Section 1: Necessity of Issuing Securities and Choosing the Type of Security
China National Aero-Engine Group High Temperature Alloy Materials Co., Ltd. (hereinafter referred to as "the Company" or "Shangda Shares") is a listed company on the Growth Enterprise Market of the Shenzhen Stock Exchange. To meet the capital needs for the Company's business development, expand its operating scale, and enhance its overall competitiveness, the Company, considering its actual situation and in accordance with the "Company Law of the People's Republic of China" (hereinafter referred to as "Company Law"), the "Securities Law of the People's Republic of China" (hereinafter referred to as "Securities Law"), and the "Administrative Measures for the Registration of Issuance of Securities by Listed Companies" (hereinafter referred to as "Registration Measures") and other relevant laws, regulations, and normative documents, plans to raise funds by issuing convertible corporate bonds to unspecified objects (hereinafter referred to as "this Issuance"; convertible corporate bonds hereinafter referred to as "convertible bonds").
Unless otherwise specified in this analysis report, the terms used herein have the same meaning as in the "Proposal for the Issuance of Convertible Corporate Bonds to Unspecified Objects by China National Aero-Engine Group High Temperature Alloy Materials Co., Ltd."
I. Type of Securities to be Issued
The type of securities to be issued in this issuance is convertible corporate bonds that can be converted into Class A shares of the Company. These convertible bonds and the Class A shares that will be converted from them in the future will be listed on the Shenzhen Stock Exchange.
II. Necessity of Choosing the Type of Securities to be Issued
The projects to be funded by the capital raised from the issuance of convertible bonds to unspecified objects have been carefully considered by the Company, are in line with national industrial policies and the Company's strategic development direction, and their implementation will further enhance the Company's core competitiveness, strengthen its sustainable development capabilities, and are in the interests of the Company and all shareholders, thus being necessary. For specific analysis, please refer to the "Feasibility Analysis Report on the Use of Raised Funds for the Issuance of Convertible Corporate Bonds to Unspecified Objects by China National Aero-Engine Group High Temperature Alloy Materials Co., Ltd." published by the Company on the same day.
Section 2: Appropriateness of the Selection Scope, Number, and Standards of Issuance Objects
I. Appropriateness of the Selection Scope of Issuance Objects
The specific issuance method for convertible bonds will be determined through negotiation between the shareholders' meeting, authorized board of directors (or authorized personnel), and the sponsor (underwriter). The issuance objects for this convertible bond issuance are natural persons, legal persons, securities investment funds holding securities accounts with the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited, and other investors that meet legal requirements (excluding those prohibited by national laws and regulations). The convertible bonds issued in this issuance will be preferentially allocated to the Company's original shareholders, who have the right to waive their pre-emptive subscription rights. The specific proportion of preferential allocation to original shareholders will be submitted to the Company's shareholders' meeting for authorization, and the board of directors (or authorized personnel) will determine it through negotiation with the sponsor (underwriter) based on market conditions before this issuance and disclose it in the issuance announcement of the convertible bonds. The remaining portion after preferential allocation to original shareholders and the portion after original shareholders waive their pre-emptive subscription rights 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 selection scope of issuance objects is in compliance with the relevant provisions of the "Registration Measures" and other laws and regulations, and the selection scope is appropriate.