ZHONGSHI MINAN (08283) announced a proposed rights issue on the basis of 5 new shares for every 1 existing share held as of the record date. The subscription price is set at HK$0.35 per rights share, representing a discount of approximately 23.91% to the closing price of HK$0.460 per share on the last trading day on the Stock Exchange.

The company aims to raise up to HK$110 million (before expenses) by issuing a maximum of 288 million rights shares, assuming no change in the number of issued shares before the record date. If fully subscribed, the net proceeds are estimated to be around HK$96.97 million.

The intended use of the net proceeds includes: (i) Approximately HK$43 million for refined sales and marketing strategies, comprising: - HK$20 million for establishing an R&D team and related capital expenditures to develop the group’s proprietary platform, AI technology, big data center, and software. - HK$5 million for setting up a creative marketing and advertising department. - HK$18 million for expanding creative marketing services, including client network development and operational working capital. These funds are expected to be utilized by July 2027.

(ii) HK$20 million reserved for future cooperation/investment opportunities, to be deployed by the end of 2026.

(iii) HK$17 million to repay outstanding debts owed to Mr. Wang, to be settled immediately after the rights issue completion.

(iv) HK$7 million to supplement working capital for the group’s core businesses, covering direct and indirect costs related to automotive and ready-to-eat food smart kitchen solutions, expected to be used by January 2027.

(v) HK$9.97 million for general working capital (including employee expenses, director remuneration, office rent, legal fees, and other daily expenditures), to be utilized by January 2027.

The rights issue will be offered to eligible shareholders on the record date (tentatively set for January 2, 2026), with excluded shareholders not participating. Additionally, the board proposed changing the trading lot size from 1,000 shares to 5,000 shares, effective from January 7, 2026.

The board also recommended increasing the authorized share capital from HK$20 million (divided into 160 million shares) to HK$200 million (divided into 1.6 billion shares) by adding 1.44 billion shares, subject to shareholder approval at an extraordinary general meeting.