Changfang Group terminates the transfer of equity in Huizhou Changfang and sells Huizhou Industrial Park and related assets for RMB 575 million

On the evening of May 21, Changfang Group announced that on February 7, 2021, the company signed the "Framework Agreement on Equity Transfer" (hereinafter referred to as the "Original Framework Agreement"). The company intends to transfer its 100% equity interest in Huizhou Changfang Lighting Energy Saving Technology Co., Ltd. (hereinafter referred to as "Huizhou Changfang") to Guangdong Baihong Zhiyuan Industrial Co., Ltd. (hereinafter referred to as "Baihong Zhiyuan").

As the Company was unable to resolve the issues preventing both parties from signing the formal equity transfer agreement, the original framework agreement could no longer be performed. Recently, the Company signed the "Termination Agreement for the Framework Agreement on Equity Transfer" with Baihong Zhiyuan. The original framework agreement is hereby rescinded and terminated as of the date of signing this agreement, with neither party in breach, and the original framework agreement shall no longer be performed.

Changfang Group also announced that its wholly-owned subsidiary, Huizhou Changfang, intends to transfer to Guangdong Shengwei Industrial Investment Co., Ltd. (hereinafter referred to as "Shengwei Industrial") the land plot located at No. 1 Xingyun East Road, Zhongkai Dongjiang High-tech Industrial Park in Huizhou, along with related real estate, air conditioners, iron-frame beds, office furniture, and other assets situated thereon. The total transaction price for the target assets, including tax, is RMB 575 million.

Shengwei Industrial's business scope includes industrial investment; project investment using own funds; venture capital; investment consulting services; industrial park management services; industrial park investment and development; development and sales of computer software; property management; parking services; cleaning services; leasing of self-owned properties; warehousing services, etc. The controlling shareholder of Shengwei Industrial is Dongguan Jinbao Smart Technology Industrial Park Operation Co., Ltd., established on November 16, 2020.

The company stated that the transfer of the Huizhou Industrial Park will help revitalize its assets, optimize the asset structure, enhance profitability, and address working capital needs.