HZIS(SH:600126) Zheng Quan Zhi Xing·2025-08-22 09:22Core Viewpoint - Hangzhou Steel Group Co., Ltd. plans to transfer 97% equity of its subsidiary Zhejiang New Century Recycling Resources Development Co., Ltd. and 100% equity of its wholly-owned subsidiary Zhejiang Deqing Hanggang Fuchun Recycling Technology Co., Ltd. to Zhejiang Resource Recycling Co., Ltd. for a total consideration of approximately RMB 508.19 million, combining cash and newly issued shares [1][2][21]. Summary by Sections Transaction Overview - The transaction involves the transfer of 97% equity of Zhejiang New Century Recycling and 100% equity of Zhejiang Deqing Hanggang Fuchun Recycling to Zhejiang Resource Recycling, with a total transaction price of RMB 508,188,910.56 [2][21]. - The payment structure includes RMB 500 million through the issuance of new shares and RMB 8,188,910.56 in cash [1][2]. Financial Details - The valuation of the transferred assets was based on assessments conducted by Wanbang Asset Appraisal Co., Ltd., with the equity value of Zhejiang New Century Recycling assessed at RMB 227,809,693.87 and Zhejiang Deqing Hanggang Fuchun Recycling at RMB 287,213,507.51 [21][18]. - The transaction is expected to increase the company's profit by approximately RMB 72 million based on the assessed values [24]. Corporate Governance - The transaction has been approved by the independent directors and the board of directors, with no need for shareholder meeting approval due to its classification as a related party transaction [2][24]. - The board meeting on August 21, 2025, resulted in unanimous approval from non-related directors [5][24]. Impact on Financial Statements - Post-transaction, the subsidiaries will no longer be included in the consolidated financial statements, which is expected to significantly reduce the company's revenue figures [24]. - The original investment cost of the transferred subsidiaries was RMB 508.19 million, and the transaction is aligned with the company's strategy to focus on its core steel business and digital economy [24][26]. Related Party Transaction - The transaction is classified as a related party transaction as Zhejiang Resource Recycling is a wholly-owned subsidiary of Hangzhou Steel Group, the company's controlling shareholder [2][24]. - The company has not engaged in any other related party transactions with Zhejiang Resource Recycling in the past 12 months [26].