Securities code: Cathay Biotech Inc(688065) securities abbreviation: Cathay Biotech Inc(688065) Announcement No.: 2022020 Cathay Biotech Inc(688065)
Report on repurchase of shares through centralized bidding transaction
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear legal responsibility for the authenticity, accuracy and integrity of its contents according to law.
Important content tips:
Cathay Biotech Inc(688065) (hereinafter referred to as “the company”) intends to buy back part of the issued RMB common shares (A shares) of the company through the trading system of Shanghai stock exchange with over raised funds by means of centralized bidding. The main contents are as follows:
1. Purpose of shares to be repurchased: the repurchased shares will be used for employee stock ownership plan or equity incentive at an appropriate time in the future, and will be transferred within three years after the implementation result of share repurchase and announcement of share change; If the company fails to use up the repurchased shares within three years after the implementation result of share repurchase and the announcement date of share change, the unused repurchased shares will be cancelled. If the state makes adjustments to relevant policies, the repurchase scheme shall be implemented according to the adjusted policies;
2. Repurchase scale: the total repurchase funds shall not be less than 80 million yuan (inclusive) and not more than 150 million yuan (inclusive);
3. Repurchase price: no more than 180 yuan / share (inclusive), which is no more than 150% of the average trading price of the company’s shares 30 trading days before the board of directors passed the repurchase resolution;
4. Repurchase period: within 12 months from the date when the board of directors deliberates and approves the repurchase plan;
5. Source of repurchase funds: over raised funds.
Does the relevant shareholder have a reduction plan
Wuxi Diwei investment partnership (limited partnership) (hereinafter referred to as “Diwei investment”) and Hangzhou Yanfu Xincai investment partnership (limited partnership) (hereinafter referred to as “Yanfu Xincai”), the shareholders holding more than 5% of the company’s shares, see the announcement of Cathay Biotech Inc(688065) shareholders’ Centralized Bidding share reduction plan (Announcement No.: 2021022) disclosed by the company on September 15, 2021 for details. After the expiration of the reduction plan, Diwei investment and Yanfu new material are expected to continue to reduce their holdings in the next six months. If they plan to reduce their holdings of shares in the future, they will timely fulfill the obligation of information disclosure in accordance with relevant regulations. Wuxi changgu investment partnership (limited partnership) (hereinafter referred to as “changgu investment”) and Hangzhou Yantian investment partnership (limited partnership) (hereinafter referred to as “Yantian investment”) have no reduction plan in the next six months.
Shanxi science and technology innovation city investment and Development Co., Ltd. (hereinafter referred to as “Shanxi science and technology innovation city investment”), the shareholder holding more than 5% of the company, replied that there is no plan to reduce the company’s shares at present. If there is a subsequent reduction plan, it will fulfill the obligation of information disclosure in accordance with relevant regulations.
Shanxi Lu’an Mining (Group) Co., Ltd. (hereinafter referred to as “Lu’an Group”), a shareholder holding more than 5% of the company, replied that there may be a reduction plan in the next six months. The specific reduction plan will be implemented in accordance with the reply of the superior competent department, and will perform the obligation of information disclosure in strict accordance with the regulatory rules of Shanghai Stock Exchange.
In addition to the above, the company’s controlling shareholders, actual controllers, repurchase proponents, other shareholders holding more than 5%, directors, supervisors and senior managers have no plans to reduce their shares in the company in the next three months and six months.
If relevant personnel plan to implement the share reduction plan in the future, the company will timely perform the obligation of information disclosure in accordance with relevant regulations.
Relevant risk tips
1. There is a risk that the stock price of the company continues to exceed the upper limit of the repurchase price during the repurchase period, resulting in the failure to implement the repurchase plan smoothly;
2. In case of major events that have a significant impact on the trading price of the company’s shares, or major changes in the company’s production and operation, financial conditions and external objective conditions, or other events that lead to the decision of the board of directors to terminate the repurchase plan, there is a risk that the repurchase plan cannot be implemented smoothly or the repurchase plan can be changed or terminated according to relevant regulations;
3. The repurchased shares of the company are intended to be used for employee stock ownership plan or equity incentive at an appropriate time in the future. If the company fails to implement the above purpose within the time limit specified by laws and regulations, there is a risk of starting the cancellation procedure of non transferred shares;
4. If the regulatory authorities issue new normative documents related to repurchase, it may lead to the risk that the corresponding terms of repurchase need to be adjusted according to the new regulatory regulations during the implementation of this repurchase.
During the repurchase period, the company will choose the opportunity to make the repurchase decision and implement it according to the market conditions, and timely perform the obligation of information disclosure according to the progress of the repurchase of shares. Please pay attention to the investment risks.
1、 Review and implementation procedures of repurchase scheme
(I) on March 29, 2022, the company held the 29th meeting of the first board of directors, deliberated and adopted the plan on repurchase of company shares by centralized bidding transaction. All directors of the company attended the meeting and adopted the proposal with 8 affirmative votes, 0 negative votes and 0 abstention. The independent directors expressed their independent opinions on this matter.
(II) according to the authorization of the Cathay Biotech Inc(688065) articles of Association (hereinafter referred to as the “articles of association”) and the relevant provisions of the guidelines for self discipline supervision of listed companies on Shanghai Stock Exchange No. 7 – share repurchase, the share repurchase plan does not need to be submitted to the general meeting of shareholders of the company for deliberation.
(III) on March 26, 2022, Cathay industrial biotech Ltd. (hereinafter referred to as “controlling shareholder” or “CIB”) proposed to buy back the company’s shares to the board of directors of the company. The content of the proposal is to propose that the company repurchase part of the issued RMB common shares (A shares) of the company through the trading system of Shanghai stock exchange with over raised funds through centralized bidding trading. For details, please refer to the website of Shanghai Stock Exchange (www.sse. Com. CN.) on March 30, 2022 Announcement of Cathay Biotech Inc(688065) on the proposal of the controlling shareholder of the company to repurchase shares of the company (Announcement No.: 2022010) disclosed on the.
On March 29, 2022, the company held the 29th meeting of the first board of directors to consider the above share repurchase proposal. The meeting deliberated and adopted the proposal on the share repurchase scheme of the company by means of centralized bidding transaction by 8 votes in favor, 0 votes against and 0 abstentions. The independent directors of the company expressed their independent opinions on the share repurchase.
The above-mentioned proposal time and procedures, as well as the deliberation time and procedures of the board of directors, comply with the relevant provisions of the self regulatory guidelines for listed companies of Shanghai Stock Exchange No. 7 – share repurchase and so on.
2、 Main contents of repurchase plan
(I) purpose and purpose of the company’s share repurchase
Based on the confidence in the company’s future development prospects and high recognition of the company’s value, in order to enhance investors’ confidence in the company, safeguard the interests of the majority of investors, and on the basis of the company’s operation, main business development prospects, financial status and future profitability, the company plans to repurchase the company’s shares with over raised funds, and use the repurchased shares for employee stock ownership plan or equity incentive at an appropriate time in the future, In order to further improve the corporate governance structure, build an innovative long-term incentive and restraint mechanism for the shareholding of management, technology and business backbone teams, ensure the realization of the company’s long-term business objectives, promote the consistency of interests and income sharing of all shareholders, and enhance the overall value of the company.
(II) types of shares to be repurchased
RMB ordinary shares (A shares) issued by the company.
(III) method of Share Repurchase: centralized bidding transaction.
(IV) repurchase period
It shall be no more than 12 months from the date when the board of directors deliberates and approves the final share repurchase plan. During the implementation of the repurchase, if the trading of the company’s shares is suspended for more than 10 consecutive trading days due to the planning of major events, the repurchase plan will be postponed and disclosed in time after the resumption of trading.
If the following conditions are met, the repurchase period will expire in advance:
1. If the use amount of repurchase funds reaches the upper limit within the repurchase period, the implementation of the repurchase plan is completed, and the repurchase period expires in advance from that date.
2. If the board of directors of the company decides to terminate the repurchase plan, the repurchase period shall expire in advance from the date when the board of directors decides to terminate the repurchase plan.
3. The company shall not repurchase shares during the following periods:
(1) If the announcement date is delayed due to special reasons within 10 trading days before the annual report, semi annual report and quarterly report of the listed company, it shall be calculated from 10 trading days before the original scheduled announcement date to the day before the announcement;
(2) Within 10 trading days before the announcement of the performance forecast or performance express of the listed company;
(3) From the date of occurrence of major events that may have a great impact on the trading price of the company’s shares or in the process of decision-making to the date of disclosure according to law;
(4) Other circumstances prescribed by the CSRC and the Shanghai Stock Exchange.
(V) purpose, quantity, proportion in the total share capital of the company and total capital of the shares to be repurchased
The shares repurchased this time will be used for employee stock ownership plan or equity incentive at an appropriate time in the future, and will be transferred within three years after the completion of the repurchase. If the company fails to use up the repurchased shares within three years after the implementation result of share repurchase and the announcement date of share change, the unused repurchased shares will be cancelled. If the state makes adjustments to relevant policies, the repurchase plan shall be implemented according to the adjusted policies.
Total repurchase funds: no less than 80 million yuan (inclusive) and no more than 150 million yuan (inclusive).
Number of shares repurchased: Based on the current total share capital of 416681976 shares of the company, calculated according to the maximum repurchase amount of 150 million yuan and the maximum repurchase price of 180 yuan / share, the number of shares repurchased this time is 833333 shares, accounting for 0.20% of the total share capital of the company. According to the calculation of the lower limit of the repurchase amount of RMB 80 million and the upper limit of the repurchase price of RMB 180 / share, the number of this repurchase is 444444 shares, accounting for 0.11% of the total share capital of the company.
The specific repurchase quantity and proportion in the total share capital of the company shall be subject to the actual repurchase situation of the company when the repurchase is completed or the repurchase implementation period expires. If the company implements ex rights and ex interests matters such as conversion of capital reserve into share capital, distribution of stock dividends, stock subdivision, stock reduction or allotment during the repurchase period, the company will adjust the number of repurchased shares accordingly in accordance with the relevant provisions of China Securities Regulatory Commission and Shanghai Stock Exchange.
(VI) price of this repurchase
The price of the shares repurchased this time shall not exceed 180 yuan / share (inclusive), and the price shall not be higher than 150% of the average trading price of the company’s shares 30 trading days before the board of directors adopted the repurchase resolution. The specific repurchase price the board of directors authorizes the management of the company to determine the stock price in the secondary market during the implementation of the repurchase. If the company has implemented ex rights and ex interest matters such as conversion of capital reserve into share capital, cash dividends, distribution of stock dividends, allotment of shares, stock subdivision or stock reduction during the repurchase period, the company will adjust the upper limit of repurchase price accordingly in accordance with the relevant provisions of China Securities Regulatory Commission and Shanghai Stock Exchange.
(VII) total amount and source of funds of this repurchase
The total amount of funds for this repurchase is no less than 80 million yuan (inclusive) and no more than 150 million yuan (inclusive), and the source of funds is the over raised funds of the company.
For details on the deposit and use of the company’s raised funds, see the company’s disclosure on the website of Shanghai Stock Exchange (www.sse. Com. CN.) on August 19, 2021 Special report on the deposit and use of raised funds in the half year of 2021.
(VIII) expected changes in the company’s equity structure after repurchase
The total capital of the company’s share repurchase this time shall not be less than RMB 80 million (inclusive) and not more than RMB 150 million (inclusive). If the upper limit of the repurchase price is 180 yuan / share, assuming that all the repurchase shares are used for employee stock ownership plan or equity incentive and locked up, the changes in the company’s equity structure are expected to be as follows:
Before this repurchase, the shares will be repurchased according to the upper limit of the repurchase amount and after the shares will be repurchased according to the lower limit of the repurchase amount
Number of shares in total share capital number of shares in total share capital number of shares in total share capital proportion (%) (share) proportion (%) (share) proportion (%)
Limited sales 24705439359.2924788772659.4924749883759.40 conditional flow
Unlimited sale of through shares
Conditional flow 16962758340.7116879425040.5116918313940.60
Total share capital 416681976100.00416681976100.00416681976100.00
Note: the above changes do not consider the influence of refinancing shares and the lifting of the ban on restricted shares during the repurchase period. The above calculation data are for reference only. The specific number of repurchased shares and the actual changes in the company’s equity structure shall prevail over the subsequent implementation.
(IX) analysis of the possible impact of this share repurchase on the company’s daily operation, finance, R & D, profitability, debt performance, future development and maintaining its listing status
1. The implementation of share repurchase has little impact on the daily operation of the company. As of December 31, 2021 (audited), the total assets of the company are 16198325 million yuan, and the net assets attributable to the shareholders of the listed company are 106650958 million yuan. According to the calculation of the upper limit of the repurchase fund of 150 million yuan, accounting for 0.93% and 1.41% of the above financial data respectively. According to the repurchase plan, the source of repurchase funds is over raised funds, and will be paid at an appropriate time within the repurchase period
