Stock Code: 600977 Stock Name: China Film

China Film Group Co. Ltd.Corporate Value and Return Enhancement Action Plan

2025 Assessment Report and 2026 Action Plan

April 2026China Film Group Co. Ltd.Corporate Value and Return Enhancement Action Plan

2025 Assessment Report and 2026 Action Plan

In order to actively respond to and implement the initiative of the

Shanghai Stock Exchange's (hereinafter referred to "SSE") Corporate

Value and Return Enhancement Action (hereinafter referred to "the

Action") China Film Group Co. Ltd. (hereinafter referred to "the

Company" or "China Film Group") released the "China Film Group Co.Ltd. Corporate Value and Return Enhancement Action Plan 2024

Assessment Report and 2025 Action Plan" on July 1 2025. The Company

regularly reviewed the progress and effectiveness of the plan's

implementation and released the " China Film Group Co. Ltd. Corporate

Value and Return Enhancement Action Plan 2025 Interim Evaluation

Report" on August 27 2025.In 2025 the Company thoroughly implemented the spirit of the 20th

National Congress of the Communist Party of China and the guiding

principles from the plenary sessions of the 20th Central Committee

promoting the implementation of the Action achieving good results in all

areas of work. Based on a comprehensive assessment of the 2025 execution

and considering the Company's development stage industry characteristics

and investor demands the Company has formulated China Film Group Co.Ltd the Corporate Value and Return Enhancement Action Plan in 2026 as

follows.

2 / 15Part I: Assessment Report of Corporate Value and Return

Enhancement Action Plan in 2025

I. Deepening Reforms and Innovations to Improving Operational

Quality

1.Focusing on Film Creation and Production

In 2025 the Company produced and released 39 films accounting for

35.37% of the total film box office of domestic films. The Company's

productions occupied 5 spots in the annual top 10 box office rankings and

won over 151 domestic and international awards including China Film

Huabiao Awards and China Film Golden Rooster Awards.Released during the summer season the film Dead To Rights

commemorated the 80th anniversary of the victory of the Chinese People's

War of Resistance Against Japanese Aggression and the World Anti-Fascist

War. With a mournful yet restrained cinematic lens it forged a national

consensus of taking history as a mirror and creating the future and achieved

a domestic box office of over RMB 3 billion and an overseas box office of

nearly US$5.5 million winning the summer box office championship. The

film The Volunteers: Peace at Last fully demonstrated the indomitable faith

and courage of the Chinese people making historical memory deeply

moving. The film won the National Day holiday box office championship

topped the audience satisfaction survey and brought the "Volunteers"

trilogy to a perfect conclusion.

2. Strengthening Distribution Advantages

The Company advanced reforms to its distribution mechanism and

reinforced its professional competitive strengths through a renewed

distribution matrix. The Company established a new branch CFG

Imported Distribution to further invigorate the market for imported films.It also strengthened coordination between content development and

distribution improving the precision and effectiveness of release and

publicity campaigns. At the same time it enhanced the CFG network

transmission and built a highly efficient and responsive distribution

platform to support full-chain distribution across multiple scenarios. In

3 / 15addition it integrated its non-theatrical distribution business to develop

new market segments. In 2025 the Company distributed a total of 616

films with settled box office reaching RMB 36.6 billion representing 78%

of the national box office. The film Zootopia 2 set a new record with 109

million admissions. The CFG network transmission covered nearly 10000

cinemas nationwide with delivery time for each film kept within two hours.Screenings at campuses communities and military units also achieved

positive results.

3.Promoting Transformation from Cinema Investment to Cinema

Management

To enhance the comprehensive competitiveness of its controlled

cinemas the Company comprehensively reviewed their assets and

operation systems strengthened unified management and innovated

characteristic operations. In adherence to terminal quality upgrading

strategy the Company comprehensively promoted the special hall

transformation of controlled cinemas through the adoption of the CINITY

system thereby providing a superior viewing experience. Furthermore the

Company developed a range of distinctive exhibits merchandise and

activities. These initiatives not only created differentiated competitive

advantages but also provided audiences with diversified experiences

contributing to a more robust and varied business model.By the end of 2025 the cinema chains and theaters in which the

Company held controlling or minority stakes covered 25818 screens and

over 3.1946 million seats nationwide with a market share of 31.26% in

screen numbers. The Company operated 121 controlled cinemas with 914

screens In 2025 it achieved an average per-screen revenue of RMB

824100 a performance that ranked among the industry leaders.

II. Promoting Technological Innovation and Driving Industrial

Upgrading

1. Advancing the Integration of Production Research and

Application

The Company has completed multiple key tasks under the National

4 / 15Key R&D Program Systematic Research Development and Application

of Key Technologies in the Whole Cinema Industrial Chain for High-

Format Films. The project outcomes were awarded the First Prize of the

Science and Technology Progress Award by the China Society of Motion

Picture and Television Engineers in 2025. As of the reporting date the

Company has accumulated a total of 540 film technology-related

intellectual property rights.

2. Accelerating the Pace of Technological Product Innovation

The newly launched CLED products in the 10-meter 20-meter and

23-meter formats have obtained the latest DCI certification achieving a

number of world-first milestones in the field of high-end film projection.Within the domain of giant-screen LED acoustically transparent screens

the Company's products feature the industry's highest aperture ratio and

thinnest panel thickness delivering faithful restoration of cinema-grade

audio quality through LED screens. The CINITY Camera — the

Company's proprietary cinematographic camera — has completed R&D

and testing. Supporting native 4K a base frame rate of 120fps and a

CINITY-exclusive color space the camera is now ready for deployment in

on-set production of major motion pictures.

3. Advancing the Commercialization of Scientific and

Technological Achievements

As of the end of 2025 a total of 248 CINITY cinema halls had

commenced operations domestically including 67 CLED cinema halls

while 26 CINITY cinema halls had either opened or were under

construction overseas. Cumulatively a total of 466 films had been

produced in the CINITY version of which 72 were high-frame-rate titles.During the theatrical run of Avatar: Fire and Ash CLED cinema halls

ranked first among all premium large-format venues nationwide recording

an average of 128 patrons per screening and an occupancy rate of 40.6%.CINITY Science has been installed and made operational in five science

and technology museums across the country. Notably the CLED giant-

5 / 15screen cinema hall at the Shanghai Science and Technology Museum

which opened in January 2026 is now recognized as the world's largest

CLED giant-screen cinema.III. Improving Corporate Governance and Strengthening

Performance Responsibilities

1. Improving the Governance Systems

The Company continuously improved the modern enterprise system

with distinctive Chinese features consolidating the foundation of

governance systems. In 2025 actively implementing the requirements of

the China Securities Regulatory Commission (hereinafter referred to

"CSRC") and the SSE the Company completed the revisions to 25

governance policies including the Articles of Association and the China

Film Group Information Disclosure Management System in accordance

with the new Company Law the newly revised Information Disclosure

Management System and supporting rules. The Company formulated and

disclosed specialized policies such as the Public Opinion Management

Rules to further improve the standardization systematicness and

effectiveness of the Company's governance system framework.

2. Improving SOE Corporate Governance

In 2025 the Company completed board election and formed the

fourth session of the Board of Directors through legal procedures. The new

board achieved an organic balance and complementary advantages in terms

of industry experience professional background and diverse perspectives

providing solid support and guarantee for the scientific decision-making of

the board. Having thoroughly implemented the spirit of the new Company

Law the company completed the governance mechanism reform

systematically integrating the various supervisory responsibilities

corresponding to the Board of Supervisors into the actual workflow and

daily operating norms of the Audit Committee. In order to implement the

governance requirements of Central Cultural Enterprises the company

established the Art Committee for the first time which provides high-end

intellectual resources and professional support into films creation and

6 / 15talent pipeline development.

3. Strengthening Responsibility of the "Key Few"

In 2025 the controlling shareholder expressed confidence in the

Company’s future development prospects and in support thereof did not

reduce its shareholding in 2025 in any way sharing risks and benefits with

the company and small and medium-sized shareholders. Meanwhile the

Company strictly implemented the Guideline on Performance Review for

the Heads of State-Owned Enterprises and related rules and established

and improved salary mechanisms and asset management accountability in

a scientific and reasonable way. The annual salary and performance bonus

are linked to the annual performance evaluation results and the salary

changes match the company’s operating performance. The long-term

interests of the Company's board of directors management and

shareholders are aligned.IV. Strengthening Communication and Convey Company Value

1. Maintaining Regular Communication

The Company actively engaged in investor communication. In 2025

the Company received over 10 investor research surveys participated in 5

analyst meetings handled over 530 calls on the IR hotline and maintained

a 100% response rate on the SSE E-Interactive inquiries. In 2025 the

Company was selected as the "Best Practice Case in Investor Relations

Management for Listed Companies".

2. Regular Performance Briefings

In 2025 the Company held 3 performance briefings alongside

periodic reports. Led by the Chairman and attended by the Board Secretary

CFO independent directors and relevant directors and vice presidents

these sessions facilitated communications with investors and media

through video Q&A live streaming and text interaction. The Company

was selected the "Best Practice Award for Annual Report Performance

Briefings of Listed Companies" for four consecutive years.

7 / 153. Innovating Investor Communication Methods

In 2025 the Company's annual general meeting and extraordinary

general meeting utilized the online voting reminder service provided by the

SSE facilitating small and medium-sized shareholders participation in

corporate governance. In October 2025 the Company participated in the

“I’m a Shareholder” activities hosted by the SSE and invited over 40 small

and medium-sized shareholders to site visits and face-to-face discussions

with company’s directors that investors could intuitively experience and

understand the company's business progress cultural atmosphere and

technological innovation achievements that enhance recognition of the

Company's value.V. Optimizing Return Mechanisms and Sharing Development

Dividends

1. Insisting on Distributing Stable and Reasonable Cash

Dividends

The Company insists on rewarding investors with pragmatic and

effective measures sharing long-term development dividends with

shareholders. In July 2025 the Company implemented the 2024 cash

dividend (the interim profit distribution was completed in January 2025)

distributing a total cash dividend of RMB 85.882 million (inclusive of tax)

accounting for 61.14% of the net profit attributable to listed company

shareholders for the period. Since listing the Company has cumulatively

distributed cash dividends of RMB 2.418 billion1 accounting for 54.05%of

the cumulative net profit attributable to listed company shareholders a

relatively high level in the market.

2. Continuously Optimizing Shareholder Return Mechanisms

The China Film Group Shareholder Return Plan for the Next Three

Years (2023-2025) was fully implemented by the end of 2025 with all

planned matters properly executed. To maintain the consistency

reasonableness and stability of the dividend policy based on a

comprehensive review of past implementation the Board of Directors has

1 In 2020 and 2022 the conditions for dividend distribution were not met and therefore no dividends were issued.

8 / 15formulated the China Film Group Shareholder Return Plan for the Next

Three Years (2026-2028) which specifies the conditions for cash dividend

implementation specific ratios and decision-making procedures. It was

disclosed on the Shanghai Stock Exchange website in April 2026.

9 / 15Part II: Corporate Value and Return Enhancement Action

Plan in 2026

I. Focusing on High-Quality Creation and Contributing to

Market Prosperity

1. Focusing on High-Quality Creation

Adhering to the principle of balancing guidance with innovation and

historical depth with genre exploration the Company is committed to

creating high-quality works that unify both social benefits and economic

returns. The sci-fi blockbuster The Wandering Earth 3 is about to wrap up

filming and will be released in two parts with Part 1 scheduled for the 2027

Chinese New Year. Infinite War a film centered on the theme of the 100th

anniversary of the founding of the People's Liberation Army will start

shooting soon using futuristic war anticipation to showcase the spirit of

the people's army in overcoming difficulties. Centering on the 50th

anniversary of the country’s reform and opening?up the Company will

develop I Am Not Van Gogh and The Genius Translator which explore the

resonance between individuals and their times against the backdrop of the

reform and opening-up era and the ongoing struggle of the new age.Furthermore the Company will step up efforts in creating films of diverse

genres such as biopics workplace comedies and suspense thrillers.

2.Promoting the China Film Group Youth Talents Initiative

The Company will integrate film creation and talent pipeline

development. Based on the practice of the first round of China Film Group

Youth Talents Initiative the company will launch the second round

investment plan. Adhering to the principles of low-budget high-quality

and distinctive features the company will establish a number of niche-

focused and differentiated studios and nurture original projects.Furthermore the company will actively explore the application of AI

across the entire creative field gathering proficient AI practitioners among

the new generation.

10 / 15II. Adhering to Innovation-Driven Development and Leading

Industrial Development

1. Promoting the Application of Technological Innovation

In alignment with the National Key R&D Program the Company will

advance the research and development of technologies and processes

related to high-format films promoting the deep integration of scientific

and technological innovation with industrial innovation. The Company

will continuously refine its CINITY product series strengthening the

competitiveness of its industrial and supply chain. The Company will

further expand the market share of CINITY and CLED systems in both

domestic and international exhibition markets while enriching the supply

of CINITY-exclusive versions of domestic and imported films. The

Company will drive the research development and commercialization of

the CINITY-X system to meet audience needs across diverse sectors and

application scenarios. In addition the Company will advance its AI R&D

initiatives and accelerate their market-oriented commercialization.

2. Accelerating the Development of New Forms and Models

The Company will not only explore and deepen the main distribution

channels but also establish specialized distribution mechanism which

focus on science popularization re-releases and youth talents in order to

cultivate niche markets by differentiated strategies. The Company will

continuously enhance the digital service capabilities of the Company’s

network transmission providing robust support for the expansion

innovation and efficiency improvement of the film market. The Company

will enrich the supply of Pre-Booked Screenings and Cinema Live

Streaming and diversify screening scenarios such as in secondary film

market or in Film-Integrated Market Tour. The Company will implement

characteristic cinema operations enrich multi-service offerings and

promote the transformation of cinemas into diverse cultural and

entertainment consumption spaces.III. Improving Corporate Governance and Strengthening

11 / 15Performance Responsibilities

1. Improving the Governance Systems

The Company continuously improves the modern enterprise system

with distinctive Chinese features consolidating the foundation of

governance systems. First actively implementing Code of Corporate

Governance for Listed Companies by CSRC the Company revised the

Remuneration Management Rules for Directors and Senior Management

clarifying remuneration structure performance assessment remuneration

payment and clawback provisions that to better ensure the Company's

sustainable development and long-term value creation. Second for

improving the internal control system and enhancing risk prevention and

control capabilities the Company revised specialized policies such as the

Regulation on External Guarantees. Third the Company officially

implemented the Public Opinion Management Rules that improve

mechanisms for consultation judgment and coordinated response and

enhance reputation management and public opinion response capabilities.

2. Improving SOE Corporate Governance

The Company's board of directors proactively plays the core role of

"setting strategy making decisions and preventing risks" to build a solid

foundation for high-quality development. First the Company optimizes

specialized committee establishing the Science and Technology Advisory

Committee and improve the differentiated positioning of specialized

committees for prior study and professional advisory committees for

promoting development that better support the scientific and effective

operation of the Board. Second the Company improves the synergy

mechanism of internal control compliance and risk control strengthening

the respective responsibilities and collaboration of business units risk

control departments and audit departments. The Audit Committee and

Independent Directors play supervisory roles to build three robust lines of

defense for major risk management. Third the Company strengthens brand

reputation management promotes the integrated deployment and

simultaneously implementation of brand strategy and corporate strategy

and deepens understanding and recognition of the company across all

12 / 15sectors of society.

3. Strengthening Responsibility of the "Key Few"

When drafting this plan the Company asked the controlling

shareholder about its shareholding intention and reduction plan. The

controlling shareholder expressed that based on the confidence in the

company’s future development prospects and high recognition of the

company’s long-term value as well as in order to safeguard the rights and

interests of investors and maintain the stability of the capital market the

controlling shareholder will NOT reduce its shareholding in 2026 in any

way and will hold shares for a long time sharing risks and benefits with

the company and small and medium-sized shareholders. The company will

promote the controlling shareholder's awareness of compliance and

enhance the performance capabilities of directors and senior management

promptly conveying the latest regulatory policies and compliance

requirements effectively building a solid foundation for the company's

standardized operation and scientific decision-making.IV. Strengthening Communication and Conveying Company

Value

1. Maintaining Regular Communication

The Company always respects and protects investors as the starting

point and goal of investor relations work. Proceeding from investor needs

the Company continuously improves communication mechanisms. In 2026

the Company plans to receive no less than 20 investor research surveys

organize or participate in no less than 4 analyst meetings and ensure a 100%

response rate for the IR hotline/email and SSE E-Interactive inquiries.

2. Regular Performance Briefings

The Company actively implements the Opinions for Further

Improving the Quality of Listed Companies establishing a good

communication mechanism between the board of directors and investors.In 2026 the Company plans to hold no less than 3 performance briefings.Led by the chairman or president and attended by directors and vice

13 / 15presidents the Company will communicate with investors through video

Q&A text and other online and offline ways widely soliciting suggestions

and opinions from all sectors of society.

3. Innovating Investor Communication Methods

While standardizing information disclosure obligations the Company

will continuously improve investor communication channels and formats

to actively convey Company value. In 2026 the Company's will utilize the

online voting reminder service provided by the SSE facilitating minority

investor participation in corporate governance. The Company will further

enrich the forms of activities such as “China Film Group Open Day” and

collaborate with financial media to produce special programs allowing

investors to gain timely and in-depth insight into the Company.V. Optimizing Return Mechanisms and Sharing Development

Dividends

1. Insisting on Distributing Stable and Reasonable Cash

Dividends

The Company insists on rewarding investors with pragmatic and

effective measures sharing long-term development dividends with

shareholders. As of the announcement date of this action plan the Board

of Directors has submitted matters related to the 2025 dividend distribution

to the general meeting of shareholders for approval proposing to distribute

a cash dividend of RMB 59.744 million (including tax) accounting for

51.26% of the Company's net profit attributable to shareholders of the

listed company for the current period. In 2026 the board of directors will

fully consider the characteristics of the industry of the company the stage

of development strategic planning profitability level and major capital

arrangements for the next year and draw up a dividend plan with an annual

dividend payout rate of no less than 40% (including interim and annual

dividends) as the benchmark.

2. Continuously Optimizing Shareholder Return Mechanisms

The Company actively implements the spirit of the Several Opinions

14 / 15on strengthen supervision forestall risks and promote high-quality

development of the capital market enhancing the stability continuity and

predictability of dividends distributions. The Company strictly will

implement the China Film Group Shareholder Return Plan for the Next

Three Years (2026-2028). During the formulation of profit distribution

plans the Company strengthened communication with small and medium-

sized shareholders fully listening to their opinions and demands. When

conditions for cash dividends are met the company will prioritize cash

dividends for profit distribution ensuring the continuity and stability of the

dividend policy and safeguarding the legitimate rights and interests of

shareholders and investors.The board of directors of China Film Group will continuously

promote Corporate Value and Return Enhancement Action Plan regularly

evaluate the implementation of relevant measures and promptly fulfill the

information disclosure obligations.This action plan is the judgment and working idea formed by the

board of directors based on the actual situation of the company at present.In the future implementation it may be affected by factors such as

macroeconomic industry policies and market environment and there is a

degree of uncertainty. The business plans involved in the action plan are

not fait accompli but forward-looking statements that do not constitute a

substantial commitment by the company and the board of directors to

investors. Investors are advised to pay attention to relevant risks.