Xiangcai plans major merger, private placement with Shanghai Dazhihui

Xiangcai Company Limited, formerly Harbin High-Tech Group, is proceeding with the absorption merger of Shanghai Dazhihui Company Limited, a Shanghai-listed A-share company. This transaction will involve Xiangcai issuing A-shares to Dazhihui's shareholders and raising up to CNY 8 bn in supporting funds through a private placement to no more than 35 specific investors. Post-merger, Dazhihui will delist, and Xiangcai will inherit all assets, liabilities, and business operations.

The transaction is contingent on the successful implementation of the absorption merger. Pricing for the share exchange is set at CNY 7.51 per share for Xiangcai and CNY 9.53 per share for Dazhihui, based on average trading prices over 120 trading days prior to the first board meeting on March 29, 2025. This constitutes a share exchange ratio of 1:1.27. Xiangcai's controlling shareholder, Xinhu Holdings, and actual controller, Mr. Huang Wei, have committed to an 18-month lock-up period for their newly issued shares.

The independent financial advisor, Caitong Securities Co., Ltd., confirmed that the share price fluctuation for Xiangcai's stock prior to the first announcement was within the 20% threshold, indicating no abnormal volatility. They also issued a positive opinion on the proposed transaction's compliance with regulatory requirements, including the preservation of shareholder rights and the company's enhanced operational capacity and risk resilience.