges and universities, vocational schools

21 Teaching Experiment Box Solution Not applicable 115.64 1,114.00 Support colleges and universities to teach based on LA architecture IP development of a variety of domestic advanced computer courses without courses

The teaching level of computer courses in the program development process is experiential

Experimental equipment

Loongson 3A6000 batch promotion stage, branch

The fourth-generation manufacturer of the No. 3 series has launched a rich variety of products based on the fourth-generation core of Loongson's domestic advanced desktop and server

22 Product Solutions N/A 4,158.35 4,158.35 case series, including desktops, all-in-one PCs, tablets, development for terminal kimono level applications

Notebooks, NUC and other solutions, starting the product solution of 60 servers

Development of 00 series servers

Total / 27,684.27 152,193.79 / / / /

2. Intellectual property rights

As of June 30, 2024, the company is actively carrying out intellectual property layout in various core technology fields.

The company has been authorized 728 patents, including 572 invention patents and 154 utility model patents.

2 design patents. In addition, the company also owns 196 software copyrights and 26 exclusive rights for integrated circuit layout design.

The list of intellectual property rights acquired during the reporting period is as follows:

Cumulative number of new additions in this period

Type of Intellectual Property

Number of applications (pcs) Number of acquisitions (pcs) Number of applications (pcs) Number of acquisitions (pcs)

Invention patent 85 30 1015 572

Utility model patents 18 14 204 154

Design patent 0 1 2 2

Software copyright 19 21 198 196

Other 0 4 34 26

Total 122 70 1453 950

Note: "Other" in the table refers to the layout design of integrated circuits

8. Whether the progress of the new business is consistent with the information disclosed in the previous period

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 the special account 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, carried out correspondence procedures for the special account for raised funds, consulted the information disclosure documents and decision-making procedure documents for the use of raised funds, inspected the site of the raised funds investment project, understood the construction progress of the project and the progress of the use of funds, and interviewed the company's senior management personnel.

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, and the necessary decision-making procedures and information disclosure procedures have been fulfilled for the use of raised funds. During the reporting period, according to the actual situation of the relevant fund-raising projects, after careful research and demonstration, the company intends to calculate the time for the raised funds investment project "advanced process chip R&D and industrialization project" to reach the predetermined usable state

15,000.00 yuan of raised funds from the reduction of the following "high-performance general-purpose graphics processor chip and system research and development projects"); It is proposed to postpone the time for the raised funds investment project "high-performance general-purpose graphics processor chip and system research and development project" to reach the scheduled usable state from the original plan to June 2025, and the proposed raised funds will be reduced by 15,000.00 yuan (the reduction amount will be used for the above-mentioned "advanced process chip research and development and industrialization project" to increase the raised funds by 15,000.00 yuan), which has been the company's board of directors and shareholders

The meeting deliberated and approved, and on April 27, 2024, it disclosed the "Loongson Zhongke on Part of the Raised Funds Investment

Announcement on the extension of the project and the adjustment of the amount of funds to be invested in the investment project of some of the raised funds

（2024-020）》。

Based on the foregoing inspection, the sponsor did not find any illegal use of the raised funds.

10. Shareholding, pledge, freezing and reduction of shareholdings, pledges, freezes and holdings of controlling shareholders, actual controllers, directors, supervisors and senior managers

As of June 30, 2024, the controlling shareholders, actual controllers, directors, supervisors and senior officers of the Company

The shareholding, pledge, freezing and reduction of holdings of management personnel are as follows:

From January to June 2024, the company's controlling shareholder and actual controller did not reduce their shareholdings. 2024 1-6

In January, the company's controlling shareholder, Beijing Tiantong Xinyuan Technology Co., Ltd. (hereinafter referred to as "Tiantong Xinyuan") passed

The Shanghai Stock Exchange increased its holdings by a total of 54,700 shares through centralized auction trading, and as of June 30, 2024,

The number of shares held by Tiantong Xinyuan is 86,468,678 shares, accounting for 21.56% of the company's total shares.

From January to June 2024, the company's directors, supervisors, senior management and core technical personnel do not hold

share movements. As of June 30, 2024, the controlling shareholder, actual controller, director and supervisor of the company

There is no pledge or freezing of the shares held by the company and senior management.

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

From January to June 2024, the company's operating income was 219.5869 million yuan, a decrease of 28.68% from the same period last year.

Among them, the operating income of chips was 163.356 million yuan, an increase of 8.51% over the same period of last year, and the operating income of solutions was 56.1734 million yuan, a decrease of 64.14% over the same period of last year.

From January to June 2024, the company's net profit attributable to shareholders of listed companies was -238.1299 million yuan

In the same period, it was -103.7853 million yuan, and the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was

-260.3973 million yuan, compared with -175.1844 million yuan in the same period of last year, mainly due to the decrease in the company's operating income and gross profit margin, the increase in impairment losses and the decrease in other income.

The sponsor has reminded the relevant risks in "3. Major Risk Events" in this report (1) Risk of significant decline in performance or loss. In the future, the sponsor will urge the company to do a good job in information disclosure, timely and fully disclose operational risks, effectively protect the interests of investors, and remind investors to pay special attention to the investment risks caused by industry cycle fluctuations and changes in the market environment.

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(There is no text on this page, it is the signing page of the "CITIC Securities Co., Ltd. on the 2024 Semi-annual Continuous Supervision and Tracking Report of Loongson Zhongke Technology Co., Ltd.")

Sponsor Representative:

Chen Xiying, He Yang

CITIC Securities Co., Ltd

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