Phancy Group Announces Placing of New H Shares to Raise HK\$1.56 Billion

Phancy Group Co., Ltd. (HKEX: 6682), formerly known as Beijing Fourth Paradigm Technology Co., Ltd., has announced a significant placing of new H shares under its general mandate, aiming to raise approximately HK\$1.56 billion to support its business expansion and technological advancements.

Key Points from the Announcement

• Placing Details: The Company has entered into a placing agreement with China International Capital Corporation Hong Kong Securities Limited and Huatai Financial Holdings (Hong Kong) Limited as placing agents. The agents have conditionally agreed, on a best effort basis, to procure at least six independent placees to subscribe for up to 38,800,000 new H shares at a placing price of HK\$40.36 per share.
• Share Dilution: The newly issued shares represent approximately 12.09% of the issued H shares and 7.47% of the total issued shares of the company as of the announcement date. Upon completion, the H shares will represent 10.79% of the enlarged issued H shares and 6.95% of the enlarged total issued shares.
• Pricing: The placing price of HK\$40.36 per share represents:
  • An 11.95% discount to the closing price of HK\$45.84 per H share on the last trading day before the agreement (April 21, 2026)
  • A 6.03% discount to the average closing price of HK\$42.95 for the last five consecutive trading days
  • A 6.39% premium to the average closing price of HK\$37.93 for the last thirty consecutive trading days
• Gross and Net Proceeds: Gross proceeds are estimated at HK\$1,565.97 million, and net proceeds (after commission and costs) at HK\$1,555.63 million. The net placing price per share is around HK\$40.09.
• Shareholder Approval: No additional shareholder approval is required, as the placement is under the general mandate granted at the June 26, 2025 AGM, allowing the board to issue up to 98,618,086 new shares (20% of issued shares at that time).
• Use of Proceeds:
  • 80% will fund advanced AI computing equipment based on heterogeneous GPUs, supporting the Group’s API business infrastructure.
  • 20% will support global business expansion and potential acquisitions, especially in emerging areas such as embodied intelligence and smart devices. Of this, 40% is earmarked for international expansion, and 60% for acquisitions related to emerging businesses (split equally between embodied intelligence and vertical industry expansion).
• Lock-up Undertaking: The Company has agreed not to issue, sell, or otherwise dispose of additional shares for 90 days after the placing completion, except for those shares being placed, without the written consent of the placing agents.
• Conditions and Risks: Completion is subject to several conditions, including regulatory approvals and necessary legal opinions. The placing may not proceed if these are not met or waived, and the placing agents reserve the right to terminate the agreement under specified circumstances, including force majeure or breach of representations.
• Shareholding Impact: After the placement, the total number of issued shares will increase from 519,678,733 to 558,478,733. The largest shareholder, Dr. Dai Wenyuan (chairman, CEO), will see his direct and indirect shareholding diluted from 28.32% to 26.35%.
• Public Float: The company confirms that, post-placement, its public float will remain above the required 25%.

Potentially Price-Sensitive Information for Shareholders

• The significant discount (up to 12%) to the recent market price may put downward pressure on the share price in the short term as new shares enter the market.
• Dilution effect: The placement will dilute current shareholders’ stakes, including that of the largest shareholder and public investors.
• Large capital raise: The net proceeds are substantial, indicating management’s expectation of high capital requirements for scaling up AI infrastructure and international expansion—an ambitious move that could generate long-term returns but also carries execution risk.
• Lock-up period: The 90-day lock-up on new issuance may provide some short-term stability to the share price post-placement.
• Regulatory risks: The placing is subject to regulatory filings and approvals in both Hong Kong and China. Any delays or issues could affect the completion or timing of the fundraise.

Background & Recent Fundraising Activities

In the past twelve months, the company completed another major placement—raising HK\$1.31 billion in August 2025 through the issuance of 25,900,000 H Shares at HK\$50.50 each. None of those proceeds have been utilized as of this announcement, and were intended for R&D in AI products, global expansion, acquisitions in emerging tech, and general corporate purposes.

Conclusion

This large-scale equity placement is a key development for Phancy Group, enabling rapid expansion of its AI infrastructure and global footprint. While the dilution and pricing discounts may weigh on the stock in the short term, the deal positions the company to compete more aggressively in AI and related emerging technologies. Shareholders should watch for updates on the completion of the placement, regulatory approvals, and management’s deployment of the new capital—each of which could influence the company’s future share price performance.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should exercise caution and consult their financial advisors before making investment decisions. The placement may not proceed as described if certain conditions are not met. Phancy Group’s share price may be volatile following this announcement.

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