*ST Mingjia Capital Reserve Conversion and Resumption Impact Analysis

The capital reserve conversion of *ST Mingjia is a common restructuring method for ST companies in China to resolve debt crises [0]. By allocating 730 million converted shares to restructuring investors and creditors, the company implements a debt-to-equity swap to directly reduce its debt burden [0]. Among these, the 664 million post-IPO restricted shares held by restructuring investors (usually locked for 12-36 months) reflect their commitment to the company’s long-term development, while the 66 million unrestricted tradable shares held by creditors may create short-term selling pressure after resumption [0]. The ex-rights reference price of RMB 3.16 per share is calculated based on the pre-restructuring market value and additional capital, aiming to avoid false declines in stock price due to share capital expansion [0].

1. Nature of Restructuring Model: This conversion is not a simple share capital expansion but a core part of debt restructuring, balancing the interests of restructuring parties, creditors, and existing shareholders through equity allocation.
2. Signaling Significance of Restricted Shares: The lock-up period of restricted shares held by restructuring investors reflects their confidence in the company’s turnaround from losses to profits, which may offset part of the short-term dilution effect.
3. Benchmark Role of Ex-Rights Price: The RMB 3.16 per share provides a new benchmark for the stock price trend after resumption, but the actual performance depends more on market expectations of the restructuring effect.

• Risks
  :
  1. Share Dilution: The share capital increases from approximately 696 million shares to 1.426 billion shares, diluting the ownership ratio of existing shareholders.
  2. Short-term Selling Pressure: The 66 million unrestricted shares held by creditors may be sold intensively after resumption, creating downward pressure on the stock price.
  3. Restructuring Uncertainty: The company’s future profitability and the effect of restructuring on operational improvement remain uncertain.
• Opportunities
  :
  1. Debt Relief: Debt-to-equity swap reduces interest expenses and improves the company’s solvency.
  2. Restructuring Party Support: Restructuring investors with long-term commitments may bring operational and financial support to the company.
  3. Valuation Repair: If the restructuring succeeds, the company’s valuation may recover from the discounted level due to its ST status.

This capital reserve conversion restructuring of *ST Mingjia needs to be comprehensively evaluated from short-term and long-term perspectives. In the short term, it faces risks of dilution and selling pressure; in the long term, there is potential for a turnaround due to reduced debt and commitments from restructuring parties. Investors should focus on operational improvements after restructuring, the ability of restructuring parties to fulfill their commitments, and market reactions to the restructuring effect, rather than just the ex-rights price itself.