Green International Holdings Announces Disposal of Loss-Making Beauty Parlors

Key Summary of the Transaction

• Green International Holdings Limited (“the Company”, Stock code: 2700) announced the disposal of two beauty parlors located in Shenzhen, China.
• The disposals were executed through the Company’s 51%-owned subsidiary, Shenzhen Marsa Guer Chain Enterprise Limited (“the Vendor”).
• First Beauty Parlor (Nanshan District) sold for RMB 1,410,000 (HK\$1,602,000) to Ms. Li Caiwen.
• Second Beauty Parlor (Futian District) sold for RMB 570,000 (HK\$648,000) to Mr. Tan Huo.
• Both sales completed on 17 March 2026 with payment due within three business days.
• Purchasers will assume all risks and liabilities from 1 September 2025 (First Beauty Parlor) and 1 October 2025 (Second Beauty Parlor).
• The disposals constitute discloseable transactions under Chapter 14 of the Listing Rules due to the applicable percentage ratios exceeding 5% but below 25%.

Details and Rationale Behind the Disposal

The two beauty parlors have recorded consecutive losses for several years, with the financial situation worsening significantly in 2025. This was mainly attributed to the prolonged negative impact of COVID-19 on consumer sentiment, a sluggish recovery in domestic consumption, and shifting consumer patterns in China post-pandemic. As a result, the Vendor’s cash and bank balances have been depleted, prompting the Company to avoid further capital injections and propose the closure of these businesses.

Financial Performance of the Beauty Parlors

As of 30 June 2025, the unaudited carrying values of the disposal assets were HK\$509,000 (First Beauty Parlor) and HK\$91,000 (Second Beauty Parlor), both significantly lower than the sale consideration.

Transaction Terms and Future Implications

• The Purchasers, who are independent PRC nationals and merchants, were introduced via the beauty parlor staff. There is no prior relationship or material loan arrangement between the Purchasers and the Company.
• In addition to the transfer of assets, the Purchasers will assume all associated liabilities, including those related to contracts, premises, staff, suppliers, and customers, effective from the respective cut-off dates.
• Both Purchasers will receive a limited-scope, non-exclusive license to use the “Marsa” trademarks at the locations until 30 December 2035.
• The sale proceeds are above the carrying values, allowing the Vendor to recoup value and reduce risk exposure compared to simply closing the parlors and facing difficulties in liquidating obsolete equipment and inventory.
• The cash proceeds will be used to repay or offset other debts and liabilities of the Vendor.

Impact on Shareholders and Share Price Sensitivity

• POTENTIAL GAINS: The Company expects to record a gain of approximately HK\$1,103,000 from the First Disposal and HK\$600,000 from the Second Disposal, representing the surplus of sale consideration over carrying values. These figures are preliminary and may be adjusted in the year-end audit.
• RISK MITIGATION: By completing these disposals, the Company removes loss-making operations, reduces future liabilities, and improves its financial position. This move is likely to be viewed positively by investors as it demonstrates proactive risk management and capital discipline.
• NO DIRECTOR CONFLICTS: No directors have material interests in these transactions, and all believe the terms are fair, reasonable, and in the best interests of the Company and shareholders.
• NO ADVERSE IMPACT: The Directors believe the disposals will not materially impact the Group’s financial position or remaining business operations.

Additional Information

• The transactions were negotiated at arm’s length and on normal commercial terms.
• Both disposals were completed upon signing on 17 March 2026; no conditions precedent were attached.
• All sales and asset transfers were conducted in compliance with the Listing Rules of the Hong Kong Stock Exchange.

Conclusion

Investor Takeaway: The disposal of the two loss-making beauty parlors is a strategic move by Green International Holdings to strengthen its financial position and reduce future risk exposure. The sales generate immediate cash inflows, eliminate ongoing losses, and allow the Company to focus on more profitable ventures. These actions are likely to support the Company’s share price by enhancing profitability and demonstrating sound financial management.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should consult professional advisers before making any investment decisions. All financial estimates are subject to final audit review. The Company’s future performance may be affected by various market and business risks.

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