Following the market close on June 4th, Mgi Tech Co.,Ltd. (688114.SH) announced a proposal from its controlling shareholder, Shenzhen Huada Technology Holding Group Co., Ltd. (referred to as "Huada Tech Holding"). Based on confidence in the company's future prospects and recognition of its intrinsic value, and to further safeguard the interests of investors, the shareholder has proposed that the company repurchase its shares via centralized competitive bidding on the Shanghai Stock Exchange.
The proposed buyback would utilize the company's own funds and raised capital, with a total amount ranging from a minimum of 250 million yuan to a maximum of 500 million yuan. The repurchase price ceiling is set at 150% of the average trading price of the company's shares over the 30 trading days preceding the resolution on the buyback plan. The specific details of the share repurchase scheme are pending review and approval by the board of directors.
According to the announcement, the repurchased shares will be allocated for an employee stock ownership plan or equity incentive scheme. This initiative aims to better align the interests of core talent with the company's success, fostering shared development. Any shares not utilized as planned within the stipulated timeframe will be canceled in accordance with regulations.
The controlling shareholder, Huada Tech Holding, confirmed it had not engaged in any buying or selling of the company's shares in the six months prior to this proposal. Furthermore, it currently has no plans to increase or decrease its shareholding during the implementation period of the buyback.
Examining the company's fundamentals, Mgi Tech's operational performance shows a sustained positive trajectory, with a clear trend of improvement. For the first quarter of 2026, the company reported revenue of 585 million yuan, marking a year-on-year increase of 24.81%. Its operating cash flow also turned positive compared to the same period last year.
As of April 20th, the company's total order backlog amounted to 770 million yuan. Within this, orders for complete long-read sequencing reached 630 million yuan, accounting for 82% of the total backlog. The company anticipates its complete long-read sequencing business will maintain double-digit growth throughout the year.
Additionally, the multi-omics (OMICS) segment achieved revenue of 276 million yuan in 2025, representing a significant year-on-year growth of 47.83%. This business line is emerging as a visible and incremental contributor, forming a second growth curve for the company.
In the context of domestic substitution, among existing domestic clients using imported sequencing equipment who have a need for upgrades, over 60% have expressed a clear intention to switch to Mgi Tech's sequencing platforms. The company plans to accelerate the pace of domestic replacement throughout 2026.
Furthermore, the company has recently engaged in a series of meetings with institutional investors and conducted investor communication activities. It has been actively disclosing advancements in its cutting-edge research and development as well as progress in business implementation. By leveraging AI technology to enhance its complete long-read sequencing capabilities, intelligent automation, and the development of its full-stack multi-omics platform, Mgi Tech is accelerating business quality and efficiency improvements, thereby solidifying the foundation for its medium to long-term earnings growth.
In recent years, supported by both policy initiatives and inherent market demand, share buybacks have become an important tool for conveying confidence and optimizing capital structures. Backed by its steadily improving performance, Mgi Tech is advancing this substantial buyback plan to reinforce shareholder value returns.
As the synergistic benefits from AI for Science (AI4S), multi-omics integration, and deeper clinical penetration continue to unfold, Mgi Tech is poised to reward capital market trust with solid operational results. The company's long-term value holds significant potential for sustained release.
Comments