According to the announcement of China Aerospace (00031), its 60% indirect subsidiary, Aerospace Gaoke, respectively terminated lease agreements and litigation with Hankaohai and Huabaorun. China Aerospace learned that Aerospace Gaoke received four second-instance judgments from the Shenzhen Intermediate People's Court of Guangdong Province on August 30, 2024, and September 2, 2024, regarding the litigation between Aerospace Gaoke and Hankaohai. The four lawsuits are as follows: Lawsuit One (Aerospace Gaoke claims rent and penalty for breach of contract from Hankaohai), Lawsuit Two (Hankaohai requests the court to order Aerospace Gaoke to compensate for operating losses due to failure to deliver the property and provide property certificates to Hankaohai), Lawsuit Three (Hankaohai sues Aerospace Gaoke for the return of overpaid rent and interest losses), and Lawsuit One (Huabaorun sues Aerospace Gaoke for rent and penalty claims). The court made second-instance judgments on Lawsuits One and Two.

1. According to the first-instance judgment of Lawsuit One between Aerospace Gaoke and Hankaohai, Hankaohai was ordered to pay a total of RMB 98.646 million in rent and RMB 1.8127 million in overdue rent penalty to Aerospace Gaoke. The other litigation requests of China Aerospace were rejected (for details, please refer to the announcement dated July 14, 2023). Both parties appealed the first-instance judgment. According to the second-instance judgment, the appeals were rejected and the original judgment was upheld.

2. According to the first-instance judgment of Lawsuit Two between Aerospace Gaoke and Hankaohai, Aerospace Gaoke was ordered to pay RMB 119,034,615.60 for operating losses to Hankaohai. The other litigation requests of Hankaohai were rejected (for details, please refer to the announcement dated July 11, 2023). Both parties appealed the first-instance judgment. According to the second-instance judgment, the appeals were rejected and the original judgment was upheld.

3. According to the first-instance judgment of Lawsuit Three between Aerospace Gaoke and Hankaohai, the court rejected all the litigation requests from both China Aerospace and Hankaohai (for details, please refer to the announcement dated July 11, 2023). China Aerospace appealed the first-instance judgment. According to the second-instance judgment, the appeal was rejected and the original judgment was upheld.

4. According to the first-instance joint judgment of Lawsuit One and Lawsuit Two between Aerospace Gaoke and Huabaorun, Huabaorun was ordered to pay a total of approximately RMB 44.5 million to China Aerospace, including rent, rent-free period amount, overdue payment penalty, rent after termination of the contract paid by the sub-lessee, and attorney fees. Aerospace Gaoke also confiscated the performance guarantee paid by Huabaorun, totaling RMB 8 million. The other litigation requests of China Aerospace were rejected (for details, please refer to the announcement dated March 18, 2024). Both China Aerospace and Huabaorun appealed the first-instance judgment. According to the second-instance judgment, the appeals were rejected and the original judgment was upheld.

Regarding the claims between China Aerospace and Hankaohai, the offset calculation of the effective second-instance judgment will offset the claims and debts between the two parties. The claims of Lawsuits One, Two, Three, and Four by Hankaohai can be settled on a net basis. It is estimated that Hankaohai will pay approximately RMB 22 million to China Aerospace (the final amount will depend on the execution). The second-instance judgment is the final judgment for the relevant litigation.