Zhongying Electronics plans to raise 1 billion yuan through a private placement to its controlling shareholder, whose shareholding ratio will increase to 33.08%.

Zhongying Electronics Co., Ltd. (hereinafter referred to as “Zhongying Electronics”) announced on April 3, 2026 that the company’s seventh meeting of the sixth session of the board of directors has considered and approved the “Proposal to Request Shareholders’ Meeting Approval for the Controlling Shareholder to Be Exempted from Increasing Its Holdings in the Company’s Shares by Means of a Tender Offer.” According to the announcement, the company plans to issue A-share stocks to its controlling shareholder, Shanghai Zhina Industrial Electronics Co., Ltd. (hereinafter referred to as “Zhina Industrial Electronics”), by way of a targeted offering, raising no more than 1 billion yuan. This will result in Zhina Industrial Electronics’ voting rights ratio in the company exceeding 30%, and therefore the company is asking the shareholders’ meeting to approve its exemption from increasing its holdings by means of a tender offer.

Targeted Share Issuance Plan: Controlling Shareholder Fully Subscribes 1 Billion Yuan

The announcement shows that Zhongying Electronics and Zhina Industrial Electronics have signed the “Conditional Effective Share Subscription Agreement.” The company plans to issue 49,407,114 A-share stocks to Zhina Industrial Electronics, with an issue price of 20.24 yuan per share. The total proceeds raised will be no more than 1B yuan (including this amount). All of the shares issued in this offering will be subscribed by the controlling shareholder Zhina Industrial Electronics.

The Equity Structure Will Change Significantly: Controlling Shareholder’s Voting Rights Ratio Breaks Through 30%

Before and after this issuance, Zhina Industrial Electronics’ shareholding and voting rights situation in Zhongying Electronics will change markedly.

Before the issuance, Zhina Industrial Electronics directly held 48,485,396 shares, accounting for 14.20% of the company’s total share capital; at the same time, Weilang International Group Co., Ltd. delegated the voting rights of 31,392,176 shares it held (9.20% of the total share capital) to Zhina Industrial Electronics for exercise. Accordingly, through direct shareholding and delegated voting rights combined, Zhina Industrial Electronics controlled the voting rights of 79,877,572 shares, accounting for 23.40% of the total share capital.

After the completion of this issuance, Zhina Industrial Electronics’ direct shareholding quantity will increase to 97,892,510 shares, accounting for 25.05% of the company’s total share capital after the issuance; meanwhile, it will still control the voting rights of 31,392,176 shares held by Weilang International through delegated voting rights, accounting for 8.03% of the total share capital after the issuance. Overall, through direct shareholding and delegated voting rights combined, Zhina Industrial Electronics will control the voting rights of 129,284,686 shares, accounting for 33.08% of the total share capital after the issuance.

Citing Relevant Regulations to Apply for Exemption from Tender Offer; Commitment: No Transfer of Newly Added Shares for 3 Years

Pursuant to Article 63 of the “Measures for the Administration of Takeovers of Listed Companies,” “where, with approval of non-affiliated shareholders at the shareholders’ meeting of a listed company, an investor obtains newly issued shares of a listed company issued to it by that listed company, resulting in the investor’s interest-holding shares exceeding 30% of the company’s issued shares; where the investor commits not to transfer the newly issued shares issued to it within 3 years; and where the company’s shareholders’ meeting agrees that the investor be exempted from issuing a tender offer,” the investor may be exempted from issuing a tender offer.

The announcement states that after the completion of this issuance, Zhina Industrial Electronics’ voting rights-bearing shares in the listed company will exceed 30%. The shares it subscribes for in this issuance may not be transferred within 36 months from the end date of the issuance. If the above restricted-period arrangement does not match the latest regulatory opinions or requirements of securities regulatory authorities, adjustments will be made according to the relevant regulatory opinions. Based on this, Zhina Industrial Electronics meets the circumstances under which it may be exempted from issuing a tender offer pursuant to the “Measures for the Administration of Takeovers of Listed Companies.”

Next Steps: Still Requires Shareholders’ Meeting Approval; Affiliated Shareholders Will Abstain from Voting

Zhongying Electronics stated that this targeted offering to specific parties involves a related-party transaction. The company’s independent directors’ special meeting has considered and approved it, and it still needs to be submitted to the company’s shareholders’ meeting for consideration. At that time, affiliated shareholders will abstain from voting at the shareholders’ meeting.

The final implementation of this targeted share issuance and the related tender-offer exemption still needs to wait for the result of shareholders’ meeting consideration and the subsequent approvals from relevant regulatory authorities.

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Responsible editor: Xiao Lang Express