SUN ART RETAIL GROUP LIMITED Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
SUN ART RETAIL GROUP LIMITED ৷㒥ཧਯϞࠢʮ̡
(Incorporated in Hong Kong with limited liability)
(Stock code: 06808)
CONTINUING CONNECTED TRANSACTIONS - (I) BUSINESS COOPERATION BETWEEN THE GROUP AND ALIBABA GROUP; AND
(II) REVISION OF ANNUAL CAPS FOR CERTAIN CONTINUING
CONNECTED TRANSACTIONS
BUSINESS COOPERATION BETWEEN THE GROUP AND ALIBABA GROUP
Reference is made to the announcements of the Company dated (i) 8 December 2017, (ii) 19 March 2018, (iii) 15 January 2019, (iv) 12 April 2019, (v) 31 May 2019, (vi) 18 October 2019, (vii) 27 December 2019, (viii) 27 February 2020, (ix) 16 March 2020, (x) 1 April 2020 and (xi) 2 July 2020 in relation to, amongst others, the continuing connected transactions under the category of "Business Cooperation between the Group and Alibaba Group".
The Board is pleased to announce (i) that on 26 February 2021 (after trading hours), the Group has entered into the New Business Cooperation Agreements (details of which are set out in sections II and III of this announcement); and (ii) the revision of annual caps of the category of "Business Cooperation between the Group and Alibaba Group" (details of which are set out in section V of this announcement).
LISTING RULES IMPLICATIONS
Taobao China directly holds approximately 27.33% of the total Shares as at the date of this announcement and is therefore a substantial shareholder and a connected person of the Company under the Listing Rules. Taobao China is an indirect wholly-owned subsidiary of Alibaba. Alibaba is therefore also a connected person of the Company under the Listing Rules.
Hangzhou Rajax is a subsidiary of Alibaba and is therefore an associate of Taobao China and a connected person of the Company under the Listing Rules. Accordingly, the New Business Cooperation Agreements and the transactions contemplated thereunder, constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.
As one or more of the applicable percentage ratios as defined under Rule 14.07 of the Listing Rules in respect of the proposed annual caps under the category of "Business Cooperation between the Group and Alibaba Group" exceed 0.1% but do not exceed 5%, the continuing connected transactions under the New Business Cooperation Agreements and the Existing Business Cooperation Agreements are subject to the reporting and announcement requirements but exempt from the independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
I. INTRODUCTION
Reference is made to the announcements of the Company dated (i) 8 December 2017, (ii) 19 March 2018, (iii) 15 January 2019, (iv) 12 April 2019, (v) 31 May 2019, (vi) 18 October 2019, (vii) 27 December 2019, (viii) 27 February 2020, (ix) 16 March 2020, (x) 1 April 2020 and (xi) 2 July 2020 in relation to, amongst others, the continuing connected transactions under the category of "Business Cooperation between the Group and Alibaba Group".
The Board is pleased to announce (i) that on 26 February 2021 (after trading hours), the Group has entered into the New Business Cooperation Agreements (details of which are set out in sections II and III of this announcement); and (ii) the revision of annual caps of the category of "Business Cooperation between the Group and Alibaba Group" (details of which are set out in section V of this announcement).
For the purpose of Rule 14A.81 of the Listing Rules, as the transactions contemplated under the New Business Cooperation Agreements are similar in nature with the transactions under the category of "Business Cooperation between the Group and Alibaba Group" as disclosed in the Previous Announcements, the proposed annual caps of the New Business Cooperation Agreements are required to be aggregated with the existing annual caps of the transactions under such category, which include the following Existing Business Cooperation Agreements as at the date of this announcement:
(a) the Original Business Cooperation Agreement, which was entered into between Alibaba Zetai, the Company, Auchan China and RT-Mart China on 7 December 2017, pursuant to which the Group and Alibaba Zetai agreed to cooperate, and cause their respective affiliates to cooperate, to adopt the "Taobao Daojia" ("ଇᘒՑ") model across the stores of the Group and its affiliates. The Original Business Cooperation Agreement has a fixed term of three years commencing from 7 December 2017 and is automatically renewable for a successive period of three years between the respective parties subject to the Company's compliance with the Listing Rules. Please refer to the announcement published by the Company on 8 December 2017 for, among other things, details of the Original Business Cooperation Agreement;
(b) the Auchan Implementation Agreement, which was entered into between Auchan China and Taobao Software (a direct wholly-owned subsidiary of Taobao China) on 19 March 2018, pursuant to which Auchan China agreed to cooperate with Taobao Software to adopt the "Taobao Daojia" ("ଇᘒՑ") model across the Auchan Stores. The Auchan Implementation Agreement has a fixed term of three years commencing from 19 March 2018 and is extendable by further agreement between the respective parties subject to the Company's compliance with the Listing Rules. Please refer to the announcement published by the Company on 19 March 2018 for, among other things, details of the Auchan Implementation Agreement;
(c) the RT Implementation Agreement, which was entered into between RT-Mart China and Taobao Software on 19 March 2018, pursuant to which RT-Mart China agreed to cooperate with Taobao Software to adopt the "Taobao Daojia" ("ଇᘒՑ") model across the hypermarkets and supermarkets operated by RT-Mart China. The RT Implementation Agreement has a fixed term of three years commencing from 19 March 2018 and is extendable by further agreement between the respective parties subject to the Company's compliance with the Listing Rules. Please refer to the announcement published by the Company on 19 March 2018 for, among other things, details of the RT Implementation Agreement;
(d) the Hainan Hema Business Cooperation Agreement, which was entered into between Shanghai Runhe and Shanghai Hema (an indirect wholly-owned subsidiary of Alibaba) on 15 January 2019, pursuant to which Shanghai Runhe agreed to cooperate with Shanghai Hema to adopt the "Hema Fresh" ("ଷ৵ᒻ͛") model across the Hainan Hema Stores. The Hainan Hema Business Cooperation Agreement has a fixed term of three years commencing from 28 December 2018 and is extendable by further agreement between the parties subject to the Company's compliance with the Listing Rules. Please refer to the announcement published by the Company on 15 January 2019 for, among other things, details of the Hainan Hema Business Cooperation Agreement;
(e) the Northeast China Hema Business Cooperation Agreement, which was entered into between Shanghai Runhe and Shanghai Hema on 15 January 2019, pursuant to which Shanghai Runhe agreed to cooperate with Shanghai Hema to adopt the "Hema Fresh" ("ଷ৵ᒻ͛") model across Northeast China Hema Stores. The Northeast China Hema Business Cooperation Agreement has a fixed term of three years commencing from 28 December 2018 and is extendable by further agreement between the parties subject to the Company's compliance with the Listing Rules. Please refer to the announcement published by the Company on 15 January 2019 for, among other things, details of the Northeast China Hema Business Cooperation Agreement;
(f) the Ele Me Business Cooperation Agreement, which was entered into between RT-Mart China and Shanghai Rajax on 11 April 2019, which set out the principal framework upon which the RT-Mart China may enter into arrangements in respect of business cooperation adopting the "Ele Me" ("ቯəჿ") model across the stores under the "Auchan" and "RT-Mart" banners, with Shanghai Rajax. The Ele Me Business Cooperation Agreement has a fixed term of one year commencing from 1 January 2019 and is extendable by further agreement between the parties subject to the Company's compliance with the Listing Rules. The Ele Me Business Cooperation Agreement has expired on 31 December 2019. Please refer to the announcement published by the Company on 12 April 2019 for, among other things, details of the Ele Me Business Cooperation Agreement.
The Ele Me Business Cooperation Renewal Agreement, which was entered into between RT-Mart China and Shanghai Rajax on 27 December 2019, which set out the principal framework upon which RT-Mart China renewed the cooperation with Shanghai Rajax adopting the "Ele Me" model under the "Auchan" and "RT-Mart" banners. The Ele Me Business Cooperation Renewal Agreement has a fixed term of one year and three months commencing from 1 January 2020 and will expire on 31 March 2021. Please refer to the announcement published by the Company on 27 December 2019 for details of the Ele Me Business Cooperation Renewal Agreement;
(g) the Dalian Hema Delivery Business Cooperation Agreement which was entered into between Dalian Runhe and Hangzhou Rajax, pursuant to which Hangzhou Rajax and Dalian Runhe (a non-wholly owned subsidiary of the Company) agreed to cooperate in providing delivery services to the customers of Hema Fresh ("ଷ৵ᒻ͛") stores operated by Dalian Runhe. The Dalian Hema Delivery Business Cooperation Agreement has a fixed term of one year commencing from 1 March 2019 and is extendable by further agreement between the parties subject to the Company's compliance with the Listing Rules. The Dalian Hema Delivery Business Cooperation Agreement has expired on 29 February 2020 and has been renewed by the parties on 27 February 2020 pursuant to the Dalian Hema Delivery Business Cooperation Renewal Agreement. The Dalian Hema Delivery Business Cooperation Supplementary Agreement was entered into on 16 March 2020 to introduce a bonus arrangement in respect of the business cooperation between Dalian Runhe and Hangzhou Rajax. Please refer to the announcement published by the Company on 12 April 2019 for, among other things, details of the Dalian Hema Delivery Business Cooperation Agreement, the announcement published by the Company on 27 February 2020 for, among other things, details of the Dalian Hema Delivery Business Cooperation Renewal Agreement, and the announcement published by the Company on 16 March 2020 for the details of the Dalian Hema Delivery Business Cooperation Supplementary Agreement;
(h) the Shenyang Hema Delivery Business Cooperation Agreement which was entered into between Shenyang Runhe (an indirect non-wholly owned subsidiary of the Company) and Hangzhou Rajax, pursuant to which Hangzhou Rajax agreed to provide delivery services to the customers of Hema Stores operated by Shenyang Runhe. The Shenyang Hema Delivery Business Cooperation Agreement has a fixed term of 9 months commencing from 31 May 2019 and can be terminated subject to not less than 30 days' prior notice served by either party to the Shenyang Hema Delivery Business Cooperation Agreement. The Shenyang Hema Delivery Business Cooperation Agreement has expired on 29 February 2020 and has been renewed by the parties on 27 February 2020 pursuant to the Shenyang Hema Delivery Business Cooperation Renewal Agreement. Please refer to the announcement published by the Company on 31 May 2019 for, among other things, details of the Shenyang Hema Delivery Business Cooperation Agreement, and the announcement published by the Company on 27 February 2020 for, among other things, details of the Shenyang Hema Delivery Business Cooperation Renewal Agreement;
(i) the RT-Mart Tao Xianda Quadripartite Implementation Agreement which was entered into between (i) Taobao Software, (ii) RT-Mart China, (iii) Hangzhou Tao Xian Da and (iv) Hangzhou Rajax, pursuant to which the parties agreed that, all the rights and obligations of Taobao Software under the RT Implementation Agreement (save for delivery service arrangements) shall be transferred to Hangzhou Tao Xian Da. Please refer to the announcement published by the Company on 18 October 2019 for, among other things, details of the RT-Mart Tao Xianda Quadripartite Implementation Agreement;
(j) the Auchan Tao Xianda Quadripartite Implementation Agreement which was entered into between (i) Taobao Software, (ii) Auchan China, (iii) Hangzhou Tao Xian Da and (iv) Hangzhou Rajax, pursuant to which the parties agreed that, all the rights and obligations of Taobao Software under the Auchan Implementation Agreement (save for delivery service arrangements) shall be transferred to Hangzhou Tao Xian Da. Please refer to the announcement published by the Company on 18 October 2019 for, among other things, details of the Auchan Tao Xianda Quadripartite Implementation Agreement;
(k) the 2020 RT-Mart China Rajax Network Shanghai Ele Me Business Cooperation Agreement (Promotion Service), which was entered into between RT-Mart China and Rajax Network Shanghai, pursuant to which Rajax Network Shanghai agreed to provide technical services relating to marketing activities to RT-Mart China through the use of software systems of Rajax Network Shanghai. The 2020 RT-Mart China Rajax Network Shanghai Ele Me Business Cooperation Agreement (Promotion Service) has a fixed term of one year commencing from 1 April 2020 and will expire on 31 March 2021. Please refer to the announcement published by the Company on 1 April 2020 for details of the 2020 RT-Mart China Rajax Network Shanghai Ele Me Business Cooperation Agreement (Promotion Service);
(l) the 2020 Auchan China Rajax Network Shanghai Ele Me Business Cooperation Agreement (Promotion Service), which was entered into between Auchan China and Rajax Network Shanghai, pursuant to which Rajax Network Shanghai agreed to provide technical services relating to marketing activities to Auchan China through the use of software systems of Rajax Network Shanghai. The 2020 Auchan China Rajax Network Shanghai Ele Me Business Cooperation Agreement (Promotion Service) has a fixed term of one year commencing from 1 April 2020 and will expire on 31 March 2021. Please refer to the announcement published by the Company on 1 April 2020 for details of the 2020 Auchan China Rajax Network Shanghai Ele Me Business Cooperation Agreement (Promotion Service);
(m) the RT-Mart China Ele Me Online Food Ordering Business Cooperation Agreement, which was entered into between RT-Mart China and the Rajax Entities, pursuant to which the Rajax Entities agreed to provide to RT-Mart China services relating to online food ordering, online promotion, logistics and delivery, as well as other related services to help RT-Mart China to meet its needs in operating online food ordering business on the Rajax Entities' platforms (including the Ele Me platform). The RT-Mart China Ele Me Online Food Ordering Business Cooperation Agreement has a fixed term of one year commencing from 1 July 2020 and will expire on 30 June 2021. Please refer to the announcement published by the Company on 2 July 2020 for details of the RT-Mart China Ele Me Online Food Ordering Business Cooperation Agreement; and
(n) the Auchan China Ele Me Online Food Ordering Business Cooperation Agreement, which was entered into between Auchan China and the Rajax Entities, pursuant to which the Rajax Entities agreed to provide to Auchan China services relating to online food ordering, online promotion, logistics and delivery, as well as other related services to help Auchan China to meet its needs in operating online food ordering business on the Rajax Entities' platforms (including the Ele Me platform). The Auchan China Ele Me Online Food Ordering Business Cooperation Agreement has a fixed term of one year commencing from 1 July 2020 and will expire on 30 June 2021. Please refer to the announcement published by the Company on 2 July 2020 for details of the Auchan China Ele Me Online Food Ordering Business Cooperation Agreement.
II. RENEWAL OF EXISTING CONTINUING CONNECTED TRANSACTIONS - HEMA DELIVERY BUSINESS COOPERATION 2021 RENEWAL AGREEMENTS
As each of the Dalian Hema Delivery Business Cooperation Renewal Agreement and the Shenyang Hema Delivery Business Cooperation Agreement will expire on 28 February 2021, the Board is pleased to announce that on 26 February 2021 (after trading hours), (i) Dalian Runhe (an indirect subsidiary of the Company) entered into the Dalian Hema Delivery Business Cooperation 2021 Renewal Agreement; and (ii) Shenyang Runhe (an indirect subsidiary of the Company) entered into the Shenyang Hema Delivery Business Cooperation 2021 Renewal Agreement, with Hangzhou Rajax to continue the business cooperation between each of Dalian Runhe and Shenyang Runhe and Hangzhou Rajax whereby Hangzhou Rajax agreed to provide delivery services to the customers of Hema Stores operated by Dalian Runhe and Shenyang Runhe, respectively.
(a) Dalian Hema Delivery Business Cooperation 2021 Renewal Agreement
The principal terms of the Dalian Hema Delivery Business Cooperation 2021 Renewal Agreement are as follows:
Date
: 26 February 2021 (after trading hours)
Parties
: (i) Dalian Runhe; and
(ii) Hangzhou Rajax.
Term
: The term commences from 1 March 2021 and ends on 31 March 2022. Extension of the term of the Dalian Hema Delivery Business Cooperation 2021 Renewal Agreement shall be agreed not less than thirty (30) days prior to the expiry of the Dalian Hema Delivery Business Cooperation 2021 Renewal Agreement.
Nature of transaction
: Pursuant to the Dalian Hema Delivery Business Cooperation 2021 Renewal Agreement, Hangzhou Rajax agreed to designate delivery service personnel to Dalian Runhe and to provide delivery service to the customers of Dalian Runhe, who make orders using the Hema Delivery APP contemplated under Dalian Hema Delivery Business Cooperation 2021 Renewal Agreement.
Prices and fees
: Service fee will be charged for each completed delivery order and additional service fee will be charged by Hangzhou Rajax if a second delivery or collection of delivered goods is required due to the default of Dalian Runhe or its customers.
This unit service fee for the delivery services (inclusive of any costs and expenses for performing the delivery service such as taxes, royalties, traveling expenses, meal fees and other contingent fees) has been determined after arm's length negotiations with reference to (i) the service fee and price charged for the same category of services offered by independent suppliers; and (ii) the continuing partnership with Alibaba Group on the Hema Fresh business model.
A dedicated team of the Group will monitor and review the unit service fee of the delivery services regularly, in order to ensure that the transactions under the Dalian Hema Delivery Business Cooperation 2021 Renewal Agreement are conducted on normal commercial terms.
Payment arrangements
: The amount payable by the Group to Hangzhou Rajax will be settled by the Group each month after issuance and confirmation of the monthly bill at a date and according to terms as agreed by Dalian Runhe and Hangzhou Rajax.
(b) Shenyang Hema Delivery Business Cooperation 2021 Renewal Agreement
The principal terms of the Shenyang Hema Delivery Business Cooperation 2021 Renewal Agreement are identical to the terms stated in section II(a), except where the references to Dalian Runhe and the Dalian Hema Delivery Business Cooperation 2021 Renewal Agreement should be read as references to Shenyang Runhe and Shenyang Hema Delivery Business Cooperation 2021 Renewal Agreement, respectively.
III. VARIATION OF TERMS OF EXISTING CONTINUING CONNECTED
TRANSACTION - 2021 DALIAN HEMA DELIVERY BUSINESS COOPERATION
SUPPLEMENTARY AGREEMENT
The Board announces that on 26 February 2021 (after trading hours), Dalian Runhe (an indirect non-wholly owned subsidiary of the Company) entered into the 2021 Dalian Hema Delivery Business Cooperation Supplementary Agreement to continue the bonus arrangement contemplated under the Dalian Hema Delivery Business Cooperation Supplementary Agreement whereby Hangzhou Rajax provides delivery services to customers of Hema Stores operated by Dalian Runhe.
According to the 2021 Dalian Hema Delivery Business Cooperation Supplementary Agreement, the parties will continue to adopt a Spring Festival event bonus arrangement (the "Bonus Arrangement") to be calculated with reference to the volume of delivery services provided during the Spring Festival between 23 January 2021 and 31 March 2021. The estimated amount of additional payment to be made to Hangzhou Rajax under the Bonus Arrangement is approximately RMB0.55 million (exclusive of applicable taxes) based on the total numbers of delivery orders completed and delivery persons worked during the Spring Festival between 23 January 2021 and 31 March 2021. This amount payable under the Bonus Arrangement has been determined after arm's length negotiations with reference to (i) the bonus requested for the same category of services and/or products offered by independent suppliers; and (ii) the continuing partnership with the Alibaba Group on the "Hema Fresh" business model.
In terms of the payment arrangement, pursuant to the 2021 Dalian Hema Delivery Business Cooperation Supplementary Agreement, after the parties confirm the settlement amount of the fees, Hangzhou Rajax shall issue the invoice (inclusive of applicable taxes) to Dalian Runhe, and Dalian Runhe shall settle such amount within 10 Business Days after receipt of the invoice.
IV. GENERAL TRANSACTION PRINCIPLES
The Group shall conduct review and evaluation of the fees payable under the New Business Cooperation Agreements with reference to the rates quoted by other independent third party providers of comparable services, in order to ensure that the fees under such agreements are conducted on normal commercial terms.
Where it is impracticable to make reference to the rate of the service fees offered by independent third party service providers for comparable services, the Group will take into consideration the service specifications, cost structure, profit margin, market condition and development strategy in determining the rate for the fees payable by the Group pursuant to the New Business Cooperation Agreements, ensuring the terms of the agreements are in the best interest of the Group.
V. REVISION OF THE EXISTING ANNUAL CAPS FOR THE CATEGORY OF
"BUSINESS COOPERATION BETWEEN THE GROUP AND ALIBABA GROUP", HISTORICAL TRANSACTION AMOUNTS AND PROPOSED ANNUAL CAPS
The aggregate of the transaction amounts under the category of "Business Cooperation between the Group and Alibaba Group", being the aggregate of the transaction amounts payable by the Group to the Alibaba Group (i) for the year ended 31 December 2020 and (ii) for the one month ended 31 January 2021 amounted to approximately RMB1,644 million (unaudited) and approximately RMB184 million (unaudited), respectively.
As the transactions under the New Business Cooperation Agreements are similar in nature with the transactions under the category of "Business Cooperation between the Group and Alibaba Group" as disclosed in the Previous Announcements, for the purpose of Rule 14A.81 of the Listing Rules, the transactions contemplated under the New Business Cooperation Agreements are required to be aggregated with the transactions contemplated under the Existing Business Cooperation Agreements under the category of "Business Cooperation between the Group and Alibaba Group".
Accordingly, the proposed annual caps under the category of "Business Cooperation between the Group and Alibaba Group", being the aggregate of the transaction amounts payable to Alibaba Group under the Existing Business Cooperation Agreements and the New Business Cooperation Agreements, for the following periods are set out as follows:
For the | For the | |
financial | financial | |
year ended | year ended | |
31 December | 31 December | |
2021 | 2022 | |
In RMB | ||
Existing annual caps | ||
(as disclosed in the Company's | ||
announcement dated 2 July 2020) | 2,163,000,000 | N/A |
Proposed annual caps | 2,199,000,000 | 9,500,000 |
The above proposed annual caps are not intended, and do not purport, to be an indication of the Group's future performance or profitability and investors should not rely on the proposed annual caps in deciding whether to invest in the Shares.
VI. BASIS FOR THE PROPOSED ANNUAL CAPS
In determining the proposed annual caps for transactions under the category of "Business Cooperation between the Group and Alibaba Group", the Board has taken into account the following factors:
(a) the historical amount of fees paid by the Group under the category of "Business Cooperation between the Group and Alibaba Group";
(b) the estimated transaction value of the delivery services to be provided by Hangzhou Rajax under the Hema Fresh model ("ଷ৵ᒻ͛") based on projected customers' demand;
(c) the Company's ongoing strategy to utilise the internet technologies and the expansion in the market segment offered through Hema Fresh model ("ଷ৵ᒻ͛") to increase the efficiency of the traditional hypermarket and supermarket Stores; and
(d) the anticipated increase in the scale of the Group's operation.
VII. REASONS FOR AND BENEFITS OF ENTERING INTO THE NEW BUSINESS COOPERATION AGREEMENTS
In light of the continuous business cooperation with members of the Alibaba Group, the Company believes that it is for the benefit of the Group to conduct the transactions contemplated under the New Business Cooperation Agreements.
The arrangements contemplated under the New Business Cooperation Agreements help facilitate the Group to continue to leverage Taobao China's expertise in internet technologies and digital infrastructure to expand its online food ordering and retail channels to maximize the revenue of the Group. They allow the Group to digitalise and introduce further new retail solutions. The alliance with Alibaba Group will enable the Group's activities to benefit from Alibaba Group's digital ecosystem and also promote the development of the new business model of "Hema Fresh" ("ଷ৵ᒻ͛") for the Group.
The Directors (including the independent non-executive Directors) are of the view that the transactions contemplated under the New Business Cooperation Agreements and the Existing Business Cooperation Agreements are on normal commercial terms and in the ordinary and usual course of business of the Group, and that the terms of such agreements and the proposed annual caps are fair and reasonable and are in the best interests of the Company and the Shareholders as a whole.
VIII.LISTING RULES IMPLICATIONS
Taobao China directly holds approximately 27.33% of the total Shares as at the date of this announcement and is therefore a substantial shareholder and a connected person of the Company under the Listing Rules. Taobao China is an indirect wholly-owned subsidiary of Alibaba. Alibaba is therefore also a connected person of the Company under the Listing Rules.
Hangzhou Rajax is a subsidiary of Alibaba and is therefore an associate of Taobao China and a connected person of the Company under the Listing Rules. Accordingly, each of the New Business Cooperation Agreements and the transactions contemplated thereunder, constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.
As one or more of the applicable percentage ratios as defined under Rule 14.07 of the Listing Rules in respect of the proposed annual caps under the category of "Business Cooperation between the Group and Alibaba Group" exceed 0.1% but do not exceed 5%, the continuing connected transactions under the New Business Cooperation Agreements and the Existing Business Cooperation Agreements are subject to the reporting and announcement requirements but exempt from the independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
IX. GENERAL The Group
The principal activity of the Group is the operation of hypermarkets and E-commerce platforms in the PRC.
Alibaba
Alibaba is a company incorporated in the Cayman Islands. Its American depository shares are listed on the New York Stock Exchange and its ordinary shares are listed on the Main Board of the Stock Exchange (Stock Code: 9988).
Taobao China
Taobao China is a company incorporated in Hong Kong. Taobao China is the direct holding company of certain PRC subsidiaries relating to Taobao Marketplace, China's largest mobile commerce destination, and Tmall, China's largest third-party platform for brands and retailers, in each case in terms of gross merchandise volume in 2017.
RT-Mart China
RT-Mart China is a company incorporated under the laws of PRC and is principally engaged in the operation of hypermarkets in the PRC.
Dalian Runhe
Dalian Runhe is a company incorporated under the laws of PRC and is principally engaged in the operation of Hema Stores.
Shenyang Runhe
Shenyang Runhe is a company incorporated under the laws of PRC and is principally engaged in the operation of Hema Stores.
Hangzhou Rajax
Hangzhou Rajax is a company incorporated under the laws of PRC and is a consolidated entity of Alibaba. Hangzhou Rajax operates, amongst others, Fengniao Delivery (ৣ) which focuses on instant and same-city delivery services.
X. BOARD CONFIRMATION
As Mr. Lin Xiaohai is currently the vice-president of Alibaba, Mr. Li Yonghe is currently the vice-president of Alibaba, and Mr. Xu Hong is currently the Deputy Chief Financial Officer of Alibaba, they are considered to have material interests in respect of the relevant board resolutions in connection with the New Business Cooperation Agreements and the proposed annual caps under the category of "Business Cooperation between the Group and Alibaba Group". For good corporate governance, Mr. Lin Xiaohai, Mr. Li Yonghe and Mr. Xu Hong had voluntarily abstained from voting on the relevant board resolution in connection with the New Business Cooperation Agreements and the proposed annual caps.
Save for the aforesaid and to the best knowledge, information and belief of the Company, none of the remaining Directors has any material interest in the New Business Cooperation Agreements for which they would be required to abstain from voting on the relevant board resolution approving such documents and proposed annual caps pursuant to the articles of association of the Company.
XI. DEFINITIONS
In this announcement, unless the context otherwise requires, the capitalised terms shall have the meanings as set out below:
"2020 Auchan China Rajax | the promotion services cooperation agreement entered |
Network Shanghai | into between Rajax Network Shanghai and Auchan |
Ele Me Business | China on 1 April 2020 (after trading hours) in relation |
Cooperation Agreement | to the technical services relating to marketing activities |
(Promotion Service)" | provided to Auchan China based on the Ele Me platform |
"2020 Rajax Network Shanghai | the 2020 Auchan China Rajax Network Shanghai Ele Me |
Ele Me Business | Business Cooperation Agreement (Promotion Service) |
Cooperation Agreements | and the 2020 RT-Mart China Rajax Network Shanghai |
(Promotion Service)" | Ele Me Business Cooperation Agreement (Promotion |
Service) | |
12 |
"2020 RT-Mart China Rajax | the promotion services cooperation agreement entered |
Network Shanghai | into between Rajax Network Shanghai and RT-Mart |
Ele Me Business | China on 1 April 2020 (after trading hours) in relation |
Cooperation Agreement | to the technical services relating to marketing activities |
(Promotion Service)" | provided to RT-Mart China based on the Ele Me platform |
"2021 Dalian Hema | the supplementary agreement to continue the Spring |
Delivery Business | Festival event bonus arrangement entered into between |
Cooperation Supplementary | Dalian Hema and Hangzhou Rajax on 26 February 2021 |
Agreement" | under the Dalian Hema Delivery Business Cooperation |
Supplementary Agreement | |
"affiliates" | has the meaning of "associate" ascribed to it under the |
Listing Rules | |
"Alibaba" | Alibaba Group Holding Limited (ڛԢˋˋණྠછٰϞ |
ࠢʮ̡), a company incorporated in the Cayman Islands, | |
the American depositary shares of which are listed on | |
the New York Stock Exchange and the ordinary shares | |
of which are listed on the Main Board of the Stock | |
Exchange (Stock Code: 9988) | |
"Alibaba Group" | Alibaba and its associates |
"Alibaba Technology" | ڛԢˋˋ€ʕၣ༩ҦஔϞࠢʮ̡ (Alibaba (China) |
Network Technology Co., Ltd.*), a company incorporated | |
under the laws of the PRC and an indirect wholly owned | |
subsidiary of Alibaba | |
"Alibaba Zetai" | ψڛԢˋˋዣइڦࢹҦஔϞࠢʮ̡(Hangzhou Alibaba |
Zetai Information Technology Company Limited*), a | |
company incorporated in the PRC and an indirect wholly | |
owned subsidiary of Alibaba | |
"associate(s)" | has the meaning ascribed to it under the Listing Rules |
"Auchan China" | ᆄ֠€ʕҳ༟Ϟࠢʮ̡(Auchan (China) Investment |
Co., Ltd.*), a company incorporated in the PRC and a | |
subsidiary of the Company | |
"Auchan China Ele Me | the agreement entered into between Auchan China and |
Online Food Ordering | the Rajax Entities on 1 July 2020 in relation to the |
Business Cooperation | technical services relating to online food ordering, online |
Agreement" | promotion and delivery, as well as other related services |
to help Auchan China to meet its needs in operating | |
online food ordering business on the Rajax Entities' | |
platforms (including the Ele Me platform) | |
13 |
"Auchan Implementation
Agreement"
the implementation agreement entered into between Auchan China and Taobao Software on 19 March 2018 relating to the cooperation between the parties thereto
"Auchan Stores"
the hypermarkets and supermarkets operated by Auchan China designated under the Auchan Implementation Agreement
"Auchan Tao Xianda
Quadripartite Implementation Agreement"
the implementation agreement entered into between Taobao Software, Auchan China, Hangzhou Tao Xian Da and Hangzhou Rajax on 18 October 2019 relating to the cooperation between the parties thereof in relation to the Auchan Implementation Agreement
"Board"
The board of Directors
"Company"
Sun Art Retail Group Limited (৷㒥ཧਯϞࠢʮ̡), a company incorporated under the laws of Hong Kong on 13 December 2000 with limited liability, the shares of which are listed on the Main Board of the Stock Exchange
"connected person(s)"
has the meaning ascribed to it under the Listing Rules
"Dalian Hema Delivery
Business Cooperation Agreement"
the delivery cooperation agreement entered into between Hangzhou Rajax and Dalian Runhe on 11 April 2019 in relation to the delivery services for the "Hema Fresh" business model contemplated under the Hainan Hema Business Cooperation Agreement and the Northeast China Hema Business Cooperation Agreement
"Dalian Hema Delivery
Business Cooperation 2021 Renewal Agreement"
the delivery cooperation agreement entered into between Dalian Runhe and Hangzhou Rajax on 26 February 2021 in relation to the delivery services to be provided by Hangzhou Rajax
"Dalian Hema Delivery
Business Cooperation Renewal Agreement"
the delivery cooperation agreement entered into between Hangzhou Rajax and Dalian Runhe on 27 February 2020 in relation to the delivery services for the "Hema Fresh" business model contemplated under the Hainan Hema Business Cooperation Agreement and the Northeast China Hema Business Cooperation Agreement, which renewed the Dalian Hema Delivery Business Cooperation Agreement
"Dalian Hema Delivery
Business Cooperation Supplementary Agreement"
the supplementary agreement in relation to Spring Festival event bonus arrangement entered into between Dalian Hema and Hangzhou Rajax on 16 March 2020 in respect of the Dalian Hema Delivery Business Cooperation Agreement
"Dalian Runhe"
ɽஹᆗଷථၣഖ߅ҦϞࠢʮ̡(Dalian Runhe Cloud Network Technology Co. Ltd.*), a limited liability company incorporated in the PRC, which is principally engaged in the operation of the Hema Stores. Dalian Runhe is an indirect wholly-owned subsidiary of the Company
"Director(s)"
director(s) of the Company
"Ele Me Business
Cooperation Agreement"
the business cooperation agreement entered into between the RT-Mart China and Shanghai Rajax on 11 April 2019 in relation to entering in arrangements in respect of the business cooperation adopting the "Ele Me" model
"Ele Me Business Cooperation
Renewal Agreement"
the business cooperation agreement entered into between RT-Mart China and Shanghai Rajax on 27 December 2019 in relation to entering in arrangements in respect of the business cooperation adopting the "Ele Me" model, which renewed the Ele Me Business Cooperation Agreement
"Existing Business
Cooperation Agreements"
collectively, the Original Business Cooperation Agreement, the Auchan Implementation Agreement, the RT Implementation Agreement, the Hainan Hema Business Cooperation Agreement, the Northeast China Hema Business Cooperation Agreement, the Ele Me Business Cooperation Renewal Agreement, the Dalian Hema Delivery Business Cooperation Renewal Agreement, the Shenyang Hema Delivery Business Cooperation Renewal Agreement, the RT-Mart Tao Xianda Quadripartite Implementation Agreement, the Auchan Tao Xianda Quadripartite Implementation Agreement, the 2020 Rajax Network Shanghai Ele Me Business Cooperation Agreements (Promotion Service), the RT-Mart China Ele Me Online Food Ordering Business Cooperation Agreement and the Auchan China Ele Me Online Food Ordering Business Cooperation Agreement
"Fengniao Delivery"
a delivery service operator in the PRC owned by Hangzhou Rajax
"Group"
the Company and its subsidiaries
"Hainan Hema"
a company incorporated in the PRC and an indirect non-wholly owned subsidiary of the Company
"Hainan Hema Business
Cooperation Agreement"
"Hangzhou Rajax"
the business cooperation agreement dated 15 January 2019 entered into between Shanghai Runhe and Shanghai Hema relating to the cooperation between the parties thereto within the Hainan province of the PRC ψז˔ڦࢹ߅ҦϞࠢʮ̡ (Hangzhou Rajax Information Technology Company Ltd*), a company incorporated in the PRC and an indirect subsidiary of Alibaba
"Hangzhou Tao Xian Da"
ψଇᒻ༺ၣഖ߅ҦϞࠢʮ̡(Hangzhou Taoxianda Network Technology Co., Ltd.*), a limited liability company incorporated in the PRC and a subsidiary of Taobao China
"Hema Delivery APP"
the online processing tool for Dalian Hema or Shenyang Hema to publish delivery orders
"Hema Delivery Business
Cooperation 2021 Renewal Agreements"
the Dalian Hema Delivery Business Cooperation 2021 Renewal Agreement and the Shenyang Hema Delivery Business Cooperation 2021 Renewal Agreement
"Hema Stores"
the retail store(s) operated by Shanghai Runhe, Dalian Runhe and/or Shenyang Runhe, which adopt(s) the "Hema Fresh" ("ଷ৵ᒻ͛") business model
"Hong Kong"
the Hong Kong Special Administrative Region of the PRC
"Listing Rules"
the Rules Governing the Listing of Securities on the Stock Exchange
"New Business Cooperation
Agreements"
the Dalian Hema Delivery Business Cooperation 2021 Renewal Agreement, the Shenyang Hema Delivery Business Cooperation 2021 Renewal Agreement and the 2021 Dalian Hema Delivery Business Cooperation Supplementary Agreement
"Northeast China Hema Business
Cooperation Agreement"
the business cooperation agreement entered into between Shanghai Runhe and Shanghai Hema on 15 January 2019 relating to the cooperation between the parties thereto within the Heilongjiang, Jilin and Liaoning provinces of the PRC
"Northeast China Hema Stores"
the retail stores operated by Shanghai Runhe in the Heilongjiang, Jilin and Liaoning provinces of the PRC in accordance with the terms of the Northeast China Hema Business Cooperation Agreement, which adopt the "Hema Fresh" ("ଷ৵ᒻ͛") business model
"Original Business Cooperation
Agreement"
the business cooperation agreement entered into between Alibaba Zetai, the Company, Auchan China and RT-Mart China on 7 December 2017 in relation to the cooperation to adopt the "Taobao Daojia" ("ଇᘒՑ") business model across the Stores
"PRC"
"Previous Announcements"
the People's Republic of China and for the purpose of this announcement, it excludes Taiwan, the Hong Kong and Macau Special Administrative Regions of the PRC the announcements of the Company dated (i) 8 December 2017, (ii) 19 March 2018, (iii) 15 January 2019, (iv) 12 April 2019, (v) 31 May 2019, (vi) 18 October 2019, (vii) 27 December 2019, (viii) 27 February 2020, (ix) 16 March 2020, (x) 1 April 2020 and (xi) 2 July 2020
"Rajax Entities"
Rajax Network Shanghai and Shanghai Rajax
"Rajax Network Shanghai"
"Relevant Promotion Services"
ז˔ၣഖ߅Ҧ€ɪऎϞࠢʮ̡ (Rajax Network
Technology (Shanghai) Co., Ltd.*), a company incorporated in the PRC and an indirect subsidiary of Alibaba
technical services for marketing activities (including sending out marketing messages to target customers) provided by Rajax Network Shanghai via the Ele Me platform pursuant to the 2021 RT-Mart China Rajax Network Shanghai Ele Me Business Cooperation Agreement
"RMB"
Renminbi, the lawful currency of the PRC
"RT Implementation Agreement"
the implementation agreement entered into between RT-Mart China and Taobao Software on 19 March 2018 relating to the cooperation between the parties thereto
"RT-Mart China"
"RT-Mart China Ele Me
Online Food Ordering Business Cooperation Agreement"
ੰϓҳ༟€ʕϞࠢʮ̡(Concord Investment (China) Co., Ltd.*), a limited liability joint venture company incorporated in the PRC and a subsidiary of the Company the agreement entered into between RT-Mart China and the Rajax Entities on 1 July 2020 in relation to the technical services relating to online food ordering, online promotion and delivery, as well as other related services to help RT- Mart China to meet its needs in operating online food ordering business on the Rajax Entities' platforms (including the Ele Me platform)
"RT-Mart Tao Xianda | the implementation agreement entered into between |
Quadripartite | Taobao Software, RT-Mart China, Hangzhou Tao Xian |
Implementation | Da and Hangzhou Rajax on 18 October 2019 relating to |
Agreement" | the cooperation between the parties thereto in relation to |
the RT Implementation Agreement | |
"Shanghai Hema" | ɪऎଷ৵ၣഖ߅ҦϞࠢʮ̡(Shanghai Hema Network |
Technology Co., Ltd*), a limited liability company | |
incorporated in the PRC and an indirect wholly-owned | |
subsidiary of Alibaba | |
"Shanghai Rajax" | ɪऎז˔ڦࢹ߅ҦϞࠢʮ̡ (Shanghai Rajax |
Information Technology Co., Ltd.*), a limited liability | |
company incorporated in the PRC and a consolidated | |
entity of Alibaba | |
"Shanghai Runhe" | ɪऎᆗଷၣഖ߅ҦϞࠢʮ̡(Shanghai Runhe Internet |
Technology Co., Ltd*), a limited liability company | |
incorporated in the PRC and jointly held by RT- | |
Mart China (holding 51% equity interest) and Alibaba | |
Technology (holding 49% equity interest) | |
"Share(s)" | ordinary share(s) of the Company in issue |
"Shareholder(s)" | holder(s) of Share(s) |
"Shenyang Hema Delivery | the delivery cooperation agreement entered into between |
Business Cooperation | Shenyang Runhe and Hangzhou Rajax on 31 May 2019 |
Agreement" | in relation to the delivery services for the "Hema Fresh" |
business model | |
"Shenyang Hema Delivery | the delivery cooperation agreement entered into between |
Business Cooperation 2021 | Shenyang Runhe and Hangzhou Rajax on 26 February |
Renewal Agreement" | 2021 in relation to the delivery services to be provided by |
Hangzhou Rajax | |
"Shenyang Hema Delivery | the delivery cooperation agreement entered into between |
Business Cooperation | Shenyang Runhe and Hangzhou Rajax on 27 February |
Renewal Agreement" | 2020 in relation to the delivery services for the "Hema |
Fresh" business model, which renewed the Shenyang | |
Hema Delivery Business Cooperation Agreement | |
"Shenyang Runhe" | ӏජᆗଷථ߅ҦၣഖϞࠢʮ̡(Shenyang Runhe Network |
Technology Co.,Ltd.*), a limited liability company | |
incorporated in the PRC and an indirect subsidiary of the | |
Company | |
"Stock Exchange" | The Stock Exchange of Hong Kong Limited |
"Store(s)" | the retail store(s) operated by the Group |
18 |
"subsidiary" | has the meaning ascribed to it under the Listing Rules |
"substantial shareholder(s)" | has the meaning ascribed to it under the Listing Rules |
"Taobao China" | Taobao China Holding Limited, a company incorporated |
in Hong Kong and an indirect wholly owned subsidiary | |
of Alibaba | |
"Taobao Software" | ଇᘒ€ʕழϞࠢʮ̡(Taobao (China) Software Co., |
Ltd.*), a company incorporated in the PRC and a direct | |
wholly owned subsidiary of Taobao China | |
"VAT" | Value added tax |
"%" | Per cent |
Hong Kong, 26 February 2021 |
By Order of the Board Sun Art Retail Group Limited
HUANG Ming-Tuan
Executive Director and Chief Executive OfficerAs at the date of this announcement, the Directors are:Executive Directors:
HUANG Ming-Tuan (Chairman and Chief Executive Officer) LIN Xiaohai
Non-executive Directors: LI Yonghe
XU Hong
Independent Non-executive Directors: Karen Yifen CHANG
Dieter YIH
Charles Sheung Wai CHAN
*For identification purpose only
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Sun Art Retail Group Limited published this content on 26 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 February 2021 14:32:03 UTC.
