Section 1 Necessity of This Issuance and Type of Securities
I. Type of Securities for This Issuance
The type of securities to be issued in this offering is convertible corporate bonds that can be converted into the company's A-share stocks, issued to unspecified objects. These convertible bonds and the A-share stocks to be converted from them will be listed on the Shenzhen Stock Exchange.
II. Necessity of Selecting the Type of Securities for This Issuance
The convertible bonds to be issued in this offering can be converted into the company's stocks when conditions are met, which is equivalent to adding an option to the issued corporate bonds, thus possessing both equity and debt characteristics. Convertible bonds typically have lower coupon rates, significantly reducing the company's financing costs.
The company is currently in a rapid development phase and has a high demand for long-term funds. Therefore, the company's issuance of A-share convertible bonds will reduce financing costs, bring more substantial profit returns to shareholders, and lay a solid foundation for the company's long-term sustainable development.
Section 2 Appropriateness of the Scope, Number, and Standards of Issuance Targets for This Issuance
I. Appropriateness of the Scope of Issuance Targets for This Issuance
The specific issuance method for this convertible bond will be determined through negotiation between the company's shareholders' meeting authorized board of directors (or its authorized personnel) and the sponsor (underwriter). The issuance targets for this convertible bond include natural persons, legal persons, securities investment funds, and other investors that meet legal requirements, holding securities accounts with the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited (excluding those prohibited by national laws and regulations).
The convertible bonds issued in this offering will be preferentially allocated to the company's existing shareholders, who have the right to waive their preferential allocation rights. The specific proportion of preferential allocation to existing shareholders will be determined by the board of directors (or its authorized personnel), authorized by the company's shareholders' meeting, through negotiation with the sponsor (underwriter) based on market conditions before this issuance, and will be disclosed in the issuance announcement.
The balance remaining after the preferential allocation to existing shareholders and the portion waived by existing shareholders will be offered to institutional investors through offline placement and/or online fixed-price issuance through the Shenzhen Stock Exchange trading system. The remaining portion will be underwritten by the underwriter. The specific issuance method will be determined by the board of directors (or its authorized personnel), authorized by the company's shareholders' meeting, through negotiation with the sponsor (underwriter) based on market conditions before this issuance.
In summary, the scope of issuance targets for this issuance complies with the relevant regulations of the "Registration Management Measures" and other relevant laws, regulations, and normative documents, and the scope of selection is appropriate.
II. Appropriateness of the Number of Issuance Targets for This Issuance
The issuance targets for this convertible bond include natural persons, legal persons, securities investment funds, and other investors that meet legal requirements, holding securities accounts with the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited (excluding those prohibited by national laws and regulations). The number of issuance targets for this issuance complies with the relevant regulations of the "Registration Management Measures" and other relevant laws, regulations, and normative documents, and the number of issuance targets is appropriate.
III. Appropriateness of the Standards for Issuance Targets for This Issuance
The issuance targets for this convertible bond should possess a certain ability to identify and bear risks, and have corresponding financial strength. The standards for the issuance targets of this issuance comply with the relevant regulations of the "Registration Management Measures" and other laws and regulations, and the standards for the issuance targets are appropriate.