According to the Zhitong Finance App, Honghai Hi-Tech Resources (00065) issued an announcement. On April 22, 2024, Hongyuan Global (an indirect wholly-owned subsidiary of the company, as the buyer) entered into a sales agreement with the seller. Hongyuan Global conditionally agreed to buy and the seller conditionally agreed to sell the shares for sale (equivalent to all shares invested by the target company Taishan Jiujiu in Laos) at a cost of RMB 40 million (equivalent to about HK$43.26 million).
In January 2024, the company paid the target company RMB 30 million (equivalent to approximately HK$32.45 million) of the memorandum of understanding in good faith in accordance with the MOU.
On April 22, 2024, Hongyuan Global and Hongyuan Group Co., Ltd. signed a subscription agreement with the target company. Hongyuan Global agreed to subscribe for the subscription shares issued by the target company; and the paid memorandum of understanding goodwill of the target company will offset the subscription payment under the subscription agreement. The subscription agreement will not be confirmed until the acquisition is completed, and the funds injected into the target company will be used to develop the copper mine.
After the acquisition is completed, the target company will become an indirect wholly-owned subsidiary of the company, and the target group's financial results will be incorporated into the group's accounts. Furthermore, the target company will continue to be an indirect wholly-owned subsidiary of the company after the subscription is completed.
According to reports, the project company holds all of the shares in the copper mine. After the shareholding change in the project company is completed, the project company will own 51% and 49% of the target company and Lao-China Mining respectively. Lao-China Mining is a company founded in Laos and will be wholly owned by an independent third party, Mr. Yu Jianmin.
The conclusion of sales agreements and subscription agreements is a good opportunity for the Group to expand its business portfolio to the Southeast Asian mining industry. In addition to the Group's existing coal mining operations, it is expected to contribute to the Group's long-term growth and development. Furthermore, labor and operating costs in Laos are relatively low, which will benefit the future financial performance of copper mines in terms of cost efficiency.
Due to environmental awareness and policies enacted by governments around the world to support the development of new energy vehicles, the directors believe that demand for electric vehicles and the construction of related infrastructure (such as electric vehicle charging stations) will rise accordingly.
Since copper is a key material for manufacturing electric vehicle components (including engines, batteries, wires, and related infrastructure), the directors believe that global demand for copper will increase in the future.