Zhitong Finance App News, Guanghetong (00638) issued an announcement. The 29th meeting of the fourth board of directors of the company held on August 20, 2026 reviewed and passed the “Proposal on Increasing Capital to Holding Subsidiaries, Terminating Their Equity Incentive Plans, and Selling Their Shares through Debt-to-Stock Swaps”. Due to the large investment in the intelligent connectivity solution business operated by Shanghai Guangyi Zhilian Technology Co., Ltd. (Shanghai Guangyi), a holding subsidiary with a direct shareholding ratio of 77% of the company, Shanghai Guangyi is currently still in the business scale expansion and capacity improvement stage. In order to focus on the company's main business development, the company is planning a change in control of Shanghai Guangyi. The board of directors agreed that the company would use debt-for-equity swaps to increase capital, terminate its equity incentive plan, and sell all of its shares held by the company and employee shareholding platforms.
As of June 30, 2026 (debt settlement date), the company had provided a total of 278.81117 million yuan in loans to Shanghai Guangyi. In order to effectively reduce the overall debt size of Shanghai Guangyi and facilitate the successful completion of Shanghai Guangyi's change of control, the board of directors agreed that the company would increase Shanghai Guangyi's capital through debt-for-equity swaps. The amount of capital increase was RMB 275 million. The funding source was the company's existing claims against Shanghai Guangyi, that is, the above claims were converted into Shanghai Guangyi's shares to increase capital. Shanghai Guangyi's employee shareholding platforms Ningbo Guangyi Enterprise Management Partnership (Limited Partnership) and Ningbo Guangxing Enterprise Management Partnership (Limited Partnership) relinquished priority subscription rights. After the debt-to-equity swaps are completed, the company's investment in Shanghai Guangyi will increase from 20 million yuan to 295 million yuan, and the direct shareholding ratio of Shanghai Guangyi will increase from 77.00% to 98.02%.
Due to the company planning a change in control of Shanghai Guangyi, according to the relevant provisions of the “Shanghai Guangyi Zhilian Technology Co., Ltd. Equity Incentive Plan (Draft)” (Draft Incentive Plan), the board of directors agreed that Shanghai Guangyi would terminate the implementation of the equity incentive plan, and that shares not yet vested cannot be attributed; some of the shares already owned will be withdrawn through friendly negotiations based on the relevant provisions and agreements of the draft incentive plan and equity incentive grant agreement after the transaction is completed. The withdrawal amount shall not be higher than the relevant rules/agreements of the draft incentive plan and equity incentive grant agreement; Ningbo Guangyi's employee shareholding platform The enterprise management partnership (limited partnership) and the Ningbo Guangxing Enterprise Management Partnership (limited partnership) will carry out commercial registration after the settlement of this transaction is completed.
The board of directors agreed that the company, Shenzhen Guanghetong Investment and Development Co., Ltd., a wholly-owned subsidiary of the company, acted as the executive partner of Shanghai Guangyi Employee Shareholding Platform Ningbo Guangyi Enterprise Management Partnership (Limited Partnership), Ningbo Guangyi Enterprise Management Partnership (Limited Partnership), Shanghai Guangyi and Lixun Precision Industry Co., Ltd. (Lixun Precision) to sign the “Equity Transfer Agreement” (“Share Transfer Agreement”). The company, Ningbo Guangyi Enterprise Management Partnership (Limited Partnership) and Ningbo Guangxing Enterprise Management Partnership (Limited Partnership) agreed to sell 100% of the total shares of Shanghai Guangyi (according to the shareholding ratio after debt-to-share conversion) to Lixun Precision. The basic transfer price is 120 million yuan (basic transfer price). The final transfer price is adjusted accordingly based on Shanghai Guangyi's net assets on the delivery date (if the net assets on the delivery date are higher or equal to 60.9 million yuan, and the final transfer price is the base transfer price; if the net assets on the delivery date are less than 60.9 million yuan, the final transfer price is the basis for the transfer price The transfer price is net of the difference between 60.9 million and net assets on the delivery date). The relevant equity transfer agreement was signed on August 20, 2026.
The debt-to-equity swap and termination of implementation of the equity incentive plan are prerequisites for the holding subsidiary's share sale and settlement. This transaction will result in a change in the scope of the company's consolidated statement. After the transaction is completed, the company will no longer hold shares in Shanghai Guangyi, and Shanghai Guangyi and its subsidiaries will no longer be included in the scope of the company's consolidated statements.
Within two years from the settlement date of this transaction, the company and its branches, wholly-owned subsidiaries, and holding subsidiaries will not directly or indirectly compete or may compete directly or indirectly with customers related to Shanghai Guangyi's industrial handheld business.
Shanghai Guangyi Zhilian Technology Co., Ltd. is mainly engaged in ODM business for industrial handheld terminals. Since its establishment in 2020, it has continued to invest in product research and development, technology accumulation and market expansion. Affected by the business development stage and early R&D investment, Shanghai Guangyi is currently still in the business scale expansion and capacity improvement stage. In recent years, the company has also vigorously expanded its IoT solution business. In order to further optimize resource allocation and focus on main business development, after careful consideration, the company plans to increase Shanghai Guangyi's capital through debt-for-equity swaps, terminate implementation of its equity incentive plan, and sell all of its shares held by the company and employee shareholding platforms.
The recipient of this transaction, Lixun Precision, has strong advantages in precision manufacturing, intelligent manufacturing, supply chain management, automated production, and global delivery. In the future, Shanghai Guangyi will complement Lixun Precision in product development and market expansion in the industrial handheld terminal ODM business, which will help promote the continuous development of Shanghai Guangyi related businesses.
Within two years from the settlement date of this transaction, the company and its branches, wholly-owned subsidiaries, and holding subsidiaries will not directly or indirectly compete or may compete directly or indirectly with customers related to Shanghai Guangyi's industrial handheld business. Arrangements relating to this transaction are in line with commercial practices. This transaction helps the company integrate resources to focus on the development of the main business, enhances the company's overall operating efficiency, conforms to the company's long-term development strategy, conforms to the overall interests of the company and shareholders, and does not harm the interests of the company and its shareholders, especially small and medium shareholders.
After the transaction is completed, it is expected that the company's operating performance will be optimized this year. The final data is based on the audit results. After the transaction is completed, the company will no longer hold shares in Shanghai Guangyi, and Shanghai Guangyi and its subsidiaries will no longer be included in the scope of the company's merger statement.