Universal Technologies Holdings Limited (Universal Tech) has agreed to sell its entire 49% stake in Qinghui Properties Limited to Dongguan Hongshun Shaohe Development Co., Ltd. for RMB8.50 million (approximately HK$9.80 million).
The buyer is wholly owned by Executive Director and major shareholder Zhu Fenglian and her spouse, rendering the deal a connected transaction. An Extraordinary General Meeting is scheduled for 29 September 2026, where independent shareholders will vote on the proposed disposal. The resolution cannot be waived and must be approved for the transaction to proceed.
Key terms and valuation • Consideration: RMB8.50 million, payable in cash on completion. • Valuation: Independent valuer Valplus Consulting Limited assessed the fair value of the 49% interest at nil, citing persistent losses, a net liabilities position of HK$626.86 million as at 31 December 2025 and significant litigation-related liabilities. • Gain/(Loss): Universal Tech expects an accounting gain of approximately HK$308.01 million upon deconsolidation of the Target Group’s net liabilities.
Strategic rationale The Target Group supplies pipelined water to Qingyuan City’s Qingcheng District but has faced sizeable disputes and litigation since March 2020 after being ordered to cease water intake from its own plant and buy higher-priced water from a government-designated source. The disposal aims to: 1. Remove litigation and contingent liability exposures linked to the Target Group’s disputes over water costs (claims of about RMB630.90 million plus RMB39.50 million in ancillary charges); 2. Halt further earnings erosion caused by elevated water purchase costs; 3. Improve Universal Tech’s net asset and liquidity position through deconsolidation of the Target Group’s current liabilities.
Conditions precedent Completion is subject to, among other things, satisfactory due diligence by the purchaser, accuracy of warranties up to completion, and independent shareholders’ approval at the EGM. The long-stop date for fulfilling conditions is 30 September 2026, extendable by mutual agreement.
Use of proceeds Net proceeds will be applied to general working capital, including office overheads, rental, staff expenses and professional fees.
Independent review McMillan Woods (Hong Kong) CPA Limited confirmed the arithmetical accuracy of the discounted cash-flow calculations underlying the valuation, while Astrum Capital Management Limited opined that the projections were made after due and careful enquiry.
If approved, the Target Group will cease to be a subsidiary of Universal Tech, and its results and liabilities will no longer be consolidated into the Group’s accounts.