SMIT Holdings (02239.HK): Sells 5 Million Xingji Shares for RMB 63.25M; Estimated Pre-Tax Loss of Approx. USD 1.4M
NewTimeSpace News: SMIT Holdings Limited (stock code: 2239) announced on July 20 the disclosure of a discloseable transaction regarding the sale of its equity interest in Xingji.
On July 20, 2026, the Seller (a wholly-owned subsidiary of the Company) and the Guarantors entered into Equity Transfer Agreement A with Shengshi Zhida and Equity Transfer Agreement B with Jiutian Shengshi, respectively, pursuant to which the Seller agreed to sell and Shengshi Zhida and Jiutian Shengshi agreed to purchase an aggregate of 5,000,000 shares in Xingji. The consideration for Equity Transfer A and Equity Transfer B is RMB 57,048,383 and RMB 6,198,161 respectively, totaling approximately RMB 63,246,544. The consideration was determined after fair negotiations among the Seller, Shengshi Zhida and Jiutian Shengshi, taking into account (among other things) the valuation of approximately RMB 63.0 million for the Seller's 3.9529% equity interest in Xingji made by independent valuer FVA Advisory Limited, as well as Xingji's business development and future prospects.
The consideration under Equity Transfer Agreement A shall be paid by Shengshi Zhida (or the designated fund of which it serves as general partner) to the Seller in a lump sum on or before September 30, 2026 (or such later date as the parties may agree), after all conditions precedent have been fulfilled (or waived). The consideration under Equity Transfer Agreement B shall be paid by Jiutian Shengshi to the Seller in a lump sum within five business days after all conditions precedent have been fulfilled (or waived). The parties to Equity Transfer Agreement B have agreed to actively fulfill the conditions precedent by July 24, 2026.
Upon completion, the Seller will no longer hold any equity interest in Xingji. The Group expects to record an aggregate unaudited pre-tax loss on disposal of approximately USD 1.4 million, estimated after taking into account (among other things) the consideration of approximately USD 9.3 million, the carrying value of the Xingji investment as of December 31, 2025 of approximately USD 10.6 million, and other transaction costs directly related to the equity transfer. The Group expects to recognize net proceeds from the equity transfer of approximately USD 9.2 million as cash and cash equivalents/receivable consideration, and derecognize the carrying value of the Xingji investment of approximately USD 10.6 million. Accordingly, the Group's consolidated total assets are expected to decrease by USD 1.4 million.
The net proceeds from the equity transfer (after deducting related expenses) are estimated to be approximately USD 9.2 million. The disposal of Xingji is in line with the Group's previously resolved strategy to cease EDA product R&D and reduce the scale of its EDA investment portfolio. After exiting the EDA sector, the Group will reposition its strategic focus and apply the net proceeds to pursue investment opportunities in emerging technologies and areas that can generate strong synergies with existing businesses.
Xingji is a joint stock company established under the laws of the PRC, specializing in the digital implementation field of chip design, and launched several self-developed EDA tools to the market in 2023. Xingji's audited consolidated net loss after tax for the years ended December 31, 2024 and 2025 was RMB 167,990 thousand and RMB 201,103 thousand respectively. As of March 31, 2026, Xingji Group's unaudited net asset value was approximately RMB 437,389,000.
As one or more of the applicable percentage ratios calculated under Rule 14.07 of the Listing Rules exceed 5% but are all below 25%, the equity transfer constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules, and is subject to reporting and announcement requirements, but is exempt from circular and shareholders' approval requirements.
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