Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
Zhong Ao Home Group Limited
中 奧 到 家 集 團 有 限 公 司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 1538)
DISCLOSEABLE TRANSACTION
The Board is pleased to announce that on 1 August 2020, Guangdong Zhong Ao and CNHTC entered into the Agreement, pursuant to which Guangdong Zhong Ao agreed to purchase and CNHTC agreed to sell the Sale Interest for a total consideration of RMB39,666,200.
As the applicable percentage ratios (as defined under the Listing Rules) in respect of the Acquisition is more than 5% but less than 25%, the Acquisition constitutes a discloseable transaction on the part of the Company under the Listing Rules and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.
BACKGROUND
On 30 June 2020, CNHTC made an open tender at the Shandong Property Rights Exchange Center in the PRC to invite purchaser(s) to acquire the entire equity interest in the Target Company at a consideration of not less than RMB39,666,200, which was determined with reference to the valuation made by 山東中新資產評估有限公司 (Shangdong Zhongxin Assets Appraisal Company Limited*) that the net asset value of the Target Company was RMB39,666,200 as at 31 December 2019. Shandong Property Rights Exchange Center in the PRC was responsible for the preparatory works for the tender, including but not limited to inviting potential bidders to participate in the tender and examining the qualification of the potential bidders.
On 27 July 2020, Guangdong Zhong Ao submitted a tender at the bid price of RMB39,666,200 and paid RMB10,000,000 as surety for participation in the tender. On 28 July 2020, Guangdong Zhong Ao was informed by Shandong Property Rights Exchange Center that it was successful in the bidding of the tender.
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The Board is pleased to announce that, upon successful bidding of the tender, on 1 August 2020, Guangdong Zhong Ao and CNHTC entered into the Agreement, pursuant to which Guangdong Zhong Ao agreed to purchase and CNHTC agreed to sell the Sale Interest for a total consideration of RMB39,666,200.
THE AGREEMENT
Date:
1 August 2020
Parties
- Guangdong Zhong Ao as purchaser; and
- CNHTC as vendor.
To the best of the Director's knowledge, information and belief and having made all reasonable enquiries, (i) CNHTC is principally engaged in the manufacturing and sale of automobiles in the PRC; (ii) CNHTC is wholly and beneficially owned by 山東重工集團有 限公司 (Shandong Heavy Industry Group Co., Ltd.*), a state owned enterprise in the PRC; and (iii) CNHTC and its ultimate beneficial owners are third parties independent of and not connected with the Company and its connected persons.
Guangdong Zhong Ao is a wholly owned subsidiary of the Company and is principally engaged in provision of property management services in the PRC.
Asset to be acquired
Pursuant to the Agreement, Guangdong Zhong Ao agreed to purchase, and CNHTC agreed to sell, the Sale Interest, which represents the entire equity interest in the Target Company.
Consideration
The total consideration for the Acquisition is RMB39,666,200, which shall be payable by Guangdong Zhong Ao to CNHTC in the following manner:
- RMB10,000,000 previously paid as surety for participation in the tender shall be applied as part payment of the consideration for the Acquisition; and
- the remaining balance of RMB29,666,200 to be paid within 5 business days after the date of the Agreement.
The total consideration for the Acquisition is equivalent to the bid price submitted by Guangdong Zhong Ao in the tender and was determined with reference to (i) the lowest bid price under the tender made by CNHTC at the Shandong Property Rights Exchange Center, which was determined with reference to the valuation made by 山東中新資產評估有限公司 (Shangdong Zhongxin Assets Appraisal Company Limited*) that the net asset value of the Target Company was RMB39,666,200 as at 31 December 2019; and (ii) the business operation and future prospects of the Target Group.
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Taking into account the above factors, the Directors (including the independent non- executive Directors) consider that the entering into of the Agreement and the terms and conditions of the Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole.
Completion
The Agreement is unconditional and Completion will take place within 10 business days after CNHTC having obtained a certificate from Shandong Property Rights Exchange Center confirming that the internal procedures of the tender are completed. Upon Completion, the parties to the Agreement will arrange for the business registration of the transfer of the entire equity interest in the Target Company from CNHTC to Guangdong Zhong Ao and the issuance of the new business license of the Target Company.
Upon Completion, the Target Company will become a wholly owned subsidiary of the Company and its financial results will be consolidated in the Group's financial statements.
After Completion, CNHTC agreed to continue to cooperate with the Target Company for a term of three years and will engage the Target Company to provide various services including indoor cleaning, outdoor cleaning and greening, shuttle bus, catering, security and maintenance services for CNHTC and its subsidiaries in Jinan, the PRC.
INFORMATION OF THE TARGET GROUP
The Target Company is a company established in the PRC with limited liability and is principally engaged in provision of indoor cleaning, outdoor cleaning and greening, shuttle bus, catering, security and maintenance services in the PRC. It has a registered and paid up capital of RMB30,000,000 and 63 staff in total for its business operation as at the date of this announcement.
As at the date of this announcement, (i) the equity interest in the Target Company was wholly and beneficially owned by CNHTC; and (ii) the Target Company owns 100% equity interest in Beijing Wanghu. Beijing Wanghu is a company established in the PRC with limited liability and is principally engaged in accommodations, Chinese food and sales of alcohol and beverage.
Followings are certain key financial figures extracted from the Target Company's audited consolidated financial statements for the two years ended 31 December 2018 and 2019:
For the year | For the year | |
ended | ended | |
31 December | 31 December | |
2018 | 2019 | |
(audited) | (audited) | |
RMB'000 | RMB'000 | |
Net profit before taxation | 12,270 | 16,218 |
Net profit after taxation | 9,042 | 11,980 |
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As at 31 December 2019, the net asset value of the Target Company was RMB39,666,200 according to the valuation made by 山東中新資產評估有限公司 (Shangdong Zhongxin Assets Appraisal Company Limited*).
REASONS FOR AND BENEFIT OF THE ACQUISITION
The Company is an investment holding company. The Group is principally engaged in the provision of property management services and property management consulting services in the PRC.
The Board expected that, upon Completion, the Group will be able to provide value adding services to the property projects currently managed by the Group directly and bring synergy effects to the existing property management services of the Group and enhance the Group's profitability. The Group could also diversify its services and markets by acquisition of businesses that are related to the Group's principal business.
Based on the above, the Directors (including the independent non-executive Directors) consider that the entering into of the Agreement and the terms and conditions of the Agreement (including the consideration and payment terms) are fair and reasonable and in the interests of the Company and the Shareholders as a whole.
IMPLICATIONS UNDER THE LISTING RULES
As the applicable percentage ratios (as defined under the Listing Rules) in respect of the Acquisition is more than 5% but less than 25%, the Agreement constitutes a discloseable transaction on the part of the Company under the Listing Rules and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.
DEFINITIONS
In this announcement, the following terms shall have the meanings set out below unless the context requires otherwise:
''Acquisition'' | the proposed acquisition of the Sale Interest by Guangdong |
Zhong Ao from CNHTC pursuant to the terms and | |
conditions of the Agreement | |
''Agreement'' | the equity transfer agreement entered into between |
Guangdong Zhong Ao and CNHTC on 1 August 2020 in | |
relation to the Acquisition | |
''Beijing Wanghu'' | 北京望湖商務賓館有限公司 (Beijing Wanghu Business |
Hotel Co., Ltd.*), a company established in the PRC with | |
limited liability and the wholly owned subsidiary of the | |
Target Company | |
''Board'' | the board of Directors |
''CNHTC'' | 中國重型汽車集團有限公司 (China National Heavy Duty |
Truck Group Co., Ltd.*), a company established in the PRC | |
with limited liability and the vendor under the Agreement |
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''Company''
''Completion''
''connected person(s)'' ''Director(s)'' ''Group'' ''Guangdong Zhong Ao''
''Hong Kong'' ''Listing Rules''
''PRC''
''Sale Interest''
''Share(s)''
''Shareholder(s)'' ''Stock Exchange'' ''Target Company''
''Target Group'' ''HK$''
Zhong Ao Home Group Limited, a company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on the main board of Stock Exchange
completion of the Acquisition in accordance with the terms and conditions of the Agreement
having the meaning ascribed to it under the Listing Rules
the directors of the Company
the Company and its subsidiaries from time to time
廣東中奧物業管理有限公司 (Guangdong Zhong Ao Property Management Company Limited*), a company established in the PRC with limited liability and a direct wholly-owned subsidiary of the Company
the Hong Kong Special Administrative Region of the PRC
the Rules Governing the Listing of Securities on the Stock Exchange
the People's Republic of China
the entire equity interest in the Target Company to be acquired by Guangdong Zhong Ao from CNHTC under the Acquisition
share(s) of HK$0.01 each in the share capital of the Company
holder(s) of the Shares
the Stock Exchange of Hong Kong Limited
濟南快勤服務有限公司 (Jinan Express Service Company Limited*), a company established in the PRC with limited liability
collectively, the Target Company and Beijing Wanghu
Hong Kong dollars, the lawful currency of Hong Kong
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''RMB'' | Renminbi, the lawful currency of the PRC |
''%'' | per cent. |
By order of the Board | |
Zhong Ao Home Group Limited | |
LIU Jian | |
Chairman and Chief Executive Director | |
Hong Kong, 2 August 2020 |
As at the date of this announcement, the Board comprises Mr. Liu Jian, Ms. Chen Zhuo, Mr. Liang Bing and Mr. Long Weimin as executive Directors, Mr. Wu Zhihua and Ms. Jin Keli as non-executive Directors, and Mr. Zhang Weilun, Mr. Chan Wai Cheung, Admiral, Mr. Chan Ka Leung, Kevin and Mr. Huang Anxin as independent non-executive Directors.
- for identification purposes only
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Zhong Ao Home Group Ltd. published this content on 02 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 August 2020 10:11:14 UTC