Proposed repurchase of shares under repurchase authorization
The company's board of directors has decided to use no more than HK$150 million in cash to repurchase the company's ordinary shares on the Hong Kong Stock Exchange. Under the repurchase mandate, the Company may repurchase up to 10% of the issued share capital of the Company on the date of the annual general meeting. The Company will subsequently cancel the repurchased shares.
The Board of Directors believes that the proposed share repurchase is in the overall interests of the Company and its shareholders for the following reasons:
(1) Shares have been traded at valuation levels that are significantly lower than the Company's performance and underlying value. The Board of Directors is committed to actively managing the Company's capital and therefore believes that the proposed share repurchase will create value for shareholders;
(2) As stated in the Company's announcement dated December 8, 2017, due to the Group's three-year The rectification is about to be completed, so the Board of Directors expects that the Group's financial performance will improve significantly in 2018 and its cash flow will be stronger than in the past three years;
(3) As of June 30, 2017, the Group's financial performance The situation is stable, and the net cash value per share is RMB 1.16 (approximately HK$1.37), accounting for approximately 48.6% of the group's net asset value.
The Group expects that its strong future cash flow and current healthy financial position will be conducive to the Company's proposed share repurchase while maintaining sufficient financial resources to ensure the continued development of the Group's business.
Increased holdings by the Chairman and certain senior management
The Company has been notified by its chairman, Mr. Ding Shuibo, and certain senior management that they have increased and intend to continue to increase their respective shareholdings in the Company in response to market conditions.
The Company will continue to monitor the actions of its Chairman, Directors and senior management to increase their holdings in the Company and make disclosures in a timely manner in accordance with applicable rules and regulations.
It is recommended to purchase shares under a share award plan
Reference is made to the Company's announcement dated August 1, 2014, regarding the Company's adoption of a share award scheme (the "Share Award Scheme").
The Board further announced that it has authorized the trustee of the Share Award Scheme to purchase shares from the open market and hold such shares to reserve for future share awards under the Share Award Scheme. The Company will make further announcements to eligible persons of the share award scheme after purchasing such share awards.
