Deepen the main business and adhere to long-termism; Absen strategically optimizes equity structure to unleash leading value.

This article is solely an objective interpretation of investor relations. For complete information on changes in controlling shareholder holdings, please refer to the official disclosure announcements. This article does not constitute any investment advice. Secondary market stock prices carry volatility risks; investors are advised to make rational judgments.

As a leading company deeply rooted in the global LED field, Absen recently disclosed a plan for changes in its controlling shareholder's holdings. The company's major shareholder intends to reduce its stake by no more than 3% of the company's total share capital. Since its listing on the capital market twelve years ago, Mr. Ding Yanhui, the controlling shareholder, has increased his holdings in the company five times, only reducing 400 shares for software testing purposes. Over the past twelve years, the actual controller has never actively reduced his holdings, accompanying the company's growth over the long term.

This adjustment in the controlling shareholder's holdings is an arrangement made by the controlling shareholder in conjunction with the company's long-term plan and does not indicate a pessimistic view of the company's development prospects. From the perspective of the listed company's long-term development, this release of equity can optimize the shareholding structure, expand the tradable share base, and introduce long-term professional institutional capital. It improves the supporting capital market system from the dimensions of governance structure, market liquidity, and valuation pricing, playing a positive role in the company's sustained and stable operation.

Since its listing, Absen's actual controller has continuously focused on the core business of LED display, increasing his holdings five times, deeply aligning with the company's development. After twelve years of steady development, the company's current operational fundamentals and global industry competitiveness are at a high-quality stage. Choosing to advance equity optimization at this moment also fully demonstrates the actual controller's strong confidence in the company's medium-to-long-term growth. The core purpose of this small-scale share release is to resolve the structural capital issues that have long constrained the company's market pricing, further improving the capital operation mechanism of the listed company.

Optimizing the Equity Structure to Build a Modern, Standardized Governance System

In the twelve years since listing, the company's shareholding structure has long been relatively concentrated. While ensuring the stable advancement of business strategies, it also has structural issues such as insufficient equity diversification and limited space for governance checks and balances. The moderate release of shares by the controlling shareholder is a key step for the company's equity to move towards marketization and standardized governance. After the completion of this share change, the actual controller will still hold a significant proportion of shares, the company's core control rights will remain stable, and there will be no changes to the development of the main business or the globalization and premiumization strategy.

This equity optimization aligns with the regulatory direction of the "Code of Corporate Governance for Listed Companies" and the standardized development trend of the A-share market. It moderately disperses equity, enriches the shareholder hierarchy, addresses internal governance and balance shortcomings, standardizes the performance duties of the controlling shareholder, and builds a more mature, diversified, and sustainable modern governance framework for listed companies. This lays a solid institutional foundation for the company to navigate industry cycles and achieve long-term stable operation.

Expanding the Float to Address Liquidity, Broadening Channels for Long-term Institutional Allocation

For a long time, Absen's tradable share capital has been relatively small, which to some extent has limited the market's ability to fully uncover the company's intrinsic value. Constrained by the scale of tradable shares, long-term professional institutions such as public funds, private funds, and northbound foreign capital have found it difficult to achieve large-scale position building and long-term heavy allocation. Limited market capital participation channels have prevented the company's industry-leading operational strength from being fully reflected in its secondary market pricing.

This share release will directly increase the market's tradable float, enhancing individual stock trading activity and capital absorption capacity, creating space for large institutional capital allocation. After improving the float conditions, it can alleviate the long-standing liquidity shortfall, allowing the market to perceive the company's true operational strength more objectively.

Opening the Float to the Market, Forming a Pattern of Multi-party Collaborative Development

Institutional investors are an important force in the capital market for uncovering the long-term value of companies and smoothing short-term stock price fluctuations. Previous float constraints made it difficult for professional institutions to deeply participate in the company's value investment. This active release of shares by the actual controller to the market returns the pricing power of the company's value to professional investment institutions, balancing the long-term interests of industrial development and secondary market investors.

After long-term institutions establish and maintain their holdings, they can effectively smooth short-term stock price fluctuations in the secondary market and continuously uncover the growth potential of the company as a global leader in its track. At the same time, regular research and communication by institutions can also push the company to continuously optimize its operations and steadily expand overseas markets. Industrial capital, institutional investors, and minority shareholders can all share in the growth dividends based on the industry's long-term development.

Perfecting the Market-based Pricing Logic, Allowing the Company's Solid Fundamentals to be Seen by the Market

Comparing horizontally with six comparable listed companies in the industry, Absen continues to lead the track in multiple core operational metrics, firmly holding a leading position in global commercial LED display. However, constrained by its float and institutional participation, its secondary market pricing has not fully reflected the company's operational fundamentals.

(Data source: Company's 2025 Annual Report)

Under the overall pressure on the industry in 2025, Absen achieved high-quality operational growth:

Annual operating revenue reached approximately RMB 4.158 billion, a year-on-year increase of 13.53%;

Profitability improved significantly, with a full-year gross profit margin of approximately 31.13%, a year-on-year increase of 3.65 percentage points. The net profit margin of 5.90% ranked among the top in the industry;

Net profit attributable to shareholders of the listed company was RMB 252 million, a significant year-on-year increase of 115.47%. Non-GAAP net profit was RMB 230 million, a year-on-year increase of 202.90%. The growth rate of net profit was outstanding within the industry.

Profit quality was equally impressive:

The company's weighted ROE for 2025 reached 15.78%, a year-on-year increase of 7.74 percentage points, leading the industry in shareholder return capability;

Operating cash flow accounted for 19.72% of revenue, and the cash content of net profit was as high as 325.51%, indicating ample cash generation capability from the core business and high-quality profits.

Relying on years of accumulated global layout, the company continues to maintain advantages in core competitive factors such as the proportion of overseas revenue, global channel coverage, implementation of Mini/Micro LED and COB advanced display technologies, and the number of benchmark projects for international top-tier events. The long-term growth logic for global commercial display is clear and solid.

After the expansion of the tradable share capital, it will attract more professional institutions to conduct regular research and continuously track the company's development, establishing a fully competitive and transparent market-based value assessment system. This will increase industry and capital market attention, forcing the company to continuously optimize its operations and management, allowing the market to objectively recognize Absen's comprehensive strength and global leading position, achieving a two-way match and synergistic growth between fundamentals and market capitalization.

A company representative stated that after the share adjustment is completed, the actual controller will continue to maintain an absolute controlling stake, unwaveringly focus on the core LED display business, and continue to advance the implementation of the product premiumization and market globalization strategy. By improving the entire chain capital supporting system covering equity, liquidity, and valuation pricing, the company will continuously release the growth value of its global leadership. With a more mature and open capital platform, it will join hands with all investors to share in the industry's development dividends.

Disclaimer
All matters related to the controlling shareholder's share reduction mentioned in this article are subject to the statutory announcements disclosed by the company on the Cninfo website. Financial data are taken from Absen's disclosed 2025 annual report, representing only past operational performance and do not constitute a forecast of future performance.