Fuxing China has entered into a conditional share purchase agreement with Liansheng (Jinjiang) New Materials Group (Liansheng) for the disposal of its 100% stake in its wholly-owned subsidiary, Jinjiang Jianxin Weaving Co..
Jinjiang Jianxin Weaving Co., which is held by Jade Star, has a sale consideration of RMB8.8 million ($1.6 million).
Based on a valuation report by Quanzhou Decheng Asset Appraisal Office (General Partnership), the sale equity recorded a negative book value amounting to approximately RMB14.6 million and was valued at approximately RMB8.3 million as at Oct 16.
Accordingly, the purchase consideration represents an excess of, or gain on disposal, of approximately RMB23.4 million.
Liansheng, which is incorporated in the People’s Republic of China, provides new material promotion services and Internet of Things technology and application services.
On a pro forma basis, had the disposal been completed on Dec 31, 2023, the group’s FY2023 net tangible assets (NTA) would have stood at RMB593.7 million, instead of RMB573.7 million. NTA per share would have stood at RMB34.50, instead of RMB33.35.
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Had the disposal been completed on Jan 1, 2023, the group’s FY2023 earnings would have stood at RMB8.9 million, instead of a loss of RMB11 million. Earnings per share would have stood at RMB0.52, instead of a loss per share of RMB0.64.
Shares in Fuxing China closed flat at 20 cents on Dec 11.
