HUA YIN INTL H plans to sell Guangze International Shopping Center, Guangze Lanting Building, and Guangze Hongfu Property to reduce debt

According to the Zhitong Finance APP, HUA YIN INTL H (00989) announced that on July 28, 2025, its indirect wholly-owned subsidiaries, Jilin Province Rongli Investment Co., Ltd., Jilin Province Rongyu Investment Co., Ltd., Changchun Rongyu Trading Co., Ltd., and Jilin Province Guangze Property Investment Co., Ltd. plan to sell all equity of Changchun Zhujia, Baishan Guangze Real Estate, Baishan Guangze Commercial Management, and Yanji Huize Real Estate to Baishan Shengda Trading Co., Ltd. for a consideration of RMB 1.0. As of March 31, 2025, the target companies hold (i) investment properties, including (a) the owned portion of Guangze International Shopping Center, with a construction area of approximately 80,938.4 square meters; (b) the leased-back portion of Guangze International Shopping Center, with a construction area of approximately 20,552.2 square meters; (ii) completed properties for sale, including (1) Guangze International Shopping Center, with a construction area of approximately 969.2 square meters; (2) Phase I, Phase II, and Phase II-A of Guangze Lanting Building, with a construction area of approximately 9,115.5 square meters; and (3) Phase I, Phase II, and Phase III of Guangze Hongfu, with a construction area of approximately 312.4 square meters. As of March 31, 2025, the total asset value of the target companies is approximately RMB 417.9 million. Guangze International Shopping Center was developed by Baishan Guangze Real Estate and began operations in January 2015. The original construction cost of the owned portion is approximately RMB 578.9 million. Since the 2019/2020 fiscal year, the fair value of the property has been declining year by year, dropping to approximately RMB 217 million as of March 31, 2025 (a loss of approximately RMB 361.9 million below the original cost). Furthermore, despite management's attempts over the years to change the tenant mix and operating model of the shopping center, the operating company of Guangze International Shopping Center, Baishan Guangze Commercial Management, has been operating at a loss since the shopping center opened. Considering the group's high leverage financial condition and negative net asset status as of March 31, 2025, the group management has conducted a substantial review of the group's project portfolio and decided to divest any (i) projects that are operating at a loss; (ii) projects that require significant development expenditure to complete; and/or (iii) project companies with a long expected recovery period. As of March 31, 2025, the target companies' current liabilities and net liabilities are approximately RMB 436.7 million and RMB 127 million, respectively, including two bank loans with a total balance of RMB 241 million. In light of the above factors, the sale will provide the group with an opportunity to reduce its overall debt situation, thereby lowering the risk of the group encountering liquidity issues. Therefore, the sale will help enhance the group's long-term financial condition and financing capability. The board of directors believes that the sale and the terms of the agreement are fair and reasonable and in the overall interests of the group and its shareholders