Hong-Kong-listed Hollwin Urban Operation Service Group Co., Ltd. (Hollwin Urban) signed a share acquisition agreement on 17 April 2026 to purchase 100% of Hunan Liwei Zhongtian Technology Development Co., Ltd. (the Target Company) from Changsha Urban Development Group Co., Ltd. (CSUDGCL) and five individual shareholders for RMB49.54 million (approximately 49.54 million). Upon completion, the Target Company will become a wholly owned subsidiary and its results will be consolidated.
Payment Structure • Consideration will be funded by internal resources and settled in five tranches: 70% on completion, three 5% tranches tied to annual profit targets, and 15% linked to receivable recovery. • Individual sellers must place 50% of their first-installment proceeds in escrow to purchase unlisted Hollwin Urban shares from CSUDGCL under a separate agreement.
Performance & Revenue Guarantees • Net-profit commitment: cumulative RMB24.00 million over three fiscal years (First Year – RMB6.55 million; Second Year – RMB8.00 million; Third Year – RMB9.45 million). • Shortfalls trigger cash compensation and allow Hollwin Urban to withhold or offset outstanding consideration. • External-market revenue pledge: at least RMB150.00 million from market-oriented projects over the same period, with compensation for deficits.
Receivable Recovery Mechanism • Baseline receivables (accounts receivable and contract assets) set at RMB124.27 million as of 30 June 2025. • The final 15% of consideration is payable only after recoveries exceed a specified threshold. • Excess recovery incentive: 60% of amounts collected above the baseline, capped per a formula linked to project receivables.
Target Company Snapshot • Core business: intelligent systems engineering, smart-city construction, and software services. • 2024 revenue: RMB77.90 million; profit after tax: –RMB0.44 million. • 2025 (unaudited) revenue: RMB80.18 million; profit after tax: RMB0.59 million. • Unaudited net assets at 31 Dec 2025: RMB55.30 million. • Independent valuation (asset-based) as at 30 Jun 2025: RMB49.54 million, a 1.0% premium to audited net assets of RMB49.05 million.
Listing-Rules Implications • Size test: 5% < percentage ratios < 25% ⇒ classify as a discloseable transaction under Chapter 14. • Connected transaction: CSUDGCL, a 51% seller and Hollwin Urban controlling shareholder, is a connected person under Chapter 14A, requiring independent shareholder approval. • An extraordinary shareholders’ meeting (ESM) will be convened; CSUDGCL and its associate (collectively holding 75% of issued shares) will abstain from voting. • Circular with independent board and financial-adviser opinions to be issued on or before 11 May 2026.
Strategic Rationale Management cites the deal as a step toward strengthening smart-city capabilities, expanding the urban-services value chain, and enhancing technological qualifications—aligning with Hollwin Urban’s goal of becoming a regionally leading, nationally first-tier integrated urban-service provider.
Completion remains subject to customary conditions, including regulatory approvals, shareholder consent, and no material adverse change before the long-stop date of 30 June 2026. Shareholders are advised to exercise caution when dealing in the company’s securities.
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