ZFTC(SH:600794) Zheng Quan Zhi Xing·2025-08-04 16:12Core Viewpoint - The company announced a reduction in capital for its subsidiary, Zhangjiagang Free Trade Zone Foreign Investment Service Co., Ltd. (referred to as "Foreign Service Company"), which will eliminate the current and potential competition with its controlling shareholder, JG Free Trade Zone Jinguang Asset Management Group Co., Ltd. [1][2] Summary by Sections 1. Overview of Related Transactions - The Foreign Service Company has a registered capital of RMB 467.33 million, with the company holding 54.004% and Jinguang Asset holding 45.996% [1][2] - The company plans to unilaterally reduce its capital in the Foreign Service Company by RMB 37.42 million, resulting in a new registered capital of RMB 429.91 million, with both the company and Jinguang Asset holding 50% equity each [1][2] 2. Related Party Introduction - Jinguang Asset is the controlling shareholder of the company, and the transaction constitutes a related party transaction but does not qualify as a major asset restructuring [2][3] - The company has had one related transaction with Jinguang Asset in the past 12 months, amounting to RMB 65.66 million [2][9] 3. Financial Overview of the Foreign Service Company - As of March 31, 2025, the Foreign Service Company reported total assets of RMB 631.98 million and net assets of RMB 598.58 million [4] - For the first quarter of 2025, the company generated revenue of RMB 16.89 million and a net profit of RMB 4.24 million [4] 4. Valuation and Pricing of the Transaction - The transaction price of RMB 65.66 million was determined based on an asset appraisal report, with the net asset value of the Foreign Service Company assessed at RMB 59.43 million [5][7] - The valuation methods included the asset-based approach and the income approach, with the asset-based approach being selected due to its reliability in reflecting the company's market value [5][7] 5. Agreement and Execution of the Capital Reduction - The capital reduction will be executed through legal procedures, with the company paying the reduction price in cash [6][8] - The company will modify its articles of association and update the shareholder register following the completion of the capital reduction [8] 6. Impact of the Transaction on the Company - The capital reduction will resolve the competition issue between the company and Jinguang Asset, and the long-term equity investment in the Foreign Service Company will shift from the cost method to the equity method [9] - It is expected that the company's net profit attributable to shareholders will increase by approximately RMB 65 million in 2025 due to this transaction [9]