Core Viewpoint - Qingdao Bank is issuing A-share convertible bonds to support future business development and enhance core tier one capital, which may dilute immediate returns for existing shareholders [1][5][7]. Group 1: Impact Analysis of Convertible Bonds - The funds raised from the convertible bond issuance will be used entirely to support the bank's future business development and will be allocated to supplement core tier one capital after bondholders convert their bonds into shares [1][8]. - The issuance is expected to dilute immediate returns for existing shareholders, with potential decreases in basic and diluted earnings per share before the bonds are converted [5][6]. - The bank has outlined various assumptions for the impact analysis, including projected net profit growth rates of 5%, 10%, and 15% for the years 2025 and 2026 [2][4]. Group 2: Financial Metrics and Projections - The bank's total ordinary share capital is projected to remain at 5.82 billion shares, with diluted earnings per share estimated to be 0.68 yuan in 2024, increasing to 0.84 yuan by 2026 under a 5% growth scenario [3][4]. - Under different growth scenarios, the diluted earnings per share could reach 0.88 yuan and 0.92 yuan for 10% and 15% growth rates, respectively [4][5]. - The bank's capital adequacy ratios as of June 30, 2025, are reported at 13.52%, with a tier one capital ratio of 10.52% and a core tier one capital ratio of 9.05%, indicating compliance with regulatory requirements [8]. Group 3: Necessity and Rationale for Issuance - The issuance of convertible bonds is deemed necessary to strengthen the bank's capital base, enhance its ability to serve the real economy, and improve risk resilience [7][9]. - The bank aims to meet increasing capital regulatory requirements amid a complex economic environment, ensuring a proactive approach to capital supplementation [7][8]. - The funds raised will support the bank's strategic goals and business development, aligning with its long-term growth plans [9][10]. Group 4: Measures to Mitigate Dilution Impact - The bank plans to implement measures to optimize business structure and enhance capital efficiency, aiming to minimize the impact of the convertible bond issuance on shareholder returns [11][12]. - A stable shareholder return policy will be maintained, with a focus on protecting the rights of shareholders, particularly minority shareholders [11][12]. - The bank's board and senior management have committed to ensuring the effective execution of measures to mitigate the dilution of immediate returns [13].