Core Viewpoint - The company is undergoing a significant restructuring by selling its indirect wholly-owned subsidiary, China Hengjia Capital Group Co., Ltd., to address ongoing litigation and operational challenges, with the sale price set at RMB 70 million [1][2]. Group 1: Sale Agreement and Financial Implications - The sale agreement involves the seller, a wholly-owned subsidiary of the company, and the buyer, Sheen Nation Holdings Limited, with the transaction aimed at resolving disputes related to Hong Kong Hengjia [1]. - China Hengjia Capital Group primarily engages in investment holding and financial leasing, holding approximately 51.39% equity in Beijing Hengjia, which has faced operational losses due to stricter regulatory frameworks and challenging market conditions [1]. - The company lost actual control over Beijing Hengjia since August 2023 due to disputes with its Chinese joint venture partner, leading to operational deadlock and ongoing litigation [1]. Group 2: Litigation and Strategic Exit - The board has considered various solutions, including potential judicial liquidation, which could take years and incur substantial legal costs without guaranteed compensation [2]. - The ongoing litigation from Beijing Hengjia demands the company to cover approximately $20 million in unpaid capital contributions, making the sale a strategic exit to eliminate uncertainties related to the lawsuit [2]. - The sale allows the company to focus on its core business lines and utilize the proceeds to expand its loan financing and securities investment operations in Hong Kong, as well as enhance its distribution of healthcare, pet products, and health food manufacturing [2].