Xiamen Jihong (02603.HK) to Place New H-shares Under General Mandate, 80% of Proceeds for Global Business Expansion

NewTimeSpace News: Xiamen Jihong Co., Ltd. (02603.HK) announced on July 16 that on July 16, 2026 (before trading hours on the Hong Kong Stock Exchange), the Company entered into a placing agreement with the placing agents, pursuant to which the Company has agreed to appoint the placing agents, and the placing agents (on an individual basis) have conditionally agreed to act as the Company's placing agents on a best-efforts basis to procure not less than six placees (who together with their respective ultimate beneficial owners will be independent third parties) to subscribe for an aggregate of up to 9,371,500 placing shares at the placing price of HK$12.24 per placing share.

The parties to the Placing Agreement are the Company and the placing agents. To the best of the Directors' knowledge, information and belief, the placing agents and their respective ultimate beneficial owners are all independent third parties. The placing agents are Guotai Junan Securities (Hong Kong) Limited, China Merchants Securities (Hong Kong) Co., Limited and Lico Securities Limited.

Assuming the Placing Shares are fully placed, the Placing Shares represent approximately 13.80% of the existing H-shares in issue (excluding treasury shares) and approximately 2.14% of the existing total issued shares (excluding treasury shares) as of the date of the announcement, and approximately 12.13% of the H-shares in issue (excluding treasury shares) and approximately 2.09% of the total issued shares (excluding treasury shares) as enlarged by the allotment and issue of the Placing Shares (assuming no change in the issued share capital of the Company from the date of the announcement up to completion). The aggregate nominal value of the Placing Shares is RMB9,371,500, calculated at par value of RMB1.00 per Placing Share.

The placing price of HK$12.24 per Placing Share represents a discount of approximately 17.02% to the closing price of HK$14.75 per H-share as quoted on the Hong Kong Stock Exchange on the last trading day; and a discount of approximately 16.68% to the average closing price of approximately HK$14.69 per H-share as quoted on the Hong Kong Stock Exchange for the last five consecutive trading days immediately preceding the last trading day. The placing price excludes applicable brokerage commissions, trading fees, transaction fees and levies. The net placing price (after deducting all applicable fees, costs and expenses) is approximately HK$12.04 per Placing Share. The placing price was determined after fair negotiation between the Company and the placing agents with reference to the prevailing market price of the H-shares. The Directors consider that the placing price is fair and reasonable and in the interests of the Company and shareholders as a whole.

Assuming the Placing Shares are fully placed, the gross proceeds from the Placing will be approximately HK$114.7 million, and the estimated net proceeds from the Placing (after deducting all fees, costs and expenses incurred by the Company in connection with the Placing (including commissions and levies)) will be approximately HK$112.8 million.

The Placing Shares will be allotted and issued under the general mandate, pursuant to which the Board is authorized to allot, issue and deal with H-shares not exceeding 20% of the H-shares in issue on the date of the relevant resolution approving the authorization passed at the extraordinary general meeting held on May 14, 2026, being 13,582,000 H-shares. As of the date of the announcement, the Company has not issued any new H-shares under the general mandate. Therefore, the general mandate is sufficient for the allotment and issue of the Placing Shares, and the Placing is not subject to further shareholders' approval.

Completion is conditional upon the fulfillment of the conditions set out in the Placing Agreement, including: approval by the listing committee for the listing and dealing of the Placing Shares on the Hong Kong Stock Exchange; obtaining all necessary approvals and permits from relevant PRC regulatory authorities in connection with the Placing; the placing agents having received the final or substantially final draft of the CSRC filing and the PRC legal opinion issued by the Company's PRC legal counsel on the CSRC filing at the completion date; the placing agents having received the PRC legal opinion issued by the placing agents' PRC legal counsel on the CSRC filing at the completion date; no material adverse change having occurred prior to completion; the representations and warranties made by the Company under the Placing Agreement being true and accurate as of the date of the Placing Agreement and the completion date; and the Company having complied with all agreements and undertakings and fulfilled all conditions to be complied with or fulfilled by it under the Placing Agreement on or before the completion date. The completion date is July 23, 2026, or such other date as the placing agents and the Company may agree in writing. If any condition is not fulfilled or waived in writing on or before 8:00 a.m. (Hong Kong time) on the fifteenth business day after the date of the Placing Agreement, each placing agent may in its sole discretion immediately terminate the Placing Agreement.

Without the prior written consent of the placing agents, during the period from the date of the Placing Agreement to the date falling 45 days after the completion date, the Company shall not directly or indirectly: effect, arrange or procure any placing, allotment, issue or transfer from treasury of any equity securities of the Company; offer to allot, issue or transfer from treasury; grant any options, rights or warrants to subscribe for such securities; or enter into any transaction with the same economic effect; or publicly announce any intention to do so. The above restrictions do not apply to the issue of Placing Shares under the Placing Agreement or the grant of awards or options under the Company's adopted share schemes. Without the prior written consent of the placing agents, the Company shall not, and shall procure that its subsidiaries shall not, directly or indirectly purchase any shares of the Company during the period from the date of the Placing Agreement to the date falling 45 days after the completion date.

The net proceeds from the Placing are intended to be used as follows: 80% or approximately HK$90.2 million for advancing the global expansion and development of the Company's cross-border social e-commerce business, comprising 40% or approximately HK$45.1 million for overseas market expansion in Europe (particularly Northeast Europe) and the Middle East; 30% or approximately HK$33.8 million for developing existing self-developed brands; and 10% or approximately HK$11.3 million for funding R&D to continuously upgrade and iterate the Company's "Giikin" system through enhanced application of AI and data technology; 10% or approximately HK$11.3 million for optimizing the existing supply chain network and expanding the scope of the Company's paper-based fast-moving consumer goods packaging business; and 10% or approximately HK$11.3 million for working capital and general corporate purposes of the Company and its subsidiaries. The Company expects the net proceeds from the Placing to be fully utilized by the end of 2027.

The Board considers that the Placing provides an effective and timely fundraising opportunity while diversifying the Company's shareholder base. The net proceeds from the Placing will strengthen the Group's financial position by providing necessary funds to support the Company's cross-border social e-commerce business and paper-based fast-moving consumer goods packaging business. The Directors consider that the terms of the Placing Agreement (including the placing price) are fair and reasonable and in the interests of the Company and shareholders as a whole, and that the Placing Agreement was entered into on normal commercial terms after fair negotiation between the Company and the placing agents.

The Company was listed on the Main Board of the Hong Kong Stock Exchange on May 27, 2025. The net proceeds from the global offering were approximately HK$426.9 million. As of June 30, 2026, approximately HK$71.0 million of the IPO net proceeds remained unutilized, while the funds allocated for the expansion of the Company's cross-border social e-commerce business in Asia, Europe and Latin America had been fully utilized. The Company has not conducted any equity fundraising activities in the 12 months immediately preceding the date of the announcement.

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