[The company recently raised capital in the Hong Kong market](Nine Fang Zhi Tu.pdf), this fundraising is similar to Xiaomi’s operation, and this article breaks down the details. –>

Nine Fang Intelligent Investment and Sales Interpretation

What are the fees associated with participating in the offering; when can these stocks be sold, what other important information is contained in this document?

✅ Fees Associated with Placement

This placement activity is a pre-existing shareholder first, then new placement method, targeting new investors (placements), does not involve retail investor subscriptions, therefore:

If you are not a placement agent-selected placement recipient (i.e., professional/institutional/individual investors), you do not need to pay any fees.

✅ Fees Associated with Placement

However, if you are a placement agent, the fees involved include: | Placement Price | ✅ Yes | HKD 39.25 per share |

✅ Fees Associated with Reselling

✅ Fees Associated with Brokerage Arrangement

✅ Fees Associated with Brokerage Arrangements

✅ Costs Associated with Distribution

✅ When Shares Can Be Sold

Based on the announcement content:

“The share placement will be undertaken by the placing agents based on their best efforts to place shares with no less than six noteholders… It is anticipated that none of the noteholders will become a major shareholder of the Company immediately following completion of the share placement.”

✅ When Can Shares Sold?

This means:

• Shares sold through the placement can be freely traded once settlement is complete;
• There is no lock-up period;
• They can be bought and sold freely on the Hong Kong Stock Exchange secondary market;
• The placement deadline is July 17, 2025, with expected settlement to occur shortly after July 17th.

✅ Important Information in Announcement

Use of Funds (HK$7.4622 Billion Net)

Nine Square Capital will use this money to do four things: | On-Chain Financial Resource Investment | Undefined | Invest in RWA underlying assets, digital asset exchanges, trust banks, and stablecoin operators |

#### **Funding Allocation (HK$7.4622 Billion Net)**
| Purpose | Percentage | Description |
|---|---|---|
| Digital Asset Services Layout | Undefined | Investment services for digital assets targeting consumers in Hong Kong and the Middle East regions |

#### **Funding Allocation (HK$7.4622 Billion Net)**
| Purpose | Percentage | Description |
|---|---|---|
| Digital Asset Investment Advisory New Model | Unspecified | AI + Research, Combining MCN Operational Experience |

Funding Allocation (HK$7.4622 Billion Net)

Offer Price Discount is Significant

• Discounted by 6.0% compared to the closing price of 41.75 HKD on July 15th
• Discounted by 17.0% compared to the past 5-day average price of 47.30 HKD
• Discounted by 15.3% compared to the past 10-day average price of 46.36 HKD

#### **Share Structure Changes**

- Following the public offering, **total shares outstanding increased from 448 million to 468 million**.
- Existing shareholders’ ownership percentages were **slightly diluted**, but they **continue to maintain a controlling stake**.
- An additional 20,000,000 shares will be held by the underwriters, representing approximately **4.27%** of total outstanding shares.

Risk Disclaimer

• The offering may not be completed, and requires fulfillment of multiple prerequisites (such as market stability, regulatory approval, and the absence of significant adverse events)
• If it is not completed within 14 days, the subscription matter will automatically become invalid.

✅ Summary in one sentence

Retail investors are excluded from this placement; the placed shares have no lock-up period and can be traded immediately after settlement. Jiu Fang Investment plans to use HK$746 million to invest in digital assets and on-chain finance, potentially transitioning towards Web3 and AI robo-advisor directions in the future.

“First Old, Then New” Distribution Method Explained

Kimi: “Existing shareholders first old shares then new” is a common Hong Kong distribution method, known in English as Top-up Placement, which you can understand as a two-step operation of “major shareholders sell old shares first and then subscribe to new shares”.

✅ Let’s take an example to understand it

Taking the case of Jiutian Intelligence Investment as an example:

1. Step 1: Major shareholders sell old shares (First Old)
   • Existing shareholders (such as Coreworth Investments) sell their existing holdings of 20,000,000 old shares to market investors (the underwriter) at a price of HKD 39.25 per share.
   • This results in the major shareholder reducing their holding, and the total issued capital remains unchanged.

• Step 2: Company issues new shares to major shareholders (Later New)
  • The company then issues an equal number (20,000,000 shares) of new shares to these major shareholders at a price of HKD 39.25.
  • The major shareholder uses the proceeds from selling old shares to buy back new shares, restoring their holding quantity to its original state.
  • However, the total issued capital increases (from 448 million shares to 468 million shares), effectively meaning the company has successfully raised capital, while the major shareholder’s shareholding ratio is slightly diluted.

✅ Why are we doing this?

✅ Why are we doing this?

✅ Why are we doing this?

✅ Why are we doing this?

✅ Key Differences: Old Stocks vs. New Stocks

✅ Key Differences: Old Stocks vs. New Stocks

✅ Key Differences: Old Stocks vs. New Stocks

✅ One-Sentence Summary

“Sell Old, Buy New” refers to major shareholders initially selling their existing shares to the market and then purchasing an equal amount of new shares from the company, simultaneously raising capital for the company while maintaining control.

Hong Kong Stock Connect Issuance Rules Interpretation

Kimi: Your question is very central: Why do Hong Kong-listed companies seem to be able to “freely” issue shares? Is the Hong Kong market rulebook particularly relaxed? The answer is: Yes, HKEX offers significantly more flexibility than the Shanghai A-share market, but it’s not “unlimited,” rather there’s a system of “relaxed but limited” rules.”

✅ H Shares vs A Shares: Issuance Rules Comparison (Key Differences)

✅ H-Shares vs A-Shares: Issuance Rules Comparison (Key Differences)

✅ H Shares vs A Shares: IPO Rules Comparison (Key Differences)

✅ H-Shares vs A-Shares: Issuance Rules Comparison (Key Differences)

✅ H Shares vs A Shares: IPO Rules Comparison (Key Differences)

✅ H Shares vs A Shares: Issuance Rules Comparison (Key Differences)

✅ Hong Kong Stocks vs. A Shares: Issuance Rules Comparison (Key Differences)

✅ Why Does the Hong Kong Stock Exchange Look “Casual”?

1. “General Mandate” Mechanism: Once a year, shareholders authorize the board to issue up to 20% new shares at their annual general meeting. Afterwards, no further shareholder meetings are required, and the board can selectively issue shares.

2. “Flash Placement” Mechanism: If the issuance does not exceed 20% of the share capital and the discount is no more than 20%, the issuance can be completed within 24 hours without approval.

3. No SEC Case-by-Case Approval: The Hong Kong Stock Exchange only conducts formative review, without substantive intervention in the use of funds or company quality.

✅ Let’s take an example: Why was JiuFang ZhiTou able to “do old and new” this time?

• JiuFang ZhiTou obtained a general authorization at the 2025 June 20th shareholder meeting, allowing for up to a 20% increase in new shares (i.e., up to 89,671,400 shares).
• This issuance of 20,000,000 shares represents only 4.46% of the capital, far below the 20% limit, and fully complies with the authorization conditions.
• Therefore, no further shareholder meeting is needed nor is approval from the Securities Regulatory Commission required; the board of directors can make the decision to implement it.

✅ Summary in one sentence

Hong Kong stocks allow “board of directors + annual authorization” rapid issuance under a streamlined process, provided it doesn’t exceed 20% of the share capital and the price cap, enabling “flash placement,” while A-shares require shareholder approval plus SEC review, resulting in a longer, more restrictive procedure.

✅ Summary in one sentence

Therefore, Jiu Fang Zhi Tu (Nine Fang Intelligent Investment) is not “arbitrary issuance,” but rather legally and compliantly utilized the relaxed mechanisms of the Hong Kong stock market.