Core Viewpoint - Huasheng Technology has shifted its focus to the pharmaceutical sector while announcing the divestiture of its pharmaceutical distribution subsidiary, indicating a strategic realignment to enhance core business capabilities and profitability [2][3][4]. Group 1: Divestiture Details - Huasheng Technology plans to publicly transfer 51% of its stake in Tibet Kangyu Pharmaceutical Co., Ltd. at a base price of 63.78 million yuan [2][4]. - The company acquired this stake for 51 million yuan in August 2023, with performance guarantees tied to net profit targets for the subsequent years [2][6]. - The decision to sell comes before the end of the performance guarantee period, raising questions about the subsidiary's financial health [2][7]. Group 2: Financial Performance - In 2023, Huasheng Technology reported revenue of approximately 1 billion yuan, a year-on-year increase of 14.92%, with the pharmaceutical segment contributing about 511 million yuan, up 21.17% [6][9]. - However, in 2024, Tibet Kangyu failed to meet its profit commitments, achieving only 1.68 million yuan in net profit, representing a completion rate of 83.92% [7][8]. - The company's net profit has been declining, with a drop of 32.89% in 2023 and a projected loss of 45 to 55 million yuan in the first half of 2025 [9][11]. Group 3: Strategic Implications - The divestiture is part of a broader strategy to concentrate resources on core business areas, aiming to improve profitability and competitive strength [3][4]. - The sale will remove Tibet Kangyu's distribution business from Huasheng's consolidated financial statements, although the company's own product distribution will continue to be managed internally [9]. - The shift in revenue structure shows a significant increase in the pharmaceutical business's contribution to total revenue, rising from 48.33% to 73.74% over three years [9].

Core Viewpoint - Huasun Technology's acquisition strategy has turned into a burden, leading to a continuous decline in profitability, with significant losses expected in the near future [1][8]. Group 1: Acquisition and Performance Issues - Huasun Technology plans to transfer 51% of its subsidiary, Tibet Kangyu, for a base price of 63.78 million yuan, after acquiring it for 51 million yuan just two years prior [2][3]. - The acquisition of Tibet Kangyu and Yuanhong Mineral Water, totaling 84.2 million yuan, has not met performance commitments, resulting in significant financial losses [6]. - Tibet Kangyu's actual net profit for 2023 was 15.67 million yuan, exceeding the commitment for that period, but it fell short in 2024 with only 16.78 million yuan against a commitment of 20 million yuan [4]. Group 2: Financial Performance - Huasun Technology's net profit has declined for three and a half consecutive years, with projections indicating a loss of 51.69 million to 61.69 million yuan in the upcoming period [1][8]. - The company's revenue figures from 2021 to 2024 show fluctuations, with a peak revenue of 955 million yuan in 2021, followed by declines in subsequent years [7]. - The expected net loss for the first half of 2025 is projected to be between 45 million and 55 million yuan, a significant drop from a profit of 911,000 yuan in the same period last year [8].

Group 1 - The board of directors of Chengdu Huasheng Technology Group Co., Ltd. held its 23rd meeting of the 13th session on August 1, 2025, with all 9 directors present, confirming compliance with relevant regulations [1][2] - The board approved the performance commitment completion report for Tibet Kangyu Pharmaceutical Co., Ltd., which reported a net profit of 16.78 million yuan for 2024, falling short of the promised 20 million yuan, leading to a cash compensation requirement from Tibet Wan'an Pharmaceutical Information Consulting Co., Ltd. [1][2] - The board approved the proposal to publicly transfer 51% of the equity of Tibet Kangyu, with a starting price based on asset evaluation at 63.78 million yuan, aiming to enhance the company's profitability and core competitiveness [2] Group 2 - The company scheduled its first extraordinary general meeting of shareholders for August 19, 2025, at 14:00, with all 9 votes in favor of the proposal [2]

Group 1 - The 16th meeting of the 13th Supervisory Board of Chengdu Huasheng Technology Group Co., Ltd. was held on August 1, 2025, via telecommunication, with all three supervisors present [1][2] - The Supervisory Board approved the performance commitment completion report for Tibet Kangyu Pharmaceutical Co., Ltd. for the year 2024, which showed a net profit of 16.7843 million yuan, falling short of the promised 20 million yuan, leading to a cash compensation requirement from Tibet Wan'an Pharmaceutical Information Consulting Co., Ltd. [1][2] - The Supervisory Board also approved the proposal to publicly transfer 51% of the equity of Tibet Kangyu, aligning with the company's future development plans and investment structure optimization [2]

Meeting Information - Chengdu Huasheng Technology Group Co., Ltd. will hold its first extraordinary general meeting of shareholders in 2025 on August 19, 2025, combining on-site voting and online voting [1][2] - The on-site meeting will take place at the company's research complex located at No. 1168 Shuxin Avenue, Chengdu High-tech Zone (West) [3] Voting Procedures - Shareholders can vote through the Shenzhen Stock Exchange trading system and the internet voting system during the specified voting times [2][6] - Shareholders must choose one voting method: on-site voting, trading system voting, or internet voting [2][5] - The voting results for small and medium investors will be counted separately from those of directors, supervisors, senior management, and shareholders holding more than 5% of shares [5] Registration and Attendance - Eligible shareholders or their agents must present identification and proof of shareholding to register for the meeting [6] - Proxy representatives must also provide a power of attorney along with their identification [6] Proposal Details - The meeting will review specific proposals, including the proposal for the public transfer of 51% equity in Tibet Kangyu [12] - The proposals have been approved by the company's 13th Board of Directors at its 23rd meeting [5] Contact Information - For inquiries, shareholders can contact Liu Qing or Sun Jia at the provided phone number and email [6]

Transaction Overview - The company plans to publicly transfer 51% equity of its subsidiary, Tibet Kangyu Pharmaceutical Co., Ltd., to focus resources on core business and enhance profitability [1][2] - The initial transfer price is set at RMB 63.78 million based on an asset appraisal [1][6] Financial Performance of the Target Company - The target company's total assets increased from RMB 12,287.27 million to RMB 15,871.39 million over the last year [5] - Total liabilities rose from RMB 7,519.00 million to RMB 11,392.73 million [5] - Net profit for the last audited year was RMB 1,678.43 million, up from RMB 289.61 million [5] Asset Valuation - The valuation of the 51% equity stake is based on an appraisal conducted by Walker (Beijing) International Asset Appraisal Co., Ltd., using both asset-based and income approaches [6] - The assessed value of the target company's total equity is RMB 125.06 million, with an increase of RMB 77.38 million, representing a growth rate of approximately 164.5% [6] Approval Process - The proposal for the equity transfer requires approval from the company's shareholders' meeting before execution [2][8] - The independent directors and supervisory board have expressed support for the transaction, confirming that it aligns with the company's strategic goals and does not harm shareholder interests [7][8] Future Implications - If the transaction is completed, the target company will no longer be included in the company's consolidated financial statements [6] - The transaction is seen as a necessary step for optimizing the company's investment structure and enhancing its operational capabilities [8]

Group 1 - The company Chengdu Huasheng Technology Group Co., Ltd. acquired 51% equity of Tibet Kangyu Pharmaceutical Co., Ltd. for RMB 51 million, making it a subsidiary included in the consolidated financial statements [1][2] - The transferor committed to achieving net profits of no less than RMB 15 million, RMB 20 million, and RMB 25 million for the years 2023 (August-December), 2024, and 2025 respectively [2][3] - If the net profit falls below 60% of the promised amount, the transferor must compensate the company in cash based on a specific formula [2][3] Group 2 - In 2024, Tibet Kangyu's net profit was RMB 16.7843 million, which is below the promised RMB 20 million, resulting in a cash compensation of RMB 6.5601 million from the transferor [4] - The performance compensation for the 2024 fiscal year has been fully executed [4]

Core Viewpoint - Chengdu Huashen Technology Group Co., Ltd. plans to transfer its 51% stake in Tibet Kangyu Pharmaceutical Co., Ltd., and an asset evaluation report has been prepared to assess the market value of the entire equity of Tibet Kangyu Pharmaceutical as of April 30, 2025 [1][4][17]. Group 1: Evaluation Purpose and Scope - The purpose of the asset evaluation is to provide a market value reference for the transfer of the 51% stake in Tibet Kangyu Pharmaceutical, which has been approved by the management of Chengdu Huashen Technology Group [4][15]. - The evaluation object includes all equity of Tibet Kangyu Pharmaceutical related to the 51% stake being transferred, and the evaluation scope encompasses all assets and liabilities reported by Tibet Kangyu as of the evaluation benchmark date [5][17]. Group 2: Financial Overview - As of April 30, 2025, the book value of the equity of Tibet Kangyu Pharmaceutical included in the evaluation is 47.6827 million RMB [5][18]. - The total assets of Tibet Kangyu Pharmaceutical as of the evaluation date are 122.8727 million RMB, with current assets amounting to 121.7788 million RMB and non-current assets at 1.0940 million RMB [18]. - The total liabilities amount to 75.1900 million RMB, with current liabilities at 74.0933 million RMB and non-current liabilities at 1.0967 million RMB [18]. Group 3: Financial Performance - The operating income for the year 2022 was 367.0327 million RMB, with a net profit of 103.825 million RMB [14]. - For the year 2023, the operating income was 368.7942 million RMB, and the net profit was 174.047 million RMB [14]. - The projected operating income for the first four months of 2025 is 220.4142 million RMB, with a net profit of 28.961 million RMB [14].

Audit Opinion - The audit report states that the financial statements of Tibet Kangyu Pharmaceutical Co., Ltd. fairly reflect its financial position as of December 31, 2024, and April 30, 2025, in accordance with accounting standards [2][3]. Company Overview - Tibet Kangyu Pharmaceutical Co., Ltd. was established on March 18, 2015, with a registered capital of RMB 10 million, fully paid [5]. - The company operates in the wholesale industry, primarily engaged in the sale of pharmaceuticals and medical devices, along with various other products [5]. Financial Reporting Basis - The financial statements are prepared based on the going concern assumption, indicating that the company has the ability to continue its operations for at least the next 12 months [6]. - The financial statements comply with the requirements of the accounting standards, providing a true and complete reflection of the company's financial status, operating results, and cash flows [6]. Accounting Policies and Estimates - The company uses the perpetual inventory system for its inventory management, valuing inventory at actual cost upon acquisition [22]. - The company recognizes financial assets and liabilities based on their classification, including those measured at amortized cost and those measured at fair value [10][12]. Financial Instruments - Financial assets are classified based on the business model for managing them and their contractual cash flow characteristics [6][10]. - The company applies the expected credit loss model for impairment accounting, assessing credit risk based on historical experience and current conditions [16][19]. Long-term Investments - Long-term equity investments are accounted for using the cost method for subsidiaries and the equity method for joint ventures and associates [26][27]. - The company evaluates its long-term investments based on the fair value of the underlying assets and adjusts the carrying amount accordingly [24][28].

Core Viewpoint - Huasheng Technology announced the approval of multiple proposals, including the performance commitment completion status of Tibet Kangyu Pharmaceutical Co., Ltd. for the year 2024 during the 23rd meeting of its 13th Board of Directors [2] Summary by Relevant Sections - Company Announcement - Huasheng Technology released an announcement on the evening of August 1, stating that its Board of Directors approved several proposals [2] - One of the key proposals discussed was related to the performance commitment completion status of Tibet Kangyu Pharmaceutical for the year 2024 [2]