Gelonghui, December 13 | China Agricultural Products Trading (00149.HK) announced that on December 13, 2024, the seller (Hongan indirect wholly-owned subsidiary), Hongan (as seller's guarantor), the buyer (China Agricultural Products Indirect Wholly-owned Subsidiary) and China Agricultural Products (as the buyer's guarantor) entered into a sales agreement. According to this, (i) the seller conditionally agreed to sell and the buyer agreed to purchase all shares of the target company Regal Smart Investment Limited; (ii) the seller conditionally agreed to sell and sell Shareholders' loans and the buyer's conditional agreement to purchase and transfer shareholder loans at a cost of HK$0.15 billion; and (iii) Hongan and China Agricultural Products have agreed to separately guarantee the seller and the buyer's performance of their responsibilities under the sales agreement.

The target company is a limited company incorporated in Hong Kong, mainly engaged in investment holding business. As of the date of this joint announcement, the target company did not have any subsidiaries, and the main asset of the target company was 50% of the shares in the Chinese joint venture.

A Chinese joint venture is a limited company established in China, which is mainly engaged in the management and sub-leasing of the Chinese wet goods market within target properties to tenants. On the date of this joint announcement, the Chinese joint venture company holds 50% of the shares, and Shenzhen Agricultural Products (a company listed on the Shenzhen Stock Exchange, stock code: 000061.SZ) ultimately holds 50% of the interests.

The Chinese joint venture owns properties, including a total of 11 agricultural markets located in Shenzhen, Guangdong Province, China, with a total construction area of about 15,463 square meters. A number of units owning properties have now been rented out to earn rental income.

China Agricultural Products Group has been seeking opportunities to expand its wet goods market and trading business in China to secure maximum shareholder benefits and enhance the investment value of China Agricultural Products Group. The deal is a valuable opportunity for China Agricultural Products Group to expand its business footprint to Shenzhen, and is in line with the overall business direction of China Agricultural Products Group. The deal is expected to generate synergy benefits between the Shenzhen agricultural products market and the existing agricultural products market in China, which in turn will further enable China Agricultural Products Group to consolidate its existing business and expand its revenue base.

Hongan Group regularly reviews its business portfolio and seeks to optimize and restructure its business portfolio to enhance the long-term development of its core business, thereby maximizing returns to shareholders and enhancing the investment value of Hongan Group. The deal will allow Hongan to organize the operation of the Chinese wet goods market through its listed subsidiary China Agricultural Products, thereby simplifying its business.