Glonghui December 1 | Hehong Services (06093.HK) announced that on December 1, 2023, the seller Guizhou Furuiying Information Consulting Co., Ltd. (an indirect wholly-owned subsidiary of the company), the buyer (Yang Wujun and Che Ziyong) and the target company entered into the agreement. According to this, the seller agreed to sell and the buyer agreed to acquire a total of 51% of the shares of the target company, Guizhou Star Property Service Co., Ltd., at a total cost of RMB 25.5 million.
The target company is a limited company incorporated in China, mainly engaged in property management business in Guizhou Province. As of the date of this announcement, the seller and Beijing Linda Tongchuang Investment Development Co., Ltd. (a limited company established under Chinese law, where Yang Wulin and Yang Wuxun hold 90% and 10% interests respectively) held 51% and 49% of interests respectively.
The Group adheres to the goal of achieving high enterprise growth and high-quality development, and is rapidly improving in terms of management scale, operating indicators, and operating efficiency. After reviewing the business and operating conditions of the target company currently managed by the target company, especially compared with the group's managed projects close to the target company's business area, the average accounts receivable cycle is relatively long despite active efforts to recover outstanding accounts receivable. Given the recent downturn in China's property market, the property management industry is expected to slow down.
The Board of Directors believes that the sale continues the Group's strategy to achieve high corporate growth and high-quality development goals, and provides a good opportunity for the Group to streamline its business and invest the Group's financial resources in its existing and potential businesses through more effective resource allocation. Furthermore, the net proceeds from the sale of approximately RMB 25,445,000 will further strengthen the Group's cash position and allow the Group to reallocate more financial resources to the Group's working capital.