CHINA JINMAO (00817) subsidiary plans to acquire 36% stake in Beijing Zhao Xing

CHINA JINMAO (00817) announced that its indirect wholly-owned subsidiary, Beijing Yicheng, has signed a cooperation development agreement with Jianfa Shenggao, Fuzhou Yucheng, and Beijing Zhaoxing for the future development of a land parcel. In accordance with this agreement, (i) Beijing Yicheng agrees to provide Fuzhou Yucheng with a total loan of no more than RMB 921 million as earnest money, with an annual interest rate of 6%; (ii) Beijing Yicheng and Jianfa Shenggao conditionally agree to acquire 36% and 35% equity of Beijing Zhaoxing, respectively. As of the date of this announcement, Beijing Yicheng has provided Fuzhou Yucheng with a total loan of RMB 921 million as earnest money. Given that the conditions for the acquisition of Beijing Zhaoxing have been met, on April 16, 2025, Beijing Yicheng signed a transfer agreement with Jianfa Shenggao, Fuzhou Yucheng, and Beijing Zhaoxing. According to this agreement, Beijing Yicheng and Jianfa Shenggao agree to purchase the equity and debt rights of Beijing Zhaoxing from Fuzhou Yucheng at the same price, with the total consideration being RMB 1.84 billion, of which Beijing Yicheng will pay RMB 933 million for the equity of target one. After the acquisition of Beijing Zhaoxing is complete, the equity ownership percentages of Beijing Yicheng, Jianfa Shenggao, and Fuzhou Yucheng in Beijing Zhaoxing will be 36%, 35%, and 29% respectively, and Beijing Zhaoxing will become an indirect non-wholly-owned subsidiary of the company. Fuzhou Yucheng acquired the land use rights of the target land parcel through a public bidding process on November 29, 2024, for a price of RMB 2.4345 billion, and established Beijing Zhaoxing as a project company on December 5, 2024, to develop the target land parcel located in Fengtai District, Beijing, China. The land parcel is for residential use, with an area of approximately 30,414.3 square meters and a planned construction area of about 60,828 square meters. It will be developed into a residential project for sale, with completion planned for December 2026. This transaction is beneficial for the group and Fuzhou Yucheng to further implement the cooperation and development of the target land parcel, fully leverage the resources of all parties involved, jointly optimize project returns, lay a foundation for the group to acquire high-quality land resources in Beijing, and enhance the group's market share and brand influence in Beijing.