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 Details - The sale agreement involves the seller, a wholly-owned subsidiary of the company, and the buyer, Sheen Nation Holdings Limited, with the transaction valued at RMB 70 million [1]. - China Hengjia Capital Group primarily engages in investment holding and financial leasing, holding approximately 51.39% of Beijing Hengjia's equity, classified as equity investments measured at fair value through other comprehensive income [1]. Group 2: Operational Challenges and Litigation - The subsidiary has faced operational losses in recent years due to stricter regulatory frameworks and challenging market conditions in China [1]. - Since August 2023, the company lost actual control over Beijing Hengjia due to disputes with its Chinese joint venture partner, leading to operational stagnation and ongoing litigation [1]. Group 3: Strategic Implications of the Sale - The board has considered various solutions, including potential judicial liquidation, but found them uncertain and costly, prompting the decision to proceed with the sale as a means to eliminate litigation-related uncertainties [2]. - The sale provides an immediate exit opportunity to divest non-core underperforming assets and allows the company to focus on more promising and manageable business lines [2]. - Proceeds from the sale are intended to be used to expand the company's loan financing and securities investment business in Hong Kong, as well as to enhance operations in healthcare, pet products distribution, and health food manufacturing and sales [2].