HGH Holdings Ltd. Announces Strategic Investment in Cool Farms Holding Pte. Ltd.

Key Highlights:

• HGH Holdings Ltd. to acquire 13.5% stake in Cool Farms Holding Pte. Ltd. for RMB 20 million (approx. S\$3.6 million).
• Investment will be made in two tranches, with the second tranche contingent on performance targets.
• Cool Farms is engaged in advanced agri-tech, including hydroponic crop modules and smart vegetable factories in China.
• Transaction classified as a “discloseable transaction” under SGX Catalist Rules.
• Potentially price-sensitive: Strategic entry into agri-tech sector and exposure to China’s growing smart farming market.

Transaction Details

On 14 November 2025, HGH Holdings Ltd. (the “Company”) announced it has entered into a subscription agreement to purchase 135,000 ordinary shares in Cool Farms Holding Pte. Ltd. (“Cool Farms”), representing a 13.5% equity stake in Cool Farms’ enlarged share capital. The total consideration for this subscription is RMB 20,000,000 (about S\$3.6 million), to be funded entirely from internal resources.

The investment will be made in two tranches:

• First Tranche: RMB 10,000,000 upon completion of the agreement.
• Second Tranche: RMB 10,000,000, subject to Cool Farms achieving sales of at least 50 container modules and revenue exceeding RMB 15,000,000 within the first year after completion (“Year 1 KPI”).

If Cool Farms fails to meet the Year 1 KPI, HGH Holdings has the right to withhold the second tranche or renegotiate the terms. If no agreement is reached, HGH can retain 50% of the subscription shares.

About Cool Farms and Group Structure

Cool Farms is a newly established investment holding company in Singapore (incorporated August 2025), focusing on the research, development, and production of hydroponic crop box-type modules, germplasm resources, nutrient solutions, and management of smart vegetable factories in China. The group holds multiple invention patents and trademarks such as Cool Farms®, Smart Plant®, and Smart Juice®.

The group structure includes:

• Cool Farms (Shanghai) Technology Co., Ltd. (to be acquired by Cool Farms), which will own 100% of Cool Farms (Jiangsu) Technology Co., Ltd.
• Cool Farms Jiangsu holds 60% of Smart Plant Technology (Suzhou) Co., Ltd.

As of 30 June 2025, the Cool Farms entities reported a net profit before tax of RMB 99,000 (approx. S\$18,000) and net tangible assets of RMB 21,179,000 (approx. S\$3.8 million). As of 31 October 2025, Cool Farms itself had no profits and an NTA of S\$86,500.

Salient Terms and Protections for HGH Holdings

• Completion is subject to satisfactory due diligence, execution of a binding shareholders’ agreement, regulatory approvals, and the completion of Cool Farms’ acquisition of Cool Farms Shanghai.
• If Cool Farms raises additional funds within 24 months, it cannot do so at a pre-money valuation lower than RMB 128 million without HGH’s consent. HGH also has co-investment rights in such fundraising rounds.
• HGH Holdings is granted the right to appoint one director to the board of Cool Farms.

Rationale and Strategic Implications

This investment marks HGH Holdings’ first foray into the agri-tech sector, targeting strategic opportunities in food security and smart agriculture, particularly in Asia and the Middle East. While not directly aligned with HGH’s core business, the move is positioned as a strategic diversification into a high-growth sector.

Financial Impact

• No immediate impact on NTA or loss per share: Both remain unchanged after the transaction, based on pro forma calculations using the FY2024 financials.
• The deal is classified as a “discloseable transaction” under SGX Catalist rules, with the consideration representing 7.9% of the Company’s market capitalization. No shareholder approval is required.

Potential Risks and Cautionary Notes

• The completion of this investment is subject to several conditions, including due diligence and regulatory approvals. There is no certainty that the deal will be completed on the announced terms.
• Any material updates or changes to the transaction will be communicated to shareholders as necessary.

What Shareholders Should Know

• No directors or controlling shareholders have any interest in the transaction, except through their shareholdings in HGH Holdings.
• No service contracts will be entered with any person as a result of this deal.
• The Subscription Agreement is available for inspection at HGH’s registered office for three months from this announcement.
• This announcement is potentially price-sensitive due to its strategic nature and the entry into a new growth sector. Investors should monitor for further updates.

Disclaimer

This article is for informational purposes only. It does not constitute investment advice or an offer to buy or sell any securities. Investors should exercise caution and consult their professional advisers before making investment decisions. The completion of the proposed subscription is subject to certain conditions and there is no certainty that it will be consummated as described above.

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