Zhejiang Shibao Controlling Shareholder Announces Plan to Reduce Shareholding by up to 3%

Key Points of the Announcement

• Zhejiang Shibao Holding Group Co., Ltd. (the controlling shareholder of Zhejiang Shibao Company Limited) has notified the company of its intention to reduce its shareholding by up to 24,678,970 A shares.
• This planned reduction represents not more than 3% of the company’s total share capital.
• The reduction will occur via two methods:
  • Centralized Bidding: Up to 8,226,323 A shares (not exceeding 1% of total share capital), within 3 months starting 15 trading days after the announcement (i.e., from 22 May 2026 to 19 August 2026), excluding sensitive periods.
  • Block Trading: Up to 16,452,647 A shares (not exceeding 2% of total share capital) within the same period, with a restriction that transferees may not transfer the shares within 6 months.
• As of the announcement, Shibao Holding owns 270,657,951 A shares, accounting for 32.90% of Zhejiang Shibao’s total share capital.
• Purpose: The reduction is for the shareholder’s own capital requirements.
• Shares to be reduced are from those issued prior to the IPO and from post-IPO capital reserve conversions.
• The price range will be determined according to the secondary market price at the time of transaction, and will adjust if ex-rights or ex-dividends events occur during the reduction period.
• This action does not violate any previous commitments or regulatory requirements and will not result in a change of control or major impact on company governance.

Important Information for Shareholders

• The planned reduction is substantial and may lead to increased supply of shares on the market, potentially impacting share price negatively, especially in the short term.
• The exact timing and pricing are uncertain and subject to market conditions, meaning the reduction may not be executed as planned.
• Regulatory compliance is confirmed – the reduction plan does not breach China’s Securities Law, Shenzhen Stock Exchange Listing Rules, or self-discipline guidelines for shareholding reduction by major shareholders, directors, or officers.
• All commitments made by Shibao Holding and its concert parties since the IPO regarding share transfer restrictions have been strictly fulfilled, and the current reduction plan remains within those bounds.
• There will be continuous monitoring and timely public disclosure of the reduction’s progress.
• No change in control of the company will result from this reduction.
• Shareholders and investors are advised to monitor for further updates, as execution details (such as price ranges and exact number of shares reduced) can change if corporate actions or market events occur.

Potential Price-Sensitive Aspects

• A major shareholder’s intention to sell up to 3% of total shares could be interpreted as a signal of reduced confidence or a need for liquidity, which may affect investor sentiment and share price.
• The scale of the reduction is significant enough to potentially influence supply-demand dynamics for Zhejiang Shibao shares on the market.
• Uncertainty around the timing and market price of actual sales could contribute to increased share price volatility in the coming months.

Summary Table: Shareholding Reduction Details

Conclusion

The announcement by Zhejiang Shibao Company Limited’s controlling shareholder of a potential sale of up to 3% of the company’s shares over a defined period is a material event for investors to monitor. While the company assures compliance with all regulations and no change in control, the scale of the planned reduction and its potential market impact warrant close attention from shareholders and prospective investors. All should remain vigilant for further disclosures regarding this reduction and be mindful of possible share price volatility during the reduction window.

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