China Shuta (08623) plans to sell 100% of the shares of Sichuan Xinhaoyue New Materials Co., Ltd. for 2.7 million yuan

Zhitong Finance App News, China Shuta (08623) announced that on December 31, 2025, Sichuan Shuta Energy Co., Ltd., an indirect wholly-owned subsidiary of the company, plans to sell 100% of the shares of Sichuan Xinhaoyue New Materials Co., Ltd. to Sichuan Ziruiyuan Enterprise Management Co., Ltd. at a cost of RMB 2.7 million.

The target company is mainly engaged in research and development of new materials for wires and cables in China. The main assets of the target company are the property's land use rights and the property, that is, land and buildings located at 88 Qingma Road, Modern Industrial Port (South Area), Pidu District, Chengdu, Sichuan Province, China, according to Real Estate Title Certificate No. 006448 of Pidu District, Sichuan (2025). Land use rights for a plot of land covering an area of about 12,361 square meters and building ownership rights for five plants with a height of 1 to 3 floors and a total construction area of about 7,498 square meters have been granted to the target company. The period expires in 2057 for industrial use. As of the date of this announcement, most of the property is currently vacant, and only a small portion has been leased out to generate rental income.

The board of directors believes that the sale provides a good opportunity for the Group to sell 100% of the target company's shares and achieve the target company's value at a reasonable price. The sale (i) brought the Group approximately RMB 2.5 million in net proceeds of sale; and (ii) offsetting outstanding bank loans and accounts payable by target companies will improve the Group's financial situation. After considering that most of the properties are currently vacant, and only a small number of properties have been leased to earn rental income, the board of directors believes that the sale can convert the target company's working capital into cash, thereby reallocating resources and focusing on the Group's existing business. In addition, the Group also has other production facilities in Sichuan Province, China for existing business operations. Therefore, the directors believe that the sale did not have a significant adverse effect on the Group's business operations. The sale provides a valuable opportunity for the Group to monetize the target company and obtain immediate cash flow, thereby improving the Group's financial position.