C Strategic Technology Group Limited (the “Group”) has signed a conditional agreement on 30 September 2026 to sell its entire equity interest in Steady Elite Limited and its underlying entities (the “Target Group”) for HK$3.70 million. The buyer is Mr. Huang Hu, an independent third-party entrepreneur in China’s electronics sector.
The consideration will be settled in three tranches: 10% (HK$0.37 million) on signing, 70% (HK$2.59 million) upon satisfactory completion of due diligence, and the remaining 20% (HK$0.74 million) on completion. The long-stop date for closing is 31 January 2027. If the conditions precedent—including due-diligence clearance, absence of material adverse change, and accuracy of vendor warranties—are not met or waived, the agreement may be terminated with deposits refunded or forfeited under specified scenarios.
Steady Elite Limited is a BVI-incorporated investment holding company whose primary operating asset is Huizhou City Eternity Co., Ltd., an electronics manufacturing services (EMS) provider in mainland China. As at 30 June 2026, the PRC operating arm reported unaudited net assets of RMB2.60 million (approximately HK$3.04 million) and accumulated losses after tax of RMB38.20 million in 2025 and RMB19.51 million for 1H 2026, following a small profit of RMB0.64 million in 2024. The unit owns production facilities and equipment valued at roughly RMB14.00 million.
Independent valuer Valplus Consulting adopted a market-based P/B approach and appraised the PRC entity at RMB3.16 million (about HK$3.70 million) as of 30 June 2026, providing the primary reference point for the agreed consideration.
Management cited persistent margin compression in the EMS division—gross profit margin contracted from 15.2% in 2024 to 5.9% in 2025 and fell further to 8.5% in 1H 2026—as a key driver of the disposal. The Group plans to outsource manufacturing and focus resources on higher-value activities such as procurement, R&D, and quality management, while accelerating investments in aerospace, precision manufacturing, and energy-storage businesses.
Upon completion, the Target Group will cease to be consolidated into the Group’s financial statements. Based on the sale price, net asset value, and estimated expenses, the transaction is expected to generate an estimated gain of HK$0.32 million. Net proceeds of approximately HK$3.30 million are earmarked for general working-capital purposes within the EMS business.
As the applicable percentage ratios exceed 5% but are below 25%, the deal qualifies as a discloseable transaction under Chapter 14 of the Hong Kong Listing Rules, requiring public announcement but not shareholder approval. Completion remains subject to the fulfilment or waiver of the stated conditions; shareholders and investors are advised to exercise caution when dealing in the company’s shares.
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