Huaxing Yuanchuang received approval from the China Securities Regulatory Commission to issue shares to purchase assets and raise funds

On the evening of June 14, Huaxing Yuanchuang announced that the company received a reply from the China Securities Regulatory Commission, approving the company's registration application to issue 18.2562 million shares to Li Qihua and 9.8302 million shares to Lu Guochu to purchase related assets. The company's registration application to issue shares to raise supporting funds not exceeding 532 million yuan was approved.

It is reported that in this transaction, Huaxing Yuanchuang intends to purchase 100% of the equity of Oulitong held by Li Qihua and Lu Guochu by issuing shares and paying cash.

The target asset of this transaction is 100% equity of Oulitong. The valuation result of the target asset is used as the pricing basis of this transaction. According to the valuation report issued by Zhongshui Zhiyuan Valuation Agency, the valuation agency selected the valuation result of the income method as the valuation conclusion. According to the valuation result of the income method, the valuation of Oulitong on the valuation base date of November 30, 2019 was RMB 1,040,700,000, which was higher than the consolidated book net assets of RMB 210,951,900.

The transaction amount of the underlying assets was RMB 1.04 billion, with an increase of RMB 829.7481 million and an increase rate of 393.34%. Based on the above valuation, the transaction parties determined that the transaction amount of the underlying assets was RMB 1.04 billion.

70% of the transaction price, or RMB 728 million, will be paid in the form of issuing shares, and 30% of the transaction price, or RMB 312 million, will be paid in cash. The share price for this issuance of shares to purchase assets is RMB 25.92 per share. Based on this calculation, Huaxing Yuanchuang plans to issue 28,086,418 shares to all shareholders of Oulitong.

At the same time, Huaxing Yuanchuang plans to raise supporting funds of no more than RMB 532 million through private placement of shares by way of inquiry, and the total amount of supporting funds raised shall not exceed 100% of the transaction price of the assets purchased by issuing shares in this transaction. The supporting funds raised shall be used to pay the cash consideration and restructuring-related expenses in this transaction after deducting the issuance expenses, and to be used for the listed company to supplement its working capital and the target company's project construction.

It is worth noting that Huaxing Yuanchuang is not only the first stock to be reviewed and issued on the Science and Technology Innovation Board, but also the first stock to be acquired on the Science and Technology Innovation Board. The launch of this acquisition plan was only 8 days apart from the release of the "Review Rules for Major Asset Restructuring of Science and Technology Innovation Board Listed Companies". It is the practice of the new regulations on mergers and acquisitions on the Science and Technology Innovation Board, and marks that the domestic capital market reform has taken another solid step forward after the registration system of the Science and Technology Innovation Board.