Newborn Town Inc. Announces HK\$300 Million On-Market Share Repurchase Plan

Key Points:

• Newborn Town Inc. has announced its intention to conduct an on-market share repurchase of up to HK\$300 million over the next two years.
• The repurchase will be executed via the Main Board of The Stock Exchange of Hong Kong Limited, subject to annual general mandate approvals.
• The repurchase is limited to not exceeding 10% of the total number of issued shares per mandate period.
• Repurchased shares will be registered as treasury shares and are intended for employee share incentive schemes and/or cancellation.
• The Board states that the repurchase will be funded from distributable profits and internal resources, without affecting the company’s sound financial position.

Detailed Analysis of the Announcement

Newborn Town Inc., a Cayman Islands-incorporated company listed on the Hong Kong Stock Exchange (Stock Code: 9911), has made a voluntary announcement regarding a major corporate action — an on-market share repurchase program capped at HK\$300 million. This decision, made by the Board, aims to provide greater value to shareholders and is a clear demonstration of management’s confidence in the company’s future business prospects.

Mandate Structure:

• The repurchase program will be governed by a Share Repurchase Mandate granted annually at the company’s general meetings. Each mandate allows the Board to repurchase up to 10% of the total issued shares, expiring at the next AGM or as otherwise specified by company regulations.
• The initial repurchase will be conducted under the mandate passed by shareholders on 21 May 2025, covering the period from 27 March 2026 until the 2026 AGM. Subsequent repurchases will require new mandates approved at the 2026 and 2027 AGMs, respectively.
• All repurchases are subject to shareholder approval and the fulfillment of relevant conditions.

Regulatory Compliance:

• The repurchases will comply with the company’s Articles of Association, Hong Kong Listing Rules, the Codes on Takeovers and Mergers and Share Buy-backs, and other applicable laws in Hong Kong and the Cayman Islands.
• The Board explicitly states it has no intention to trigger a mandatory offer under the Codes on Takeovers and Mergers and Share Buy-backs, and will ensure compliance with minimum public float requirements before and after repurchase.

Use of Repurchased Shares:

• Repurchased shares will be registered as treasury shares, primarily intended for share incentive schemes for employees or cancelled directly in accordance with laws and regulations.

Financial Impact and Rationale:

• The Board asserts that the repurchase will be funded through distributable profits and internal resources. The company’s financial position is deemed strong enough to support the repurchase without compromising stability.
• Management believes the repurchase reflects confidence in Newborn Town’s business outlook and will ultimately benefit shareholders by potentially enhancing share value.

Important Shareholder Information & Price Sensitivity:

• The repurchase may be conducted at the Board’s absolute discretion and will be subject to prevailing market conditions, meaning there is no assurance regarding the timing, quantity, or price of shares repurchased.
• This initiative could be price sensitive, as share repurchases often signal management’s belief in undervaluation and can positively affect share prices by reducing outstanding shares and increasing earnings per share.
• Shareholders and investors are advised to exercise caution when dealing in Newborn Town shares, given the potential for market movements resulting from the repurchase program.

Board Composition

The Board comprises four executive directors: Mr. LIU Chunhe (Chairman), Mr. LI Ping, Mr. YE Chunjian, and Mr. SU Jian; and three independent non-executive directors: Mr. CHEN Yuyu, Mr. CHI Shujin, and Ms. CHEN Sichao.

Conclusion

The announcement of a HK\$300 million share repurchase program by Newborn Town Inc. is a significant corporate action that could impact the company’s share price, reflecting management’s confidence and commitment to shareholder value. Shareholders should monitor further developments and be aware of the market sensitivity associated with this initiative.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should exercise caution and conduct their own due diligence before making investment decisions. The share repurchase is subject to market conditions and regulatory approvals, and there is no guarantee regarding the timing, quantity, or price of shares repurchased.

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