Sunrise Shares Holdings Announces Detailed Responses to SGX Queries on Proposed Acquisition of Fuzhou Tianfujia Industrial

Sunrise Shares Holdings Ltd. has released a comprehensive response to queries from the Singapore Exchange Regulation (SGX RegCo) regarding its proposed acquisition of Fuzhou Tianfujia Industrial Co., Ltd. (福州天富佳实业有限公司). The acquisition, valued at S\$1 million, presents several key developments and material disclosures that are highly relevant to current and prospective investors.

Key Points in the Report

• Acquisition Overview: Sunrise Shares Holdings is proposing to acquire 100% equity interest in Fuzhou Tianfujia Industrial Co., Ltd. for S\$1 million, to be satisfied via new share issuance, preserving the Group’s cash resources for other expansions.
• Leadership Continuity: Mr. Chi Fubo will remain as the legal representative and sole director of the Target Company post-acquisition, providing continuity in management.
• Enhanced Corporate Governance: The Group is implementing robust internal controls, including dual signatories for bank mandates, controlled access to company seals and original documents, and comprehensive oversight by the Audit Committee. Notably, Mr. Chi Fubo will not have authority over cash disbursements.
• Lack of Audited Financials: The Target Company does not have audited financial statements for the past three years. The Board relied on management accounts, with legal confirmation that audits are not a PRC legal requirement for the entity.
• Purchase Consideration Rationale: The Board considered the Target Company’s net tangible assets (approx. S\$1.4 million as at 30 June 2025), its existing operational refinery plant, and strategic fit with the Group’s growth objectives. The asset is seen as immediately revenue-generating with minimal lead time or capital expenditure.
• Due Diligence: Legal due diligence was conducted by Guanghe Law Firm, with a scope including corporate structure, assets, contracts, liabilities, and compliance. Financial due diligence included site visits and verification of financial and operational data.

Material Disclosures and Price-Sensitive Issues

• Historical Non-Compliance Issues:
  • Lease Renewal Lapse: There was a gap (16 April–24 July 2025) where the Target Company operated on its premises without a valid right of use. Estimated maximum exposure is RMB 732,000, but the landlord has not taken action and has since renewed the right of use. The Vendors have indemnified the Company against liabilities arising from this.
  • Employment Law Breaches: The Target Company did not have a written contract nor made required social insurance and housing provident fund contributions for its general manager, Mr. Wong. Potential penalties include double salary liability, fines of RMB 2,000–20,000, and further penalties for late contributions (up to three times the amount in arrears and fines up to RMB 50,000). The Vendors have indemnified the Company on these matters, and Mr. Wong will enter into a service agreement moving forward.
• Details of Right of Use for Operational Premises:
  • Size: Approximately 44,000 sqm
  • Authorised Use: Factory for loading, unloading, storage, and operations for silica sand business
  • Fees:
    • No monthly rent
    • Port operation rates: Unloading foreign silica sand at RMB 16.8/ton, loading for domestic trade at RMB 6.575/ton
    • Cargo port charges: Foreign import RMB 1.2/ton, export RMB 0.6/ton; Domestic both ways RMB 0.425/ton
    • Discounts for exceeding 200,000 tons handled
    • Storage: Free for first 90 days, RMB 0.10/ton/day after; waived if >200,000 tons handled
    • Minimum annual unloading requirement: 150,000 tons, shortfall charged at RMB 18/ton
  • Term: 25 July 2025 to 24 July 2026
• Conflict of Interest Management in Renewable Energy Business:
  • Datuk Tan (ED & CEO) and Mr. Lam (CFO), due to their interests in Sunrise Energy, will abstain from Board deliberations and voting on Renewable Energy Business transactions, but will continue to provide market intelligence and execute the Board’s decisions operationally. The Audit Committee will regularly review these arrangements to ensure transparency and integrity.
• Deferred Acquisition of Sunrise Energy:
  • The Group has opted not to acquire shares in Sunrise Energy (controlled by Datuk Tan and Mr. Lam) at this time due to Malaysian regulations requiring local ownership for government energy project eligibility. A direct acquisition would render Sunrise Energy foreign-owned and restrict access to government projects. The Group instead maintains options for future alignment, pending regulatory changes.

Other Notable Details for Investors

• Strengthened Corporate Controls: Registers of legal representatives’ external interests, rigorous custody of company seals and licences, and half-yearly reviews by the Audit Committee are being implemented to mitigate operational risks.
• Indemnities: The Vendors have provided indemnities on all disclosed historical non-compliance matters, limiting the Group’s direct financial exposure.
• Strategic Fit and Growth: The acquisition is positioned as an immediate platform for further revenue generation, leveraging established infrastructure in China’s silica sand sector, which may be of strategic importance to shareholders.

Conclusion

The proposed acquisition by Sunrise Shares Holdings Ltd. of Fuzhou Tianfujia Industrial Co., Ltd. is a significant development with potentially material impacts for shareholders. Key price-sensitive disclosures include the lack of audited financial statements, historical non-compliance exposures (with indemnities), and the strategic rationale for the acquisition. Additionally, the Group’s approach to conflict of interest management and deferred acquisition of Sunrise Energy could impact future growth prospects and regulatory risk profiles. Investors should monitor further announcements and periodic reviews, as these developments may affect the Group’s valuation and share price.

Disclaimer: This article is for informational purposes only. It does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult with professional advisers before making investment decisions. The information is based on public disclosures by Sunrise Shares Holdings Ltd. and may be subject to change or further clarification.

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