HAIER SMART HOME CO., LTD.
DGAP Post-admission Duties announcement: Haier Smart Home Co.,Ltd.
/ Third country release according to Article 50 Para. 1, No. 2 of the WpHG [the German Securities Trading Act]
Announcement on the Receipt of the Inquiry Letter from Shanghai Stock Exchange on the Information Disclosure of the Company's Material Asset Purchase cum Related Party Transaction Report (Draft) The board of directors of the Company and all of its directors ensure that the contents of this announcement do not contain any false record, misleading statement or material omission, and bear several and joint liability for the truthfulness, accuracy and completeness of the contents thereof. Qingdao / Shanghai / Frankfurt, 14 August 2020 - Haier Smart Home Co., Ltd. (hereinafter referred to as the 'Company' or 'HSH') held the 10th Meeting of the Tenth Session of the Board of Directors on July 30, 2020 to review and approve the Proposal on Material Asset Purchase cum Related Party Transaction Report (Draft) of Haier Smart Home Co., Ltd. and its Summary. The relevant announcements were disclosed on the Shanghai Stock Exchange website (www.sse.com.cn) and the information disclosure media designated by the Company including Shanghai Securities News, China Securities Journal, Securities Times, and Securities Daily on August 1, 2020. The Company received the Inquiry Letter Regarding Information Disclosure of the Material Asset Purchase cum Related Party Transaction Report of Haier Smart Home Co., Ltd. (Shang Zheng Gong Han [2020] No. 2447) (hereinafter referred to as the 'Inquiry Letter') issued by the Shanghai Stock Exchange on August 14, 2020. The Shanghai Stock Exchange reviewed the Material Asset Purchase cum Related Party Transaction Report (Draft) of the Company, and the Company shall make further description and explanation on the following issues. The full text of the Inquiry Letter is hereby announced as follows: 'After reviewing the Material Asset Purchase cum Related Party Transaction Report (Draft) (hereinafter referred to as the 'Restructuring Report') submitted by the Company, the following issues need your further statement and explanation: 1. As disclosed in the Restructuring Report, this transaction involves the proposed privatisation of Haier Electronics Group Co., Ltd. (hereinafter referred to as 'HEG') by HSH and will result in the delisting of HEG from Hong Kong Stock Exchange; and HSH intends to issue H Shares and list H Shares on the Hong Kong Stock Exchange by way of introduction, and the shares will be issued to HEG Scheme Shareholders except HSH and Haier Shareholdings (Hong Kong) Limited (hereinafter referred to as 'HS (HK)'). The Company is requested to further disclose: (1) the rationality and necessity of this transaction from the perspectives of corporate strategy, resources allocation, business coordination, market competition and operating results; (2) the specific effects of this transaction on the Company's governance structure, personnel setting, related party transactions and integration of various business segments, the specific integration measures, plans and arrangements the Company intends to carry out in the above areas, as well as the expected results. Please ask the financial advisor to give opinions. 2. As disclosed in the Restructuring Report, in this transaction, HSH, as the offeror, put forward a proposal to the Scheme Shareholders for the privatisation of HEG. The Scheme Shareholders will obtain new HSH H Shares as a consideration for privatisation, with a Share Exchange Ratio of 1:1.60. Meanwhile, HEG will make a Cash Payment to the Scheme Shareholders at HK$1.95 per share. According to the H Share Valuation Report issued by Platinum, the value of HSH H Shares was estimated to be in the range of RMB16.45 per share to RMB16.90 per share and the theoretical total value of the H Shares and the Cash Payment that the Scheme Shareholders can obtain was estimated to be in the range of approximately RMB42.979 billion to RMB44.073 billion. Please make additional disclosure: (1) the main considerations for the privatization of HEG through issuing H shares by the Company and paying cash by HEG; (2) analyse and explain the process and basis to determine the Share Exchange Ratio and amount of Cash Payment per share; (3) the impact of the Cash Payment made by HEG to the Scheme Shareholders on the Company's issuance of H shares or the overall value of HEG, and explain its ability to pay and its impact on subsequent daily operations based on the asset and liability structure of HEG; (4) the valuation method of HSH value, the basis for selection of comparable companies or valuation parameters, the evaluation results and the determination method in the H Share Valuation Report, the difference between the current market value of the Company and the reasons thereof; (5) the difference between HEG's theoretical total value under the privatization proposal (determined according to the estimated range of the above-mentioned Company's issuance of H shares, Share Exchange Ratio, and Cash Payment amount) and the HEG's current market value; and (6) quantitative analysis of the specific impact of this transaction on the Company's basic earnings per share and basic earnings per share after deducting non-recurring gains and losses. Please ask the financial advisor to give opinions. 3. As disclosed in the Restructuring Report, the Company intends to proceed with the proposal for exchangeable bonds (hereinafter referred to as EB), namely that the exchangeable bonds issued by the Company through its overseas subsidiary Harvest will be changed into convertible bonds (hereinafter referred to as CB) issued by the Company through its overseas subsidiary Harvest which are convertible into the newly issued H Shares of the Company. The Company is requested to further disclose: (1) the conversion price and determination basis of CB and the conversion ratio between CB and EB, and analyze the consideration of H shares issued by the Company obtained by relevant bondholders before and after the change of the above proposal, respectively; (2) terms for early redemption of EB, including but not limited to trigger conditions and time points, redemption price, possible redemption amount, and redemption terms of CB after the above proposal is changed; (3) if the above proposal is ultimately not adopted or implemented, does the Company have a plan or an arrangement to purchase EB or the shares of HEG subsequently exchanged by bondholders of EB; (4) whether the above proposal is conducive to protecting the interests of the Company and minority investors, please make full disclosure for the relevant risks. Please ask the financial advisor to give opinions. 4. As disclosed in the Restructuring Report, HEG's businesses mainly include research and development, manufacturing and sales of washing machines, water heaters and water purifiers under the subordinate brands ('Haier', 'Casarte' and 'Leader') of Haier Group, the distribution of electrical products of Haier Group in the PRC and the investment in bulk logistics services developed in China under the brand of Ririshun. The Company is requested to further disclose: (1) the upstream and downstream conditions, production and sales and financial data such as operating income, operating costs and gross profit margin of different business segments of HEG, and analysis to the position in the industry; (2) whether there will be an impact on the daily business development given that HEG will be delisted from the Hong Kong Stock Exchange upon completion of this transaction. Please ask the financial advisor to give opinions. 5. As disclosed in the Reconstructing Report, during the year of 2018 and 2019, HEG realized net profit contribute to the parent company of RMB3.884 billion and RMB7.351 billion, respectively, representing an increase of 83.48%. It was mainly because HEG and its subsidiaries conducted asset replacement with Haier Group and its subsidiaries to purchase 51% equity of Qingdao Haishi at the early stage, with 55% equity of Bingji it held as the consideration, resulting in profit or loss of equity settlement of RMB3.827 billion. As at the end of 2019, the long-term equity investment of HEG amount to RMB5.719 billion, representing a year-on-year growth of 3,117.67%. Among which, the long-term equity investment to Gooday Investment (???????) amounted to RMB5.474 billion. Please make additional disclosure: (1) the main businesses and products, major financial data and industry position of Qingdao Haishi and Bingji, as well as the details of above asset replacement scheme, and illustrate whether the major concern of HEG about the above asset replacement will impact the normal business of HEG based on the changes in the industry; (2) the forming background, the accounting process of the long-term equity investment by the Company to Gooday Investment, as well as the impact on the financial data of the Company; (3) illustrate the specific influence of above asset replacement transaction to the valuation of HEG. Please ask the financial advisor to give opinions. 6. As disclosed in the Restructuring Report, as at the end of 2019, HEG's houses and buildings were RMB1.087 billion, representing a decrease of 46.34% year-on-year, and machinery and equipment were RMB2.329 billion, representing an increase of 86.78% year-on-year. Please make additional disclosure: whether the specific reasons, backgrounds and rationality of above-mentioned changes in houses, buildings, machinery and equipment will adversely affect the capacity structure of HEG. Please ask the financial advisor to give opinions. Please make immediate disclosure upon receiving the inquiry letter and give a written reply about above matters to our department within 5 trading days, and amend the Restructuring Report accordingly.' The Company will promptly respond to the questions raised in the Inquiry Letter and fulfill its information disclosure obligations as required. The information disclosure media designated by the Company include Shanghai Securities News, China Securities Journal, Securities Times, and Securities Daily and the website of Shanghai Stock Exchange (http://www.sse.com.cn). Investors shall pay attention to relevant announcements and investment risks. It is hereby announced. Haier Smart Home Co., Ltd. August 14, 2020
14.08.2020 The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. |
| Language: | English |
| Company: | Haier Smart Home Co.,Ltd. |
| Haier Industrial Park, Laoshan District | |
| 266101 Qingdao | |
| China | |
| Internet: | www.haier.net |
| End of News | DGAP News Service |
1119055 14.08.2020
