Stock code: 688082 Stock abbreviation: Shengmei Shanghai Announcement No.: 2024-065

Shengmei Semiconductor Equipment (Shanghai) Co., Ltd

In relation to the issuance of A-shares to specific targets to dilute the immediate return with the Company

Announcement on the adoption of infill measures and commitments by relevant entities (revised draft).

The board of directors and all directors of the company guarantee that there are no false records, misleading statements or material omissions in the content of this announcement, and assume legal responsibility for the authenticity, accuracy and completeness of its content in accordance with the law.

Shengmei Semiconductor Equipment (Shanghai) Co., Ltd. (hereinafter referred to as the "Company") in January 2024

The 8th meeting of the 2nd Board of Directors and the 8th meeting of the 2nd Board of Supervisors were held on the 25th, in February 2024

On the 22nd, the first extraordinary general meeting of shareholders in 2024 was held, and the company's 2024 annual target was deliberated and approved

Proposal for the issuance of A shares. The Company held its 10th second session of the Board of Directors on October 21, 2024

At the fourth meeting and the thirteenth meeting of the second board of supervisors, the "Proposal on the Company's 2024 Plan for Issuing A Shares to Specific Targets (Revised Draft)" and other related proposals were deliberated and approved, and the plan for issuing A shares to specific targets was revised. In accordance with the relevant requirements of the "Several Opinions of the State Council on Further Promoting the Healthy Development of the Capital Market" (Guo Fa [2014] No. 17), the "Opinions of the General Office of the State Council on Further Strengthening the Protection of the Legitimate Rights and Interests of Small and Medium-sized Investors in the Capital Market" (Guo Ban Fa [2013] No. 110) and the "Guiding Opinions on Matters Concerning the Dilution of Spot Returns in the Initial Offering and Refinancing and Major Asset Restructuring" (CSRC Announcement [2015] No. 31), as well as the company's financial data and operating conditions The possible impact of the issuance of A shares to specific targets in 2024 (hereinafter referred to as the "Offering") on the equity of ordinary shareholders and immediate returns was analyzed, and the compensation measures were proposed in light of the actual situation, and the relevant entities made commitments to the effective implementation of the compensation measures, as follows:

1. The impact of the issuance on the company's main financial indicators

The total amount of funds to be raised by the issuance of shares to specific targets does not exceed RMB 450,000.00 million.

The net proceeds after deducting the issuance expenses are intended to be used for R&D and process testing platform construction projects, high-end semiconductor equipment iterative R&D projects and supplementary working capital.

(1) Calculation assumptions and premises

The following assumptions are only to measure the impact of the diluted spot return of the issuance on the company's main financial indicators, and do not represent the company's judgment on future operating conditions and trends, nor do they constitute profit forecasts. Investors should not make investment decisions based on this, and the company shall not be liable for compensation if investors make investment decisions based on this and cause losses.

1. It is assumed that the offering is expected to close in June 2025. This completion time is for the purpose of calculating this offering only

The impact on the diluted spot return is ultimately subject to the time when the issuance is registered with the CSRC and the actual issuance is completed.

2. It is assumed that there are no major changes in the macroeconomic environment, industrial policy, industry development status, product market situation, etc.

3. Assuming that the total amount of funds raised this time does not exceed RMB 450,000.00 (including the principal amount), the impact of issuance costs and other impacts will not be considered for the time being. It is assumed that the number of shares to be issued is not more than 10% of the company's total share capital before the issuance, that is, no more than 43,615,356 shares (including the number of shares). When forecasting the total share capital of the company, only the impact of the issuance of shares is considered, and the changes in share capital caused by equity incentives, option incentives, conversion increases, repurchases, share payments and other factors are not considered.

4. The company's net profit attributable to shareholders of listed companies from January to June 2024 after deducting non-recurring gains and losses is

434.5392 million yuan, net profit attributable to shareholders of listed companies before and after deducting non-recurring gains and losses in 2024

According to the annualized performance data from January to June 2024, it is estimated to be 869.0784 million yuan. Assuming 2025 year

Net profit attributable to owners of the parent company and net attributable to owners of the parent company after deducting non-recurring gains and losses

Compared with FY2024, there are three scenarios of an increase of 20%, a flat, or a decrease of 20%, and 2025 is calculated according to this

Net profit attributable to owners of the parent company and net profit attributable to owners of the parent company after deducting non-recurring gains and losses. This assumption is only used to calculate the impact of the diluted spot return of the issuance of shares to specific targets on the main financial indicators, and does not represent the company's judgment on the future operating conditions and trends, nor does it constitute the company's profit forecast.

5. The number of shares issued to specific objects, the amount of funds raised, and the issuance time are only based on the assumption for calculation purposes, and the final number of shares issued, the issuance results and the actual date shall prevail.

6. When calculating the number of ordinary shares outstanding, only the impact of the issuance on the total share capital is considered, and the changes in share capital caused by equity incentives, option incentives, share repurchase cancellation, and provident fund conversion to share capital are not considered.

7. This calculation does not consider the impact on the company's production and operation and financial status (such as financial expenses and investment income) after the funds raised by this issuance are received.

(2) The impact on the company's main financial indicators

Based on the above assumptions, the Company has calculated the impact of the Offering on key financial indicators such as earnings per share, as shown in the table below:

2024 Annual/2024 2025 Annual/December 31, 2025

December 31, year of the project

Before this issuance After this issuance

Total share capital at the end of the period (10,000 shares) 43,615.36 43,615.36 47,976.89

Assumption 1: The net profit attributable to ordinary shareholders of the listed company after deducting non-recurring gains and losses realized in 2025 is higher

20% annual growth in 2024

After deducting non-recurring gains and losses, it was attributable to the listed company 86,907.84 104,289.41 104,289.41

Net profit of shareholders (10,000 yuan)

Basic earnings per share after deducting non-recurring gains and losses 1.99 2.39 2.28

(RMB/Share)

Diluted earnings per share after deducting non-recurring gains and losses 1.96 2.35 2.24

(RMB/Share)

Assumption 2: The net profit attributable to ordinary shareholders of the listed company after deducting non-recurring gains and losses realized in 2025 is higher

Unchanged for 2024

After deducting non-recurring gains and losses, it was attributable to the listed company 86,907.84 86,907.84 86,907.84

Net profit of shareholders (10,000 yuan)

Basic earnings per share after deducting non-recurring gains and losses 1.99 1.99 1.90

(RMB/Share)

Diluted earnings per share after deducting non-recurring gains and losses 1.96 1.96 1.87

(RMB/Share)

Assumption 3: The net profit attributable to ordinary shareholders of the listed company after deducting non-recurring gains and losses realized in 2025 is higher

20% reduction in FY2024

After deducting non-recurring gains and losses, it was attributable to the listed company 86,907.84 69,526.27 69,526.27

Net profit of shareholders (10,000 yuan)

Basic earnings per share after deducting non-recurring gains and losses 1.99 1.59 1.52

(RMB/Share)

Diluted earnings per share after deducting non-recurring gains and losses 1.96 1.57 1.49

(RMB/Share)

Note: Basic earnings per share and diluted earnings per share are calculated in accordance with the provisions of the Rules for the Preparation of Information Disclosure of Companies Offering Securities to the Public No. 9 - Calculation and Disclosure of Return on Net Assets and Earnings per Share.

2. Risk warning of dilution of spot returns in this issuance

After the completion of the issuance of shares to specific targets, the company's total share capital and net assets will increase. In view of the need for a certain period of use and benefit generation of raised funds, in the case of the company's share capital and net assets are increased, if the company's performance has not obtained a corresponding increase in the current range, the company's issuance to specific objects is completed

There is a risk that spot returns (financial metrics such as earnings per share) will be diluted. In addition, in the event of a significant change in the assumptions of the foregoing analysis or in the Company's operating conditions, the possibility of a change in the dilution of the immediate return as a result of the Offering cannot be ruled out.

The company's profitability assumption is only to measure the impact of the diluted spot return issued to specific objects on the company's main financial indicators, and does not represent the company's judgment on the operating situation and trend, nor does it constitute the company's profit forecast and performance commitment, and investors should not make investment decisions based on this assumption. The company shall not be liable for any losses caused by investors making investment decisions based on this.

3. The necessity and reasonableness of this issuance

The necessity and reasonableness of this issuance are detailed in the "Shengmei Semiconductor Equipment (Shanghai) Co., Ltd."

2024 Plan for Issuance of A Shares to Specific Targets (Revised Draft)" Section 2 of the Board of Directors on the Term

Feasibility analysis of the use of the proceeds".

Fourth, the relationship between the raised funds investment project and the company's existing business, the company's reserves in terms of personnel, technology, market and other aspects of the fund-raising project

(1) The relationship between the investment project of the raised funds and the company's existing business

Since its establishment, the company has been committed to providing leading equipment and process solutions for the global integrated circuit industry, adhering to the development strategy of differentiated international competition and original innovation, through independent research and development, the establishment of a relatively complete intellectual property system, with rich technology and process accumulation, the formation of an international leading level or advanced level of front-end semiconductor process equipment, including cleaning equipment, semiconductor electroplating equipment, vertical furnace series equipment, front-end gluing and developing Track equipment, plasma-enhanced chemical vapor deposition (PECVD) equipment, stress-free polishing equipment; Back-end advanced packaging process equipment and silicon material substrate manufacturing process equipment.

With the integrated application experience accumulated in the integrated circuit equipment industry for many years, the company has mastered the mature core key process technology, production and manufacturing capabilities and original innovation research and development capabilities, has a mature supply chain management and manufacturing system, and meets the needs of the middle and downstream application markets of the integrated circuit industry chain. With leading technology and rich product lines, the company has developed into one of the few semiconductor devices with certain international competitiveness in Chinese mainland

The fund-raising projects involved in this issuance include R&D and process test platform construction projects, high-end semiconductor equipment iterative R&D projects and supplementary working capital, which are closely related to the company's main business, which is an extension and expansion of the existing main business, in line with the company's long-term development plan and business layout, conforms to the development direction of the industry market, and has a high degree of relevance to the development of the company's existing main business.

The implementation of this fundraising project will further enhance the company's market competitiveness, effectively improve the company's R&D strength, consolidate and further enhance the company's competitive position in the industry, and achieve the company's long-term sustainable development.

(2) The company's reserves in terms of personnel, technology, market and other aspects of the investment projects engaged in raising funds

1. Personnel reserves

The company attaches great importance to the construction and training of technology R&D team, and encourages independent innovation and independent R&D. Since its establishment, the company has continued to cultivate and introduce professionals in the global industry, and after years of accumulation, the company has an international and professional technical research and development team. The company's core technology R&D team has international competitiveness, and most of the main core technical personnel have overseas study or work experience, and have an international vision and thinking, which is conducive to learning and mastering international leading technology. In addition, the company has set up a professional R&D team in Korea, relying on Korea's technical talents in the field of machinery and electronics, and learning from the R&D team in Chinese mainland. Through the establishment of an international and professional technical research and development team, and adhere to the differentiated technological innovation and competitive strategy, the company ensures that the company can continue to launch new products, and continuously improve existing products, consolidate and enhance the company's technical research

Hair ability. As of June 30, 2024, the number of R&D personnel in the company is 776, accounting for the total number of employees in the company

of 46.22%. During the reporting period, the company's core technology R&D team was stable and had strong technical R&D team advantages.

In the future, the company plans to further increase R&D investment, continue to introduce high-level talents, continuously expand the scale of the company's R&D team, further improve the comprehensive ability and level of the R&D team, and reserve sufficient talents for the company's fund-raising investment project.

2. Technical reserves

The company's main products include front-end semiconductor process equipment, including cleaning equipment, semiconductor electroplating equipment, vertical furnace series equipment (including oxidation, diffusion, vacuum tempering, LPCVD, ALD), gluing and developing track equipment, plasma-enhanced chemical vapor deposition PECVD equipment, stress-free polishing equipment; Back-end advanced packaging

Through years of technology research and development, the company has mastered the relevant core technologies in the above product fields, and continues to innovate in continuously improving equipment process performance and production capacity, improving customer product yield and reducing customer costs. These core technologies have been continuously applied in the products sold by the company and formed the competitiveness of the company's products.

The National Integrated Circuit Innovation Center and Shanghai Integrated Circuit R&D Center Co., Ltd. were launched on June 20, 2020

The company's core technology was evaluated, and the "Evaluation of the Core Technology of Shengmei Semiconductor Equipment (Shanghai) Co., Ltd." was issued, and the core technology of Shengmei Shanghai is mainly used in semiconductor cleaning equipment, stress-free polishing equipment and electroplating copper equipment. Compared with well-known equipment manufacturers at home and abroad, the core technologies such as SAPS megasonic cleaning technology, TEBO megasonic cleaning technology, single-wafer trough combination Tahoe high-temperature sulfuric acid cleaning technology, stress-free polishing technology, and multi-anode electroplating technology have reached the international leading or international advanced level.

In terms of R&D achievements, continuous R&D investment has also accumulated a large number of technological achievements for the company, as of 2024

As of June 30, the company and its holding subsidiaries had 463 major patents that had been granted patents, including:

There are 177 domestic authorized patents, 286 overseas authorized patents, and a total of 461 invention patents. With recent years

With the deep integration of R&D achievements and industry, the company has been rated as one of the "Top Five Semiconductor Equipment Enterprises in China" for many years, selected as the first batch of enterprise key laboratories issued by the Shanghai Municipal Science and Technology Commission, and SAPS megasonic cleaning technology won the first prize of Shanghai Science and Technology Progress Award in 2020. In addition, the company was rated as a national "specialized, special and new" enterprise.

At present, the company has established a relatively complete core technology system and technological achievement protection system, and formed a complete technological achievement transformation system of independent research and development, design and production to promote the company's technology to achieve industrial transformation. Therefore, the company's rich technical reserves and excellent technology transformation capabilities provide technical support for the implementation of the project.

3. Market reserves

The technology of integrated circuit manufacturing is complex, the process steps are numerous, the production of equipment required is more, the efficiency and reliability of a single equipment will directly affect the efficiency of the entire production line and the yield of chip products, so the integrated circuit manufacturing enterprises are very cautious in the selection of new equipment, and need to go through a long verification cycle.

With leading technology and rich product lines, the company has developed into one of the few semiconductor equipment suppliers with certain international competitiveness in Chinese mainland, and its products have been recognized by many mainstream semiconductor manufacturers at home and abroad

Achieve a good market reputation. The company's products have received orders from customers including Hynix, Huahong Group, SMIC, Yangtze River Storage, Hefei Changxin, Xinen Semiconductor, Silan Micro, Jinghe, BYD Semiconductor, Star, Shanghai IC R&D Center, Shenghe Jingwei, Changdian Technology, Tongfu Microelectronics, Huatian Technology, V-SOL, Texas Instruments, Zhongke Zhixin, Quliang Electronics, Nepes, Jin Ruihong, Taiwan Hejing Technology, Chengdu Yicheng, Institute of Microelectronics of Chinese Academy of Sciences, Huajin Semiconductor, Xiamen Lianxin and other customers. Through the cooperation with the above-mentioned well-known customers, the company has accumulated a high brand and market awareness, which has a strong demonstration effect, which helps the company to further expand potential customers and has a good market foundation.

To sum up, the company's raised funds investment project has a good foundation in terms of personnel, technology, and market. With the construction of the raised funds investment project, the company will further improve the reserves of personnel, technology, market and other aspects to ensure the smooth implementation of the project.

5. Measures taken by the company to dilute the immediate return of this issuance

The issuance may lead to a decline in the immediate return of investors, in order to protect the interests of investors, the company has taken the following measures to enhance the company's competitiveness to make up for shareholder returns.

(1) Rapidly enhance the overall strength of the company and expand the company's business scale

After the company's issuance, the company's total assets will be further enhanced, the anti-risk ability and comprehensive strength will be significantly enhanced, and the market value will be significantly enhanced. With the help of the capital market and good development opportunities, the company will continue to expand the scale of its main business, give full play to the company's advantages in the field of semiconductor special equipment, and promote the company's sustainable, healthy and stable development.

(2) Strengthen internal management and reduce operating costs

The company will actively promote the optimization of product technology, the improvement of process flow, the transformation and upgrading of technical equipment, strengthen refined management, continue to improve production and operation efficiency, and continuously reduce production loss. At the same time, the company will strengthen budget management, control the company's expense ratio, and improve profitability.

(3) Accelerate the implementation of investment projects with raised funds and strengthen the management of raised funds

The investment projects of the raised funds are all focused on the company's main business, which is conducive to enhancing the company's comprehensive competition

progress to achieve the expected benefits as soon as possible. At the same time, the company will strengthen the management of raised funds and standardize the use of raised funds in accordance with the requirements of the Articles of Association of Shengmei Semiconductor Equipment (Shanghai) Co., Ltd. and the Management System for Raised Funds of Shengmei Semiconductor Equipment (Shanghai) Co., Ltd. to ensure that the raised funds are realized in accordance with the established purposes.

(4) Improve the profit distribution policy and strengthen the return of investors

In accordance with the requirements of the China Securities Regulatory Commission's Notice on Further Implementing Matters Concerning Cash Dividends of Listed Companies, Regulatory Guidelines for Listed Companies No. 3 - Cash Dividends of Listed Companies, and other relevant regulations, combined with the actual situation of the company, in order to clarify the return on the company's shareholders' equity dividends, the company has further refined the provisions on the principle of dividend distribution in the Articles of Association of Shengmei Semiconductor Equipment (Shanghai) Co., Ltd., and formulated the Shengmei Semiconductor Equipment (Shanghai) Co., Ltd. Shareholder Dividend Return Plan for the Next Three Years (2024-2026). The company will strictly implement the profit distribution policy, and actively implement the profit distribution to shareholders and optimize the return on investment mechanism if the distribution conditions are met.

The Company's formulation of the above-mentioned compensation measures does not amount to a guarantee for the Company's future profits, and investors should not make investment decisions based on them, and the Company shall not be liable for compensation for losses caused by investors' investment decisions based on them.

6. The commitment of the company's directors, senior management personnel, and the company's controlling shareholders and actual controllers to the company's compensation measures

(1) The company's directors and senior management personnel can effectively fulfill the company's compensation measures

All directors and senior management of the Company make the following commitments:

"1. I promise to perform my duties faithfully and diligently, and safeguard the legitimate rights and interests of the listed company and all shareholders;

2. I promise not to transfer benefits to other units or individuals free of charge or under unfair conditions, nor to damage the interests of listed companies in other ways;

3. I promise to restrain my duty consumption behavior;

4. I promise not to use the assets of the listed company to engage in investment and consumption activities unrelated to my performance of duties;

5. Within the scope of my legal authority, promote the remuneration system formulated by the board of directors or the remuneration and appraisal committee to be linked to the implementation of the listed company's compensation measures;

6. In the future, if the listed company implements the equity incentive plan, within the scope of my legal authority, the exercise conditions set by the equity incentive plan to be announced will be linked to the implementation of the listed company's compensation measures;

7. I promise to strictly fulfill the above commitments to ensure that the listed company's compensation measures can be effectively fulfilled. If I violate the commitments I have made or refuse to fulfill my commitments, I agree that the China Securities Regulatory Commission, the Shanghai Stock Exchange and other securities regulatory authorities shall take relevant penalties or regulatory measures against me in accordance with the relevant regulations and rules formulated or promulgated by them. ”

(2) The relevant commitments of the controlling shareholders and actual controllers of the Company to the Company's compensation measures can be earnestly fulfilled

The controlling shareholder and actual controller of the company make the following commitments:

"1. Do not interfere with the company's operation and management activities beyond its authority, and do not encroach on the company's interests;

2. Urge listed companies to earnestly implement measures to fill diluted spot returns;

3. From the date of signing of this letter of commitment to the completion of the company's issuance, if the China Securities Regulatory Commission makes other new regulatory provisions on the return and its commitments, and the above commitments cannot meet the requirements of the China Securities Regulatory Commission, the company/I promise to issue supplementary commitments in accordance with the latest regulations of the China Securities Regulatory Commission;

4. Earnestly fulfill the relevant compensation measures formulated by the company and any commitments made by the company/myself on the compensation measures, if the company/I violate these commitments and cause losses to the company or investors, the company/I am willing to bear the corresponding compensation liability to the company or investors in accordance with the law. ”

The announcement is hereby made.

Shengmei Semiconductor Equipment (Shanghai) Co., Ltd

board of directors

October 22, 2024