Announcement of Qingdao Kingking Applied Chemical Co., Ltd. on signing a "smart retail" strategic cooperation framework agreement with Shenzhen Tencent Computer System Co., Ltd.

Securities code: 002094 Securities abbreviation: Qingdao Golden King Announcement Number: 2018-070

Qingdao King King Applied Chemical Co., Ltd.

Announcement on the signing of a “Smart Retail” strategic cooperation framework agreement with Shenzhen Tencent Computer Systems Co., Ltd.

The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete, and that there are no false records, misleading statements or major omissions.

Special reminder: 1. This agreement is only a framework document for the two parties to carry out strategic cooperation. This agreement lays the foundation for both parties to promote specific project cooperation. Subsequent cooperation between the two parties shall be subject to the specific signed agreement.

2. The strategic cooperation agreement signed this time does not involve specific projects and amounts. The specific cooperation projects and amounts of both parties to the transaction are subject to various formal contracts signed in the actual cooperation in the future. It is currently impossible to predict the impact of this strategic cooperation agreement on the company's operating performance.

3. This agreement is not a related transaction and does not constitute a major asset reorganization as stipulated in the "Administrative Measures for Major Asset Reorganization of Listed Companies".

1. Overview of contract signing

Qingdao King King Applied Chemical Co., Ltd. (hereinafter referred to as the "Company") recently signed the "Qingdao King King-Tencent "Smart Retail" Strategic Cooperation Framework Agreement" with Shenzhen Tencent Computer Systems Co., Ltd. (hereinafter referred to as "Tencent") , based on the company and the resources of about 9,500 stores in the CS and KA channels of various provinces across the country and the offline retail channels of Chinese cosmetics, the company and Tencent have the vision of jointly developing "smart retail" in the Chinese cosmetics industry and will jointly build a brand in the field of cosmetics. "Digital" new capabilities, building a "digital" operating system, and ultimately creating a new beauty ecosystem to carry out in-depth cooperation and realize the reshaping of the value chain of beauty smart retail. After friendly consultations and discussions between the company and Tencent, they unanimously agreed to establish a long-term strategic partnership, launch comprehensive cooperation, and reach this agreement.

2. Introduction to counterparties

Company Name: Shenzhen Tencent Computer Systems Co., Ltd.

Legal representative: Ma Huateng

Registered capital: RMB 65 million

Registered address: Floors 5-10, Fiyada Building, Gaoxin South 1st Road, High-tech Zone, Nanshan District, Shenzhen

Business scope: design, technology development and sales of computer software and hardware (excluding exclusive, exclusive control, exclusive products and restricted items); database and computer network services; domestic commerce and material supply and marketing industry (excluding exclusive, exclusive control and exclusive sales) goods); information service business in the second type of value-added telecommunications business (excluding fixed network telephone information service and Internet information service, and shall be handled in accordance with License No. B2-20090028); information service business (limited to Internet information service business, And in accordance with the license document (Guangdong B2-20090059)); engage in advertising business (if laws and administrative regulations stipulate that advertising business approval levels should be carried out, separate approval and registration can be carried out before operating); online game publishing operations (with a valid new network license Certificate (Guangdong) No. 010 Internet Publishing License Operation); Import and export of goods and technology.

Tencent's shareholders, directors, supervisors and senior executives have no relationship with the company and its directors, supervisors and senior executives.

3. Main contents of the contract

(1) Exploring the new value chain of “smart retail”

The two parties have established a comprehensive strategic partnership to reshape the value chain of the beauty retail industry with the common concept of "smart retail". Promote the transformation of the traditional model that focuses on operating the difference between sales and purchases to a new model that operates the entire customer life cycle.

(2) Building new capabilities

Relying on Tencent's technological advantages and based on the full range of advanced Internet products under the "Tencent Group", it also deeply explores the potential of social and consumer interaction scenarios on Tencent's online social platform and the company's offline multi-consumption scenarios, combined with the company's leading multi-format comprehensive operation experience, to provide Provide customers with a complete digital consumption experience and build new digital capabilities. Provide more valuable online and offline integrated services for customers throughout their life cycle, and achieve new value creation and profit model transformation based on the digitization and Internet of production factors.

(3) Build a new “digital” operating system

Deeply integrate the company's experience and insights in supply chain management and retail management with Tencent's technical strength to achieve a comprehensive transformation and upgrade of the operating system, and realize digital customers, digital products, and digital operations.

After the signing of this agreement, we will cooperate closely to complete various details of cooperation matters as soon as possible and sign various formal agreements.

4. Impact on the company

The company signed the "Qingdao King King-Tencent "Smart Retail" Strategic Cooperation Framework Agreement" with Tencent this time, which is conducive to the complementary advantages of both parties in technology and beauty. The company relies on Tencent's technological advantages and combines its own beauty omni-channel operations. As well as the company's advantage of having approximately 9,500 stores in the cosmetics supply chain in various provinces, it solves the pain points of traditional retailing of beauty products in CS and KA channels, leads the new business model of unbounded smart retail in China's beauty industry, and reshapes the value of the beauty industry. chain. By jointly building "smart retail", we can provide customers with personalized content services and increase customer stickiness. By leveraging Tencent's intelligent management system, advanced cloud computing and AI capabilities, we will further enhance the informatization level of the company and the beauty industry, enhance the company's big data acquisition, processing and comprehensive operation capabilities, and develop science based on big data and algorithms. Decision-making system, promote the realization of fully digital operations of the company and the beauty industry, open up online and offline digital stores, and fully realize the company's smart retail in the beauty industry. This cooperation will further enhance the company's core competitiveness, and also It brings new turning opportunities for smart retail in China's beauty industry, provides a strong guarantee for the company's sustained, rapid and steady development, and is in line with the interests of all shareholders of the company, especially small and medium-sized shareholders.

5. Risk warning

This agreement is only a framework document for the two parties to carry out strategic cooperation. This agreement lays the foundation for the two parties to promote specific project cooperation. The subsequent cooperation between the two parties shall be subject to the specific signed agreement. The company will perform corresponding deliberations based on the specific business development conditions. and disclosure procedures.

6. Documents available for inspection

"Qingdao King King Applied Chemistry Co., Ltd. and Shenzhen Tencent Computer Systems Co., Ltd. Qingdao King King-Tencent "Smart Retail" Strategic Cooperation Framework Agreement"

Special announcement.

Qingdao King King Applied Chemical Co., Ltd.

Board of Directors

August 25, 2018