China Travel International Investment Hong Kong Limited (Stock Code: 308) has released a supplemental announcement detailing key valuation assumptions and figures related to its disclosed equity acquisition. According to the announcement, the value of the entire shareholders’ equity of Target Company A reached RMB346.10 million as at 31 March 2025. The figure was derived using an income-based approach, factoring in projected revenues, costs, and capital expenditures from 1 April 2025 to 30 June 2064.
Growth rates for the Target Company A’s revenue are set at approximately 1% for 2025–2035 and 0% for 2036–2064. A weighted average cost of capital of 7.84% was applied, incorporating a risk-free rate of 1.81%, a market risk premium of 6.50%, and a specific risk factor of 1.50%. Planned capital expenditures include renewals and expansions across the ski resort’s operations, hotels, and commercial facilities. The announcement also indicates total interest-bearing debts of RMB755.00 million, covering both short-term and long-term borrowing arrangements.
The transaction follows negotiation on a fair consideration that took into account the appraisal prepared by CEA. The supplemental announcement provides the underlying assumptions of Target Company A’s forecasted financials, including details of revenue composition, cost structure, and projected gross profit margins. It also highlights renewals of key land lease agreements underpinning the operations of the ski resort and related facilities. According to the Company, these assumptions were prudently developed to reflect industry cycles, depreciation schedules, and potential stable growth in the long run.
Additional details regarding discount rates, surplus assets, non-operating items, and the calculation of the target capital structure are set out in the announcement. The Company states that all projections and valuation parameters have been formulated with reference to historical trends, current operating conditions, and anticipated capital requirements within the forecast period.
The announcement concludes with a breakdown of key interest-bearing liabilities. It reiterates that the acquisition’s consideration was determined on an arm’s length basis, primarily referencing the valuation findings as of 31 March 2025 and the ski resort’s income period running through 30 June 2064.
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