Jiangsu Horizon Chain Supermarket Company Limited Announces Proposed Change in Use of Unutilized Net Proceeds
Key Points of the Announcement
- Jiangsu Horizon Chain Supermarket Company Limited (“the Company”; Stock Code: 2625) has announced a proposed change in use of HKD66.2 million unutilized net proceeds from its Global Offering.
- The Board resolved on 27 April 2026 to reallocate funds originally designated for establishing a new distribution centre to instead expand the existing distribution centre and open new retail stores.
- This change is a response to business needs, operational efficiency, and regulatory progress related to land use rights.
Detailed Breakdown of Net Proceeds Utilization
| Use of Net Proceeds |
Allocated Amount (HK\$ million) |
Utilized (HK\$ million) |
Unutilized (HK\$ million) |
Revised Allocation (HK\$ million) |
| To open new retail stores |
27.5 |
21.9 |
5.6 |
11.9 |
| Store renovation |
8.2 |
8.2 |
0 |
6.3 |
| Purchase of shelves |
7.9 |
5.2 |
2.7 |
2.7 |
| Purchase of cold storage facilities, lighting, air-conditioning, CCTV, POS |
7.5 |
4.6 |
2.9 |
2.9 |
| Installation of fire safety system |
3.9 |
3.9 |
0 |
0 |
| To establish a new distribution centre |
36.7 |
0 |
36.7 |
13.2 |
| Acquisition of land in Jiangdu District |
13.2 |
0 |
13.2 |
13.2 |
| Construction of new distribution centre |
16.3 |
0 |
16.3 |
0 |
| Acquisition of shelves, lighting, ancillary facilities, fire safety system |
7.2 |
0 |
7.2 |
0 |
| To establish a new central kitchen |
23.9 |
0 |
23.9 |
23.9 |
| Construction of new central kitchen |
4.5 |
0 |
4.5 |
4.5 |
| Acquisition of machines and equipment |
8.9 |
0 |
8.9 |
8.9 |
| Acquisition and installation of fire safety, ventilation, cold storage, utilities, air-conditioning, CCTV |
9.2 |
0 |
9.2 |
9.2 |
| Acquisition of additional vehicles for meal delivery |
1.3 |
0 |
1.3 |
1.3 |
| To enhance ERP and infrastructure systems |
1.0 |
1.0 |
0 |
0 |
| To expand the existing distribution centre |
0 |
0 |
0 |
17.2 |
| Expanding construction of the existing distribution centre |
0 |
0 |
0 |
10.0 |
| Acquisition of shelves, lighting, ancillary facilities, fire safety system |
0 |
0 |
0 |
7.2 |
| Total |
89.1 |
22.9 |
66.2 |
66.2 |
Important Information for Shareholders
- Reallocation of Funds: The Board’s decision to reallocate a substantial portion of the funds (HKD17.2 million) from the planned new distribution centre to the expansion of the existing centre and opening new retail stores is a significant shift in capital deployment.
- Regulatory and Land Use Issues: The delay in acquiring land use rights for the new central kitchen and distribution centre has led to interim measures, with the central kitchen relocation plan temporarily suspended. The Company will monitor regulatory progress and update plans as appropriate.
- Operational Impact: The expansion of the existing distribution centre is expected to address current warehousing and distribution needs more efficiently, supporting a 15% year-on-year increase in sales revenue from retail and wholesale operations, reaching RMB1,478.2 million for 2025.
- Strategic Growth: Opening new retail stores is aimed at strengthening market position, increasing market share, and capturing growth opportunities in the PRC retail industry.
- No Change in Business Nature: The Board confirms there is no material change to the Company’s business nature as stated in the prospectus, and the reallocation will not adversely affect operations.
- Shareholder Action: The Company will circulate a notice convening a general meeting to seek shareholder approval for the proposed change.
- Potential Price Sensitivity: Investors should note that changes in capital allocation, operational focus, and delays in major capital projects (distribution centre and central kitchen) could impact future growth, margins, and share value. The focus on rapid retail expansion and distribution capacity may be taken positively by the market, but delays in infrastructure projects could be a concern.
Board and Corporate Governance
- The Board comprises seven executive directors (including Chairman Mr. Gao Feng), one non-executive director, and four independent non-executive directors, reflecting robust governance and oversight of strategic decisions.
Conclusion and Outlook
Jiangsu Horizon Chain Supermarket’s decision to reallocate HKD66.2 million in unutilized proceeds marks a proactive response to regulatory and operational challenges. By prioritizing the expansion of its existing distribution centre and opening new retail stores, the Company aims to maintain growth momentum and operational efficiency amidst delays in land use approvals for its new central kitchen and distribution centre. Shareholders should closely monitor these developments, as changes in capital allocation and the Company’s ability to address regulatory hurdles could have a material impact on the Company’s share price and future prospects.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are advised to review the official Company circular and consult their financial advisors before making any investment decisions. The information herein is based on Company announcements and may be subject to change or further clarification.
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