WUHAN YOUJI (02881.HK): Disposes Resin Workshop Assets for RMB 50.4mn and Terminates Lease; Connected Transaction

NewTimeSpace News: On 22 October 2026 (after trading hours), Wuhan Youji Holdings Limited (the "Company") announced that Wuhan Youji, a wholly-owned subsidiary of the Company, entered into an asset transfer agreement with Shuanghu Coatings, under which Wuhan Youji agreed to sell and Shuanghu Coatings agreed to acquire the disposal assets for a total consideration of RMB 50,365,635.41; upon completion, Wuhan Youji and Shuanghu Coatings will also terminate the lease agreement, and the Group will not receive any separate consideration or compensation for the lease termination.

The announcement disclosed that the disposal assets comprise 107 machines and equipment located at No. 1 Chemical Second Road, Wuhan Chemical Industry Park, the PRC, used for the resin workshop, intermediate tank farm and ancillary facilities, including MVR evaporation equipment, DCS equipment, industrial explosion-proof platform scales and related production and ancillary equipment; the disposal does not include land or plant. The consideration comprises a transfer price of RMB 44,571,358.77 and value-added tax of RMB 5,794,276.64, determined after arm's length negotiation by reference to the appraised net value of RMB 44,571,358.77 of the disposal assets as at 31 July 2026 (the valuation date) set out in the valuation report, with the valuer adopting the replacement cost method under the cost approach. Shuanghu Coatings shall pay in cash in five instalments of RMB 3,000,000.00, RMB 6,000,000.00, RMB 9,000,000.00, RMB 12,000,000.00 and RMB 20,365,635.41, with the payment period expiring about four months after completion. The implementation and completion of the transactions are conditional upon approval by the independent shareholders at an extraordinary general meeting.

The Company stated that, according to its announcement dated 26 March 2025, Shuanghu Coatings leased to Wuhan Youji the resin workshop premises (land area of 10,890 square metres and plant area of 10,146 square metres) and the intermediate tank farm (land area of 8,431.5 square metres) for a term of ten years from 14 July 2025 to 13 July 2035 at a monthly rent of RMB 186,597.25 (tax inclusive); the lease agreement will terminate upon completion. Based on the unaudited consolidated carrying amount of the disposal assets of RMB 43,804,982.75 and after taking into account estimated taxes and transaction expenses of approximately RMB 695,313.20, the Group currently expects to recognise a gain of approximately RMB 71,062.82; as regards the lease termination, it expects to derecognise right-of-use assets of approximately RMB 14,521,406.38 and lease liabilities of approximately RMB 14,971,422.54, generating an estimated additional gain of approximately RMB 450,016.15. After deducting applicable taxes and transaction expenses, the net proceeds from the disposal are expected to be approximately RMB 398,625.42, to be used for general working capital purposes.

The Company stated that, as one or more of the applicable percentage ratios for the disposal and the lease termination are 5% or more but all are below 25%, the transactions constitute a discloseable transaction; as at the date of the announcement, Shuanghu Coatings is indirectly owned as to 80% by Mr. Gao Yuankun, the father of Mr. Gao Lei, a non-executive director and controlling shareholder of the Company, and as to 20% by Mr. Shen Yingming, a non-executive director, so Shuanghu Coatings is an associate of Mr. Gao Lei and a connected person of the Company, and the transactions constitute connected transactions subject to the reporting, announcement, circular and independent shareholders' approval requirements; Mr. Gao Lei and Mr. Shen Yingming are interested in an aggregate of 62,688,552 shares (approximately 67.19% of the issued share capital), and their respective associates must abstain from voting at the extraordinary general meeting. An independent board committee comprising Mr. Liao Qiyu, Dr. Liu Zhongdong and Dr. Yuan Kang has been established, and Ruanku Zhonghua Hong Kong Securities Limited has been appointed as independent financial adviser. The board considers that the transactions will enable the Group to optimise its asset allocation and concentrate management and financial resources on its core fine chemical products and other development opportunities.