STAR SHINE HLDG (01440.HK): Disposal of Circle Time for HK$58.7mn, a Discloseable and Connected Transaction

NewTimeSpace News: On 23 October 2026 (after trading hours), Star Shine Holdings Group Limited (the "Company") announced that the Company, as seller, entered into a sale and purchase agreement with the buyer, Wing Wai Investment Limited, in respect of the sale and purchase of the sale shares and the transfer of the sale loan. Under the agreement, the Company has conditionally agreed to sell and the buyer has conditionally agreed to purchase the sale shares, being the entire issued share capital of Circle Time (one ordinary share), and the Company has conditionally agreed to sell and assign to the buyer, and the buyer has conditionally agreed to purchase and assume, all rights and benefits in the sale loan free from encumbrances and together with all rights attaching thereto at completion. The sale and purchase of the sale shares and the transfer of the sale loan shall complete simultaneously. The consideration for the disposal is HK$58,700,000, of which the consideration for the sale shares is HK$1.00 and the consideration for the sale loan is the consideration amount less HK$1.00.

The announcement disclosed that the sale loan is the amount owing by Circle Time to the Company after the pre-completion loan restructuring, equal to the aggregate of the Hop Shing loan balance, the Kam Kei loan balance and the target company loan balance, and will equal HK$70,965,199 after the pre-completion loan restructuring. The buyer shall settle the full consideration of HK$58,700,000 at completion by way of set-off against the shareholder loan in an equal amount, whereupon the corresponding amount payable by the Company will be cancelled, and the buyer is not required to pay any cash. As at the date of the announcement, Circle Time is a direct wholly-owned subsidiary of the Company and holds the entire issued share capital of Kam Kei and 50% of the issued share capital of the joint venture Star Pak, a joint venture with Asia Partners responsible for organising and operating CR7 Museum HK, with Kam Kei operating the merchandise business related to CR7 Museum HK. Following completion, the Company will hold no direct or indirect interest in Circle Time, Kam Kei or Star Pak.

The Company stated that the disposal group recorded losses before and after tax of HK$17,000 and HK$42,468,000 for the two financial years ended 31 December 2024 and 2025 respectively, and HK$11,879,000 for the eight months ended 31 August 2026; as at 31 August 2026, the disposal group's unaudited consolidated net liabilities were approximately HK$54.4 million. The consideration was determined through arm's length negotiations by reference to the disposal group's business prospects, the aggregate valuation of approximately HK$58.7 million prepared by the valuer using the asset-based approach, the above net liabilities and the reasons for the disposal. Following completion, the Group expects to recognise an unaudited net gain of approximately HK$42.1 million, which will be credited directly to equity, and to improve its gearing ratio from about 0.3 as at 30 June 2026 to about 0.1; the Company will not receive any proceeds from the disposal.

The Company stated that Star Pak and Kam Kei are currently pursuing legal proceedings against defendants including Asia Partners. Kam Kei commenced proceedings in the High Court of the Hong Kong Special Administrative Region in October 2025 to recover a deposit of approximately HK$15 million; the defendants denied the claim and counterclaimed EUR 4,200,000, and Kam Kei's application for summary judgment was dismissed by the court after a hearing in October 2026. Star Pak commenced proceedings in December 2025 against three defendants including Asia Partners and re-filed the writ of summons in September 2026, with quantified claims of approximately HK$42,142,000 (equivalent to approximately RMB 36,019,000) and further amounts to be assessed; the litigation is ongoing. Given the material uncertainty over the outcome, duration and ultimately recoverable amounts of the litigation, the cessation of CR7 Museum HK's operations on 8 June 2026 and the expectation that the joint venture business will not generate meaningful revenue or cash flow in the foreseeable future, the board considers that continuing to hold the disposal group's interest would require substantial management time and effort on litigation without commensurate benefit. On the Listing Rules, as one or more applicable percentage ratios exceed 5% but are below 25%, the disposal constitutes a discloseable transaction; the buyer holds approximately 28.85% of the issued shares and is a substantial shareholder and the ultimate holding company of the Company, wholly owned by Mr. Cai, the chairman, executive director and substantial shareholder, so the disposal constitutes a connected transaction subject to the announcement and independent shareholders' approval requirements; Mr. Cai and Ms. Cai Linqi abstained from voting on the relevant board resolutions, and the Company intends to convene an extraordinary general meeting, with a circular containing further details expected to be despatched on or before 9 November 2026.