The first listed company's controlling shareholder increased their shareholdings by using loans, as reported by 'Star Market Daily' on October 7th.

On the evening of October 7th, Beijing Balance Medical Technology Co., Ltd. announced that its controlling shareholder and actual controller Jin Lei plans to use special loan funds to increase the company's circulating A-shares by 0.1 million-2.13 million shares through the Shanghai Stock Exchange trading system allowed method within 6 months starting from October 8, 2024.

According to the company's announcement, according to the 'Star Market Stock Listing Rules of Shanghai Stock Exchange', the shares held by non-public shareholders should not exceed 75% of the total shares of the company, and the upper limit of this shareholding increase is 1.55% of the total share capital of the company.

Regarding the reasons and purposes of the proposed share buyback by the company's actual controller, Jin Lei, Chairman of Beijing Balance Medical Technology Co., Ltd., stated to a reporter from 'Star Market Daily' today (October 7th) that on one hand, it is to respond to the policy guidance of the central bank, actively repurchasing the company's shares, and promising not to reduce holdings in the next 12 months; on the other hand, the company will have some innovative products approved for listing in the coming year, showing a firm confidence in the company's future development and effectively enhancing public investors' confidence in the company.

In the secondary market, as of the last trading day before the National Day holiday, Beijing Balance Medical Technology Co., Ltd.'s closing price was 115.98 yuan per share, with a market capitalization of 15.94 billion yuan. Based on this calculation, the funds needed for the proposed increase in shareholdings range from 11.5989 million yuan to 0.25 billion yuan.

It is worth noting that this is the first A-share company in response to the announcement by the People's Bank of China of establishing special repurchase and shareholding refinancing after the Chinese central bank officially announced it.

On September 24th, the State Council Information Office held a press conference where People's Bank of China Governor Pan Gongsheng stated that special refinancing will be established to guide banks to provide loans to listed companies and major shareholders, support repurchases and increased holdings of listed company stocks. The initial quota is 300 billion yuan, which may be expanded in the future based on usage.

Beijing Balance Medical Technology Co., Ltd.'s move has attracted attention from the industry, with experts believing that the company has actively maintained stability in the capital markets.

Economist Song Qinghui stated in an interview with the Star Market Daily on October 7th that Beijing Balance Medical Technology Co., Ltd.'s decision to increase its shareholding through special loans signifies the company's great confidence in its future prospects, which also helps stabilize stock prices and boost investor confidence. This move also sends a positive signal to the market.

However, the risks of this move should not be overlooked. "Generally speaking, special loans have relatively low interest rates, but if a listed company fails to repay the debt within the specified time, it may face higher financing costs and financial pressure," further stated Song Qinghui.

Regarding this, Chairman Jin Lei of Beijing Balance Medical Technology Co., Ltd. mentioned that the company is currently in a phase of stable development. As a major shareholder of the company, his annual dividends can fully cover the loan interest, avoiding financial risks arising from bank loans.

Beijing Balance Medical Technology Co., Ltd. is a domestically leading innovative platform for animal-sourced interventional medical devices, mainly used in structural heart diseases such as heart valve diseases, congenital heart diseases, and soft tissue repair field.

The company has obtained approval for 20 Class III medical device products, including artificial biological heart valves - bovine pericardial valves, valve shaping rings, cardiac surgery biological patches, outflow tract monocusp patches, and heart valve biological patches.

In the first half of the year, Beijing Balance Medical Technology Co., Ltd. achieved revenue of 191 million yuan, a year-on-year increase of 13.74%; the net income attributable to the company's shareholders decreased by 20.42% to 35.1907 million yuan.

Financially, as of the end of June this year, Beijing Balance Medical Technology Co., Ltd.'s debt-to-asset ratio was 10.96%, an increase of 2.36 percentage points from the first quarter of this year. Currently, the company has 1.68 million yuan in cash and cash equivalents, total debts of 1.39 billion yuan, of which current liabilities due within one year are 34.69 million yuan.