Major Shareholder Actions at Jiangsu Lopal Tech. Group Co., Ltd.: Capital Reduction, Share Cancellation, and Remuneration Overhaul

Date: March 17, 2026
EGM Date: April 2, 2026
Stock Code: 2465 (Hong Kong), 603906 (Shanghai)

Key Points for Investors

• Extraordinary General Meeting (EGM) scheduled for April 2, 2026 to approve major corporate actions.
• Proposal to cancel 2,082,400 previously repurchased shares, reducing the Company’s registered capital.
• Amendment of the Articles of Association to reflect new share capital and registered capital figures.
• Implementation of a new Remuneration Management System for directors and senior management.
• No shareholders are required to abstain from voting; all shareholders are eligible to vote.

Details of Key EGM Proposals

1. Change of Purpose and Cancellation of Repurchased Shares; Reduction of Registered Capital

• Background:
  • In 2022, Jiangsu Lopal Tech. approved a share repurchase program for up to RMB100 million, with a maximum price of RMB38 per share, to support employee stock ownership plans or equity incentives.
  • By March 24, 2023, the Company repurchased 2,082,400 shares (0.37% of total share capital), at an average price of RMB24.14 per share, totaling RMB50.27 million (excluding fees).
• New Proposal:
  • The Board now proposes to change the purpose of these unused repurchased shares from employee incentives to cancellation and capital reduction.
  • This complies with PRC regulations, which require unused repurchased shares to be cancelled within three years if not transferred.
  • Total share capital will decrease from 685,078,903 shares to 682,996,503 shares; registered capital will decrease accordingly.
• Shareholding Structure Impact:
  • The controlling shareholder’s absolute shareholding remains unchanged, but their percentage holding will increase passively due to overall share capital reduction.
  • No change in control or de facto controller of the Company is expected.
• Financial Impact:
  • The cancellation and capital reduction are not expected to have a material adverse effect on the Company’s financial position, profitability, debt servicing capability, or future development.
  • The Company’s shareholding distribution will remain compliant with listing requirements.
• Audit Committee Opinion:
  • The Audit Committee has reviewed and unanimously approved the proposal, confirming it is compliant with regulatory and internal requirements and will not prejudice shareholder interests.
• Procedural Note:
  • If approved by shareholders, the Board will be authorized to handle all related regulatory filings, disclosures, and registration amendments.

2. Amendments to Articles of Association and Completion of Registration

• Amendments proposed to update:
  • Registered capital (from RMB685,078,903 to RMB682,996,503).
  • Total number of shares (from 685,078,903 to 682,996,503).
• Other provisions of the Articles remain unchanged.
• Board will be authorized to complete all relevant industrial and commercial registration and filing procedures.

3. Formulation of Remuneration Management System for Directors and Senior Management

• Comprehensive overhaul of remuneration policy to align with market practices and regulatory requirements.
• Key features:
  • Remuneration for directors and senior management will be based on principles of fairness, market alignment, responsibility, and performance.
  • Independent Directors will receive a fixed allowance; non-independent Directors will be remunerated based on their management role, with no extra director’s fees.
  • Senior management remuneration will comprise basic salary, performance-based remuneration (at least 50% of total), and medium/long-term incentives (such as equity or share schemes).
  • Performance pay is linked to audited financial results and subject to deferral and post-assessment.
  • Detailed claw-back provisions: performance pay can be withheld or recovered in cases of misconduct, regulatory censure, financial restatement, or material losses due to dereliction of duty.
  • Remuneration adjustments will consider industry benchmarks, inflation, company performance, and individual circumstances.
  • Any increase in executive pay in a loss year must be explained and disclosed.
  • The new system takes effect upon shareholder approval and will apply equally to amendments.

Important Notes for Shareholders

• Shareholders as of March 30, 2026 are eligible to vote at the EGM. The register of members will be closed from March 30 to April 2, 2026 (inclusive); no share transfers will be processed during this period.
• Proxy voting is available. Shareholders unable to attend may appoint proxies by submitting forms to Computershare Hong Kong Investor Services Limited by 4:30 p.m. on March 27, 2026.
• The proposed cancellation of shares and capital reduction may be price sensitive, as it will increase earnings per share (EPS) and the relative holding of remaining shareholders, potentially supporting the share price.
• The remuneration overhaul introduces stricter performance alignment and clawback mechanisms, which may impact management incentives and market perception of governance standards.
• All changes are subject to approval by special and ordinary resolutions at the EGM.

Potential Share Price Impact

• Capital Reduction: The cancellation of repurchased shares will reduce total share capital and may improve per-share financial metrics, which is typically viewed positively by the market.
• Governance Enhancements: The new remuneration system aligns with best practices and may enhance investor confidence in the Company’s long-term governance and performance incentives.
• No change of control or major shareholder dilution is expected, reducing uncertainty.

View LOPAL TECH Historical chart here