Report on the Second Repurchase Shares

Ming Yang Smart Energy Group Ltd

20 February 2024

 

MING YANG SMART ENERGY GROUP LIMITED

(GDR under the symbol: "MYSE")

(a joint stock company established under the laws of the People's Republic of China with limited liability)

Report on the Second Repurchase Shares through Centralized Competitive Trading

IMPORTANT NOTICE:

l Purpose of repurchased shares: In order to maintain the Company's value and interest of the shareholders, the Company intends to repurchase its shares through centralized competitive trading and sell them through centralized Competitive trading 12 months after disclosing the announcement on the repurchase results and changes in shares. The portion that has not been sold within 36 months after disclosing the above announcement will be cancelled. If there are any adjustments on the relevant national policies, this repurchase plan will be implemented based on the adjusted policies.

l Scale of repurchased shares: The total funds for repurchased shares this time will not be more than RMB600 million (inclusive) while not be less than RMB300 million (inclusive).

l Price of repurchased shares: The price of repurchased shares this time will not be more than RMB15 per share (inclusive), which shall not be higher than 150% of the average trading price of the Company's stocks during the 30 trading days prior to the deliberation and adoption of this repurchase plan by the Board of Directors.

l Source of repurchase funds: The self-owned funds of the Company.

l Repurchase period: It will be no more than 3 months from the date of deliberation and adoption of this repurchase plan by the Board of Directors.

l Whether there is an underweight plan for relevant shareholders: Upon inquiry, the directors, supervisors and executives, controlling shareholders, actual controllers and shareholders holding more than 5% of the shares of the Company have no plans to underweight their shares in the Company in the next 3 or 6 months.

l Tips on relevant risks: 1. During repurchase period, due to the stock price of the Company continues to exceed the price range disclosed in the repurchase plan, results in the risk that the repurchase plan cannot be implemented; 2. Due to significant changes in the operation, financial position and external conditions of the Company, there may be a risk of changing or terminating this repurchase plan. 3. The repurchased shares in the specific accounts fail to be disposed before the expiry of the holding period, resulting in the risk that such shares need to be cancelled; 4. The risk that in the event that the regulatory authorities promulgate new laws, regulations and normative documents related to the repurchase, may result in the relevant terms of this repurchase required to be adjusted accordingly during the implementation. The Company will make repurchase decisions and implement them subject to market conditions during the repurchase period. Therefore, investors are kindly advised to attach importance to investment risks.

I. Deliberation and Implementation Procedures of the Repurchase Plan

1. Deliberation of the Repurchase Share Plan

On 19 February 2024, the Company held its 5th meeting of the third session of the Board of Directors, deliberating and adopting the "Proposal on the Plan to the Second Repurchase Corporate Shares through Centralized Competitive Trading".

According to Articles 24, 25 and 27 of the Articles of Association of the Company, the repurchased shares this time are necessary to maintain the Company's value and interest of the shareholders, so the repurchase plan can be implemented after being deliberated and adopted by a board meeting as attended by more than two-thirds of the directors of the Company, and does not need to be submitted to the general meeting for deliberation.

The above implementation procedures are in compliance with the laws, regulations and normative documents such as the Rules for Share Repurchase of Listed Companies and the Guidelines for Self-regulation of Listed Companies on Shanghai Stock Exchange No.7 - Share Repurchase (hereinafter referred to as the "Repurchase Guidelines").

2. Explanation of the use of the repurchased shares in compliance with the relevant conditions

As of February 19, 2024, the Company's stock price met the condition of "the closing price of the Company's stock is less than 50% of the highest closing price of the stock in the most recent year" as stipulated in paragraph 2 of article 2 of the Repurchase Guidelines, which is in line with the circumstance of "necessary for maintaining the Company's value and the interest of shareholders" as stipulated in paragraph 2 of article 1(4) of the Repurchase Guidelines.

II. Main Contents of the Repurchase Plan

1. Purpose of share repurchase

Based on its confidence in the future development prospects of the industry and the Company and its recognition of the intrinsic investment value, combined with its own operating conditions as well as aiming at safeguarding the interests of investors, enhancing investor confidence and boosting healthy and sustainable development of the Company, the Company intends to repurchase some of its shares through centralized competitive trading, and shall sell the such shares repurchased through centralized competitive trading 12 months after the date of disclosure of the repurchase result and announcement of changes in shareholding structure; the portion of shares not being sold 36 months after the date of disclosure of the repurchase result and announcement of changes in shareholding structure will be cancelled..

2. Type of the shares to be repurchased

The shares to be repurchased this time refer to the RMB common shares (A shares) issued by the Company.

3. Method of the shares to be repurchased

The share repurchase this time is planned to be conducted through the trading system of Shanghai Stock Exchange by means of centralized competitive trading.

4. Repurchase period and start and ending dates of the shares to be repurchased

The period of this share repurchase will not exceed 3 months from the date of deliberation and adoption of this repurchase plan by the Board of Directors.

The repurchase period will expire ahead of schedule in case one of the following conditions is satisfied:

(1) In the event that the total amount of repurchased shares reaches the upper limit during the repurchase period, the repurchase plan will be completed and the repurchase period will expire ahead of schedule from that date;

(2) In the event that the total amount of repurchased shares reaches the lower limit during the repurchase period, the repurchase plan will expire ahead of schedule from the date when the management of the Company determines to terminate this repurchase plan;

(3) In the event that the Board of Directors of the Company resolves to terminate this repurchase plan, the repurchase period will expire ahead of schedule from the date when the Board of Directors resolves to terminate this repurchase plan.

During the implementation of the repurchase plan, if stocks of the Company are suspended for more than 10 consecutive trading days due to significant planning events, the repurchase plan will be postponed and disclosed in time after the stock resumes trading.

The Company may not repurchase shares during the following periods:

(1) From the date of significant events that may have a significant impact on the trading price of the securities and derivatives of the Company or during the decision-making process to the date of disclosure according to law;

(2) Other circumstances stipulated by China Securities Regulatory Commission and Shanghai Stock Exchange.

In the event that the relevant authorities promulgate new laws, regulations and normative documents related to the repurchase, the implementation of this repurchase will be adjusted accordingly in accordance with the new regulations.

In the event that the regulatory authorities promulgate new laws, regulations and normative documents related to the repurchase, the implementation of this repurchase will be adjusted accordingly.

5. Number, proportion to the total share capital of the Company and purpose of the shares to be repurchased

The total funds for repurchased shares this time will not be more than RMB600 million (inclusive) while not be less than RMB300 million (inclusive); according to the repurchase price ceiling of RMB15 per share, the number of shares to be repurchased will be 20 to 40 million, accounting for 0.88% to 1.76% of the total share capital of the Company. The repurchase of shares is based on the maintenance of the Company's value and shareholders' interests, and the Company plans to sell the shares through centralized competitive trading in accordance with the requirements of the relevant repurchase rules and supervisory guidelines 12 months after the disclosure of the announcement on the repurchase results and report on changes in shares. If the Company fails to implement the aforementioned purposes within 36 months after the completion of the implementation of the share repurchase, the unused portion will be cancelled, which will be executed in accordance with the relevant laws, regulations and policies.

In the event of any ex-right or ex-dividend matter like dividend distribution, share bonus, capital reserve conversion to share capital, share reduction, share allotment, etc. during the repurchase period of the Company, the repurchase quantity will be adjusted accordingly in line with relevant regulations. In the course, the specific repurchase quantity and its proportion to the total share capital of the Company shall be subject to the actual repurchase of the Company when the repurchase is completed or the repurchase implementation period expires.

6. Price or price range of the shares to be repurchased

The price of repurchased shares this time will not be more than RMB15 per share (inclusive), whose ceiling shall not be higher than 150% of the average trading price of the Company's stocks during the 30 trading days prior to the adoption of this share repurchase resolution by the Board of Directors. The specific repurchase price will be determined by the management of the Company as authorized by the Board of Directors in combination with market conditions, as well as the stock price, financial condition and operating status of the Company during the repurchase implementation period.

In the event of other ex-right or ex-dividend matter like capital reserve conversion to share capital, share bonus, cash dividend, share allotment, etc. during the repurchase period of the Company, the repurchase price ceiling shall be adjusted accordingly pursuant to relevant laws and regulations of China Securities Regulatory Commission and Shanghai Stock Exchange from the date of ex-right or ex-dividend.

7. Total amount and source of funds for the shares to be repurchased

The total funds for repurchased shares this time will not be more than RMB600 million (inclusive) while not be less than RMB300 million (inclusive). The specific total funds for repurchase will be subject to the total funds actually used to repurchase shares at the expiration of the repurchase period. The source of funds of this repurchase is self-owned funds of the Company.

8. Expected changes in the shareholding structure of the Company after the repurchase

According to the total repurchase fund ceiling of RMB600 million, the lower limit of RMB 300 million and the repurchase price ceiling of RMB15 per share, the number of repurchased shares ranges from 20 million to 40 million. If all the repurchased shares are sold out, the total share capital and equity structure of the Company will not change; If the repurchased shares this time are cancelled due to the failure to realize sales, the expected changes in the Company's share capital structure before and after the repurchase are as follows:

Share Category	Before the Implementation of This Plan		After the Implementation of This Plan (Based on the minimum number of repurchase shares)		After the Implementation of This Plan (Based on the maximum number of repurchase shares)
	Number of Shares (in Share)	Proportion to Total Number of Shares	Number of Shares (in Share)	Proportion to Total Number of Shares	Number of Shares (in Share)	Proportion to Total Number of Shares
Outstanding shares with restricted selling conditions	9,250,700	0.41%	9,250,700	0.41%	9,250,700	0.41%
Outstanding shares without restricted selling conditions	2,262,508,506	99.59%	2,242,508,506	99.59%	2,222,508,506	99.59%
Total	2,271,759,206	100%	2,251,759,206	100%	2,231,759,206	100%

Note: The above calculation data is for reference only, and the specific number of shares to be repurchased and the changes in the Company's share capital structure will be subject to subsequent implementation.

9. Analysis of the possible impact of this share repurchase on the Company's daily operation, finance, research and development, profitability, debt performance, future development, maintenance of the status of listed company, etc.

As of 30 September 2023, the Company had the total assets of RMB80.944 billion and the current assets of RMB45.787 billion. In case the maximum repurchase amount of RMB600 million is fully used up, the repurchase funds will represent approximately 0.74% of the Company's total assets and 1.31% of its current assets based on financial data as at 30 September 2023, and is relatively low as compared to the asset size of the Company, thus the Company has sufficient self-owned funds to pay for this repurchase.

Based on the current operation, finance and future development of the Company, this repurchase will not pose a significant impact on the operation, finance and future development of the Company. Such a share repurchase is conducive to enhancing investor confidence, maintaining the Company's share price and upgrading its capital market image, thus creating favorable conditions for its future development. The implementation of the share repurchase plan will neither lead to changes in its control, nor lead to its equity distribution not meeting the listing conditions.

10. Explanation of whether the directors, supervisors and executives, controlling shareholders and actual controllers of the listed company have bought or sold shares of the Company within 6 months before the Board of Directors made a resolution to repurchase shares, whether there was a conflict of interest with this repurchase plan, whether there were any insider trading and market manipulation, and whether there was a plan to overweight or underweight their holdings during the repurchase period

On 26 August 2023, the Company disclosed the "Announcement on the Plan of the Chairman and Chief Executive Officer and the Actual Controller of the Company to Increase the Shareholding of the Company" (Announcement No. 2023-055), in which Mr. Zhang Chuanwei, the Chairman and Chief Executive Officer (General Manager) and the actual controller of the Company, intends to increase his shareholding of the Company through centralized competitive transactions on the trading system of the Shanghai Stock Exchange within 6 months from the date of the disclosure of such announcement, with the amount of increase not less than RMB20 million and not more than RMB30 million. As of February 2, 2024, Mr. Zhang Chuanwei has increased his shareholding in the Company by 1,909,600 shares, accounting for 0.08% of the total share capital of the Company (i.e., 2,271,759,206 shares), and the amount of the increase is RMB20,097,275.00. The implementation of the plan of increase in shareholding has been completed. For details, please refer to the Announcement on the Result of the Increase in Shareholding by the Chairman and Chief Executive Officer and Actual Controller of the Company and the Company's Action Program of "Enhancing Quality, Increasing Efficiency and Focusing on Returns" disclosed by the Company on February 3, 2024 (Announcement No. 2024-013).

Upon self-examination, except for the above-mentioned overweight behaviors, other directors, supervisors and executives, controlling shareholders and actual controllers of the listed company have never bought or sold shares of the Company within 6 months before the Board of Directors made a resolution to repurchase shares, there was no conflict of interest with this repurchase plan, and there was no insider trading or market manipulation.

Upon inquiry, the directors, supervisors and executives, controlling shareholders and actual controllers of the Company confirm that they have no plans to underweight their holdings during the repurchase period, and currently they have no plans to overweight their holdings. If they plan to overweight or underweight their holdings subsequently, the Company will timely fulfill its information disclosure obligation in accordance with relevant laws and regulations strictly.

11. Specific circumstance about that the listed company inquires the directors, supervisors and executives, controlling shareholders, actual controllers, and shareholders holding more than 5% of shares about whether there is an underweight plan in the next 3 or 6 months

The Company has respectively sent inquiries to directors, supervisors and executives, controlling shareholders, actual controllers and shareholders holding more than 5% of shares about whether there is an underweight plan in the next 3 or 6 months. The response received by the Company is as follows:

The directors, supervisors and executives, controlling shareholders, actual controllers and shareholders holding more than 5% of the shares of the Company have no plans to underweight their stocks in the Company in the next 3 or 6 months.

12. Relevant arrangements for legal cancellation or transfer after share repurchase

The repurchased shares will be sold by centralized competitive trading 12 months after the disclosure of the announcement on the repurchase results and changes in shares. If the Company fails to implement the aforementioned purposes within 36 months after the completion of the share repurchase, the unutilized portion will be cancelled, which will be implemented in accordance with relevant laws, regulations and policies. The Company will fulfill its information disclosure obligations in a timely manner in accordance with the specific implementation situation at that time.

13. Relevant arrangements for the Company to prevent infringement upon creditors' interests

The repurchased shares will not affect the normal and continuous operation of the Company and will not impair the Company' ability to pay back the debts. In case of subsequent cancellation of the repurchased shares, the Company will timely perform relevant decision-making procedures and notify all creditors according to the Company Law and other relevant regulations, so as to fully protect the legitimate rights and interests of creditors and timely fulfill its information disclosure obligation.

14. Specific authorization for handling this share repurchase

With a view to successfully, efficiently and orderly completing the work related to this share repurchase, the Board of Directors of the Company authorizes the management of the Company to specifically handle the involved matters, with the authorized content and scope including but not limited to:

1. Repurchase shares at an opportune time within the repurchase period, including but not limited to specific time, price, quantity, etc. of repurchased shares;

2. Determine the postpone maters of the repurchase if the trading of the Company's shares is suspended during the implementation period of the share repurchase plan;

3. Handle relevant approval procedures according to applicable laws, regulations, normative documents and other relevant provisions, including but not limited to authorizing, signing, executing, modifying and completing all necessary documents, contracts and agreements related to such share repurchase;

4. Authorize the management of the Company to make corresponding adjustments to the specific plan for share repurchase and other related matters, if there are changes in the regulatory authorities' policies or market conditions regarding the share repurchase, apart from the matters that require a re-vote by the Board of Directors according to relevant laws, regulations and the Articles of Association;

5. Adjust and modify the internal governance systems of the Company such as the Articles of Association according to relevant laws and regulations (including but not limited to adjusting and modifying the words, chapters, clauses, effective conditions, registered capital, etc. in the Articles of Association), and handle matters such as approval, change of registration and filing with the Administration for Market Regulation and other relevant authorities after the completion of this share deregistration, if the Company fails to use the repurchased shares for the above purpose within 36 months after the completion of this repurchase and deregister them according to law;

6. Handle other matters not listed above but necessary for such share repurchase according to applicable laws, regulations and relevant provisions of the regulatory authorities.

The above authorization commences from the date of deliberation and adoption of this repurchase plan by the Board of Directors to the date of completion of the above authorization.

III. Uncertainty Risks Associated with the Repurchase Plan

The uncertainty risks associated with this share repurchase plan are as follows:

1. During repurchase period, due to the stock price of the Company continues to exceed the price range disclosed in the repurchase plan, results in the risk that the repurchase plan cannot be implemented;

2. Due to significant changes in the operation, financial position and external conditions of the Company, there may be a risk of changing or terminating this repurchase plan;

3. The repurchased shares in the specific accounts fail to be disposed before the expiry of the holding period, resulting in the risk that such shares need to be cancelled;

4. The risk that in the event that the regulatory authorities promulgate new laws, regulations and normative documents related to the repurchase, may result in the relevant terms of this repurchase required to be adjusted accordingly during the implementation.

IV. OTHER RELEVANT INFORMATION

According to relevant regulations, the Company has applied to open a special account for share repurchase at the Shanghai Branch of China Securities Depository and Clearing Corporation Limited. The special account is as follows:

Name of holder: the special securities account of Ming Yang Smart Energy Group Co., Ltd. for repurchase

Securities account numbers: B883428573

Ming Yang Smart Energy Group Limited

20 February, 2024

 

END