Changfang Group plans to transfer 100% equity of its subsidiary for RMB 500 million; Huati Technology consortium wins bid for RMB 186 million engineering project

Changfang Group announced that, in order to revitalize assets and enhance profitability, the company intends to transfer 100% of the equity of its wholly-owned subsidiary Huizhou Changfang Lighting Energy Saving Technology Co., Ltd. to Guangdong Baihong Zhiyuan Industrial Co., Ltd. (hereinafter referred to as "Baihong Zhiyuan") for a transfer price of RMB 500 million.

The announcement shows that Baihong Zhiyuan's business scope includes park management services; marketing planning; enterprise management consulting; housing leasing; investment activities using own funds; entertainment exhibitions; hotel management; information consulting services (excluding licensed information consulting services); property management; real estate brokerage; and real estate consulting.

Baihong Zhiyuan is a subsidiary in which Huizhou Bailihong Venture Capital Co., Ltd. holds a 50% stake, and it is also an affiliated company of Huizhou Wandong Zhigu Development Co., Ltd., but it has no affiliation with Changfang Group.

Huizhou Changfang Lighting Energy Saving Technology Co., Ltd. operates in the research, development, design, production and sales of smart home, optoelectronic product series and LED application products, as well as supporting project scheme design, technical transformation, engineering installation, consulting services, energy performance contracting (EPC / EMC), plastic products, hardware products, electrical appliances, electronic products, etc.

Changfang Group stated that the framework agreement signed this time will not affect the company's business independence, and there is no dependency on the transferee due to the performance of the framework agreement terms; it will not constitute exclusivity in the company's cooperation with other partners. Since this framework agreement is only an intention reached between the company and the transferee, its success remains uncertain, and the impact on the company's financial status, operating results, etc. for 2021 cannot be determined at this time. The specific impact will depend on the signing and implementation of the formal contract.

Huati Technology announced that on February 17, 2021, the Company received notice that Zhangjiakou Yicai Lighting Co., Ltd. (hereinafter referred to as "Yicai Lighting"), Hebei Fangze Construction Engineering Group Co., Ltd. (hereinafter referred to as "Hebei Fangze"), Shanghai Engineering Survey and Design Co., Ltd. (hereinafter referred to as "Shanghai Survey"), and the Company had signed the "General Contract for Engineering Construction Design, Procurement, and Construction".

The project name is "Zhangjiakou City Chongli District Smart Tree (Street Light Intelligent Upgrade and Renovation) Project Design, Construction, and Procurement EPC Tender"; the contract price is approximately 186 million yuan.

The project is located in Chongli District, Zhangjiakou City, and includes four roads leading to the ski resorts, with a total length of 66,558 meters. Urban roads include: Yingbin Road, Yuxing Road, Changqing Road Extension, Nanxin Street, Binhe West Road, Tongshun Street, No. 3 Middle School Street Renovation and Extension, Primary School Street Extension, Passenger Transport Hub Road Network, Provincial Highway 242 and the newly built South Interchange Connection Line, Xiwang Bridge, Traditional Chinese Medicine Hospital Pedestrian Bridge, Donggoumen First Bridge, Donggoumen Second Bridge, and other road projects. Roads from the urban area to the four ski resorts: Urban Area to Taizicheng, Urban Area to Wanlong, Urban Area to Changchengling, and Mazhangzi to Duolemeidi Ski Resort.

The scope of this project mainly includes the installation of Smart Tree poles (hereinafter referred to as "Integrated Poles"), excavation, backfilling and off-site disposal of earthwork, foundations for Integrated Poles, removal and restoration of pavement and landscaping, integrated pipelines, integrated cables (power supply circuits for lighting, public security, and traffic police equipment), integrated inspection wells, grounding, power supply and distribution works (high-voltage box-type substations, low-voltage distribution boxes), network supply (fiber optics from optical cross-connect cabinets and self-operated optical cross-connect cabinets to the pole clamp boxes), construction drawing design, equipment procurement, construction, equipment installation, completion acceptance, handover, filing, defect repair during the defect liability period, warranty services, and all other related content, until handed over to the Employer for use after completion acceptance.

Huati Technology stated that the performance of this contract will have a positive impact on its 2021 results, helping to enhance the company's sustainable profitability. The execution of this contract does not affect the company's business independence and will not create significant dependence on the counterparty.