This lighting company plans to sell two subsidiaries for 1 yuan

On the evening of March 14, Qinshang Shares announced that the company intends to transfer 100% equity interest in its education and training industry-related subsidiary Guangzhou Longwen Education Technology Co., Ltd. (hereinafter referred to as "Guangzhou Longwen") and 99% equity interest in Beijing Longwen Cloud Education Technology Co., Ltd. (hereinafter referred to as "Beijing Longwen Cloud") to Zhuhai Huizhuo Enterprise Management Partnership (Limited Partnership) (hereinafter referred to as "Zhuhai Huizhuo") for a consideration of RMB 1.

Qinshang Shares stated that, in order to implement the "Double Reduction Policy", safeguard the rights and interests of the listed company, protect the interests of all shareholders, expedite the adjustment of the company's education and training-related businesses, and avoid risks in the education and training industry, the Board of Directors has carefully considered and decided to proceed with the transfer.

Upon completion of this equity transfer, Guangzhou Longwen and Beijing Longwen Cloud will no longer be included in the company's consolidated financial statements. The company's revenue scale and total asset scale will decrease, while the quality of assets and business structure will improve.

It should be noted that the transaction party, Zhuhai Huizhuo, is affiliated with Qinshang Shares and is a company established in February 2022 that has not yet commenced actual business operations. Jia Qian, Director and Deputy General Manager of Qinshang Shares, holds a 30% equity interest in Zhuhai Zhourui, the executive partner of Zhuhai Huizhuo, and serves as the manager of Zhuhai Zhourui. Meanwhile, Jia Qian, Jin Huifang, Mao Chunfeng, Ou Siheng, Mou Song, Meng Jian, Peng Yanhua, and Li Geng are all core management personnel of Guangzhou Longwen and Beijing Longwen Cloud.

It is reported that at the end of 2015, Qinshang Shares acquired 100% equity of Longwen Education for RMB 2 billion at a high premium. This acquisition marked Qinshang Shares' entry into the education industry. Beijing Longwen Cloud is a company in which the Company acquired a 99% equity stake in 2018 with an investment of RMB 9.9 million.

The announcement shows that, according to the "Asset Appraisal Report", as of the appraisal reference date, the assessed value of all shareholders' equity of Guangzhou Longwen Simulation is 0 yuan, and the assessed value of all shareholders' equity of Beijing Longwen Cloud Simulation is 0 yuan. Considering that the assessed value of all shareholders' equity of the target companies in simulation is 0 yuan, and affected by the "Double Reduction Policy", Guangzhou Longwen and Beijing Longwen Cloud face significant pressure for business transformation, as well as related policy and operational risks. After negotiation between Party A and Party B, the transaction price for this deal is 1 yuan.

Qinshang Shares stated that, affected by the "Double Reduction Policy," Guangzhou Longwen and Beijing Longwen Cloud are facing significant pressures related to employee placement, tuition refunds, as well as other policy risks, operational risks, and business transformation challenges. The company chose to conduct this transaction with Zhuhai Huizhuo, which was established by Jia Qian and seven other core management executives from Guangzhou Longwen and Beijing Longwen Cloud, primarily because these key managers possess inherent advantages in their familiarity with the education and training industry, the target company, its employees, customers, and regulatory authorities. This facilitates the smooth progression of the transaction and helps the target company effectively handle matters related to employees, customers, and regulators after the transaction is completed, thereby enhancing the target company's sustainable operating capabilities.

It is reported that Qinshang Shares focuses on education and training and Semiconductor / Solid-state lighting (SSL) as its core businesses, covering areas such as K12 education, outdoor garden products, smart lighting, and Nightscape / Landscape lighting. In the first half of 2021, the company's education incubation business generated Revenue of RMB 341 million, while the Semiconductor / Solid-state lighting (SSL) business generated Revenue of RMB 298 million. Longwen Education, which is to be divested this time, accounts for more than 50% of Qinshang Shares' Revenue and is one of the company's current sources of main business Revenue and profit.