Red Star Macalline Announces Cancellation of Repurchased Shares and Share Capital Reduction

Key Points for Investors

• The Company has approved and implemented the cancellation of 1,044,800 repurchased A shares, with a corresponding reduction in registered capital.
• The total registered share capital will decrease from 4,354,732,673 shares to 4,353,687,873 shares.
• This cancellation will not affect the controlling shareholder, the de facto controller, or the Company’s listing status.
• The repurchased shares were originally intended for the employee stock ownership plan or equity incentive plan, but remained unused.
• No creditors objected during the legally mandated notification period, ensuring a smooth cancellation process.

Detailed Breakdown of Events

Background and Approval Process

On 24 April 2022, the Board of Directors of Red Star Macalline Group Corporation Ltd. approved a share repurchase plan, allowing the use of self-owned or self-raised funds between RMB 150 million and RMB 300 million to buy back A shares at a maximum price of RMB 11.04 per share. The repurchase was intended to support the Company’s employee stock ownership and equity incentive plans, with a repurchase period capped at 12 months.

By 22 April 2023, the Company had repurchased 1,044,800 A shares through centralized bidding, representing approximately 0.0240% of its total share capital, with a total expenditure of RMB 5,003,480.17 (excluding transaction costs).

Cancellation of Repurchased Shares

The Board and a subsequent general meeting in December 2025 and January 2026 approved the cancellation of these repurchased shares and the corresponding reduction in registered capital. The Company fulfilled all creditor notification requirements, and after a 45-day public notice period with no creditor objections, the cancellation was set for 22 April 2026 at the Shanghai Branch of China Securities Depository and Clearing Corporation Limited. Subsequent changes to industrial and commercial registration will be handled as per legal procedures.

Changes in Share Capital Structure

Impact on Shareholders and Potential Price Sensitivity

• Capital Reduction: The reduction in share capital is minor (approximately 0.024%) and is unlikely to significantly affect the overall valuation or ownership structure.
• No Change in Control: The controlling shareholder and de facto controller remain unchanged. The Company’s listing status and compliance with relevant regulations are unaffected.
• Market Perception: Although the repurchased shares were not used for their initial purpose (employee incentives), the cancellation reflects prudent capital management and may be viewed positively as it avoids further dilution.
• Legal and Procedural Compliance: All legal requirements for creditor notification and public disclosure were met, minimizing legal risks.

For shareholders, the announced cancellation and reduction of share capital is a corporate housekeeping measure with negligible direct financial impact. However, it signals management’s discipline and commitment to capital structure optimization, which could have a marginally positive impact on market sentiment.

Board Composition

As of the date of this announcement, the Board of Directors consists of executive, non-executive, independent non-executive, and employee directors, ensuring a balanced governance structure.

• Executive Directors: LI Yupeng, SHI Yaofeng, YANG Yingwu
• Non-executive Directors: YE Yanliu, ZOU Shaorong, CHE Jianxing, XU Guofeng
• Independent Non-executive Directors: XUE Wei, HUANG Jianzhong, CHEN Shanang, WONG Chi Wai, CAI Qinghui
• Employee Director: ZHENG Jianjie

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult professional advisors before making investment decisions. The information is based on company disclosures as of 21 April 2026 and may be subject to change.

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