Verification Opinion of Shenwan Hongyuan Securities on Adjustments Related to Midea Group's Stock Swap Merger with Wuxi Little Swan Due to Dividend Issues
According to the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Administrative Measures for Major Asset Restructuring of Listed Companies, and other relevant regulations issued by the China Securities Regulatory Commission (hereinafter referred to as "CSRC"), Shenwan Hongyuan Securities Co., Ltd. (hereinafter referred to as "this independent financial advisor") acts as the independent financial advisor for Midea Group Co., Ltd. (hereinafter referred to as "Midea Group") in the stock swap merger with Wuxi Little Swan Co., Ltd. (hereinafter referred to as "Little Swan"). This independent financial advisor has conducted a special verification regarding the adjustments related to the dividend distributions in this transaction and now presents the following opinions:
- The plan for this stock swap merger is based on the proposals approved at Midea Group's third extraordinary general meeting of shareholders in 2018 and Little Swan's second extraordinary general meeting of shareholders in 2018 regarding the issuance of A-shares for the stock swap merger with Little Swan. The merger plan is for Midea Group to issue A-shares as consideration to absorb and merge with Little Swan. The newly issued A-shares by Midea Group will be applied for listing and trading on the Shenzhen Stock Exchange (hereinafter referred to as "SZSE"). Upon completion of the merger, the shares of Little Swan (excluding those directly held by Midea Group and Titoni Investments Development Ltd. (hereinafter referred to as "TITONI")) will be fully converted into the A-shares issued by Midea Group according to the determined swap ratio. The shares directly held by Midea Group and TITONI will not participate in the swap and will not exercise cash options; these shares will be canceled simultaneously with the cancellation of Little Swan's legal entity status.