Transaction Overview - The company approved the transfer of a 10% stake in Ningxia Zhongke Biological New Materials Co., Ltd. from Shizuishan Zhengxingcheng New Materials Technology Partnership for a total consideration of RMB 106 million [1] - The company failed to pay the remaining transfer amount within the stipulated 60 working days, leading to a supplementary agreement allowing payment by October 31, 2022 [2] Debt Settlement Agreement - Due to the outstanding payment, the company was required to pay a penalty of 0.05% per day on the unpaid amount until settled [3] - On November 23, 2023, the company approved a debt settlement agreement using a property as payment for the remaining transfer amount [3] - The company later decided to terminate the debt settlement agreement on December 5, 2023, considering its business development and financial arrangements [3] Property Transfer and Management - The company signed a property holding agreement to ensure the property remains an asset of the company despite the termination of the debt settlement agreement [3] - The company is unable to transfer back the property due to tax payment issues, which are a result of financial constraints [4] - As of the announcement date, the property has been transferred back to the company, and the property holding agreement has been terminated [4][5]

Group 1 - Several real estate companies are reported to be selling assets to recover debts [1] - Rongwanjia (02146.HK) announced a debt compensation framework agreement with its major shareholder Rongsheng Development (002146), involving the sale of properties to offset a debt balance of approximately 1.07 billion [2][3] - The properties to be sold include 12,700 parking spaces, 5,479 storage units, and 112 residential, apartment, and commercial units across various provinces [2][3] Group 2 - Zhongjiao Real Estate announced a major asset sale plan, proposing to transfer its real estate development assets and liabilities to its controlling shareholder for a nominal price of 1 yuan [4][5] - This transaction aims to focus the company on property services and asset management, transitioning to a light asset operation model [4][5] - The company has been facing continuous losses in its real estate development business, with a projected net asset of -3.579 billion by the end of 2024, indicating a risk of delisting [5]

Core Viewpoint - The company has established a debt compensation framework agreement with Rongsheng Development to recover outstanding receivables through the acquisition of properties, amidst challenges in the real estate market and liquidity tightening [1][2][3] Group 1: Debt Compensation Framework - The company successfully settled receivables amounting to RMB 288 million under the debt compensation framework agreement [1] - A new debt compensation framework agreement for 2025 has been signed, with a total value of RMB 1.07 billion for property acquisition to offset outstanding receivables [1] - The company has the discretion to refuse to offset debts if any properties experience adverse changes before the offset [1][2] Group 2: Market Context and Challenges - Rongsheng Development, like other Chinese real estate developers, is affected by a sluggish real estate market and liquidity issues, leading to difficulties in settling receivables [2] - The company has faced challenges in executing the debt compensation framework due to properties being seized or frozen by the government or courts shortly after the agreement's effective date [2] Group 3: Future Strategies and Market Opportunities - The company plans to sell the acquired properties to third-party buyers to recover cash, leveraging its experience in property management to identify parking space demands [3] - The ongoing urbanization in China is expected to enhance the market value of residential properties, particularly in key cities, driven by population influx and improved housing policies [3] - The company is considering selling properties through debt compensation to downstream suppliers and has established a specialized sales team to facilitate property disposal [3]