TIANLI INT HLDG (01773.HK): Updates Valuation of Art Education Target

NewTimeSpace News: On 29 September 2026, Tianli International Holdings Limited (stock code: 01773.HK) issued a supplemental announcement in relation to its announcement dated 9 June 2026 on the acquisition of equity interest in, and capital increase in, the Target Company, providing further information on the transaction structure and consideration, payment arrangements, valuation information, the additional investment and the performance guarantee.

The Valuer's pre-investment valuation of the Target Company as at 31 August 2025 was RMB 348.74 million and, taking into account the proposed capital increase of RMB 140.8 million, the post-investment value was approximately RMB 489.54 million. The Purchaser's aggregate payment and investment of RMB 244.8 million to acquire a 51% equity interest in, and control of, the Target Company was lower than approximately RMB 249.67 million, being 51% of the post-investment value. The equity transfer consideration of RMB 104 million corresponds to a 10% existing equity interest held by the Transferors and also serves to terminate the Transferors' special shareholder rights arrangements.

Based on the updated valuation as at 31 March 2026, the market value of the 100% equity interest in the Target Company was approximately RMB 358.62 million, an increase of approximately RMB 9.88 million, or approximately 2.8%, from the original valuation of RMB 348.74 million; after taking into account the capital increase of RMB 140.80 million, the updated post-investment valuation was approximately RMB 499.42 million. For the twelve months ended 31 March 2026, the Target Company recorded revenue of RMB 297.17 million, net profit after tax of RMB 37.18 million and EBITDA of RMB 109.34 million. The adjusted EV/EBITDA multiple was updated from 5.03 times to 4.04 times, and the control premium from 31.20% to 33.70%.

The Target Group was founded in 1998 and focuses on the three principal businesses of art Gaokao, integration of art and education, and children's literacy, with nine art Gaokao intensive training centres in Chongqing, Sichuan, Guizhou, Yunnan, Henan, Shandong and Zhejiang. The maximum aggregate amount under the Transactions is RMB 294.8 million, comprising the equity transfer consideration of RMB 104.0 million, the capital increase amount of RMB 140.8 million and the Additional Investment of RMB 50.0 million. The performance guarantee period runs from 1 March 2027 to 31 August 2028, with the Guarantors being Chongqing Huajing and its shareholders.

The supplemental announcement also disclosed the repurchase arrangement: if a termination event is triggered, the Target Company, the Existing Shareholders and their shareholders shall, within 30 days, jointly and severally repurchase all equity interests then held by the Purchaser, with the repurchase price comprising all amounts actually paid by the Purchaser plus a return calculated at an annual simple interest rate of 5%, secured by a pledge of all equity interests held by the Existing Shareholders within 10 days.

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