Shanghai REFIRE Group Limited Announces Major Reallocation of IPO and Subscription Proceeds

April 24, 2026 – Shanghai REFIRE Group Limited (Stock Code: 2570) has announced a significant proposed change in the use of funds raised from its Global Offering and recent Subscriptions. These changes, pending shareholder approval at the forthcoming Annual General Meeting (AGM) on May 18, 2026, are likely to impact the company’s capital structure, operational flexibility, and growth trajectory.

Key Points of the Announcement

• Reallocation of Unutilized IPO Proceeds: The Board proposes to reallocate HK\$200 million, originally earmarked for research and development (R&D) and production capacity expansion of hydrogen fuel cell and hydrogen production systems, to replenish the Group’s working capital.
• Change in Use of Subscription Funds: Similarly, RMB100 million from the funds raised under Domestic Share Subscriptions, previously allocated for an R&D center construction, is proposed to be redirected to working capital.
• Approval Required: Both proposed changes are subject to approval by shareholders through ordinary resolutions at the upcoming AGM.
• Material Change in Use of Proceeds: These shifts represent a major reallocation of resources, potentially influencing future R&D and capacity expansion timelines.

Detailed Breakdown of the Changes

(A) Global Offering (IPO) Proceeds

• Total Net Proceeds: HK\$623.3 million
• Utilized as of March 31, 2026: HK\$321.3 million
• Unutilized as of March 31, 2026: HK\$302.0 million
• Original allocations focused on R&D and expanding production capacity for hydrogen fuel cell systems, hydrogen production systems, and overseas market expansion.

If the proposed change is approved: The allocation for working capital and general corporate purposes will increase dramatically from 2.5% (HK\$15.6 million) to 66.2% (HK\$200 million) of the remaining IPO proceeds. Allocations for R&D and production expansion will decrease significantly, with the majority of unutilized funds redirected to liquidity support.

Revised Allocation Table for Unutilized IPO Proceeds (Post-Change)

• R&D and production capacity expansion (hydrogen fuel cell systems): HK\$45.9 million (15.2%)
• Production capacity expansion (hydrogen production systems): HK\$34.0 million (11.3%)
• Overseas market footprint: HK\$22.1 million (7.3%)
• Working capital and general corporate purposes: HK\$200.0 million (66.2%)
• All remaining categories are reduced or unchanged, with some R&D categories now at zero allocation.

(B) Proceeds from Domestic Share Subscriptions

• Total Net Proceeds: RMB272.2 million
• Utilized as of March 31, 2026: RMB100.3 million
• Unutilized as of March 31, 2026: RMB171.9 million
• Originally allocated primarily to the construction of an R&D center and related R&D activities.

Post-change allocation: Only RMB1.3 million (0.8%) will remain for the R&D center construction, while RMB70.6 million (41.0%) is kept for R&D activities in hydrogen systems. The largest share, RMB100 million (58.2%), will go to replenishing working capital.

Shareholder Impact and Potential Price Sensitivity

• Significant Shift in Capital Allocation: The redirection of substantial funds from long-term R&D and capacity-building projects to working capital may signal a need to address short-term liquidity or operational requirements. This could be interpreted by the market as the company responding to near-term cash flow pressures or changing priorities.
• Potential Impact on Growth Plans: With less capital dedicated to R&D and production expansion, the pace of development for new hydrogen technologies and facilities could slow, potentially affecting long-term revenue growth and market competitiveness.
• Transparency and Governance: The changes are subject to shareholder approval at the AGM, offering investors an opportunity to voice their support or concerns. The company has committed to ongoing disclosure regarding the actual use of proceeds in future reports.
• No Change in Business Nature: The company asserts there is no change to the underlying business model or strategic direction, merely an adaptation of capital allocation in response to market and internal conditions.

Board’s Rationale

The Board states that these reallocations are driven by a desire to enhance resource utilization efficiency and to better support the company’s financial and business operations amid evolving market conditions. The Board considers the proposed changes fair, reasonable, and in the best interest of shareholders and the company, emphasizing that all other aspects of the business remain unchanged.

Next Steps

• The proposed changes are subject to shareholder approval at the AGM on May 18, 2026.
• A detailed circular will be dispatched to shareholders around April 24, 2026, outlining the proposed changes and the AGM notice.
• The company will continue to provide updates on the use of proceeds in future annual and interim reports, and further announcements will be made as required by the Listing Rules.

Conclusion

These proposed reallocations are material and could significantly impact Shanghai REFIRE Group Limited’s financial position, operational flexibility, and growth prospects. Investors should consider both the short-term liquidity benefits and the potential long-term strategic implications as they evaluate these proposals ahead of the AGM.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers should consult their own advisors and review official company materials before making any investment decisions. The author and publisher assume no responsibility for investment actions taken based on this article.

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