Minsheng Securities Co., Ltd
About Shareate Tools Ltd(688257)
Purchase 100% equity of Suzhou Hongrui Management Consulting Co., Ltd
Verification opinions on related party transactions
Minsheng Securities Co., Ltd. (hereinafter referred to as “sponsor”) is a sponsor of Shareate Tools Ltd(688257) (hereinafter referred to as ” Shareate Tools Ltd(688257) ” or “company”) for initial public offering of shares and listing on the science and innovation board, In accordance with the measures for the administration of the registration of initial public offering shares on the science and Innovation Board (for Trial Implementation), the measures for the administration of securities issuance and listing recommendation business, the measures for the continuous supervision of listed companies on the science and Innovation Board (for Trial Implementation), the listing rules of the science and Innovation Board of Shanghai Stock Exchange and other relevant provisions, the Shareate Tools Ltd(688257) purchase of 100% equity of Suzhou Hongrui Consulting Management Co., Ltd. and related party transactions were carefully verified, and the following opinions were issued:
1、 Overview of this transaction
The company has long-term leased the real estate of Suzhou Hongrui Management Consulting Co., Ltd. (hereinafter referred to as “Hongrui consulting” or “target company”) as the production and operation place of office and profile division and bar division. Hongrui consulting is only engaged in house leasing business. Its real estate is located at No. 6, Weixi Road, Suzhou Industrial Park, with a land area of 2241326 square meters and a construction area of 1186811 square meters.
At the end of 2021, the cemented carbide production line of Wuhan Xinrui Alloy Tools Co., Ltd., a wholly-owned subsidiary of the company, was completed. The bar business department of the company has been relocated from Suzhou, Jiangsu to Wuhan, and the mining alloy business department has been relocated from Qianjiang, Hubei to Wuhan. Since 2021, covid-19 epidemic has shown the trend of local outbreak and multi-point spread. In order to avoid excessive losses caused by shutdown due to the epidemic, the company has reasonably arranged the production base and plans to keep the profile division in Suzhou production base, which is also better adapted to the characteristics that the customers of the profile division are mainly concentrated in the Yangtze River Delta.
Meanwhile, in order to further reduce related party transactions, strengthen and improve the company’s internal control and governance, and improve the efficiency of operation and decision-making management, the company plans to purchase 100% equity of Hongrui consulting from Suzhou Hongrui Investment Management Co., Ltd. (hereinafter referred to as “Hongrui investment”) at the price of 454112 million yuan. The acquisition funds come from the company’s own funds. After the completion of this transaction, Shareate Tools Ltd(688257) will hold 100% equity of Hongrui consulting.
As the counterparty Hongrui investment and the company are controlled by the same actual controller and are related parties of the company, this transaction constitutes a related party transaction, but does not constitute a major asset reorganization specified in the measures for major asset reorganization of listed companies.
As of the 12 months before the consideration of this transaction, the company had no other related party transactions with Hongrui investment. The amount of this transaction was 454112 million yuan, accounting for more than 1% of the company’s total assets audited in the latest period and more than 30 million yuan. The transaction was deliberated and approved at the 9th meeting of the 4th board of directors on April 19, 2022. The board of supervisors agreed to submit it to the general meeting of shareholders for deliberation. The independent directors expressed their explicit prior approval opinions and independent opinions on the transaction. This transaction needs to be submitted to the general meeting of shareholders of the company for deliberation.
2、 Basic information of counterparty
(I) description of association relationship
The counterparty Hongrui investment and the company are controlled by the same actual controller, which is in line with the situation of affiliated persons of listed companies specified in Chapter 15 “interpretation” of the Listing Rules of science and Innovation Board of Shanghai Stock Exchange. (II) description of counterparty
Company name: Suzhou Hongrui Investment Management Co., Ltd
Legal representative: Wu Hehong
The registered capital is 3.5 million yuan
Date of establishment: June 25, 2007
Unified social credit code 91320594663297642u
Registered address: No. 6, Weixi Road, Weiting Town, Suzhou Industrial Park
Business scope: investment management, investment consulting, industrial investment. (projects subject to approval according to law shall be approved by
Business activities can only be carried out after approval by relevant departments)
3、 Basic information of the target company
(I) transaction category
This transaction belongs to the type of “purchase or sale of assets” stipulated in the Listing Rules of science and Innovation Board of Shanghai Stock Exchange.
(II) basic information of the target company
Company name: Suzhou Hongrui Management Consulting Co., Ltd
Legal representative: Wu Hehong
The registered capital is 3.5 million yuan
Date of establishment: August 16, 2004
Unified social credit code 9132059476514417xy
Registered address: No. 6, Weixi Road, Suzhou Industrial Park
Business scope: enterprise management consulting services, self owned house leasing services. (for projects subject to approval according to law, business activities can be carried out only after approval by relevant departments)
Before the completion of this transaction, Hongrui investment holds 100% equity of Hongrui consulting. The main financial data of Hongrui consulting are as follows:
Unit: 10000 yuan
December 31, 2021 December 31, 2020
/2021 / 2020
Total assets 146206193290
Total liabilities 855.64134544
Net assets 606.42 587.46
Operating income 213.42
Total profit 20.61 -24.61
Net profit 18.96 -66.68
Audit report (Sugong w [2022] A402 Report No.) issued by audit institution and audit notary Tianye Certified Public Accountants (special general partnership)
As of the disclosure date of this announcement, the equity property rights involved in this transaction are clear, there are no mortgages, pledges and any other restrictions on transfer, there are no litigation, arbitration matters or judicial measures such as seizure and freezing, and there are no other circumstances that hinder the transfer of ownership.
4、 Pricing of this transaction
(I) pricing principle, method and basis
According to the assets appraisal report on the value of all shareholders’ equity involved in Shareate Tools Ltd(688257) proposed acquisition of 100% equity of Suzhou Hongrui Management Consulting Co., Ltd. (szzipingbao Zi [2022] No. 7016) issued by Jiangsu Zhongqi huazhongtian Assets Appraisal Co., Ltd. with December 31, 2021 as the appraisal base date, the appraisal value of all shareholders’ equity of Hongrui Consulting Co., Ltd. was 454112 million yuan as of December 31, 2021, The company negotiated with Hongrui investment and determined that the price for purchasing 100% equity of Hongrui consulting was 454112 million yuan.
(II) rationality analysis of pricing
As an asset appraisal institution complying with the provisions of the securities law, China enterprise China Assets Appraisal Co., Ltd. is a securities service institution qualified to carry out securities and futures related businesses. It adopted the asset-based method to evaluate the value of Hongrui Consulting’s assets. The appraisal conclusion is that the value of all shareholders’ equity of Suzhou Hongrui Management Consulting Co., Ltd. is 454112 million yuan.
Through negotiation between both parties, the price for the company to purchase 100% equity of Hongrui consulting is 454112 million yuan, and the transaction price does not damage the interests of listed companies and shareholders.
5、 Main contents of this transaction agreement
(I) parties
Party A (transferee): Shareate Tools Ltd(688257)
Party B: Ruihong Investment Management Co., Ltd
(II) main contents of the agreement
Party B transfers 100% of the equity of the target company to Party A, and the equity transfer price is 454112 million yuan. After the industrial and commercial change registration of this equity transfer is completed, Party A shall pay the price to Party B at one time.
Both parties confirm that Party A will become the legal owner of the target equity and enjoy and undertake all rights and obligations related thereto from the date of completion of the industrial and commercial change registration procedures of this equity transfer; Party B will no longer enjoy any rights related to the target equity, nor assume any obligations and responsibilities related to the target equity, unless otherwise expressly agreed in this agreement.
Both parties confirm that the taxes and fees arising from this equity transfer shall be borne by both parties in accordance with relevant national regulations.
After being signed and sealed by both parties, this Agreement shall come into force on the date of deliberation and approval by Party A’s general meeting of shareholders. Within one month from the effective date of this agreement, Party B shall cooperate with Party A to complete the industrial and commercial change registration of this equity transfer.
6、 Impact of this transaction on the company
After the completion of this transaction, the company will hold 100% equity of Hongrui consulting, which is conducive to further reducing related party transactions, strengthening and improving the company’s internal control and governance, and improving the efficiency of operation and decision-making management.
This transaction will lead to changes in the company’s consolidation scope. Hongrui Consulting’s entry into the consolidation scope will not have an adverse impact on the company’s financial status and operating results, and there is no damage to the interests of the company and shareholders. This transaction is paid in cash and does not involve the issuance of shares, so it will not have an impact on the equity structure of the company. The capital source of this transaction is the company’s own funds, which will not affect the company’s normal production and operation activities, will not have a significant adverse impact on the company’s cash flow and operating performance, and will not damage the interests of the company and all shareholders, especially minority shareholders.
7、 Review procedures of this transaction
(I) written audit opinions of the audit committee
This transaction is conducive to further reducing related party transactions, strengthening and improving the company’s internal control and governance, and improving the efficiency of operation and decision-making management. According to the market rules, the transaction price is fair and reasonable, follows the principles of fairness, impartiality and fairness, and the pricing is fair and reasonable without harming the interests of the company and shareholders, especially minority shareholders. Agree to submit it to the 9th meeting of the 4th board of directors for deliberation, and the affiliated directors of the company shall withdraw from voting.
(II) prior approval opinions of independent directors
The independent directors of the company expressed clear prior approval opinions on this transaction: the way and price of this transaction are fair and reasonable, and there is no damage to the interests of the company and shareholders, which is conducive to further reduce related party transactions, strengthen and improve the company’s internal control and governance, and improve the efficiency of operation and decision-making management. They agreed to submit it to the ninth meeting of the Fourth Board of directors for deliberation, and the related directors of the company should avoid voting.
(III) deliberations of the board of directors
On April 19, 2022, the company held the 9th meeting of the 4th board of directors, deliberated and passed the proposal on purchasing 100% equity and related party transactions of Suzhou Hongrui Management Consulting Co., Ltd. the related directors Mr. Wu Hehong and Mr. Yuan AI have avoided voting, and the proposal was unanimously voted by the unrelated directors attending the meeting. This transaction needs to be submitted to the general meeting of shareholders of the company for deliberation.
(IV) independent opinions of independent directors
This transaction of the company is conducive to further reducing related party transactions, strengthening and improving the company’s internal control and governance, and improving the efficiency of operation and decision-making management. The way and price of this transaction are fair and reasonable, without prejudice to the deliberation and decision-making procedures, in line with laws and regulations and other relevant provisions, and in line with the interests of all shareholders of the company. Therefore, all independent directors agreed that the company would purchase 100% equity of Hongrui consulting from Hongrui investment, and agreed to submit it to the general meeting of shareholders for deliberation.
(V) deliberation of the board of supervisors
On April 19, 2022, after deliberation at the fifth meeting of the Fourth Board of supervisors of the company, the board of supervisors held that this transaction is conducive to further reduce related party transactions, strengthen and improve the company’s internal control and governance, improve the efficiency of operation and decision-making management, and will not have a significant adverse impact on the company’s cash flow and operating performance. The deliberation and decision-making procedures of this transaction are legal and compliant, and there is no damage to the interests of the company and shareholders. The three supervisors of the company are all affiliated supervisors. They avoided voting on the proposal and agreed to submit it to the general meeting of shareholders for deliberation.
8、 Verification opinions of the recommendation institution
After verification, the sponsor believes that this transaction is conducive to further reducing related party transactions and improving the company’s internal control and governance. This transaction has been deliberated and approved at the 9th meeting of the 4th board of directors of the company, the related directors avoided voting, the board of supervisors agreed to submit the proposal to the general meeting of shareholders for deliberation, and the independent directors have issued explicit prior approval opinions and independent opinions, which need to be submitted to the general meeting of shareholders for deliberation. This transaction has performed the necessary approval procedures, and the decision-making procedures comply with the relevant provisions of laws, regulations and the articles of association. The above transaction is determined by both parties through negotiation on the basis of the assessed value. The transaction price is fair and the transaction method complies with the market rules, without damaging the interests of the company and its non affiliated shareholders, especially the minority shareholders. In conclusion, the recommendation institution agrees with the matters of the company’s transaction.
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