Sapphire Corporation Limited Announces Incorporation of New Associated Company in China

Key Highlights

• New Associated Company Formed: Shengshi Fanmu (Sichuan) Cultural and Creative Development Co., Ltd. (SFCCD), an indirectly owned subsidiary of Sapphire Corporation Limited, has incorporated a new associated company in the People’s Republic of China.
• Name and Nature: The new entity, Benxishi Benxihu Industrial Tourism Co., Ltd., is focused on tourism services and the construction of cultural relic protection projects.
• Registered Capital: RMB 1,000,000.
• Ownership Structure: SFCCD holds a 35% stake (RMB 350,000 investment), while Benxishi Cultural and Tourism Industry Development Group Co., Ltd. holds the remaining 65%.
• Funding: The investment will be funded through the Group’s internal resources.
• Financial Impact: The transaction is not expected to materially impact the Group’s earnings per share or net tangible assets per share for FY2025.

Details for Investors

Sapphire Corporation Limited has taken a strategic step by investing in a new associated company within the Chinese tourism and cultural relic protection industry. This move aligns with the Group’s broader strategy to diversify its business portfolio and tap into China’s growing tourism and cultural sectors.

The new associated company, Benxishi Benxihu Industrial Tourism Co., Ltd., will operate with a registered capital of RMB 1 million. SFCCD’s 35% stake (RMB 350,000) signals a meaningful, yet measured, commitment to this new venture. Importantly, Benxishi Cultural and Tourism Industry Development Group Co., Ltd. serves as the principal partner, holding 65% of the equity, which indicates strong local government or institutional support for the project.

The principal activities of the new entity—tourism services and construction of cultural relic protection projects—are sectors experiencing robust growth in China. The partnership could bring synergies and potential upside to Sapphire Corporation’s long-term earnings, should the venture succeed in building a significant presence in the market.

The Group’s decision to fund the investment using internal resources is prudent, minimizing risk and avoiding dilution for existing shareholders. However, the company has stated that the investment is not expected to have any material impact on earnings per share or net tangible assets per share for FY2025.

Director and Shareholder Interests

For transparency, Sapphire Corporation disclosed that Mr Cheung Wai Suen, the Executive Chairman, has a direct interest of 2.01% in Chengdu Kai Qi Rui Business Management Co., Ltd and an indirect interest of 0.40% in Chengdu Shengshi Jialong City Management Service Co., Ltd (held in trust by Chengdu Kai Qi Rui Business Management Co., Ltd). SFCCD is a directly owned subsidiary of Chengdu Shengshi Jialong City Management Service Co., Ltd.

Other than what is disclosed, there are no additional interests that Directors or substantial shareholders hold in this transaction, apart from their roles as shareholders or Directors within the Company.

Potential Share Price Impact

• Strategic Expansion: The investment into a tourism and cultural relic protection business could be seen as a positive diversification initiative and may attract investor interest, depending on future operational performance and sector trends in China.
• No Immediate Financial Impact: As stated by the company, the transaction is not expected to have a material impact on FY2025 earnings or net tangible assets, and thus may not immediately move the share price. However, the longer-term implications could become price-sensitive if the new venture performs well.
• Management Transparency: Disclosure of director interests supports good governance and may reassure shareholders regarding the alignment of management and shareholder interests.

Conclusion

Sapphire Corporation Limited’s announcement signals a new strategic direction in the tourism and cultural relic protection sector in China. While the immediate financial impact is minimal, the company’s diversification efforts could provide future growth opportunities. Investors should monitor subsequent developments and performance updates from the new associated company.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or an offer to buy or sell any securities. Investors are advised to consult their own financial advisors and conduct their own research before making any investment decisions. The information provided is based on official company announcements and may be subject to change or revision.

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