Core Viewpoint - The legal opinion provided by Beijing Deheng Law Firm confirms that Hainan Airlines Holding Co., Ltd.'s cash purchase of assets complies with relevant laws and regulations, and there are no significant legal obstacles or risks affecting the transaction [6][16]. Group 1: Transaction Overview - The transaction involves Hainan Airlines Holding Co., Ltd. acquiring Hainan Tianyu Flight Training Co., Ltd. through a cash payment, with the share transfer agreement signed on August 27, 2025 [5]. - The transaction's evaluation report indicates a valuation difference of approximately 47.46 million RMB between the income approach and the asset-based approach [6]. - The approval and authorization processes for the transaction have been completed, ensuring compliance with legal requirements [7]. Group 2: Financial and Tax Considerations - Hainan Tianyu Flight Training Co., Ltd. benefits from a reduced corporate income tax rate of 15% under the Hainan Free Trade Port tax incentive policy, which has been extended until December 31, 2027 [8]. - The company has reported a minor proportion of related party transactions, with related purchases amounting to 100.43 million RMB, representing 1.26% of the operating costs for the first four months of 2025 [12]. Group 3: Corporate Governance and Management - Hainan Tianyu's governance structure allows for the participation of Hainan Airlines Group in daily operations, ensuring compliance with safety management standards [9][10]. - The management changes and operational oversight by Hainan Airlines Group are deemed necessary for maintaining safety and operational standards in flight training [10]. Group 4: Related Party Transactions - The related party transactions before and after the acquisition show minimal changes, with related purchases decreasing from 3.38% to 3.04% of operating costs, and related sales increasing slightly from 7.59% to 7.80% of operating income [13][14]. - The transactions are conducted at market prices, ensuring fairness and compliance with legal standards [12][14]. Group 5: Insider Information Compliance - The self-examination reports confirm that no insider trading occurred during the transaction period, with all parties adhering to legal and regulatory requirements [15][16]. - The independent financial advisor, Galaxy Securities, has established strict information barriers to prevent conflicts of interest and insider trading [16]. Group 6: Conclusion - The legal opinion concludes that the cash purchase of assets by Hainan Airlines Holding Co., Ltd. meets all legal and regulatory requirements, with no significant legal risks identified [16][18].

Core Viewpoint - The response from Zhongwei Zhengxin (Beijing) Asset Appraisal Co., Ltd. addresses the inquiry from the Shanghai Stock Exchange regarding Hainan Airlines Holding Co., Ltd.'s major asset purchase proposal, focusing on the asset valuation and the rationale behind the pricing methods used in the transaction [1][2]. Valuation and Pricing - The previous transaction in June 2020 involved the transfer of 100% equity of the target company to Hainan Airport Facilities Co., Ltd. at a price of 749 million yuan, reflecting a premium of 12.68% over the net asset value of 665 million yuan as of December 31, 2019. The current transaction price is based on a valuation of 799 million yuan, which represents a 34.37% premium over the net asset value of 595 million yuan as of December 31, 2024 [1][9]. - The asset-based valuation for the current transaction is 752 million yuan, indicating a premium rate of 26.39%, primarily driven by the appreciation of intangible assets [1]. Financial Performance - The financial data for Tianyu Flight Training over the past five years shows fluctuating revenues, with a peak revenue of 421 million yuan in 2023 and a projected revenue of approximately 404 million to 409 million yuan for 2025, attributed to the addition of two new simulators [4][5]. - The gross profit margin has varied, with a notable increase to 41.04% in 2024, while the net profit has shown recovery from a significant loss of 414 million yuan in 2020 to a cumulative net profit of -71.03 million yuan by 2024 [4][8]. Intangible Assets - The intangible assets of Tianyu Flight Training include trademarks and domain names, which are crucial for business operations and revenue generation. The valuation of these intangible assets has significantly increased, contributing to the overall asset valuation in the current transaction [12][13]. Transaction Structure - The absence of performance compensation clauses in the transaction is justified by the regulatory framework, as the transaction does not involve a change in control and is negotiated based on market principles. However, a supplementary agreement has been established to include impairment compensation clauses to protect minority investors [10][11].

Core Viewpoint - Hainan Airlines Holding Co., Ltd. has received an inquiry letter from the Shanghai Stock Exchange regarding its major asset acquisition proposal, which involves purchasing 100% equity of Tianyu Flight Training Co., Ltd. from its wholly-owned subsidiary, Hainan Airport Development Industry Group Co., Ltd. The transaction price is set at 799 million yuan, constituting a significant asset restructuring [1]. Financial Performance - The target company's 2024 operating revenue is 385 million yuan, a decrease of 8.55% year-on-year, while net profit is 70 million yuan, down 62.17% year-on-year, indicating a decline in both revenue and profit [3]. - The target company's net assets as of December 31, 2024, are 665 million yuan, a reduction of 10.53% compared to the previous transaction benchmark date [3]. Accounts Receivable - Accounts receivable balance accounts for 108.83% of operating income, an increase of 16.89 percentage points year-on-year, with over 47.77% of accounts receivable aged over one year, up 10.39 percentage points from the previous year [2]. - The company is required to disclose the names, relationships, sales content, amounts, payment terms, and collection status of its top five customers, as well as the rationale for the high accounts receivable ratio [2]. Valuation and Pricing - The transaction price of 799 million yuan is based on a valuation using the income approach, which reflects a premium of 12.68% over the book net asset value of 665 million yuan as of December 31, 2019 [4]. - The premium primarily arises from the valuation increase of intangible assets [4]. Related Party Transactions - The company must clarify the involvement of related parties in the operations of the target company and whether this affects the independence of the target's operations [6]. - There is a need to assess the risk of uncollectible accounts receivable post-acquisition and the potential impact on the company's performance [7]. Cash Acquisition and Financial Structure - The company has a high debt ratio of 98.91% as of the end of 2024, significantly above the industry average, with total interest-bearing liabilities amounting to 619.14 billion yuan compared to cash and trading financial assets of only 11.91 billion yuan [7]. - The company is required to disclose the specific funding sources for the cash acquisition and assess whether this will impact its operational cash flow and debt repayment capabilities [7].