PART ONE: UPDATE ON LEGAL MATTERS INVOLVED IN THE COMPANY'S CURRENT RESTRUCTURING
I. The Restructuring Plan
According to the "Company's 2025 Profit Distribution Plan" deliberated and approved by the Company's 2025 Annual Shareholders' Meeting, the Company will distribute a cash dividend of RMB 0.65 (tax inclusive) per 10 shares to all shareholders based on the total share capital as of the end of 2025. The profit distribution plan was completed on June 12, 2026. According to the adjustment plan for ex-rights and ex-dividend matters set forth in the transaction plan, the restructuring plan involves the following adjustments:
(I) Specific Plan for Issuing Convertible Bonds to Purchase Assets
The pricing base date for the initial conversion price of the convertible bonds to be issued is the announcement date of the resolution of the fifth meeting of the sixth board of directors of the Company. After negotiation between the parties, the initial conversion price is RMB 12.15 per share. After the implementation of the 2025 profit distribution plan, the initial conversion price is adjusted to RMB 12.09 per share. The initial conversion price of the convertible bonds to be issued shall not be less than 80% of the average trading price of the Company's shares in the 20 trading days, 60 trading days, or 120 trading days prior to the pricing base date.
(II) Specific Plan for Raising Supporting Funds
The pricing base date for the issuance of shares to raise supporting funds is the announcement date of the resolution of the fifth meeting of the sixth board of directors of the Company. The issuance price of the shares to be issued will be determined at a price not less than 80% of the average trading price of the Company's shares in the 20 trading days prior to the pricing base date (Average trading price of the Company's shares in the 20 trading days prior to the pricing base date = Total transaction amount of the Company's shares in the 20 trading days prior to the pricing base date / Total trading volume of the Company's shares in the 20 trading days prior to the pricing base date), which is determined to be RMB 12.15 per share. After the implementation of the 2025 profit distribution plan, the issuance price of shares is adjusted to RMB 12.09 per share.
If the Company undergoes any ex-rights or ex-dividend events, such as equity distribution, capital reserve to increase share capital, or rights issue, during the period from the pricing base date to the issuance date of the shares for the supporting financing, the parties agree to make corresponding adjustments to the issuance price in accordance with the relevant regulations of the China Securities Regulatory Commission (CSRC) and the Shenzhen Stock Exchange.
The final issuance price is subject to the review and approval of the Shenzhen Stock Exchange and the registration and approval of the CSRC. If the CSRC makes any policy adjustments to the determination of the issuance price during the period from the pricing base date to the issuance date of the shares for the supporting financing, the issuance price will be adjusted accordingly.
(III) This Adjustment Does Not Constitute a Major Adjustment to the Current Restructuring
Except for the adjustment of the initial conversion price and the issuance price of shares due to the annual profit distribution, the specific plan of the restructuring remains consistent in all other aspects.
According to the "Administrative Measures for Major Asset Restructuring of Listed Companies" and the "Opinions on the Application of Articles 29 and 45 of the Administrative Measures for Major Asset Restructuring of Listed Companies — Securities and Futures Legal Application Opinions No. 15," etc., the adjustment of the transaction plan does not involve changes in the target assets or transaction counterparties, the total transaction price remains unchanged, and no additional supporting funds are raised, thus it does not constitute a major adjustment.