Grand Baoxin Auto Group Announces Major Disposal of Subsidiaries in RMB 25.36 Million Deal
Key Points of the Announcement
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Disposal of Entire Interest in Two Subsidiaries:
Grand Baoxin Auto Group Limited (“the Company”) announced the disposal of its entire interest in two subsidiaries, Karamay Yanbao Automobile Sales and Service Co., Ltd. and Karamay Xindebao Economic and Trade Development Co., Ltd., for a combined consideration of approximately RMB 25.36 million. -
Counterparty:
The buyer is Guangxi Jincai New Materials Technology Co., Ltd., an independent third party not connected to the Company. -
Transaction Details:
– The sale of Karamay Yanbao was agreed at approximately RMB 24.36 million.
– The sale of Karamay Xindebao was agreed at RMB 1 million. -
Completion and Financial Impact:
Upon completion, the Company will cease to have any interest in the target companies, which will also cease to be subsidiaries. Their financials will no longer be consolidated into the Group’s results. -
Expected Gain:
The Group expects to record a gain of approximately RMB 11.85 million from the disposals. -
Use of Proceeds:
Net proceeds from the disposals will be used to supplement the Group’s working capital. -
Listing Rules:
The transaction constitutes a discloseable transaction under Chapter 14 of the Hong Kong Listing Rules, as the highest applicable percentage ratio for the transactions exceeds 5% but is less than 25%.
Detailed Transaction Terms
Yanbao Agreement
- Date: 15 May 2026 (after trading hours)
- Vendor: Urumqi Yanbao Automobile Sales and Service Co., Ltd. (an indirect non-wholly owned subsidiary)
- Target: Karamay Yanbao Automobile Sales and Service Co., Ltd.
- Consideration: RMB 24.36 million, determined after arm’s length negotiations referencing the audited equity interest as of 31 October 2025 (RMB 16.54 million) and other commercial factors.
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Payment Terms:
- Deposit of RMB 2.5 million within three business days of agreement
- Remaining RMB 21.86 million upon completion
- Completion: Will occur upon delivery of requisite documents for equity change registration.
Xindebao Agreement
- Date: 15 May 2026 (after trading hours)
- Vendor: Beijing Dongbao Jinlong Economic and Trade Development Co., Ltd. (an indirect non-wholly owned subsidiary)
- Target: Karamay Xindebao Economic and Trade Development Co., Ltd.
- Consideration: RMB 1 million, taking into account the audited net liability as at 31 October 2025 (RMB 2.94 million loss).
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Payment Terms:
- Deposit of RMB 500,000 within three business days of agreement
- Remaining RMB 500,000 upon completion
- Completion: Will occur upon delivery of requisite documents for equity change registration.
Financial Information of the Target Companies
Karamay Yanbao
- Principal Activities: Automobile retail, wholesale, and after-sales consulting in the PRC
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Financials:
- 2024 Net Loss (after tax): RMB 2.80 million
- 2025 Net Loss (after tax): RMB 7.61 million
- Net Asset as at 31 Dec 2025: RMB 16.54 million
Karamay Xindebao
- 2024 Net Profit (after tax): RMB 25,636
- 2025 Net Loss (after tax): RMB 3.57 million
- Net Liability as at 31 Dec 2025: RMB 2.94 million
Strategic Rationale
The Company’s directors have continuously evaluated business strategies to optimize resource allocation and improve performance. The disposals are aimed at streamlining operations and improving the Group’s financial position. The transactions were negotiated on normal commercial terms and are considered fair, reasonable, and in the interests of the Company and shareholders.
Potentially Price-Sensitive Information for Shareholders
- Improved Financial Position: The disposals are expected to result in a gain of approximately RMB 11.85 million, providing a positive impact on the Group’s net earnings for the period.
- Streamlined Operations: Exiting from two subsidiaries that reported losses helps optimize the Group’s portfolio and operational focus.
- Working Capital Enhancement: The cash proceeds will strengthen the Group’s liquidity.
- Regulatory Compliance: The transactions are classified as discloseable under the Listing Rules, signaling a moderate level of significance.
Company Background
Grand Baoxin Auto Group Limited is one of the major luxury automobile dealership groups in China, principally engaged in automobile sales and after-sales services.
Disclaimer
This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a professional advisor before making investment decisions. The information provided is based on public disclosures as of 15 May 2026.
